[2013] Consequential Damages

by Joseph Hayes

  Juggling everything was stressful, but on balance, they made it work. Life was full, but fulfilling. Most evenings, they were able to eat dinner as a family at a reasonable hour. In the spring and summer, they would take an evening walk or bike ride through the neighborhood. They had moved from their downtown condominium to Jake's old neighborhood on the South Side, in search of more family-oriented surroundings, where Anna would have no shortage of playmates her own age. The neighborhood was full of parents and children taking evening strolls, or playing or visiting in front yards, so the McShane family found their evening walks to be a great way of casually socializing with friends and neighbors, as well as an opportunity for fresh air and exercise. Weekends revolved around soccer games, birthday parties, and the myriad of other activities that filled the social calendar of a five-year-old girl.

  Anna and Jake continued their bedtime reading ritual, and it had become a special time for both of them that they sorely missed on occasions when Jake was traveling or working late. Although she was only in kindergarten, Anna had begun reading already and it was a great source of pride for both of them when she read to her father rather than the other way around. After reading time, Jake and Amanda would tuck Anna in, and then have a precious hour or so to themselves. They called it their “couch time,” as they would sit on the sofa in the family room and catch up.

  Before turning in for the evening, Jake would quietly sneak into Anna's room to kiss her goodnight as she lay sleeping. He would often look at her quietly for a few moments, caressing her hair or cheek, feeling a profound sense of gratitude for the precious little girl that had become such a major part of his life. Later in the evening, he would frequently lie in his bed staring at Amanda after she had drifted off to sleep, thinking the same thing.

  CHAPTER 30

  Rick closed the door of his office after having escorted his new client to the elevator. “Yes!” he shouted, raising both arms into the air triumphantly.

  He picked up the signed retainer agreement that was lying on his desk. The ink was barely dry. He delighted in performing the simple mathematical calculation in his head. The first part of the equation was typical: thirty-three percent of any favorable settlement; forty percent of the award if the case went to trial. It was the next part of the equation that thrilled him. Forty percent of what? One hundred million perhaps? Maybe even several times that. This was the case he'd been waiting for his entire career. He was in the big time now, and the whole world would be watching as he worked his magic.

  In the two years since the Quinn trial, Rick's career had been skyrocketing. Soon after that trial, he had scored several other good-sized verdicts in personal injury and medical malpractice lawsuits. His successes fed on themselves. Each favorable trial outcome generated publicity—he made sure of that. The publicity brought in more cases. As his courtroom successes mounted, defendants became loath to litigate against him. That produced nice settlements—easy money.

  Last year produced his biggest verdict yet. He sued a major fast food company after one of its employees sexually assaulted a teenaged customer in a restroom. It turned out that the perpetrator had been hired despite having had a prior history of sexual assault. Unfortunately for the company and the victim, the company had failed to check references or do any sort of criminal background check.

  The employer had been eager to settle, but Rick persuaded his client to take the case to trial, so that the sins of the company could be put on display for the entire world to see. Besides that, he believed he could work the jury into a righteous rage, setting the stage for a large punitive damages award. That was precisely how it played out. The jury rendered an award of eight million dollars. Rick enjoyed his forty percent take, but he relished the publicity even more.

  After that, a number of prominent plaintiff firms began sending feelers his way. Recruiting this talented young trial lawyer would be a major coup for any plaintiffs’ firm. For the most part, Rick had no interest. He was doing quite well on his own. There was only one firm that was attractive enough to lure him away from his own increasingly lucrative and successful practice.

  Sullivan & Leach had established itself as one of the premier class action law firms in the nation. Class action litigation was a burgeoning business for plaintiffs’ lawyers, and that's where the real money was. By representing thousands of plaintiffs in a single lawsuit, the potential award could be enormous. Even though the amount that actually worked its way into the hands of the injured parties was often paltry, the legal fees were based on a percentage of the entirety, which frequently was a staggering figure. Because of the lucrative rewards for successful class action attorneys, hundreds of plaintiffs’ firms wanted in on the game. Only a small handful had the resources and know-how to truly master it, and Sullivan & Leach was among the very best.

  Rick had met Jack Leach, the firm's founder, at a luncheon seminar relating to the new federal laws designed to limit class action litigation. Leach had actually sought him out. A week later, after a round of golf, the deal was sealed. Rick was in, as the twenty-second attorney with Sullivan & Leach.

  That was just six months ago, and since then, Rick had unquestionably pulled his weight. He had strong-armed the city into a sizable settlement after one of its buses ran a red light, broadsiding another vehicle and making the driver a paraplegic. He also brought in several promising medical malpractice cases and a handful of employment cases involving wrongful termination and workplace discrimination that were still pending.

  Despite those successes, he had been waiting for the big case—the kind that had class action potential and would draw national attention; the kind that would enable him to combine his own considerable skills with the vast resources now at his disposal at Sullivan & Leach; the kind that would catapult him to instant notoriety, and make him really, really rich. An hour ago, that case had just walked through his door.

  “Jake, come look at this,” Amanda called from the living room, as Jake quietly closed Anna’s bedroom door after putting her to bed. Amanda was watching the ten o'clock news on TV. There was Rick Black, talking to a roomful of reporters at what appeared to be a planned press conference.

  “We believe that US Health has engaged in widespread and systematic fraud in its billing practices,” Rick said to the reporters. “Overcharging, billing for services that weren’t provided, furnishing unnecessary services at exorbitant rates—it's been occurring on a massive scale. The amount of money involved is staggering. We may be talking about hundreds of millions of dollars. We intend to put a stop to these egregious practices and ensure that patients who have been unknowingly victimized are made whole.” Rick spoke forcefully and passionately. He seemed credible and convincing. He went on to explain that his firm would be asking the federal court in Chicago to certify this lawsuit as a nationwide class action, so that his firm could seek redress for victims all across the country.

  “What do you make of that?” Amanda asked.

  Jake flipped the channel, and caught the same footage on two other stations. “US Health is a major client of ours,” he said. “It's a gigantic company. They have hospitals, surgical centers, and outpatient clinics in more than thirty states. They bring in over ten billion dollars in revenue and serve nearly 900,000 patients each year. This could be a huge case.”

  As a medical professional, Amanda was generally familiar with US Health. The company had created significant waves in the medical industry as it underwent explosive growth through its voracious acquisition of hospitals and other medical businesses over the past decade. “I thought Rick was a solo practitioner,” said Amanda. “The caption on the TV screen referred to him as a partner with some law firm.”

  “Sullivan & Leach. I didn't realize Rick had joined them. It's a real powerhouse plaintiffs’ firm,” Jake explained. “They've developed a reputation as one of the premier class action firms around. They really have that kind of litigation down to a science.”

  “Do you think the case has any merit
?”

  “Who knows?” Jake mused. “I hope not. I know some of their senior management team fairly well and they seem like well-meaning, ethical people. I wonder if we'll be representing them?”

  Jake’s question was answered promptly the following morning. He was summoned into the office of Demetrius Giannakis, the firm’s managing partner, and the person who was primarily responsible for the firm’s relationship with USH. Upon entering Demetrius’s plush office, Jake recognized Paul LaDuke, USH’s General Counsel, whom he knew well, and Dr. Bernard Parkerson, the company’s president, whom he had met only once. After shaking hands, Jake sat down.

  “Did you see the news, Jake?” Demetrius asked.

  “Yes, I saw it on television last night and in this morning’s paper.”

  “We’ve been asked to represent USH. At Paul’s specific request, you and I will lead the team. As of this moment, we have no higher priority than this.”

  Jake felt the kind of nervous excitement he used to feel before stepping onto a basketball court before a big game. He also knew that when Demetrius said that he and Jake would be leading this effort, that meant it would be mostly Jake. Demetrius was a big picture guy, used to dealing with relationships and politics rather than actually trying cases. That said, he had a keen intellect and a wealth of experience, so his involvement would undoubtedly be helpful.

  “I understand you went to law school at Stanford,” Dr. Parkerson said. He was stocky, of medium height, with the bearing of a military man. Jake had heard that he was a West Point graduate, who placed great emphasis on academic pedigree, and surmised that Paul or Demetrius must have provided Jake’s background.

  “Yes sir,” Jake replied.

  “I did some research on the plaintiffs’ attorney last night,” said Parkerson. “He went to Stanford, too. Do you know this guy?”

  “Yes, I know him pretty well. We spent a fair amount of time together during law school.”

  “Is he a friend of yours?”

  Jake thought about the Quinn trial. “No. We’re not friends. We played basketball together in school. I haven’t kept in touch with him since we graduated.”

  “So what are we up against?” Parkerson demanded.

  Jake thought carefully. “A very tough, capable adversary. He’s smart and resourceful. He’s aggressive. We should expect some serious hardball tactics. And he’s great in front of a jury. All in all, I’d have to say that he may be the most naturally gifted trial lawyer I’ve ever laid eyes on.”

  “Shit! What a goddamned mess,” sputtered Dr. Parkerson. “Gentlemen, we need our best, too. Whatever it takes. You will have full and unfettered access to our people, our facilities, our records, whatever you need. We need to make this go away as quickly as we can, with as little pain as possible. I’m counting on you to make that happen.”

  CHAPTER 31

  Randy Kraft closed his office door and read every word of the article in the morning Tribune. Then he read it again. He felt a sense of power, knowing that he'd put the wheels in motion to bring this disaster down upon his employer. The company deserved this. It was sweet and satisfying.

  He had been a loyal soldier for USH for over twelve years, and manager of the Accounts Receivable Department for five. He routinely worked twelve-hour days, and was happy to do it. When USH acquired a new business, as it had done countless times in recent years, he was the one who ensured that the Accounts Receivable systems of the acquired company were properly integrated into USH's system. Based on all of those conversions, he knew the company’s billing systems better than anyone. Billing was the lifeblood of the company, after all. He was the guy that kept the bills going out, which in turn kept the money flowing in.

  When the Assistant Controller position opened up, Randy believed he was a shoo-in. His tenure with the company was far longer than any other candidate. He was intimately familiar with the various accounting functions within the organization and the hardware and software systems that supported those functions. He knew the people, too. And yet the job went to Alberto Garza, a glad-hander who had been with the company barely two years. They told Randy that technical proficiency wasn't enough, and that the position required someone with better leadership skills. It just wasn't right, Randy told himself. He had earned that position. He felt cheated and betrayed. The company would pay for this insult, one way or another.

  Randy first encountered Rick Black when Black had brought a malpractice lawsuit against USH a little over a year ago. Randy had been subpoenaed to appear for a deposition to explain a series of medical bills. Mr. Black had made an impression on him. That guy was a shark, if there ever was one, and he proved it by muscling USH into a two-million-dollar settlement.

  Rick had been more than happy to meet with Randy after Randy called him and briefly explained his situation. According to Rick, the fact that Randy had been passed over for promotion did not give him much of a legal claim. He was a thirty-six-year-old white male, and therefore had no ammunition for any discrimination allegations. But, Rick pointed out, there were other possibilities, if he was patient and played his cards right.

  Rick explained that if Randy sent a written communication to senior management complaining about wrongdoing within the company, then the company was prohibited by law from retaliating against him. That was a great way to obtain job security. More importantly, from Randy's perspective, from that point forward, any adverse action against him by the company could be considered unlawful retaliation. If that happened, he would have a claim with some real teeth. So he just had to identify some improper activity on the part of the company and call it to management's attention.

  That was easy. Randy knew that the company's billing system was a mess. Countless customers received invoices containing mistakes, some of them pretty egregious. This was due to the fact that the company was continually acquiring new businesses, each having different billing and accounting systems. As a result, numerous billing systems were in use at any given time and there was an ongoing effort to merge the acquired companies’ systems into the standard USH platform. There were inevitably bugs that had to be worked out whenever they handled a system conversion, and until that happened, errors were commonplace. Randy had already raised this issue several times, but the company had not provided the staffing and financial resources necessary to adequately address these issues.

  The lawyer's interest had really picked up when he heard that. Rick suggested that Randy send an e-mail to his bosses, alerting them to these serious billing problems, and even drafted it for him. Randy had asked Rick if he could sue USH based on these billing irregularities. Because Randy had never been a patient of USH, Rick explained that Randy himself had no standing to bring a lawsuit alleging fraudulent billing practices. However, there definitely was a basis for bringing a class action lawsuit against the company on behalf of many of its patients, and Randy could help him do that. It was clearly justified, Rick pointed out, in light of all the patients that were being overcharged. And, once the company realized that Randy's knowledge would make him a dangerous witness, they might not want to keep him in his present role. Then he'd have them. If they fired him, or transferred him to another position, he'd have a strong whistleblower’s claim. If they were afraid to fire him, they might try to entice him to leave voluntarily—with a generous severance package. It was beautiful! He could position himself for a nice payoff, but even if that didn't happen, he could see the company punished. And they deserved it.

  The first step had been sending the memo that Rick had written for him. He had done that, and now enjoyed the protected status of a whistleblower. The next step had been to find clients for the lawsuit. Rick explained that he had no way of knowing which patients had been overcharged, and that even if he had that information, the ethical rules of the legal profession would not allow him to directly contact those patients to solicit their business. That was where Randy could help. Having access to all of the company's billings, he was in a perfect position to identif
y erroneous invoices. He could find a way to make sure that some of those patients wound up in Rick's office.

  Now everything was coming together. Randy put the newspaper back in his briefcase. He would take it home and keep it, like a trophy—a testament to his power and accomplishment.

  CHAPTER 32

  It was Friday afternoon, four days after he had filed the USH lawsuit and held his press conference. Rick sat in his office, pleased with how well the week had gone. Due to the firm's extensive network of media contacts, the lawsuit had received considerable attention all week long in every major market in the country—television, radio and newspaper. His firm had also run full-page newspaper advertisements in every market where USH did business, alerting USH patients to the possibility that they may have been overcharged, and the fact that Sullivan & Leach was prepared to represent them if they had. There would be no charge to those patients except for a percentage of any recovery. All they had to do was contact the firm to sign a representation letter. The ads provided a toll-free phone number to call for further information as well as the Internet address for the website the firm had established to provide information about the lawsuit.

  The calls were pouring in, and the firm was well-prepared to handle them. It had mobilized the call center it had used many times before in similar situations. The phones were manned around-the-clock—six operators on staff from 8 a.m. until midnight, and two handling the night shift. The operators answered routine questions about the lawsuit and obtained permission to send representation letters to the callers. They contacted people who had requested information through the website, again with the ultimate goal being to obtain more representation letters.

  A small army of clerical support worked closely with the phone operators to send out the representation letters. They kept meticulous records, which enabled them to follow up with contacts who did not return the letters promptly. They also generated detailed reports showing how many calls had come in, which USH business was involved, how many representation letters had gone out, and how many had been returned.