Friday, February 10, 2012


Looking for deep pockets


Two articles of interest crossed my desk(top) this morning.

One, Tribe sues beer companies for alcohol problems , is an Associated Press article carried in Canadian Business .

The other, David Laffer victim's family files $20M suit, carried by Newsday.

In the Tribe sues story, the AP reports that the Oglala Sioux Tribe of South Dakota filed suit against beer makers Thursday, claiming they knowingly contributed to devastating alcohol-related problems on South Dakota's Pine Ridge Indian Reservation. The suit also names four off-reservation retailers.

The Indians are seeking damages for the cost of health care, social services, and child rehabilitation caused by chronic alcoholism on the reservation, where alcohol is banned.

The article cites a high rate of fetal alcoholism and a greatly reduced life span among reasons for the suit.

In Newsday's David Laffer article, "The family of one of four people killed during the Father's Day holdup of a Medford pharmacy has filed a $20 million lawsuit against a doctor, a pharmacy and a drug company.

Since I am not involved in either case, there will be no discussion of the cases' merits.

However, from a risk management point of view, there are a couple of lessons to be (re-)learned.

Lesson One: Plaintiffs always go for "deep pockets" and are encouraged by their lawyers to sue "jointly and severally"; in plain English, sue everyone and hope there's money to be found among the defendants.

Lesson Two: People are not required to protect themselves from adverse events, at least in so far as bringing suit.

In both cases, a smart risk manager will make certain to recommend insurance coverages "in the event of."

A organization need not lose to suffer. The costs to defend can be extremely high.

There also is the image hit; protecting that image also can be costly.

Apparently warning labels and laws are not a defense in the alcoholism action. Translation: organizations must involve their Legal departments in the risk management process, developing ways to assure that the organization has done its "due diligence" to make users of the product aware of any potential hazards.

Bear in mind that the information in this blog entry is just a snippet of the articles. I encourage practitioners to read the articles completely and then to keep in mind these are simply filings. The cases have been neither heard nor decided.

If I wrote it, you may quote it.

Longer articles at

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