Products Liability
Filings Remain High but Continue Decline
After peaking in 2004, the number of total federal products liability lawsuits
filed in the U.S. declined by 14% last year and is on pace to decline an
additional 16% in 2006. The data was compiled with information gathered from
the LexisNexis® Market Intelligence database and released by LexisNexis® U.S.,
a leading provider of
information and services
solutions.
According to the
LexisNexis Market Intelligence report, a gradual rise in federal lawsuits
filed under NOS 365 (Nature of Suit 365), the designation for personal
injury-products liability claims, began in 2001, when just over 5,000 NOS 365
filings were made. That number grew to more than 13,000 cases filed in 2002,
rose to 17,000 in 2003 and then soared to nearly 28,000 lawsuits in 2004.
A slight falloff occurred
in 2005, when the number of products liability filings declined to less than
24,000, and the year-to-date lawsuits in 2006 are on pace for less than 20,000
cases to be filed this year. “The question that legal experts will be
attempting to answer in the coming months is whether this recent decline is
just a temporary blip or the beginning of a downturn in products liability
filings,” said Mason White, vice president of Market Intelligence at
LexisNexis.
White pointed out that it
has now been nearly 18 months since President Bush signed into law the Class
Action Fairness Act of 2005 (CAFA), an ambitious bill that sought to curb
abusive class action and products liability litigation. Although most
observers don’t foresee a substantial long term decline in products liability
cases, some experts hold out the possibility that 2004 was a peak year and
that CAFA is helping to produce a slight downturn.
To
download the entire report, including a U.S. map that illustrates which states
are most popular for products liability case filings, can be found at
www.lexisnexis.com/literature/pdfs/LNMI_IndustryReport0506.pdf.
LexisNexis® (www.lexisnexis.com)
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services, to a wide range of professionals in the legal, risk management,
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the company does business in 100 countries with13,000 employees worldwide.
NASA Sued Over Fraudulent
Contract Data
Lloyd
Chapman, President of the American Small Business League, has filed suit in
Federal court against the National Aeronautics and Space Administration under
the Freedom of Information Act (FOIA) in order to obtain the names of firms to
which NASA has awarded small business contracts. Efforts by Chapman to obtain
the information through the FOIA process were largely ignored by NASA
personnel-no written response was ever received-however, NASA did acknowledge
receipt of the requests by telephone.
“I believe that NASA is
falsifying their small business reports to Congress and I believe that they
are allowing their contractors to falsify their small business reports. I’ve
also seen evidence that NASA is protecting large companies that are
intentionally misrepresenting themselves as small in order to illegally
receive small business contracts,” stated Chapman.
A 2003 Government
Accountability Office investigation found that NASA contracting officers were
reporting contracts to large businesses as small business awards. Chapman is
convinced that this problem is ongoing: “We are requesting information to
determine the magnitude of this problem and NASA has refused to respond to our
FOIA request, or to our appeal, or to our final notification letter. My
experience has been that anytime an agency has refused to provide information
that is readily available, it’s usually because they are trying to cover
something up.
“It’s ridiculous that we
have to go through Federal court for simple information like this. NASA has
these statistics in a database and could e-mail them to us in five minutes,
yet we’ve spent months going back and forth with them. Clearly, there is a
problem with NASA’s reporting, and the fact that we have to go to court is
proof of that.”
The American Small
Business League was formed to promote and advocate policies that provide the
greatest opportunity for small businesses - the 98 percent of U.S. companies
with less than 100 employees. The ASBL is founded on the principle that small
Businesses, the backbone of a vital American economy, should receive the fair
treatment promised by the Small Business Act of 1953. Representing small
businesses in all fields and industries throughout the United States, the ASBL
monitors existing policies and proposed policy changes by the Small Business
Administration and other federal agencies that affect its members.
Insight Public Sector,
Inc. Pays Million-Dollar Fine to Settle
Federal False Claims Act Case
The Justice
Department and the Offices of Inspector General of both the Small Business
Administration (SBA) and the General Services Administration (GSA) have
jointly announced that an agreement has been reached with Insight Public
Sector, Inc. of Tempe, Arizona, to settle a Federal case against one of
Insight’s subsidiaries for
misrepresenting itself as a small
business in order to illegally receive government contracts. Insight will pay
a one-million-dollar fine to settle the case.
American Small Business
League President and founder Lloyd Chapman originally brought the complaint
against the company to the SBA. Chapman alleged that the company, Comark
Government & Education Services (CGES), had falsely certified itself as a
“small business” to receive preference in government contracting.
According to the SBA, the
investigation determined that CGES had misrepresented its size status on its
1996 application. Insight acquired CGES in 2002 and withdrew the small
business certification in 2005. Under the False Claims Act, any individual
that provides evidence that proves a company is guilty of fraudulent activity
is eligible to receive between 15 percent and 25 percent of the fines
collected by the government.
Chapman said he would
encourage anyone that has knowledge of this type of fraud to provide the
information to the SBA Inspector General, the Justice Department or the
Government Accountability Office.
Under section 16d of the Small
Business Act, misrepresenting a firm’s size status to receive contracts is
punishable by up to 10 years in prison and debarment from doing business with
the Federal government.
Seven Federal
investigations have found billions of dollars in contracts that were reported
as going to small businesses actually wound up in the hands of some of the
largest firms in the nation. Fraud, vendor deception, and false
certifications were among the reasons cited in the reports as to why large
firms have received small business contracts.
