Unforeseen Consequence of Scientific Advancement?

Medical Devices Rendered Defective by a Computer Virus

May 12, 2009. By Gordon Gibb

Washington, DC: It reads like a sci-fi movie, but it is anything but entertaining. The advent of connecting medical devices to computers may, on the surface seem like a natural given modern-day interconnectivity. However, such computerization invites the potential for viruses for PCs directly connected to either the Internet or to a local area network (LAN)—and it has already happened. A defective medical device is created in the process.

According to a report from CBS News the Conficker Internet virus has infected important computerized medical devices.

Rodney Joffe is the senior vice president for Neustar and a founder of the Conficker Working Group. In recent weeks Joffe has told a panel at the House Energy and Commerce Committee that he, together with another Conficker researcher had identified at least 300 critical medical devices from a single manufacturer that had been infected with the Conficker virus.

According to the report, the devices in question were connected to a LAN and found at, or near intensive care (ICU) stations. These devices allowed doctors to view and manipulate MRI scans. The thought of such a device infected with a nasty computer virus more than just boggles the mind. It is unthinkable.

And yet it is happening and is poised to grow even bigger given the push to computerize hospital records and interconnect hospitals and doctor's offices.

Implantable medical devices such as heart defibrillators that allow doctors to adjust settings by way of computer are another worry. What if the computer is connected to the Internet? One would assume that such an integral piece of equipment would not be connected to the Internet for obvious reasons.

However, if the computer in question is part of a LAN where other computers in the building have Internet access then the defibrillator computer does, indeed have indirect Internet access.

Could the medical device be hacked from afar? And does that constitute a defective medical device, if the device can be accessed from afar?

Joffe told CBS News that the medical devices he found in the hospital setting "…should have never, ever been connected to the Internet."

Worse, he said were the government regulations that prevented the hospitals in question from fixing the problems in a timely manner. Under current regulations, affected hospitals would have to wait 90 days before the systems could be modified to facilitate the removal of the infections, together with other vulnerabilities.

That's 3 months. Three months that the hospital would either have to do without the equipment (and anything connected to it via a LAN network), or continue using the equipment knowing that it has been compromised in some fashion.

"The open Internet, one of its great values is it allows you to connect fairly cheaply and fairly easily to other computers," Joffe said. He added, however, that "the Internet was never designed to do the things it's doing today."

In an unrelated but equally troublesome issue, it was revealed that Chinese and Russian spies had infiltrated US electrical grids. The so-called 'smart grids,' which interconnect many of the nation's utility grids via the Internet, are open to any hacker who can get around whatever protections have been built into them.

The Homeland Security Department was recently given Congressional authority to exercise greater influence over public utilities in order to mitigate potential hacks into the smart grid system.

The concern has even greater import within the health care field. The widespread move to electronic record-keeping and the computerization of all things medical—including medical devices—poses an even bigger question: how secure are these networks and systems from unsavory hackers, and what does that mean to an individual now walking down the street with a potential computer virus in his pacemaker?

A computer virus could make an otherwise viable medical device—a defective medical device. It has been known since last year that pacemakers and defibrillators can be hacked. Similarly, it was discovered in 2003 that signals from GSM phones could interfere with pacemakers. A study published that year in Physics in Medicine and Biology found that some pacemakers were prone to confusing signals from mobile phones for the heart's own electrical signals, causing the pacemakers to fail.

At the time, it was determined that the addition of a ceramic filter would resolve the defective medical device problem. What could be brought to bear to protect medical devices of all stripes from computer viruses given the tremendous interconnectivity prevalent today is another matter.

Let's Debunk a Few Myths About the Legal System

Don't always believe what you hear. The number of lawsuits is down, and has been for years, and there is a move afoot to keep you out of court at all costs - Bobby

Debunking Some Myths About Lawsuits and Tort Reform

March 19, 2009

Myth: The number of lawsuits filed is skyrocketing.

Not true. According to the Justice Department under President George W. Bush, the number of federal tort (personal injury) cases resolved in U.S. District Courts fell by 79 percent between 1985 and 2003. In 1985, 3,600 tort trials were decided by a judge or jury in U.S. District Courts. By 2003, that number had dropped to less than 800.¹

Additionally, the most recent statistics from the Administration’s Bureau of Justice Statistics show the number of tort trials at the state level has decreased. These statistics were compiled as part of the Bureau’s survey of state civil justice systems in the nation’s largest 75 counties. Among these counties, the number of tort trials decreased 31.8 percent between 1992 and 2001. ²

Myth: Health care costs are rising and doctors are unable to practice due to litigation.

Health care costs are rising; however, medical malpractice litigation has nothing to do with it. According to the Congressional Budget Office, medical malpractice amounted to less than 2 percent of overall health care spending.³ The Government Accountability Office also found that malpractice cases have not widely affected access to health care. ⁴

According to the American Medical Association, the overall number of physicians is up more than 40 percent since 1990⁵, while over the same time, the U.S. population increased by only 18 percent .⁶ The number of emergency physicians, neurosurgeons, and OB/GYNs has also increased significantly over the same time period.

Myth: Legal reform is needed because lawsuits hurt small businesses.

Wrong. Multiple surveys have shown that lawsuits are not a concern for small business owners. A survey from the National Association of Manufacturers suggests that “lawsuit abuse” ranks at the bottom of concerns for manufacturers.⁷ A 2008 survey from National Federation of Independent Business had similar results, with “costs and frequency of lawsuits / threatened suits” ranking 65th on a list of small business owners’ worries. ⁸

In reality, only big corporations and their front groups want to destroy the legal system so they can’t be held accountable for negligence and misconduct. Drug, oil, and insurance companies have tried to hide behind small business owners to accomplish this; however, these surveys reveal their true intentions.

Myth: Trial attorneys are trying to drive corporations out of business.

Absolutely not. Corporations, large and small, are all entitled to have profitable businesses. Most do so without being negligent or engaging in misconduct.

A strong civil justice system allows deserving individuals to get justice and hold wrongdoers accountable. Civil justice attorneys work to make sure all people have a fair chance through the legal system – even when it means taking on the most powerful corporations.

Myth: Lawsuits are out of control. Someone even sued because they spilled hot coffee on their lap!

Those looking to destroy the civil justice have continually mocked Stella Liebeck and the McDonald’s coffee case. Unfortunately, the actual facts of this case make it no laughing matter.

Ms. Liebeck’s injuries include third degree burns—the most severe—to her groin, inner thighs, and buttocks. She was hospitalized for eight days, during which time she underwent skin grafting and debridement treatments (the surgical removal of tissue).

Ms. Liebeck sought to settle her claim with McDonald’s for $20,000, but they refused. McDonald’s eventually produced documents showing more than 700 claims by people burned by its coffee between 1982 and 1993, some involving third degree burns similar to Ms. Liebeck. This history documented McDonald’s knowledge about the extent and nature of this hazard. McDonald’s own quality assurance manager testified that a burn hazard exists with any food served above 140 degrees; their coffee was kept warm at 185 degrees.

A jury awarded Ms. Liebeck $200,000 in compensatory damages, but reduced it to $160,000 because they found her 20 percent at fault for the spill. The jury also awarded her $2.7 million in punitive damages, equal to two days of McDonald’s coffee sales. This was eventually reduced to $480,000, even though the judge called McDonald’s conduct reckless, callous, and willful. Jurors expressed similar sentiments in interviews after the trial. Ms. Liebeck and McDonald’s eventually entered a post-verdict settlement.

Myth: Trial attorneys are charging outrageous hourly fees and leave victims with nothing if they win.

Civil justice attorneys do not charge by the hour like most other attorneys. Instead, their clients pay on what is called a “contingency fee basis.”

For over 200 years the contingency fee system has provided Americans who must go to court with a degree of access to justice that is unheard of in most other countries. Our system allows people who cannot afford to pay legal fees to obtain representation on a contingency fee basis. In personal injury and death cases, and in certain other types of litigation, the fee is based on a percentage of any money damages that are recovered.

Myth: My insurance rates are skyrocketing because of lawsuits.

Your insurance premiums may be going up, but it has nothing to do with lawsuits. Look no further than the insurance industry’s annual profit reporting. In 2007, insurance companies reported a near-record profit of $61.9 billion. In comparison, the insurance industry’s 2004 profit was $38.7 billion, which broke all previous records. Their profits continue to rise, and unfortunately, your premiums are following suit.

The insurance industry has also made the argument that awards and damages should be limited; however, have later admitted that caps will not lower premiums. For example, American Insurance Association spokesman Dennis Kelly told the Chicago Tribune in 2005 that, “We have not promised price reductions with tort reform.”

Myth: Lawsuits cost taxpayers X hundreds of dollars each year.

Several so-called “independent” think tanks or organizations have devised the notion that American families pay a yearly “tort tax,” or that the cost of litigation is passed on to taxpayers. These organizations, funded by oil, drug, tobacco, and insurance companies, produce studies that are a prime example of junk science. There is no methodology or academic basis for their results. Trying to pass off these organizations and their studies as legitimate is yet another scheme by corporations to avoid accountability in the courtroom and stack the deck against every day Americans.

Myth: Schools are cancelling recess because they are afraid of litigation.

Wrong. School districts across the country are almost universal in blaming the elimination of recess on the need to meet requirements for teaching and testing hours.⁹

Myth: People aren’t volunteering to help with Little League, Boy / Girl Scouts, etc., because they are afraid of lawsuits.

Wrong again. Similar to the previous myth, these lies are peddled by groups interested in destroying the civil justice system.

The Volunteer Protection Act of 1997 was passed to provide immunity for volunteers of nonprofits in the course of their charity work.

Sources:

1. "Federal Tort Trials and Verdicts, 2002-03”, Bureau of Justice Statistics, 8/17/05

2. "Civil Trial Cases and Verdicts in Large Counties, 2001”, Bureau of Justice Statistics, 4/04

3. "Congressional Budget Office, “Limiting Tort Liability for Medical Malpractice,” 1/08/04

4. “Medical Malpractice: Implications of Rising Premiums on Access to Health Care,” GAO, 9/29/03, www.gao.gov/cgi-bin/getrpt?GAO-03-836

5. “Physician Characteristics and Distribution in the U.S.,” American Medical Association, 2006 edition, p.312

6. U.S. Census Bureau data: http://factfinder.census.gov/servlet/SAFFPopulation?_submenuId=population_0&_sse=on; http://factfinder.census.gov/servlet/DTTable?_bm=y&-geo_id=01000US&-ds_name=PEP_2005_EST&-mt_name=PEP_2005_EST_G2005_T001

7. “National Manufacturing Week 2006 Annual Survey Results,” National Association of Manufacturers, http://www.nam.org/s_nam/doc1.asp?CID=6&DID=236617

8. “Small Business Problems and Priorities,” National Federation of Independent Business, http://www.nfib.com/object/2008problemspriorities.html

9. http://www.washingtonpost.com/wp-dyn/content/article/2006/05/31/AR2006053101949_pf.html;
http://seattlepi.nwsource.com/local/191407_recess18.html; http://online.wsj.com/public/article/SB116044203663787613-OWTfLOXAilkTcNPcqP3tS75OWcE_20061108.html?mod=tff_main_tff_top

Increase Your UM/UIM Coverage

Increase Your UM/UIM Coverage!
Bobby Lott

Due to the troubled economy, chances are there will be more and more uninsured and underinsured motorists on our highways.

Most if not all states now require drivers to carry liability insurance, but despite that fact, many do not comply.

Normally UM/UIM coverage must be in your policy unless you opt out in writing.

To protect yourself and your family, you should get with your insurance agent and increase your uninsured (UM) and underinsured (UIM) motorist coverage.

You can typically carry an amount equal to, but not greater than, the amount of your liability coverage.

So if your liability coverage is 100/300, which is common ( $100,000 for each person, $300,000 for the entire accident) , you can carry up to $100,000 in UM/UIM coverage.

The cost for this extra coverage is minimal compared to other insurance.

This is especially important if you have no health insurance. If that were case, and you were injured, you would have no other source for big medical payments but your auto policy's medpay and UM/UIM coverage.

Are These the Real Bad Guys?

Ratings Agencies Next on the Chopping Block?
Bobby Lott

Most people have heard of Standard & Poors, Moody's, and perhaps Fitch. They are the so-called "ratings agencies". It is the job of rating agencies to provide investors with reliable, accurate and unbiased information on the financial state of an organization.

Now, there is a growing movement among attorneys and industry professionals that it was the rating agencies and the conspiracy between them and the banks that caused this $7 trillion collapse of the world economy.

How?

In a Congressional hearing in October of 2008, testimony confirms, according to some, that the rating agencies were in essence acting as consultants and being paid hundreds of millions of dollars to put inflated or deceptive ratings on credit default obligations. Allegedly, both the banks, and the ratings agencies knew these things were "absolutely toxic."

If these allegations are true, that would constitute a clear conflict of interest, since the ratings agencies are charged with being an independent source of information used by investors worldwide. For them to be paid by the companies issuing the securities would be almost certainly fraudulent and actionable.

The big question remaining is - what happened to the money?

More to come.

Beware of Loan Modification Scams

IN THESE troubled economic times, the financial vultures have started appearing.

More and more, so called "loan modification" or "loan-mod" companies are springing up like weeds, with promises of loan forgiveness, easier payments, or a "little known government program."

Most are scams, pure and simple.

If someone is already in foreclosure, the only person who can help is an attorney, and even their help is limited to state and federal law.

If someone is simply behind in payments, or even if they aren't but simply want to refinance at a better rate, they don't need to hire a loan modification company to do so.

One can simply contact the mortgage company, bank or other financial institution that holds the mortage on your home and deal with them directly.

That is all the loan mod company would do anyway, but they would charge you a fee from $500 to $5000 to do so.

I am currently looking at filing suit on behalf of a client who fell prey to one of these boiler room type operators. I will keep you posted on the progress.

These types of companies are most prevalent in California, Arizona and Florida, but are becoming more and more prevalent all across the country.

If you are tempted to pay someone a fee for helping you modify your loan terms, think twice, then call an attorney who is well versed in this area of the law.

You will thank yourself later.

HOW TO PROTECT YOUR PROPERTY IF THERE IS A "NATIONAL EMERGENCY"

If the new President were to suddenly declare a National Emergency or institutes martial law, what would that mean for you and your assets?

If you say nothing, you may be sadly mistaken. In today's political climate, almost nothing is beyond the reach of our overactive and overprotective federal government.

Below are suggestions to protect you, your business and your family.* (Even without an "emergency", these are still effective strategies)

If you have property that you believe may be at risk for some future expansion of emergency or wartime controls, you still may legally take action to protect it. Here are some ideas:

• Transfer funds outside the United States and outside the U.S. dollar. It's still possible to legally transfer funds from the United States, but it may not be if the U.S. imposes foreign exchange controls. This could occur in the event of another terrorist attack on the United States, or if the U.S. dollar falls sharply due to a terrorist incident or financial panic. That possibility may seem remote at the moment, because the U.S. dollar has appreciated sharply in the last few weeks in response to the global economic crisis. But this gives U.S. investors a rare opportunity to invest offshore and convert their dollars to foreign currencies, or to gold, at the most attractive exchange rates in more than a year.
• Use offshore structures to hold non-U.S. investments. This strategy may not only provide protection against domestic judgments, but may also provide a legal means to avoid future foreign exchange controls.
• Hold investments that aren't subject to U.S. jurisdiction. The most vulnerable investments are those located within the United States. But as this report documents, foreign investments may also be vulnerable, particularly those denominated in U.S. dollars. The least vulnerable foreign investments are foreign real estate and gold, silver or collectibles held outside the United States. Certain contractual relationships, such as insurance contracts and trusts, may also be configured to avoid U.S. jurisdiction.
• Avoid electronic transactions in U.S. dollars through U.S. clearing networks. Most electronic transfers of U.S. dollars clear through a U.S. clearing bank and ultimately the Federal Reserve. U.S. courts have ruled that funds involved in such transactions are subject to U.S. jurisdiction and thus to possible confiscation. A growing number of countries have set up dollar clearing facilities to clear their own domestic U.S. dollar electronic transactions. Such foreign clearing networks are at far less risk from the U.S. legal system than U.S. clearing networks.
• If you’re a foreign investor with U.S. interests, assess your risk to U.S. emergency or war controls. Investors from any country accused of "sympathizing with" or "harboring" terrorists are at particular risk. So are investors in countries or financial institutions through which terrorists have been accused of operating bank and trust accounts.
• U.S. persons not wishing to live under emergency controls are understandably interested in relocating to lower profile jurisdictions. Many countries welcome affluent retirees or other financially self-sufficient persons.

The idea that the President would impose monetary controls might seem remote, but they’ve been imposed many times in U.S. history. And, as this financial crisis deepens, they may be imposed once again, so prepare yourself.

*Be sure to consult an attorney or financial professional before attempting to structure an offshore account or other specialized structure, since there can be significant tax consequences to improperly setting one up.

Setting Up A " Series LLC"

When One is Better Than Many: The Series LLC

by Jay Adkisson and Chris Riser

Segregating “dangerous” assets and businesses into separate entities away from other assets, especially “safe” assets, is always a good idea from an asset protection point of view. For example, an individual who owns a gas station and a rental home should not own both within the same entity. Further, an individual with a large amount of liquid assets (cash, securities, etc.) to protect should not hold those assets in the same entity as a business.

Best practices would dictate that every distinct business or major business asset be segregated into a different limited liability entity. In an ideal situation, someone with 25 rental properties would have 25 separate LLCs, one for each property. However, this is not always practical because of administrative costs and government fees that must be paid for each LLC. What can such a business owner do to protect his assets from liabilities unrelated to those assets in a cost-effective way?

Enter the series LLC. The LLC acts of Delaware, Iowa and Oklahoma provide for the creation of separate protected “cells” (‘series’) within one limited liability “container” (the series LLC) without the need to create separate entities, thus avoiding the inefficiencies associated with multiple related entities. [1] The Delaware LLC Act is the LLC act most often used for series LLCs and is the act used for discussion purposes in this article.

The Delaware LLC Act provides that the liabilities of a particular series are enforceable only against the assets of that series. The Act also provides that classes or groups of members can be established, having whatever rights the LLC agreement says they have.

The combination of these two provisions allows a series to function in many ways as a separate entity for practical purposes. The series LLC concept is similar in function to segregated portfolio companies and protected cell companies designed for the mutual fund and captive insurance industries in a number of offshore and onshore jurisdictions.