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SAN FRANCISCO-In a defeat for California hospitals, a federal district court in California has ruled that the state's $250,000 damages cap for professional negligence does not apply to the federal emergency room "anti-dumping rule."

In her 42-page Oct. 6 decision in Barbara Jackson vs. East Bay Hospital et al., Judge Marilyn Hall Patel concluded that damages under the federal Emergency Medical Treatment and Active Labor Act of

1986 should not be restricted by applying California's Medical Injury Compensation Reform Act of 1975, which she noted was passed in response to the medical malpractice "crisis" at the time.

EMTALA, also known as the "anti-patient-dumping rule," was created out of concern that hospitals were dumping patients who were unable to pay by refusing to provide emergency treatment or transferring them before they had stabilized, the decision noted.

The complex case was brought by the widow of Robert Jackson, who was sent from one hospital to another despite having gone into cardiac arrest after being given an antipsychotic medicine. He died 38 minutes later. Ms. Jackson said that medicine in combination with another he had been taking caused his death.

Commenting on the decision, Ms. Jackson's attorney, Richard Massa of Lakeport, Calif.-based Massa & Associates, said it will give patients without medical insurance who are forced to use emergency rooms "the opportunity to receive fair compensation for whatever happened."

A defense attorney in the case, John Gilmore of Sacramento-based Diepenbrock, Wulff, Plant & Hannegan, who represented Roseville, Calif.-based Adventist Health Inc., said he disagreed with the judge's analysis. He also noted that within three months, there will be more decisions on this or similar issues from cases now before state and federal courts that could have different outcomes.

OSHA drafts TB proposal

WASHINGTON-A proposed safety standard designed to protect health care workers from tuberculosis could save more than 130 lives a year at a cost of about $245 million annually, according to the Occupational Safety and Health Administration.

OSHA last week unveiled the proposed standard, which would cover about 5.3 million workers. If adopted, the standard would cover more than 100,000 facilities that fall into eight general categories: hospitals, long-term care facilities for the elderly, prisons, hospices, homeless shelters, drug abuse treatment centers, facilities where high-hazard procedures are conducted, and certain laboratories.

The proposal would require, among other things, that employers covered by the standard draft written exposure control plans, identify and isolate workers with TB and provide workers with respiratory protection devices under certain circumstances.

Public hearings on the proposed standard are scheduled to begin at the U.S. Labor Department in Washington on Feb. 3, 1998.

Nielsen retires at J&H/M&M

NEW YORK-With the Oct. 1 retirement of Richard A. Nielsen as a vice chairman of J&H Marsh & McLennan Inc., only two of the former five senior executives of Johnson & Higgins currently hold senior positions with the combined brokerage.

Mr. Nielsen joined J&H in 1965 and climbed the ranks at the brokerage to the position of vice chairman and chief operating officer.

He was due to retire from J&H at the end of 1997. While he assumed a position with the combined brokerage when Marsh & McLennan bought J&H in March, that did not change his plans to retire this year, a spokesman said.

The retirement of Mr. Nielsen means the only former senior J&H executives with senior positions at the combined brokerage are David A. Olsen, the former chairman and chief executive officer of J&H and now vice chairman of Marsh & McLennan Cos. Inc., and Norman Barham, the former president of J&H and now a vice chairman of J&H Marsh.

Two former executive vps at J&H, Joseph P. Platt and John W. Gussenhoven, were not given senior executive positions in the combined company, and brokerage officials would not confirm whether they remained on staff.

Meanwhile, a former J&H senior manager in Bermuda has left to join ACE Insurance Co. Ltd.

Roger Gillett will become senior vp-business development at ACE on Nov. 3. He formerly was senior vp of Johnson & Higgins (Bermuda) Ltd., where he managed the worldwide captive management operations.

Settlement not taxable: Court

ST. LOUIS-Money paid from a fund established to settle a class action suit is excluded from gross personal income, a federal court judge has ruled.

The case involved payments made to Michael Mayberry, a former employee of Continental Can Co. who became part of a class action charging that Continental Can had violated the Employee Retirement Income Security Act by laying off employees before they became eligible for early retirement benefits.

The case ultimately went to the 3rd U.S. Circuit Court of Appeals, which ruled against Continental Can, which in turn subsequently agreed to set up a $415 million settlement fund to compensate former employees. The amount of compensation was based on the former employee's age, length of service, and lost wages for periods of unemployment that followed the termination. Mr. Mayberry received more than $19,000, on which he paid personal income taxes and then sought a refund from the Internal Revenue Service. The IRS refused, and Mr. Mayberry sued.

U.S. Magistrate Judge David Noce of the U.S. District Court for the Eastern District of Missouri ruled last month that Mr. Mayberry was due the refund plus interest. Judge Noce said such payments are compensation for personal injury, not remuneration for income and therefore are not subject to income taxes or other employment taxes.

Exchange opening set

HAMILTON, Bermuda-The Bermuda Commodities Exchange plans to begin trading catastrophe insurance risk on Nov. 12, following a ribbon-cutting ceremony for the market last week.

The exchange, whose opening has been twice delayed for a variety of reasons, now has 20 members that are primarily participants in the insurance industry (BI, Aug. 4; March 17). More members who are not necessarily directly involved in the insurance industry will be sought, said President Thomas C. Heise.

The exchange, authorized by the Bermuda Parliament last year and which is under the supervision of the Bermuda Monetary Authority, will offer members the opportunity to conduct trading in option contracts based on an index of insured homeowner losses due to atmospheric perils in particular regions of the United States over specified periods.

To start, the exchange will offer options in $5,000 units covering six-month periods, January through June and July through December, for these regions: Florida, Northeast, Southeast, Gulf Area, Mid/West and National. Contracts will cover damages from a single event, aggregate damage or second event over the covered period.

The initial members of the Exchange are: AIG Insurance Commodities Trading Ltd.; Aon Re (Bermuda) Ltd.; Bankers Trust International; CAT Ltd.; Chase Manhattan International Finance Ltd.; former Guy Carpenter executives Clement S. Dwyer Jr. and Aaron B. Stern; E.W. Blanch Holdings Inc.; General Re Underwriting Services Ltd.; Goldman Sachs International and Griffin Trading Co., a trading and clearing operation.

Also, Guy Carpenter Advisors Inc., IPC Reinsurance Co. Ltd.; Mid Ocean Reinsurance Co. Ltd.; Morgan Stanley & Co. Inc.; Partner Reinsurance Co. Ltd.; Renaissance Reinsurance Ltd.; Sedgwick Lane Financial L.L.C.; Stockton Reinsurance Investments Ltd.; Tempest Reinsurance Co. Ltd. and Transatlantic Holdings Inc.

Settlement rejection sought

MIAMI-An American Airlines Inc. flight attendant is asking a Miami Circuit Court judge to reject the $300 million settlement the tobacco industry has reached with a class of flight attendants to end a secondhand smoke liability lawsuit.

The objection was filed last week on behalf of Juanita V. Ramos, who has been an American Airlines flight attendant for about 15 years.

In the motion to Dade County Circuit Court Judge Robert P. Kaye, Ms. Ramos' attorney, Eric G. Olsen of Jensen Beach, Fla., listed several criticisms of the settlement:

The defendants did not admit to allegations that secondhand smoke is deadly and that they have long concealed this danger.

The use of the settlement proceeds to establish a foundation to research smoking-related diseases is unnecessary and will not benefit class members, because they already were ready to prove the harmful health effects of secondhand smoke.

No proceeds from the settlement-which is 6% of the $5 billion originally sought-will go to individual class members.

While the settlement allows class members to file individual personal injury claims against the industry, most plaintiffs will not be financially capable of pressing individual claims. That was a major reason a Florida appellate court supported creating the class in the first place.

The settlement prohibits class members who file individual suits from seeking punitive damages, the most effective weapon that plaintiffs have to force reasonable settlements.

Attorneys for the tobacco defendants and the class-action plaintiffs could not be reached for comment.

401(k) information hearing set

WASHINGTON-The Labor Department will hold a hearing next month to help it decide whether employers are giving 401(k) plan participants enough information to determine if fees and other charges associated with the investment options they select are reasonable.

The Nov. 12 hearing in Washington also will focus on whether 401(k) plan participants are receiving information on plan fees and expenses that can be easily understood.

In addition, the department wants to know what action, if any, it should take to improve disclosure of fee information to participants.

Briefly noted

Sacramento Superior Court Judge James Ford disclosed earlier this month his new ruling expanding California's ground-breaking ergonomics standards so that they apply to all employers, not just those with 10 or more employees (BI, June 16). . . .The monthly Medicare Part B premium rate will remain at $43.80 next year, the first time in eight years it has not increased, the Health Care Financing Administration says. Roughly 5% to 10% of employers pay all or a part of the premium for their retired workers. Part B covers physician services. . . .A federal judge on Friday decertified a class of up to 2 million smokers who were suing the tobacco industry for the cost of medically monitoring smokers in Pennsylvania. . . . Continental Airlines Inc. is "vigorously appealing" an $875,000 jury award to a female pilot who alleged she was sexually harassed as a result of pornographic photos strewn about a cockpit. A Newark, N.J., jury found that the Houston-based airline did not retaliate or discriminate against the pilot and awarded no punitive damages. The award covers lost pay and emotional suffering.