The LitiGator
Michigan lawyers specializing in civil litigation

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Friday, July 26, 2002
 

Buffett on corporate accounting gimmicks

Warren Buffett writes a New York Times op-ed piece called "Who Really Cooks the Books?"  Buffett focuses, not on criminal misrepresentations such as those made by Enron and Worldcom officers, but on two perfectly legal and accepted (under GAAP) misrepresentations: reporting stock options and the use of inflated projected returns on pension investments.


11:17:29 PM    

Federalism - when it's convenient

Jeff Cooper's Cooped Up has an entry pointing out another example of Republican inconsistency on the issue of federalism - the President's call for nationwide medical malpractice caps.  (We previously posted a comment about the lack of coherence of the current administration on this point.)  He has several excellent comments on this issue.  I would add a couple more.

A nationwide cap on damages for product liability claims would make some sense, because consumer products and commercial products are sold nationwide and the exposure to differing levels of tort liability in different states can be regarded as a burden on interstate commerce.  The sale of products is in many instances a "broadcast" relationship - that is, one manufacturer will hope to sell thousands or millions of replications of one product to thousands or millions of people across the country. By contrast, nationwide caps on medical malpractice awards would make no sense at all.  The relationship between physician and patient is inherently a one on one relationship, and it is inherently a local relationship.  Even if a patient travels to a regional referral center for specialized care (Mayo Clinic, Johns Hopkins, etc.), she will be travelling for treatment at that location, and presumably is willing to accept whatever the local law in that location provides for redress in the event of a medical malpractice claim. 

Of course, we all know that people go to referral centers for treatment alone, and never stop to ask what the law of the remote state will provide in the event that a claim is later made.  But the law regards the patient who goes to Rochester, Minnesota for treatment as having essentially accepted Minnesota law governing the physician-patient relationship and the remedies it provides in the event that it breaks down.  The analysis is precisely the same for the application of Minnesota law if she is in an auto accident on the way to the Mayo Clinic, or if she falls on the sidewalk outside her Rochester hotel while leaving for her appointment.

All of these activities are necessarily local activities, and are governed by local law.  The Federal government has no legitimate interest in mucking with them.


9:44:49 PM    



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