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Best nuclear verdict deterrents are fleet safety technology and planning

Mish Boyka

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Best nuclear verdict deterrents are fleet safety technology and planning

 

Four years ago, John Vaccaro, president of the New Jersey-based Bettaway Beverage Distributors Inc., picked up the phone and got the news every fleet owner fears: One of his drivers was involved in an out-of-state accident involving multiple vehicles and serious injuries. Someone also required a medical evacuation.

Vaccaro said shocks rolled through his body as more calls with more chilling details crept in. He contemplated how this could happen and if some decision he made caused this tragedy. Thoughts also jumped to how this could impact the future of the business his father entrusted to him in 1999, and all those 250-plus employees depending on it.

“I just knew that this was the one,” Vaccaro told FleetOwner, referring to how this tragic event, in which one person was left permanently injured, would also forever alter the company. Bettaway, which started as a soda factory, now in its 38th year, also includes a supply chain and logistics division, and pallet service.

While just one of 121,000 large trucks and buses were involved in an injury crash in 2017, according to Federal Motor Carrier Safety Administration (FMCSA) data, the incident that tested Bettaway’s operational character represents the full scope of what a fleet faces when a crash like this occurs.

Better safe than sorry

One outcome of the crash was that it would ensure Bettaway doubled down on its deployment of safety technology, such as advanced driver assistance systems for its fleet of 150 tractors and 750 trailers.

“We accelerated trade-outs of existing Freightliners that we had to bring our fleet up to almost 95% collision avoidance,” Vaccaro noted. The fleet’s newer Cascadias employ various versions of the Detroit Assurance safety system.

Because of leasing terms with Penske and Ryder, among others, the process took about 12 to 18 months.

“How could you not choose to have collision avoidance on a truck,” Vaccaro pointed out. “Whatever the expense, it was irrelevant. If you avoided one crash or one injury, it would be worth it.”

And Vaccaro knew from operating in the metropolitan New York area that collision avoidance technology was worth the investment.

“We’re in a business that this could happen every day,” he said. “The more trucks that we run in a densely populated area, the odds are against us that this will happen again.”

At the time of the crash, Vaccaro, who had already prided his fleet as always having “the latest and greatest” equipment, had trucks spec’d with Wabco’s OnGuard collision mitigation system with active braking. That technology advancement launched in 2014 and within a few years, one-third of Bettaway’s power units had the radar-based solution. Unfortunately, the truck involved in that 2017 crash was a model year 2013 Freightliner, so it did not have collision avoidance.

“We don’t know what happened, but for sure the collision avoidance would have helped,” Vaccaro asserted.

Bettaway's fleet of 150 Freightliner Cascadias are equipped with collision avoidance to prevent crashes, and dash cams to understand how crashes happened.Bettaway’s fleet of 150 Freightliner Cascadias are equipped with collision avoidance to prevent crashes, and dash cams to understand how crashes happened.Photo: Bettaway Beverage Distributors Inc.

The addition of dash cameras has helped Bettaway understand what happens on the road. This has already paid dividends with “a rapid decline in claims,” Vaccaro said. In one instance earlier this year, a refuse truck going in reverse in a parking lot smashed into the hood of a parked Bettaway Cascadia, leaving the new truck with $25,000 of damage. Without the video, the location of the damage would indicate to the insurer that the Cascadia drove into something.

The video is also used for training drivers and rewarding good behavior.

The nuclear option

While Bettaway becoming safer is the bright side to this tale, there’s a darker underbelly as well. As much faith as Vaccaro has in modern trucking technology, he has perhaps even more disdain for the American civil justice system.

“The system is broken; it makes me angry,” he said.

It wasn’t always that way. Even the night of that 2017 crash.

“I remember going home and thinking, ‘We did everything right,’” Vaccaro recalled.

Along with the fleet’s due diligence toward safety, the Bettaway driver and the truck were not found to be at fault during the accident, according to Vaccaro.

“There’s nothing that should point to anything wrong nor was anything found,” Vaccaro said. “Because of the nature of the accident, we knew we were up against something big.”

Bettaway had planned for “the big one,” though, carrying umbrella insurance liability coverage of $5 million, nearly seven times more than the legally mandated minimum of $750,000. The fleet’s trucks had been involved in accidents before, but none above $400,000, Vaccaro maintained.

There was still reason to worry, as nuclear verdicts, or those in excess of $10 million, were on the rise. From 2017 to 2018, the threat of nuclear verdicts reached a new crescendo, according to the American Transportation Research Institute (ATRI), with the average verdict award growing 483% year over year.

Nuclear Verdict Growth Atri

Notably in 2018, a $90 million verdict was levied against Werner Enterprises in Texas’ Harris County. That stemmed from a 2014 crash that killed a 7-year-old boy, left his 12-year-old sister with brain damage, and injured another brother and their mother. The pickup carrying the family had lost control in icy conditions, crossed the Interstate 20 median, and oriented itself going with traffic just before the Werner truck, operated by a student driver, made impact with the pickup’s bedside. Officers at the scene did not cite the Werner driver, but the jury found that Werner was liable, as it was an unsupervised student driver delivering a just-in-time load to California.

“There was really no thought prior to that [Texas ruling] that something like that was even possible,” Vaccaro said.

In the current litigious landscape, such things are becoming not just possible but probable. When the Bettaway case was being brought to civil court in 2020, the company found itself in the python-like grip of the plaintiff’s lawyer.

The specific details must remain between the two parties, but Vaccaro, who prefers “to fly under the radar,” felt the essence of what was said should be brought to light. In no uncertain terms, this plaintiff’s lawyer made it clear he thought Bettaway was a decent business with plenty of assets, from which this particular lawyer wanted to squeeze every last dollar.

And to do it, he would likely employ the reptile theory to sway the jury.

Cold-blooded case

“As human beings, we all have this reptilian brain, meaning we all have this innate need to feel safe and secure in our world and our communities,” explained Rachel York Colangelo, national managing director of jury consulting for Magna Legal Services. The end-to-end legal service provider helps the defense team for trucking companies choose the 12 people who will decide how much is awarded to the plaintiff side in an accident if a case goes to trial.

Colangelo said the objective of a plaintiff’s lawyer is “inciting fear in the hearts and minds of these jurors,” that if these trucking companies aren’t taught a lesson, the next truck-related crash could involve someone in that jury. “That is directly related to these huge nuclear verdicts,” she said.

Juries aren’t able to enforce specific fleet safety changes, so their only recourse is targeting their bank accounts, Colangelo reasoned.

“You’re taking the focus away from this particular plaintiff and what happened in this incident, and what their damages are, what their compensation should be, and shifting that focus around to the conduct of the defendant, making this a statement about the trucking industry’s policies and whether they’re adequately prioritizing safety,” she explained.

“That fear, and attention on the defendants, quickly turns to anger, and an angry jury becomes punitive,” Colangelo added. For this reason, she said engineers, who “carefully think through everything, make great jurors.”

The best defense against such torts, often punitive actions toward fleets that disregarded or neglected safety, is being a responsible fleet that invested in safety technology.

“Good fleets are being proactive, thinking ahead to establishing good quality policies that do put safety first, and following through on those policies,” Colangelo said.

A fleet’s safety manual tells a lot about the company culture, and one lacking in information or that contains unclear wording could damage a defense. Texas defense attorney Glenn J. Fahl, who has taken 19 commercial vehicle cases to court, said fleets should do a “litigation drilldown” of their manuals, so in the event of an accident, it won’t give the jury reason to doubt a fleet’s attention to safety.

“Revise it now, not after being tortured in a deposition on a bad case,” he said.

If the problem is emotion, the solution should be knowledge. That means if a trucking company representative takes the stand for the defense, they need to know the safety policies inside and out and be able to defend them.

“I’ve seen this witness testimony from the company sort of blow a case up, whether that’s in a deposition or at trial, because a corporate representative is uninformed,” Colangelo said.

Fortunately for Bettaway, they never had to face a jury, as Vaccaro called for a “Hail Mary pass” on the day of jury selection and demanded a court-appointed mediation.

“I wanted a fair shot under the right light, and I wanted everyone to know that we cared, and we wanted to take care of this,” Vaccaro said.

The terms were undisclosed, but Vaccaro thought it was better than the alternative: “Nothing good was going to come from going to jury.”

Blood letting

The potential for big pay days has led to “more blood in the water,” Vaccaro said, illustrated on billboards advertising plaintiff’s lawyers, lurking above urban highway stretches like sharks. And each headline-making jury award is like a truckload of chum. “The more that takes place, the more that’s going to engage the entrepreneurialism in attorneys.”

This has not gone unnoticed by trucking’s leaders. In 2019, Chris Spear, president and CEO of the American Trucking Associations, had publicly stated “nuclear verdicts are strangling our industry.” It has also got the FMCSA mulling a minimum insurance of $2 million. The premium increase would make it harder for fleet drivers to branch out on their own, a reason the Owner-Operator Independent Drivers Association (OOIDA) has been a staunch detractor of the idea, and a reason the group could not support a Democrat-led infrastructure bill last summer.

In a letter sent Feb. 1, a coalition of more than 30 organizations, including OOIDA, sent a letter to the House Committee on Transportation & Infrastructure that read: “An increase in insurance requirements is wholly unnecessary, would do nothing to improve highway safety and would have a severe negative impact on truckers, farmers, and manufacturers by significantly increasing their operational costs.”

The letter went on to say this would lead to more American job losses, all for the 0.6% of commercial motor vehicle crashes that the exceed $750,000.

There is a fine line. For example, an Army veteran in Florida who tried to avoid a 45-car pileup swerved his motorcycle into the emergency lane and hit a stopped truck. He sustained severe injuries, including a shattered pelvis, and after six months in the hospital, must carry a colostomy bag and endure constant pain. The medical bills alone were nearly $750,000.

In an October 2020 virtual hearing held on Zoom, a jury valued the injured man’s suffering at $411 million, which would be paid out by an owner-operator whose speeding, and a subsequent jackknife in the rainy conditions, they reasoned, caused the accident and the plaintiff’s traumatic transformation. The single-driver company has lost its authority and is unlikely to have the means to pay off the exorbitant fee.

Vaccaro understands both sides, though not the imbalance.

“When someone’s injured, they should be compensated without a doubt,” he said. “But the numbers don’t make sense.”

If a case does go to court, there are two ways to mitigate the damage, Fahl said agreeing to a high-low settlement, where a payout would not exceed a certain number if the defense loses badly nor go below it even if the defense’s argument is airtight.

“It may be a hard one to choke on if you [beat] them, but it’s still better than $100 million,” Fahl said.

Another option is to have an appellate council sit in, “so that if all of these erroneous rulings occur, you can then appeal and get it reversed.” Fahl noted from personal experience that the judge in the Werner case let the plaintiff’s side submit “anything into evidence.” The appellate council is more discerning. “They actually know the law,” Fahl said.

The best solution, in Vaccaro’s GFN, is to cap the award amount of verdicts through tort reform. If not reined in, his concern is that the bar of entry for owner-operators and smaller trucking companies will be too high due to higher premiums: “The whole supply and demand and free market model is going to be out of kilter if it is not hauled in,” he said.

He expects the fallout from nuclear verdicts to continue unabated though.

“I have no confidence that anything like that would occur, because of the amount of money that’s involved. What attorney or what lobbyist is going vote to shut that down?” Vaccaro asked.

Until sweeping changes are enacted, the fleets and drivers labeled heroes throughout the pandemic must prepare to someday become pariahs before a jury of their peers.

“We were good, law-abiding operators with good equipment and over-insured, in my mind,” he said. “Why should we as a company face peril?”

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Vermont Health Connect had 10 data breaches last winter

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Vermont Health Connect had 10 data breaches last winter
Vermont Health Connect has set up a special enrollment period in response to the coronavirus outbreak. VHC photo

In mid-December, a Vermont Health Connect user was logging in when the names of two strangers popped up in the newly created account.

The individual, who was trying to sign up for health insurance, deleted the information that had suddenly appeared.

“It was super unsettling to think that someone is filing in my account with my information,” the person, whose name is redacted in records, wrote in a complaint to the Department of Vermont Health Access. “Just seems like the whole thing needs a big overhaul.”

It was one of 10 instances between November and February when Vermont Health Connect users reported logging to find someone else’s information on their account.

The data breaches included names of other applicants and, in some cases, their children’s names, birth dates, citizenship information, annual income, health care plans, and once, the last four digits of a Social Security number, according to nearly 900 pages of public records obtained by VTDigger. On Dec. 22, the department’s staff shut down the site to try to diagnose the problem.

While officials say the glitches have been resolved, it’s the most recent mishap for a system that has historically been plagued by security and technical issues. The breaches could be even more widespread: Administrators of Vermont Health Connect can’t tell if other, similar breaches went unreported.

“We don’t know what we don’t know,” said Jon Rajewski, a managing director at the cybersecurity response company Stroz Friedberg. Regardless of whether there are legal ramifications for the incidents, they should be taken “very seriously,” he said.

“If my data was being stored on a website that was personal, — maybe it contains names or my Social Security number, like my status of insurance… — I would expect that website to secure it and keep it safe,” he said.

“I wouldn’t want someone else to access my personal information.”

Andrea De La Bruere, executive director of the Agency of Human Services, called the data breaches “unfortunate.” But she downplayed the severity of the issues. Between November and December, 75,000 people visited the Vermont Health Connect website for a total of 330,000 page views, she said. The 10 incidents? “It’s a very uncommon thing to have happen,” she said.

De La Bruere said the issue was fixed on Feb. 17, and users had reported no similar problems since. The information that was shared was not protected health information, she added, and the breaches didn’t violate the Health Insurance Portability and Accountability Act, or HIPAA.

“No matter what the law says technically, whether it’s HIPAA-related or just one’s personal information, it’s really concerning,” said Health Care Advocate Mike Fisher.

The timing of the issue is less than ideal, he added. Thousands of Vermonters will be logging into Vermont Health Connect in the coming weeks to take advantage of discounts granted by the American Rescue Plan. “It’s super important that people can access the system, and that it’s safe and secure,” Fisher said.

A ‘major issue

The issues first arose on Nov, 12, when at least two Vermonters logged in and found information about another user, according to records obtained by VTDigger.

Department of Vermont Health Access workers flagged it as a “major issue” for their boss, Kristine Fortier, a business application support specialist for the department.

Similar incidents also occurred on Nov. 17 and 18, and later on multiple days in December.

Department of Vermont Health Access staff members appeared alarmed at the issues, and IT staff escalated the tickets to “URGENT.”

“YIKES,” wrote a staff member Brittney Richardson. While the people affected were notified, the data breaches were never made public.

State workers pressed OptumInsights, a national health care tech company that hosts and manages Vermont Health Connect, for answers. The state has contracted with the company since 2014. It has paid about $11 million a year for the past four years for maintenance and operations, with more added in “discretionary funds.”

Optum appeared unable to figure out the glitch. “It is hard to find root cause of issue,” wrote Yogi Singh, service delivery manager for Optum on Dec. 10. Optum representatives referred comments on the issues to the state.

By Dec. 14, Grant Steffens, IT manager for the department, raised the alarm. “I’m concerned on the growing number of these reports,” he wrote in an email to Optum.

The company halted the creation of new accounts on Dec, 14, and shut down the site entirely on Dec, 22 to install a temporary fix. “It’s a very complex interplay of many many pieces of software on the back end,” said Darin Prail, agency director of digital services. The complexity made it challenging to identify the problem, and to fix it without introducing any new issues, he said.

In spite of the fixes, a caller reported a similar incident on Jan. 13.

On Feb. 8, a mother logged in to find that she could see her daughter’s information. When she logged into her daughter’s account, the insurance information had been replaced by her own.

“Very weird,” the mother wrote in an emailed complaint.

Optum completed a permanent fix on Feb. 17, according to Prail. Vermont Health Connect has not had a problem since, he said.

Prail said the state had reported the issues to the Centers for Medicaid and Medicare Services as required, and had undergone a regular audit in February that had no findings. The state “persistently pressured Optum to determine the root cause and correct the issue expeditiously but at the same time, cautiously, so as to not introduce additional issues/problems,” he wrote in an email to VTDigger.

“We take reported issues like this very seriously,” he said.

A history of glitches

The state’s health exchange has been replete with problems, including significant security issues and privacy violations, since it was built in 2012 at a cost of $200 million.

The state fired its first contractor, CGI Technology Systems, in 2014. A subcontractor, Exeter, went out of business in 2015. Optum took over for CGI, and continued to provide maintenance and tech support for the system.

Don Turner
Don Turner, right, then the House minority leader, speaks in 2016 about the need to fix the state’s glitch-ridden Vermont Health Connect website. With him are Phil Scott, left, then the lieutenant governor, and Sen. Joe Benning. Photo by Erin Mansfield/VTDigger

In 2018, when Vermont Health Connect was less than 6 years old, a report dubbed the exchange outdated and “obsolete.”

Officials reported similar privacy breaches in 2013, when Vermonters saw other people’s information.

An auditor’s report in 2016 found a slew of cybersecurity flaws, and officials raised concerns again during a  2018 email breach.

It wasn’t the first time that Vermont Health Connect users had been able to view other people’s personal information. Three times since October 2019, individuals had logged in to see another individual’s insurance documents. Prail attributed those incidents to human error, not to system glitch; a staff member uploaded documents to the wrong site, he said.

In spite of the issues, Prail said he and other state officials have been happy with Optum. After years of technical challenges with Vermont Health Connect, “Optum has really picked up the ball and improved it and been running it pretty well,” he said.

Glitches are inevitable, he added, and Optum has addressed them quickly. “They took a really difficult-to-manage site and made it work pretty well,” he said. “Optum is generally quite responsive to any issues we have.”

“I find any privacy breach to be concerning,” said Scott Carbee, chief information security officer for the state. He noted that the state uses “hundreds of software systems.” “While the scope of the breaches can be mitigated, true prevention is a difficult task,” he wrote in an email to VTDigger.

Optum spokesperson Gwen Moore Holliday referred comments to the state, but said the company was “honored” to work with Vermont Health Connect “to support the health care needs of Vermont residents.”

Prail said the Agency of Human Services had no plans to halt its contract with the company. “I don’t have a complaint about Optum,” he said. “They took a really difficult-to-manage site and made it work pretty well.”

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Health Care

Tags: data breaches, Optum, Vermont Health Connect

Katie Jickling

About Katie

Katie Jickling covers health care for VTDigger. She previously reported on Burlington city politics for Seven Days. She has freelanced and interned for half a dozen news organizations, including Vermont Public Radio, the Valley News, Northern Woodlands, Eating Well magazine and the Herald of Randolph. She is a graduate of Hamilton College and a native of Brookfield.