EP 710: The Amazonization of Liability Part 2

Episode Notes

Transcript

Announcer:

Welcome to The Jury Is Out, a podcast for trial attorneys who want to sharpen their skills and better serve their clients. Your co-hosts are John Simon, founder of the Simon Law Firm, Tim Cronin, personal injury trial attorney at the Simon Law Firm, and St. Louis attorney Erich Veith.

Tim Cronin:

We’re back for another episode of The Jury is out. I’m Tim Cronin.

Johnny Simon:

I’m Johnny Simon.

Tim Cronin:

And Johnny and I are going to continue our discussion of corporate liability in the gig economy and Amazon and other industries where this is happening. Johnny, thanks for coming back.

Johnny Simon:

No problem. So practically what this means is when you get an Amazon case, you have to be able to understand and know and discover their system, their quote unquote proprietary system. And it’s not a trucking case and it’s not a typical trucking case. It’s not something where you’re going to have a statutory employer and A, it’s Amazon and that’s who it is. You’re litigating kind of aside, you’re going to have the liability portion of your case, which is what the underlying driver did wrong, what you’re saying they did wrong, but also this kind of main issue that you’re going to have to work up and encounter is- It will

Tim Cronin:

Be the focus of your litigation.

Johnny Simon:

What do you need to prove to show this? And

Tim Cronin:

Amazon is on the hook, or at least it’s a jury question.

Johnny Simon:

And that’s it. And I don’t think-

Tim Cronin:

If it’s a jury question.

Johnny Simon:

If it’s a jury, right.

Tim Cronin:

I think you’re in good shape.

Johnny Simon:

I think that Amazon is what they’re going to have to face as an existential question is because this agency issue requires us to get into a lot of things that don’t look very flattering to Amazon. It requires us to get in their financing and their numbers and their profits and how they interact with the payroll system of these drivers and how they treat them. And that’s not always the most flattering evidence, Damn.

Tim Cronin:

No, I mean, they will push back in any case to prevent all of this from coming out and try to prevent a corporate rep from being produced about it in a depo that can be shared.

Johnny Simon:

But it can only be hidden for so long. I mean, I think that the wave, what we’re seeing with the South Carolina case and the Georgia case is people are receptive to this agency thing.

Tim Cronin:

Judges are too. Judges are people. They understand this is fundamentally not fair.

Johnny Simon:

And when you think about it, it’s like where does it end with Amazon? So look in the delivery context, what about medicine? What about home contracting? What’s to take a law firm and say, okay, now we’re-

Tim Cronin:

These lawyers are all our independent contractors. I don’t have malpractice insurance for them. I

Johnny Simon:

Mean, law firms do

Tim Cronin:

That.

Johnny Simon:

Yeah. They own all their own businesses, except they have to work every case up according to my standards and I have the absolute right to assign you every case or not assign you a case. And based on your performance, I can either take the cases away from you or give them to someone else.

Tim Cronin:

And the reason I said the title of this is not just Amazon, it’s corporate liability in the gig economy is because Johnny, we are encountering this. The same corporate lawyers that help big companies like Amazon set this up represent people in every industry. So I am seeing it very concerningly spread like wildfire in the healthcare industry. In a lot of major cities, you have your major hospitals and hospitals never employ the doctors, of course, even though they make billions of dollars from what the doctors do, but you usually still don’t have an issue because a major university is affiliated with the hospital and they employ the doctors and they admit employment and you don’t have an issue. I see it more in rural areas, but depending on if it’s like a dialysis tech, we’ll talk about that. I am increasingly seeing this exact very similar scenario play out in the healthcare industry where I have clients that are seeing doctors in a rural hospital.

That rural hospital has immunity because they’re like a municipal hospital. I don’t think they should, but they do. That’s different by state, but regardless, they don’t ever employ the doctor. And then you go, okay, well, the doctor’s the one who made the decision that harmed my client, who employs the doctor and what kind of insurance do they have? Oh, lo and behold, they claim they’re employed or an independent or have a contract with some company that doesn’t really exist and has no assets and no bank account and no office and no employees and no nothing. And then you dig deeper and you find out, well, that company has a parent company, which has a parent company, which has its own separate subsidiary that manages everything. We ran into this with UHS in a verdict we got a few years ago and I’m now seeing it on other cases where the doctors not, they’re employed by a completely non-existent company and the parent of the parent has decided that there’s only going to be a million dollar wasting policy so there’s not adequate insurance for the people who are most injured.

So I’m fighting this in spreading to industries that it’s kind of unbelievable and med mal, it is happening more and more. I mean, you have dialysis tech

Johnny Simon:

Mission in a case. I mean, you think like the corporate form, that is a uniquely American invention, right? The corporation funding a corporation so that your personal assets aren’t at risk so people can develop businesses, but I think it just gets taken too far where, okay, now we have this tool. How do we make sure that we’re never responsible for anything? How do we make sure that we’re never responsible for anything that- But we

Tim Cronin:

Want all the money.

Johnny Simon:

So I think it comes down to there’s some really, really smart lawyers on the other side or who are creating these structures and it’s amazed tearing it down and it really distracts from the central issues and what you would think would be the central issues in the case, but it really creates this, I mean presenting this corporate maze of one subsidiary versus another, and then this is the entity that does all the policies and this is the entity that actually has the money and we don’t employ them so you can’t get it. And what is it going to take? I mean, I think it takes jury trials holding people accountable and kind disregarding those corporate shells. But I really think what we don’t want to happen is the Uberization of corporations, meaning Uber creates, they say, “We’re a service, we’re not driving.” And I’m like, “No, the driver is the service.

The business- And

Tim Cronin:

Only does it buy and through you and what you make available for them to do it.

Johnny Simon:

” So is that the best thing from a community policy perspective to have our community members solely responsible for this stuff? And of course not, it isn’t.

Tim Cronin:

That flies in the face of the purpose of the entire tort system.

Johnny Simon:

It upends it. Yeah, it upends it.

Tim Cronin:

So I’ve had arguments like this in these cases where this is the issue that’s primarily being fought about, underlying liability is obvious, or at least it’s not complicated. And I hear from the lawyers defending it on the other side to the judge where I’m talking about the fundamental unfairness of it all and they just go, “Well, this is just how corporate America works and Mr. Cronin doesn’t like it. ” And I go, “Well, Judge, first of all, it’s not corporate America. It’s the United States of America and it’s not how our judicial system works that you can create these farces. We actually have legal tests to tear those walls that they claim to put up down.”

Johnny Simon:

He was right about one thing. You don’t like it.

Tim Cronin:

Yeah, I don’t like

Johnny Simon:

It. You don’t like it. The truthful statement is you don’t like it.

Tim Cronin:

No, especially when I have a severely brain injured three-year-old or a brain injured guy who was on a bike who got hit by an Amazon van. I super, super don’t like it and we’re not going to just take what they’re trying to say at face value. We’re going to get to the bottom of it. And I think you can usually find that whether you call it veil piercing after getting a judgment, I think you need to directly in the case say, “No, no, no, they’re actually the principle.”

Johnny Simon:

That issue should, I think it should be decided

Tim Cronin:

Pretrial,

Johnny Simon:

Right? I mean, I think, but that takes courageous, brave judges. And I think the thing that you pointed out earlier is conflicts of interest as lawyers are supposed to be a real thing and we’re a self-policing profession. For someone who’s listening this, as I’m listening to you lay it out, it’s like, well, that’s terrible for the doctor who could be on the hook.

Tim Cronin:

I’ve raised that with the court multiple times. We have one set of lawyers here that represents the doctor and they’re trying to argue that the one entity that could actually satisfy the judgment so it doesn’t have to be collected from him totally isn’t the employer and these other entities that have no assets are. And I’ve been like, “Judge, I don’t understand that is a conflict.” If the doctor were here, he’d be going, “What?”

Johnny Simon:

Yeah. So in the DSP space, if I was representing a DSP and the DSP came into my office and said, “One of my employee drivers made an illegal turn and hurt someone or killed him,” my intake would be, “Well, what’s the best defense I can raise for you so that you’re not solely responsible for this? ” And the best defense is I was totally working for Amazon, I am their agent and thus Amazon is vicariously liable for all my conduct. Thank you very much.

Tim Cronin:

And so those big companies are now controlling the lawyers that are representing the other entities and it’s troubling.

Johnny Simon:

We might not get to lay all this out in front of the jury, right? Yeah. I think we should be able to and argue strenuously that if you’re deposing it or have a doctor on the stand who is taking positions that are bad for him, why can’t I show the jury why he’s doing that? Why his

Tim Cronin:

Lawyers are doing it.

Johnny Simon:

It’s bias, right? Yeah. And so in the DSP context, it’s like you understand that here’s the contract you sign and the contract says that Amazon gets to control your defense. Do you think that’s in your best interest? Why do you think they set it up that way?

Announcer:

Yeah.

Johnny Simon:

Do you think they’re taking positions that are bad for Amazon if they’re assigning a lawyer to you and controlling your defense? What positions would be bad for you? What positions wouldn’t be bad for you? I think this is all stuff that is fair game.

Tim Cronin:

It should be. I mean, because the issue is control in any context related to their employment, which includes conduct and defending the lawsuit.

Johnny Simon:

And the objection to that is those are legal decisions and maybe it’s privileged, but we’re not saying what advice they’re giving to them.

Tim Cronin:

No. Do you think this position is actually in your best interest or Amazon’s?

Johnny Simon:

And you can run down the line. I mean, Uber driver, if an Uber driver runs a red light and hurts someone, if you talk to the Uber driver, what’s in their best interest? Is their best interest to get a massive judgment against them that puts them in a bankruptcy or go to the party that has the funds to compensate the deep pocket, right?

Tim Cronin:

Yeah. I mean, it’s our obligation if there’s an appropriate deep pocket for it to be available for our client in the event we win and the jury assesses a big verdict and there’s a big judgment and that’s the way it should be.

Johnny Simon:

So I think a big pillar here, like when you look at how this gets solved, where does it … So it’s not just plaintiff or injured person versus big corporation. There are lawyers who can and need to step up and say things during these conversations like, “I can’t advise my client that he’s not an agent of your corporation because that’s bad for them.” I think we’re really pushing the boundary of what’s ethical and what’s not ethical.

Tim Cronin:

I agree. Johnny, I have directly said before the court and not before the court in these situations, Judge, what I’m troubled by here is that there is a defense being put forth on behalf of an individual that is very clearly not in his best interest and especially in light of the following. If employment or agency were admitted by Amazon or big, bad company, whatever it is, I would very likely voluntarily dismiss the individual

Because I don’t think it behooves my client to have an individual that the jury can think is on the hook for it and ultimately they wouldn’t be I couldn’t collect from them. So how can it be in this individual’s best interest to take a position contrary to when I’m saying I will let them out of the lawsuit and it’s usually crickets after I say that because counsel can’t say anything. And then there’s no response. And the judge can’t force them to do it, but it really highlights the point. If we have cases against, I won’t say the names, but major institutional healthcare providers in St. Louis where there’s a doctor and their employer, if it’s a university or hospital, how often do we dismiss that doctor right before we start? Every time.

Announcer:

Every time.

Tim Cronin:

Every single time. If it’s admitted, the last time I didn’t was 10 years ago in a case you and I worked up together and we got a really nice result, but we found out from the jury afterwards that they were talking about double the money and then that somebody brought up, “Well, hold on, it’s doctor and this corporation, the doctor might be on the hook for it and they cut the award in half.”

Johnny Simon:

Sounds like a bad decision on our part, right?

Tim Cronin:

Well, we maybe should have dismissed. It still turned out very, very, very well when it was a case that made sweeping changes to opioid prescribing practices. But that’s the point. We will usually let the individual out of the case if what’s obviously true were just admitted and instead they’re being hung out to dry.

Johnny Simon:

And being hung out to dry because they’re not sufficiently insured or have the adequate assets to cover the judgment, which if you’re going to have this … All rig, assume for a second that the DSPs are independent business owners if the DSPs were independent and we saw this with Uber and this is a bad thing because- And

Tim Cronin:

You handled Uber cases.

Johnny Simon:

So Uber went around the country and had laws passed called, they call themselves transportation network companies. And the whole idea of the drivers not being employees or agents of Uber was so preposterous that they had to create a law change and they did so on the condition that they insure the Uber’s up to a million dollars. So the Uber has $1 million of insurance paid for not by the driver. By

Tim Cronin:

Uber.

Johnny Simon:

By Uber. Now, what does that mean? That means that if you have four people in that car, that sounds like a lot of money, a million dollars when you talk about if you- And

Tim Cronin:

It’s per incident.

Johnny Simon:

And if you go have four people in the car, four people are injured, you each have $100,000 in medical bills, where are you going to recover from?

Tim Cronin:

Right.

Johnny Simon:

You can’t. You’re

Tim Cronin:

Paying your lawyers, you’re paying expenses to work up the case.

Johnny Simon:

Now if that law said Uber has to pay up to $50 million in coverage, maybe our problem goes away. Maybe the unfairness of it doesn’t look as bad because $50 million

Tim Cronin:

Yeah, but they will never do that because that defeats the entire purpose of what they’re trying to do. They’re not going

Johnny Simon:

To pay the

Tim Cronin:

Premiums.That’s

Johnny Simon:

Exactly it. So it’s a money issue. So I think it comes down to you can’t have it both ways, right? You can’t have all the money and none of the responsibility-

Tim Cronin:

All the money control everything and then none of the responsibility, right?

Johnny Simon:

Or if you’re going to do that, you need to create the remedy because the remedy is insufficient insurance and that really-

Tim Cronin:

Every time.

Johnny Simon:

… undermines our tort system.

Tim Cronin:

Yeah. Every time it’s completely inadequate insurance and wasting policies, which I think should be illegal.

Johnny Simon:

And it confronts this. Everyone else loves talking about the First Amendment, the Second Amendment. We have a right in this country to a jury trial, but the jury trial is meaningless if there’s no one to pay it. It’s completely meaningless to go get a judgment that you can never collect.

Tim Cronin:

And look, sometimes that’s just the reality. If somebody who isn’t working for someone else at the time gets into a car accident and they were staring at their cell phone and ran a red light and hit somebody and they’re really, really hurt or dead, that individual has the insurance they have. They very likely don’t have the kind of assets to pay for. Understandable. That happens. It’s very unfortunate, but when you are on the job clearly doing work to benefit a company that has billions of dollars, we shouldn’t have this

Johnny Simon:

Problem. That’s it. I mean, it’s like, where do you feel … And I was talking with you about this. It’s like I’m trying to get my feelings about why this is so unfair. What is the unfair part about all this? The unfair part is we know that Amazon is trillions of dollars, right? Trillions of dollars, $50 million on a wedding. And we see that and it’s in public and then we think about, okay, the poor DSP owner is-

Tim Cronin:

We’re not

Johnny Simon:

Just talking about

Tim Cronin:

Our clients. Our client is stuck not being able to get compensation and then the small business owner that’s clearly just a part of Amazon will go bankrupt and out of business.

Johnny Simon:

His credit ruined all of his life savings that he’s invested in building this business gone and that’s just unfair. It seems to me the feeling I had was we’re getting all these jobs, but they’re scraps in the big scheme of things from the table, right? Yeah. I mean, it’s great that people are getting driving jobs. It’s not great that they’re not trained. It’s great that we now have 400,000 people that are now employed and people are getting whatever packages that they own in one hour or less or 24 hours, but at what cost? There’s that quote that putting one guilty person in jail is the reason why we have reasonable doubt and the burden of proof- It’s

Tim Cronin:

Worse than releasing a hundred innocent people.

Johnny Simon:

So would we rather have … I mean, why do we tolerate one injured person or one person who’s killed not having a remedy when we can totally do it and the tools exist and it’s common law agency, but that can go away in an instant.

Tim Cronin:

Yeah, it can.

Johnny Simon:

And I don’t want to give anyone the roadmap of how to do that, but …

Tim Cronin:

No, but-

Johnny Simon:

I don’t think

Tim Cronin:

They

Johnny Simon:

Need me to do

Tim Cronin:

It. No, no, they don’t. They’ve been working on it and making progress for quite some time, but as it stands, if you dig into it, certainly with Amazon, with Uber and with a lot of these other companies where you need to find out the corporate structure and dig into it. When we were talking about this the other night, Johnny, we make it kind of comical but not really. I think I referred to it as neofeudalism, except it’s worse because at least when the feudal system surfs, if they were in trouble, there was an obligation by the nobles or the king to come protect them with knights. And here the company with all the money’s like, “Oh, no, no, we’re not coming in to save you. In fact, we’re going to throw you under the bus, but keep picking the crops for us.”

Johnny Simon:

Yeah, you imagine if there was a, and I’m sure there are many and DSP success stories and you see it in their marketing. I was a healthcare worker and I was this, but now I own a fleet of trucks and very successful and Amazon puts those folks on their front page and markets with them. How about the unlicensed delivery guy who runs over a child in the street, right? When they have that situation, they’re not stepping in as a community partner and saying, “We’re going to make this all right. We want to help you and we want to be a part of it. ” They’re saying, “Not on us.”That’s not okay. And I think practically if you get one of these cases and it could be a DSP case, it could be an Amazon Flex case, it could be a med mal case, it’s kind of like putting in your checklist of what you need to do, secure the vehicle, inspect the vehicle.

You really need to have a checkbox that says understand completely the corporate structure

And who are they paying, what devices are they, what standards are they meeting? Who else is controlling the process? And it’s easy to say follow the money, but that might not even lead you there because the money might not be in a company that’s completely unreachable, but it’s really like becoming standard of care and we call it the Amazonization of business because they created a phenomenal program and I haven’t picked a jury in one of these cases yet, but I imagine we’re going to have to talk about … I mean, raise your hand here if you’ve received an Amazon package in the last week.

Tim Cronin:

Yeah. Almost everybody’s hand is going to go up.

Johnny Simon:

Does everyone love their- Who

Tim Cronin:

Do you think they work for? Everybody’s going to say Amazon, right? They’re going to go, “What do you mean?”

Johnny Simon:

Right, right. So it’s kind of like we got to confront it and I can think of no better litmus tests than a jury in the community where the crash happened.

Tim Cronin:

Yeah, I agree. Well, that’s why we’re supposed to have juries in the community where the act happened. Okay. Well, any final thoughts on it?

Johnny Simon:

No, just if you’re injured by an Amazon truck, Amazon DSP provider, the goal of this was to make sure that people are aware, your lawyers, the public, that you can’t handle that like a typical red light case. You just can’t. You need to know how to work up the case and how to handle the case and work. We’re here and available to help.

Tim Cronin:

All right. Well, Johnny, thank you for joining.

Johnny Simon:

No problem.

Tim Cronin:

This has been another episode of the jury is out. I’m Tim Cronin.

Johnny Simon:

I’m Johnny Simon. We’ll see

Tim Cronin:

You next time.

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