Heck of a Job, Bentonville!

Michael C. Moynihan | March 25, 2008

I have written a fair amount defending the much-maligned big box store—a brief history of chain store panics here, in praise of Wal-Mart's prescription drug program here, and various fawning blog posts. So here's a little more Bentonville hagiography for the unsated. According to a story in today's The Federal Times, a new study by the Mercatus Center at George Mason University shows that "Private organizations such as Wal-Mart, Home Depot and other so-called "big box" stores provided more supplies and relief than the Federal Emergency Management Agency in the days immediately after Hurricane Katrina."

Local store managers took advantage of their autonomy and moved quickly to reopen after the storm and distribute supplies - sometimes for free, and often without the permission of superiors. One Wal-Mart employee in Kenner, La., broke through a warehouse door with a forklift to get water for a nearby retirement home, the report said.

But at the bureaucratically stymied FEMA, supply purchases and shipments were tied up in red tape, and offers of help from other parties were turned down for fear of liability issues. The main difference, said report author Steven Horwitz, is that private companies have to make sure there are still people in the community to shop at their stores after a disaster and who think well enough of stores like Wal-Mart and Home Depot to give them their business. That prompts companies to act quickly and keeps them from gouging prices, which, they believe, hurt them in the long run.

Full story here; full text of the Mercatus report here.

Comments

|3.25.08 @ 4:31PM|#

What does government do well?

Geoff Nathan|3.25.08 @ 4:34PM|#

Of course then Wal-Mart makes a PR blunder that makes it to the front page of CNN this afternoon (I'm paying no attention to the rights and wrongs of the case--if they had just quietly paid up this wouldn't have blown up in their faces)
CNN Front page article on Wal-Mart being tone-deaf

|3.25.08 @ 4:36PM|#

On the other hand, benevolent Bentonville is suing a severly brain damages mother of three to recoup her medical costs from a settlement for the accident that caused the injury (http://www.cnn.com/2008/US/03/25/walmart.insurance.battle/index.html). Please remind me again why a single-payer health care is so bad?

TaxAndSpend|3.25.08 @ 4:39PM|#

What does government do well?

Geotpf|3.25.08 @ 4:41PM|#

Wow, two people post the same link within two minutes. In any case, it is obviously that woman's fault for people too poor to take care of herself after she was in a car accident. Fuck her. (That's how a Libertarian thinks, anyways.)

tselin|3.25.08 @ 4:43PM|#

It doesn't hurt that the local store managers and local staff are LOCAL and thus also affected by the events and not 1500 miles away annoyed because they got called away from the links to deal with the emergency.

|3.25.08 @ 4:49PM|#

Does Kos have an automatic link every time something positive is said about Walmart or something?

Yes, the case in that CNN article is incredibly sad. And while everyone involved admits that Walmart is technically playing by the rules in demanding the $ back, they should allow her to keep it, as the public relations blowback it causes will likely cost more than that $477k.

But that case also has nothing whatsoever to do with the story at hand here.

|3.25.08 @ 4:50PM|#

Please remind me again why a single-payer health care is so bad?

The woman had her medical bills paid twice, once by the insurance plan, once by the lawsuit settlement. Based on the terms of the contract she accepted when she enrolled in the plan, the insurance company wants the overpayment back. The fact that she is poor does not obligate Wal-Mart to make payments outside of the plan of benefits.

|3.25.08 @ 4:51PM|#

Wait. A person entered a voluntary agreement without bothering to read what that agreement was? Shocker.

|3.25.08 @ 4:55PM|#

On the other hand, benevolent Bentonville is suing a severly brain damages mother of three to recoup her medical costs from a settlement for the accident that caused the injury

Of course, you failed to mention that it was dictated in the contract which she voluntarily signed that Wal-Mart has the right to recoup medical expenses if an employee wins compensatory damages in a lawsuit, as her husband even admits.

Please remind me again why a single-payer health care is so bad?

Because nobody is forced to buy health care from Wal-Mart.

|3.25.08 @ 5:04PM|#

A few points for Walmart's defenders:
1) The Walton heirs have a net worth of over $40 BILLION.
2) As if Walmart pays enough for most of their employees to get their own coverage (not).
3) I've never heard of a government trying to pull this kind of shit.
4) If any of their employees tried to correct the situation through unionization, you can bet they would be fired or harassed, the law notwithstanding.

|3.25.08 @ 5:07PM|#

Well, in Penna. we have enabled double or triple recovery. I served on a civil injury trial jury and the judge explicitly said we can't weren't allowed to know what the plaintiffs got from the insurer or other defendants. So we had the opportunity to whack another poor bugger for millions (though we ultimately found no fault.)

dhex|3.25.08 @ 5:08PM|#

i am not a walmart fan - i've never even been in one of their stores (sips latte, smiles smugly)

but:

3) I've never heard of a government trying to pull this kind of shit.

have you ever talked with anyone who's dealt with the VA? try it sometime.

|3.25.08 @ 5:09PM|#

Onr other thing, do you think for one minute the judge would have awarded just enough for this woman's medical expenses know this would happen? The settlement was intended to provide for this woman's needs, likely for the rest of her life.

|3.25.08 @ 5:09PM|#

3) I've never heard of a government trying to pull this kind of shit.

You're clearly new here. There's HnR posts aplenty with various governments (Sweden and the UK tend to be the worst) pulling pretty much exactly the same shit.

|3.25.08 @ 5:12PM|#

1) Strawman. Nobody said Wal-Mart couldn't afford to pay for her or anyone else's healthcare.
2) Nobody is forced to work for Wal-Mart.
3) Irrelevant.
4) You can predict the future now? Lay another one on us, Miss Cleo.

highnumber|3.25.08 @ 5:12PM|#

Onr other thing, do you think for one minute the judge would have awarded just enough for this woman's medical expenses know this would happen?

Clarify this statement. "Onr" should be "One," of course, but I feel like there is either another typo or a missing word. Help me out.

|3.25.08 @ 5:21PM|#

3) I've never heard of a government trying to pull this kind of shit.

Try this with Medicare or Medicaid then come back with your findings.

1) The Walton heirs have a net worth of over $40 BILLION.

Check the NYSE. Wal-Mart is a publicly traded company. If you have any stock mutual funds you likely own part of the company.

The settlement was intended to provide for this woman's needs, likely for the rest of her life.

You have absolutely no idea what the settlement stipulates. The family is conceding that they owe the money, they just don't want to repay it.

Michael|3.25.08 @ 5:22PM|#

Just don't any of you dare mention the trial lawyer with $583K in the bank.

|3.25.08 @ 5:22PM|#

Of course Wal-Mart is within its rights. That does not change the fact that the final outcome here-a brain-damaged women who can not provide for herself being left destitute- is shitty. All the legal justification in the world doesn't change that.
However, that is not an indictment of capitalism, of big-box stores, or even of Wal-Mart itself.

|3.25.08 @ 5:23PM|#

Highnumber, to clarify for our guest, the question is: A judgment for the plaintiff would, by contract, result in her having to return money from the insurance settlement in the amount of her medical expenses. Do you think a judge who knew that would rule in her favor and award damages equal to her medical expenses?

|3.25.08 @ 5:28PM|#

It is also worth noting that (according to a commenter on the linked story) it is not Walmart that is going after the money, it is Blue Cross/Blue Shield.

Rhywun|3.25.08 @ 5:30PM|#

It sounds like the lawyer walked away with around a half million? Not bad for ruining this family's lives.

|3.25.08 @ 5:30PM|#

NotThatDavid-If it was a plea bargain, the judge's role would be to allow it or not. If the parties agreed to the settlement, and if no laws were broken by it, the judge wouldn't have much cause to reject the settlement.

|3.25.08 @ 5:53PM|#

The judgement was for loss of future earnings. I don't see why Wal-Mart can stake a claim against that money since they are paying for current care.

|3.25.08 @ 6:06PM|#

That does not change the fact that the final outcome here-a brain-damaged women who can not provide for herself being left destitute

Why will making her repay money that she's not entitled to make her destitute?

If she's poor, its because she was poor before she tried to rip Walmart off by breaching her contract with them.

highnumber|3.25.08 @ 6:16PM|#

If she's poor, its because she was poor before she tried to rip Walmart off by breaching her contract with them.

She worked for Wal Mart before the accident left her unable to work.
Take that as you may.

Kolohe|3.25.08 @ 6:25PM|#

From a management perspective I would like to know whose the rocket surgeon who decided to pursue a case against a brain damaged women whose son was killed in Iraq?

|3.25.08 @ 6:38PM|#

It is also worth noting that (according to a commenter on the linked story) it is not Walmart that is going after the money, it is Blue Cross/Blue Shield.

Oh that would make it completely different. Blue Cross/Blue Shield is a "non-profit" health insurer, so it would be OK. Nothing to see here, socialists. If it's the Blues that are doing this, not one of those "for profit" bloodsuckers, it must be fair.

Right?

|3.25.08 @ 6:55PM|#

Ummm, former health insurance underwriter weighing in here.

Of course Blue Cross / Blue Shield is going after the money they are contractually owed. Because someone's life has taken some bad turns, they are entitled to steal money from an insurance company and thus drive up everybody's rates? And then drive them up even more when other people with a sad story try to get ahold of this "free" money? If you're for giving her this money that doesn't belong to her, you should logically be in favor of every other redistributionist scheme cooked up by politicians, or every fucking lawsuit where an innocent deep-pockets defendant is forced to shell out money to some plaintiff with a sob story, even though the defendant is not responsible for said sad story.

|3.25.08 @ 7:00PM|#

Okay, as a former employee of WalMart I am going to address multiple poster's comments in one so watch for your names to appear below.

classwarrior | March 25, 2008,
2) As if Walmart pays enough for most of their employees to get their own coverage (not).

You are right, but then they are working retail and you name me one retail establishment that does.

3) I've never heard of a government trying to pull this kind of shit.

As others have noted, try looking up just how often Medicare/Medicaid & VA in the US or NHS in the UK will refuse service or only fund partial service. Canada isn't much better if you need critical or long term care.

4) If any of their employees tried to correct the situation through unionization, you can bet they would be fired or harassed, the law notwithstanding.

This is a load of shit. When I worked at WalMart was the beginning of yet another attempt to unionize the workforce. WalMart does not want a union, this is true, but the only action they took regarding the union was sitting everybody in on a bit of propoganda tape saying why "unions are bad". We all knew it was BS but frankly, outside of a couple of real agitators, nobody was much motivated to unionize so the movement died...again.

NEXT!

Isaac Bartram | March 25, 2008, 5:28pm | #
It is also worth noting that (according to a commenter on the linked story) it is not Walmart that is going after the money, it is Blue Cross/Blue Shield.

This is as I remember it. When working for WalMart our HMO provider was BC&BS of Florida, not WalMart itself.

NEXT!

Rhywun | March 25, 2008, 5:30pm | #
It sounds like the lawyer walked away with around a half million? Not bad for ruining this family's lives.

Uhh, where did you learn to do math? Woman has accident, BC&BS pays $470k for medical expenses. Then a lawyer gets involved and the case goes to court with a $1m settlement. Once the legal fees are paid, they are left with $417k "extra". Then BC&BS opts to recollect the settlement. If BC&BS make full recoupment* the family stands to owe an additional $52k which is still far less than if they hadn't had the medical insurance to begin with**.

*I doubt they will actually take the full $470k, more likely the $417k that the family was awarded thereby leaving the family at the exact same point they were prior to the lawsuit. Functionally, I blame the lawyer for not looking at the fine print (what he's paid to do) and getting a much larger settlement, one that would cover both BC&BS's recoupment as well as set the family up for long term care.
**Remember, without the insurance she probably wouldn't be alive at all. So you can argue about it "ruining her life" but at least she has one to ruin. Sort of, brain damaged is not my cuppa tea mind you.

TTT|3.25.08 @ 7:11PM|#

before she tried to rip Walmart off

Speak of being tone deaf! With comments like this, it is no wonder libertarians are considered heartless bastards. Where in the linked story does it say that she tried to "rip off" walmart? They, like Walmart, played by the rules. They did not try to hide the settlement money. Their attorney informed Walmart of the award. It was a contract dispute resolved by the courts.

|3.25.08 @ 8:03PM|#

"What? A person entered a voluntary agreement without bothering to read what that agreement was? Shocker."

What? A libertarian assumes that he would, of course, never, ever enter into any contract without taking it home, reading and doing a complete legal analysis of every word? And he knows this because, well, nothing bad like this has ever happened to him yet, so it must be his unmatched legal acumen, not luck. So he can pass judgment on someone with worse luck than himself? Shocker."

|3.25.08 @ 8:09PM|#

It's funny in a way. FEMA of course is funded with all that money taken at gunpoint from H&R's freedom loving patriots. Now, lawmakers have passed all these laws to make sure the money is not tossed won a hole. These laws make it hard for them to spend money fast. And then government haters can bitch because they can't spend the money fast.

This kind of arguing reminds me of the Freudian psychoanalyst arguing with his patient.

"So you feel sexual attraction to your mother?"
"God no, never, I've never felt that."
"Ahh, your insistence you do not, a sign of denial, proves how strong your attraction is..."

|3.25.08 @ 8:09PM|#

What? A libertarian assumes that he would, of course, never, ever enter into any contract without taking it home, reading and doing a complete legal analysis of every word?

[shaking head tiredly] No, MNG. A libertarian doesn't fucking whine about a contract he signed. Whether read , understood or not. Libertarians are tired of others signing legal documents and later exclaiming "It wasn't fair!" and "I want a do over." Fuck you. You signed it. You live with it. Is taht too hard for "the poor undereducated lower classes" to understand?

Sheesh!

|3.25.08 @ 8:12PM|#

Should read "down a hole"

If FEMA had less regulations libertarians could moan "they spend taxpayer money with no accountability." With the regulations they can moan they can't spend it fast: "look at how FEMA can't match the speed of the private sector."

MM should stick to writing articles about how the IDF should bomb Venezula to rid them of Chavez, then turn their nukes on England's oppressive national health care policy and Michael Moore...

|3.25.08 @ 8:18PM|#

J sub D
This is why libertarians live in lollipop land. Companies and businesses have a lil' more capital than you and I Joe Q. Consumers. They can hire the best lawyers to create the best (from their vantage point) adhesion contracts possible laced with legal mumbo-chicanery. And since in a market society we have to buy various things, many of them necessaries, from such companies (cause our government can't provide them or freedom lovers bitch), we have to do the best we can about such contracts and sign many of them when we don't fully understand some of the implications.

Yes even Supermen like you and Jacob are, I guarantee it, at this moment contracted within contracts in which you don't understand the full legal implications of all the provisions therein. And it's just in many ways dumb luck you haven't been fucked yet.

But hey, I believe you that if you were fucked like this you would take it like a real man. That's what libertarians are all about, right?

|3.25.08 @ 8:26PM|#

Actually I think the guy who wrote the Uniform Commercial Code (that damned socialist!) had it right: when you sign a contract you are agreeing to all the dickered terms and then any reasonable provisions (as decided by a court looking at things like industry norms) in the biolerplate...That strikes me as fair (and may well favor Wal-Mart in this case). But I think it's nucking-futs to say "well anyone who signs any contract deserves anyting they get" when in the real world people sign contracts all the time that have provisions in them they don't understand...

|3.25.08 @ 8:55PM|#

MNG, when you have an contractual agreemeent with someone, do you think they should be able to pick and choose what parts count later on? Do you think that the guy you bought the house from really does have to live up to the agreed deal and fix the roof that starts leaking 364 days into a one year warrantee?. When you sell a used car "as is" should the buyer be able to get a refund because the engine threw a piston rod a week after he bought it?

Those people might be less wealthy and less educated than you. Do they get a pass? Why or why not?

|3.25.08 @ 9:08PM|#

Walmart just wants to keep it hard for folks to get medical insurance and what have you so that when Walmart begins its bargain basement insurance plan/ in-store clinics, people will use them. Very clever plan I have helped them formulate. Cha Cha Chicos!

|3.25.08 @ 9:09PM|#

J sub D
I think if you check out my 8:26 post my answer is in there. Whatever was dickered stays in, for the other stuff the question is whether it's reasonable or "oppressive" to enforce it. If the answer is no and yes courts should not enforce it. Otherwise you've got everyone involved in contracts with provisions they are fairly clue-less about that they in a real sense never bargained for. And it actually encourages every business to make the most arcane and byzantine contract language they can (since to make it plain would be to give up possible advantages, and since most potential customers can't understand the provisions few will turn down the contracts for that reason). Who wins there?

If I sell you a fish sandwich that turns out to be a rat sandwich even the ardent libertarian would cry foul (or rather, "fraud", [force's evil cousin]). How different is that than if we sign a contract that you (and any non-lawyer reasonable person) thought meant x and y but actually meant b and f.

thoreau|3.25.08 @ 9:35PM|#

I don't know all the details of that case, but it seems kind of shitty for the insurer to wait around and not enter the fray until after the woman has won a settlement. I thought that insurance companies were pretty ardent at going after anybody who might be liable for something that they're covering.

I'm guessing that if the insurance company had entered the fray early in the case, either joining with the plaintiff or at least making its demands clear to the plaintiff's lawyers, the award would have been structured somewhat differently, including a component for medically expenses already incurred and another component for the woman's future care.

Am I right on this?

thoreau|3.25.08 @ 9:42PM|#

And, like MNG said, I thought that lawyers make a point of finding out exactly what sorts of expenses and responsibilities you have as a result of an injury so they can press for as big of a settlement as possible. Not that they necessarily give a crap about you, but the more expenses they can owe the bigger the settlement they can get and the bigger their piece of the pie.

If this is a common provision in insurance contracts, you'd think the lawyer would check into it so he could add another $400k+ to the requested settlement and mention the poor woman's medical insurance bills in the statement to the jury.

|3.25.08 @ 11:18PM|#

Walmart hater #1 here. But c'mon. If we want Walmart to be a better citizen, why don't we say 'heckuva job' when they do right?

I don't know the details of the suit everyone is discussing, but Walmart did OK picking up where FEMA failed. That doesn't make me like Walmart. It just says that Walmart feels the pressure to reduce the vinegar in its corporate douche. How is that not a win?

anon|3.26.08 @ 10:38AM|#

FEMA acting cautiously because of liability fears?

OMIGOD who would sure FEMA?

LarryA|3.26.08 @ 12:19PM|#

If FEMA had less regulations libertarians could moan "they spend taxpayer money with no accountability." With the regulations they can moan they can't spend it fast: "look at how FEMA can't match the speed of the private sector."

Actually what I saw during Katrina was an agency specifically designed to provide immediate help after a disaster which purchased vast inventories of supplies, everything from bottled water to mobile homes, and failed to distribute them in any meaningful way. Much of that inventory is still stored somewhere, and no longer useable.

FEMA also went out of its way to hinder individuals and agencies who were delivering services in a big fit of NIH. (Not Invented Here)

Whatever was dickered stays in, for the other stuff the question is whether it's reasonable or "oppressive" to enforce it. If the answer is no and yes courts should not enforce it. Otherwise you've got everyone involved in contracts with provisions they are fairly clue-less about that they in a real sense never bargained for.

If I understand this, of course, what you have set up is a situation where "the courts" get to change the terms of a contract after it has been implemented. Which means no one has any idea how the contract is going to be enforced. Which means there's no such thing as a contract.

And it actually encourages every business to make the most arcane and Byzantine contract language they can (since to make it plain would be to give up possible advantages, and since most potential customers can't understand the provisions few will turn down the contracts for that reason).

Actually it's better for a business to write a simple contract that everyone clearly understands. The "arcane and Byzantine" contract provisions are mostly the product of government requirements "protecting" consumers.

Case in point: Insurance companies are getting a lot of bad press because they won't pay flood damages. The reason the insurance companies won't pay flood damages is because flooding is not covered in the insurance contracts. The reason flooding is not covered in the insurance contracts is because the U.S. Government provides discount flood insurance, therefore commercial companies can't charge premiums to cover the risk.

|3.26.08 @ 1:00PM|#

Am I right on this?

Sorry, thoreau, it doesn't work that way. Not an insurance lawyer, but my understanding is as follows

BCBS doesn't have a claim against whoever injured the patient here. They also don't have a claim against the patient until she collects money for medical expenses and refuses to pay it to BCBS under their contract.

With no claim until some point after the judgement has been paid out, I don't think they have any standing in this lawsuit.

From a trial strategy standpoint, having BCBS in the lawsuit just informs the jury that her bills have already been paid, making it less likely that they would tag the defendant with those bills. Technically, its irrelevant to the case against the defendant whether insurance has already covered some or all of the damages.

|3.26.08 @ 1:02PM|#

I thought that lawyers make a point of finding out exactly what sorts of expenses and responsibilities you have as a result of an injury so they can press for as big of a settlement as possible.

Telling the jury she may have to refund the payments made on her behalf by BCBS doesn't add to her damage claim. Those payments are the result of her contract with BCBS, and were not caused by the defendant.

thoreau|3.26.08 @ 4:41PM|#

Thanks for the clarification, RC.

|3.30.08 @ 4:44PM|#

Good thing those stores had a functioning infrastructure to keep going. Those roads, that plumbing, etc etc etc.

I wonder how all that got built?