Court to rule on whether hepatitis cases can proceed

By Jeff German (contact)

Monday, Aug. 24, 2009 | 2 a.m.

Steve Marcus

Dr. Dipak Desai, center, owned the Endoscopy Center of Southern Nevada, where dangerous injection practices have led to eight confirmed cases of hepatitis C.

Unless cooler heads prevail, this week’s hearing in U.S. Bankruptcy Court on whether the massive litigation over the valley’s 2008 hepatitis C outbreak can proceed is shaping up as a real donnybrook.

The litigation was put on hold last month after three endoscopy clinics owned by Dr. Dipak Desai, the man at the center of the hepatitis scare, filed for Chapter 7 bankruptcy protection.

Lawyers for Brian Shapiro, the bankruptcy trustee in charge of distributing assets in the case, and attorneys representing former patients suing the clinics for malpractice teed off on each other in bankruptcy court papers last week.

Shapiro’s attorneys contend the lawyers for the patients, in their “race to deplete” limited insurance money for potential malpractice judgments, are making it difficult for Shapiro to do his job.

They say he opposes allowing the District Court litigation to go forward because he’s looking out for the interests of all of the creditors, including the more than 4,000 former patients suing the clinics. More than 300 of those patients claim to have been infected with the hepatitis C virus.

The first malpractice trials are to get under way in October, and if those few plaintiffs prevail, they could gobble up all of the clinics’ $6 million in insurance money, leaving nothing for the majority of the plaintiffs whose trials are months down the line, Shapiro’s lawyers argue.

But plaintiffs’ attorney Will Kemp charges in his court papers that Shapiro doesn’t know what he’s talking about and is actually working against the interests of the former patients.

Kemp says there is no race to get to the insurance money. Plaintiffs’ lawyers have agreed to hold off attempting to collect any judgments so that an equitable compensation formula can be worked out for all plaintiffs.

Robert Cottle, a plaintiffs’ attorney who represents the majority of the 4,000-plus noninfected patients, says in an affidavit that he never gave Shapiro permission to make any arguments in Bankruptcy Court on behalf of his clients.

Cottle says his clients understand that, contrary to Shapiro’s belief, allowing the hepatitis litigation to move forward is in their best interests.

The early trials are viewed by plaintiffs’ lawyers as test cases to get verdicts that could end up leading to settlements in other cases and speed up the litigation.

Cottle plans to be in Bankruptcy Court for the big hearing Wednesday, as Kemp put it in his court papers, “to relieve the trustee of any temptation to make further arguments on behalf of Mr. Cottle’s clients.”

•••

Now that a federal magistrate has allowed him to act as his own lawyer in his criminal case, Shawn Rice is back to stirring up mischief in court.

Authorities regard Rice, who faces money-laundering charges, as a leader in the nation’s sovereign citizens movement.

Members of the anti-government group have a reputation for flooding the courts with wild documents, and Rice is proving to be no exception.

He recently filed a 19-page document he called “Supoena Duces Tecum, or in the alternative, Petition to Dismiss with Prejudice in This Matter.”

Rice refers to himself in the court papers as the “real party in interest defendant in error.”

Anyone reading the document will have a hard time making sense of it.

Pity the prosecutors who have respond in writing to the magistrate.