Walmart Drops Lawsuit Against Brain Damaged Worker

<!–bigbrickwalmartsign.jpg–>In a surprising turn-around Walmart has decided to drop its effort to collect $400,000 in money awarded to a brain damaged former employee, says the Associated Press.

The world’s largest retailer said Tuesday in a letter to the family of Deborah Shank it will not seek to collect money the Shanks won in an injury lawsuit against a trucking company for the accident.

Wal-Mart’s top executive for human resources, Pat Curran, wrote that Shank’s extraordinary situation had made the company re-examine its stance.

Deborah’s husband Jim Shank welcomed the news. Family lawyer Maurice Graham of St. Louis said Wal-Mart deserves credit for doing the right thing.

‘It’s a good day for the Shank family,’ Jim Shank said in a statement.

Wal-Mart has been roundly criticized in newspaper editorials, on cable news shows and by its union foes for its claim to the funds, which it made in a lawsuit upheld by a federal appeals court.

Walmart says its internal rules required it to seek reimbursement for medical costs, but it has now revised those rules so that it can make exceptions in individual cases. Some experts think that Walmart is concerned about the issue attracting pressure from lawmakers.

The case put a spotlight on the growing use of reimbursement claims by health plans, experts say.

Roger Baron, professor of law at the University of South Dakota and a specialist in health-plan law, said health plans have become ‘very aggressive’ about subrogation since the 2006 Supreme Court decision.

‘It’s free money. They want the free money,’ Baron said.

Lynn Dudley, vice president for policy at the American Benefits Council in Washington D.C., said the negative publicity around the case was beginning to draw the attention of lawmakers who might want legislation to stop or limit subrogation.

‘Capitol Hill is paying attention,’ Dudley said.

Wal-Mart drops injured worker claim [AP]


Edit Your Comment

  1. But Wal-Mart could really use the money…

  2. Landru says:

    I think all these April Fools jokes are in bad taste.

  3. SoCalGNX says:

    There is the legal thing to do and the right thing to do. Many times they clash.

  4. @Bay State Darren: I’m an idot, aren’t I?

  5. EJXD2 says:

    @Bay State Darren: Wal Mart will certainly need the money after doing this for every litigant who has a sad sack story.

    The woman was already reimbursed for medical expenses. This is a free $400k for her. Why does she deserve it more than every other person who has been reimbursed twice?

  6. lesspopmorefizz says:

    @Landru: Uhhhh, yeah, okay, except this one isn’t a joke, and if you don’t believe me, believe the Wall Street Journal:


    Wal Mart was actually trying to get reimbursement from this woman and her family. They only stopped hounding this poor woman (and her family) because there was a lot of press and a huge public outcry.

  7. @EJXD2: OK, this April Fools thing is really screwing me up…

  8. spinachdip says:

    @EJXD2: Except it’s not free money. It’s not like Wal-Mart paid for her medical expenses out of the good of their heart. It’s money she was entitled to, since she’d paid into the employee health plan and all.

  9. lesspopmorefizz says:


    Maybe if she didn’t have so many ongoing medical bills because her injuries are permanent and require her to expend huge sums of money on healthcare. It’s not like the family is going to use the money to go on vacation; they’re using it to pay for her nursing home and enormous medical expenses. There are people who take advantage of the system, but this woman and her family are not of that ilk. Also, read about the case closely, and you’ll find that if Wal Mart had taken the rest of that money, it would actually have left the family in debt, without a way to pay her medical bills in the future. How is that right, or fair?

    Sorry ’bout the double-comment, guys…I have strong feelings about this one.

  10. bohemian says:

    Lawmakers need to still pay attention because this happens to people every day. It isn’t just Walmart.

    The one that made me really mad was our former health insurance plan. They insisted on sending every single minor claim to the VA for possible payment. They were told by us and the VA that he only had service connected issues type of coverage through the VA. Yet they continued to waste the time of the VA forcing them to process more paperwork in a shotgun attempt to see if the private carrier could milk the VA for a few bucks. This was going on at the same time the VA was begging for additional funding for the influx of people coming home from Iraq.

    The insurance industry needs to be so highly regulated they can only perform a basic set of functions.

  11. Her mistake was in suing the driver for medical expenses, rather than pain and suffering or loss of wages or something.

    An extra $400k sounds like a great payoff for a healthy person, but this lady’s condition will suck that up in about a year. Trust.

  12. Tzepish says:

    @EJXD2: Walmart “will certainly need the money” if they provide health insurance for their employees? I guess that isn’t a new one…

  13. Paul says:

    @lesspopmorefizz: This “poor woman” sued for reimbursement of expenses she didn’t pay. That’s fraud, and since obviously a civil court ruled that the expenses should have been reimbursed, Wal Mart’s health insurance provider deserved to be the one reimbursed.

  14. @Bay State Darren: I’m totally confused on whether I’ve been fooled or not. Dammit, Meg! Don’t post true things on this day of deception! Or maybe just- Head explodes.

    April Fool’s Day is cruel on us paranoid-types.

  15. Blinkman says:

    As far as I understand, the whole problem is still her hiring a dumb lawyer who didn’t know how to petition for future medical costs.

    Maybe she wanted to surround herself with people who are brain damaged as a showing of solidarity?

  16. EJXD2 says:

    @Bay State Darren: Whether or not it’s a joke is irrelevant as the discussion is one worth having.

    I spend $1,000 on medical expenses because the Schwan’s man broke my foot. My company’s insurance pays for said medical expenses and then my lawyer sues Schwan’s and I receive $1,000 for medical expenses plus $5,000 for pain and suffering.

    Why should I get to keep the $1,000 in medical expenses?

    Wal Mart is an easy target because of its size but really any company should do this in this situation.

  17. Meg Marco says:

    @Bay State Darren: All of my posts are real. No fake posts for me.

  18. paulinsf says:

    Way to go, KO. Only took 3 days.

  19. DogTown says:

    “Wal-Mart’s top executive for human resources, Pat Curran, wrote that Shank’s extraordinary situation had made the company re-examine its stance.”
    The problem here is the brain dead corporate culture at Walmart which constantly fails to PRE-EXAMINE their stance on such issues before they keep digging deeper and deeper public relations holes.

  20. @Meg Marco: Well, it fooled me anyways! I’m cracking up at my own fooled-ness, so hats off to you on that one, intentional or otherwise. [Did I think you were conspiring with AP?]

  21. homerjay says:

    I’d like to think that the damage has been done and its too late, but really is it possible for WalMart’s reputation to be more damaged?

    Then again, I just saw on the news that another redneck couple got married in WalMart so…..

  22. toddiot says:

    Wow, real post, confusing.

  23. Pylon83 says:

    While I agree she shouldn’t be entitled to keep it, it’s certainly not fraud on her part. Unless she said in open court “I paid these bills out of my pocket” she didn’t commit fraud. It’s not uncommon for a person who is injured to claim medical expenses that they didn’t pay themselves. The only problem that arises is if she claimed that she actually paid them. However, I think Wal-Mart should have collected the money. She shouldn’t get to be reimbursed for something she didn’t pay in the first place.

  24. Towtruck says:

    Boooo. Wal Wart bows to public opinion, regardless of legal rights.

    I’m sorry. This IS a very unfortunate incident, HOWEVER, allowing victims to claim double compensation is one of the many reasons insurance costs are so high.

    As with 99.999% of all insurance policies I have ever seen, victims are not allowed to seek secondary damages once a claim has been paid. If so, the original insurer has the right to any/all secondary judgments to recoup their loss.

    As a small business owner, this frightens me. Insurance premiums rise as it is and if we allow victims to seek double (whose to stop triple, quadruple, etc) judgments where will our premiums go from there.

    Back to the typical sue-happy US mindset.

    Again, I know this is a very sad and horrendous event, but that does not make collecting double judgments/claims fair for the rest of us.

    Obviously Wal Mart is having a struggling year as they chose the PR route, rather than the legal and fair route.

  25. pigeonpenelope says:

    april fools?

  26. etc says:

    Taking these kinds of stances against a corporate, when it is blatantly in the right, regardless of the previous misdeeds, only dilutes the respect and regard that people have for Consumerist, and other consumer protection groups.

    The fact of the matter is, she received money for her injuries, and Wal-Mart has every right to what they paid her for her damages as well, she shouldn’t be allowed to double dip. For those that are saying she would have future expenses as well, then her lawyer should have taken that into account.

    I have less respect for consumerist after these posts on this case, as well as anyone who sides on the injured in this case. If you decided to help your brother pay for his education, and wrote him a check, if he subsequently got a scholarship or got tuition by other means, would you not ask for it back?

    It is a tragic accident, but when organizations like Consumerist blindly allies itself with consumers, ever when they are in the wrong, they do nothing but give themselves a bad name, and make themselves appear illegitimate. This is why many view Consumerist as nothing more than a vicious mob…because even when they are in the wrong, they push forth relentlessly.

    Boo all the way around.

  27. zeepow says:

    “Family lawyer Maurice Graham of St. Louis said Wal-Mart deserves credit for doing the right thing.” Please. The right thing would’ve been to leave it alone from the beginning. Greedy jerks.

  28. SuperJdynamite says:

    @EJXD2: “Why should I get to keep the $1,000 in medical expenses?”

    The point that people who disagree with you are trying to make is simple: if you have $1000 of prior medical expenses and $1000 worth of future medical expenses then you should be allowed to keep the $1000 award.

    That’s what’s going on here. She had medical expenses that WalMart covered and has future expenses that the award money will contribute towards.

  29. SuperJdynamite says:

    @Towtruck: “I’m sorry. This IS a very unfortunate incident, HOWEVER, allowing victims to claim double compensation is one of the many reasons insurance costs are so high.”

    If WalMart provided disability insurance that would meet her needs then I can see how this would be considered double dipping. However, WalMart covered her medical insurance and the judgement should be considered compensation for ongoing care. The insurance industry recognizes that these are two different needs since they offer insurance for both. Why should WalMart have the right to dip into her disability compensation to cover medical expenses?

  30. AustinTXProgrammer says:

    Clearly she didn’t get enough money from the trucking company to cover future medical expenses and pain and suffering.

    When there is clearly not enough money to go around, it doesn’t seem that the insurance should be the first to get the compensation.

  31. Slytherin says:

    “Wal-Mart’s top executive for human resources, Pat Curran, wrote that Shank’s extraordinary situation had made the company re-examine its stance.”

    Translation: the negative media coverage regarding our greed and lack of humanity had made the company re-examine its stance.

  32. specialed5000 says:

    I haven’t seen enough of the details of this case to know if the original settlement amount was for direct medical expenses, future care, lost future wages, or pain and suffering. If it was for expenses that her insurance through WalMart had already covered, then they clearly were within their rights to sue to recover it. If it was for pain and suffering, future lost wages, etc, then WalMart shouldn’t have been able to touch it. I presume that the courts made the correct legal decision, and that it was for expenses already covered by insurance.

    However, as has been stated before, there is a difference between what is legal and what is the right thing to do. I am surprised by WalMart’s apparent obliviousness to the how bad a PR move this was for them. A better response (if legally possible) would have been for them to sue but not make any attempt to collect. That way they would have the legal decision in their favor and avoid setting a precedent for future cases. Some employers might have even set up a fund (maybe through their charitable foundation) and asked employees to contribute to help pay for the woman’s long term care. A few hundred thousand dollars really won’t go that far.

    Her life, and that of her whole family has been changed in the most horrible way through no fault of their own. So many comments here fault her family not having a better lawyer and getting a bigger original settlement, or accusing them of getting paid twice, or faulting them for fighting to keep as much of their financial resources as possible. I guess that these must be from people who can afford to pay for decades of medical expenses if something like this happened to their family. Or maybe they just wouldn’t mind having their mother, wife, or sister spend the rest of their life receiving whatever level of care that Medicaid or other government programs can provide (after spending down all the family’s assets, going through a divorce, and whatever else they would have to do to qualify). Legally right or not, what kind of heartless pricks are you people?

  33. Bill Brasky says:

    What Slytherin said.

    I’m a former employee for Wally. I had sick days I wasn’t allowed to use. I was written up for taking an extended break, while I was with my supervisor. This may sound like sour grapes, but I’m liking it.

  34. President Beeblebrox says:

    @EJXD2: No, actually it’s free money for Wal-Mart, not the injured worker. Any subrogation claim is a windfall for an insurer, because unless there is a third party responsible for the expenses the insurer pays, the insurer absorbs the expense and spreads the loss across its policyholders.

    ERISA is an odd law, and unfortunately for the injured worker, recent caselaw from the U.S. Supreme Court makes it clear that under ERISA, an insurer or employer can recover 100% of its lien, without sharing in the cost of recovering that money. At common law, subrogation was considered an equitable remedy, meaning the carrier had to reduce its lien by a proportionate share of the attorney’s fees and expenses incurred by the injured plaintiff in recovering that money. I.e., if the fees and expenses came to 35% of the plaintiff’s recovery, the carrier would generally have to cut its lien by that amount. But under ERISA, the employer calls the shots, and if the plan documents say the carrier gets 100% of its lien, or the entire plaintiff’s recovery if the amount of the lien exceeds the plaintiff’s recovery, then, according to the Supreme Court that’s Just Too Damn Bad for the plaintiff.

    But, again, subrogation is a windfall for the carrier, NOT the plaintiff.

    [And, yes, I am a lawyer, and a subrogation lawyer at that. :) ]

  35. blkhwk86 says:

    This better not be a joke. I’ve had my emotions messed with enough today.

  36. President Beeblebrox says:

    @Pylon83: There’s no “fraud” here at all. Practically every state in the nation has a legal concept known as the collateral source rule. This means that if the plaintiff incurs medical expenses, she can put them into evidence regardless of whether they were paid. There may be exceptions as, for instance, with no-fault auto insurance, but those are statutory. The collateral source rule has been around forever.

    Those of you who are claiming the plaintiff double-dipped are missing the point. The plaintiff won $700,000 for a serious brain-damage case. Just over $400,000 was left after attorney’s fees and costs. (We don’t know the details of the attorney’s fee agreement, but it would not be uncommon for it to provide for 40% if the case went to trial. That’s $280,000 in fees, and another $120,000 in expenses, which isn’t out of the ordinary either for a complicated case.)

    We don’t know what the plaintiff introduced at trial in terms of future medical expenses, loss of earning capacity, etc. Obviously, though, part of that claim was the medical expenses Wal-Mart paid, but that was only one piece of the pie. What does seem clear is that the plaintiff was awarded a hell of a lot less than the case was worth.

  37. I guess I’ll abjure my prior stance:

    They didn’t sue to prove a point. They sued for the monies to which they were reasonably entitled. Who puts all that effort into a long, drawn-out lawsuit and then gives it all back with interest? []

    Apparently Wal-Mart does (except the interest part). Good for them.

    @Bay State Darren: April Fool’s Day is cruel on us paranoid-types.

    The way it went down today is funny in light of the early morning comments on Introducing the Conglomerist:

    Example A: Oh common…. I really expected a bit more creativity…

    Example B: The essence of a good April Fool’s Joke is a) pulling it when someone least expects it, b) making it seem so plausible that any doubt the subject has is reasoned away, and c) thinking up a better name than Chad Steelgate.

    Example C: I admit it – I got sucked in for a second. But “The Conglomerist” was just too over the top. If it had been a bit more subtle this probably would have been the longest thread of the year, full of outraged readers screaming about Ben “selling out”.

    I give it a 6. Amusing, but seemed like a token effort

    Ha ha ha, how little did the foolish humans know that this was just Step 1 of 2:

    1) Lure readers into a false sense of security.
    2) Mess with their brains.

  38. Pylon83 says:

    @President Beeblebrox:

    I’m aware of the collateral source rule, and I did state that it wasn’t fraud. If I recall correctly, the collateral source information can come in if the plaintiff states that he/she paid the expenses out of his/her own pocket when in fact the insurance carrier paid the bill. While I clearly didn’t make my point, that’s what I was getting at with my comment.

  39. bricko says:

    Sorry folks but most all big company plans are written as such. Even Anderson Cooper at CNN who was just beside himself that someone would do such a thing…..found out the CNN’s own policy is the same….heh.

    So check your own while you are pi**ing and moaning at WalMart.

    Plus these companies do NOT carry actual “insurance” they are self insured. The money comes right out of the till, not from an outside insurance company per se. They only use groups such as Aetna, etc as paper pushers and administrators. The money is all Walmarts and comes from a health fund for the entire group of employees. So the less money in it..the less the other employees have access to.

  40. girly says:

    If her need for medical care wasn’t open-ended and was totally coverable by the judgement then I’d consider it double-dipping, but in her case that doesn’t seem to be it.

  41. FrankTheTank says:

    Just to check, if this was a small, family owned business instead of the world’s largest company, would people still feel alright about this woman being paid twice for medical costs?
    If you ran a business and something like this happened (and you subsequently had to pay higher insurance rates) would you not want that money back if you found out all of her costs were covered by someone else?
    Do the same rules not apply when you’re company grows to a certain size?

    Her costs should have been entirely covered by the trucking company that was found to be at fault. And it seems that they were. If they weren’t, people need to be going after this trucking company. ITS THEIR FAULT!

    To collect money from two sources for the same costs is not right.
    It’s not fraud, but it’s not right either, and we can’t just gloss over that.

  42. modenastradale says:


    “To collect money from two sources for the same costs is not fright. It’s not fraud, but it’s not right either, and we can’t just gloss over that.”

    Setting aside the fact that “not right” is a 100% subjective determination about which we have very different opinions…

    You must acknowledge that subrogation allows the *insurer* to collect money from two sources for the same costs. The carrier collects those funds in the first pass via the combined insurance premiums of all policyholders. Then the subrogation action allows the carrier to collect 100% of the benefit it paid out, and KEEP THE PREMIUMS IT HAD ALREADY RECEIVED. The question here is not whether it’s right or wrong to “double dip”; the question is that one party or the other is going to get a windfall, and which party should that be?

  43. 3DLADY says:

    I had the same thing happen to me with a car accident. My
    settlement was $22,500. State Farm took $6,675 for medical
    expenses they paid. After the lawyer took over 6k for her fee,
    and another 1.5k in expenses, I barely cleared 8k. However, I
    paid car insurance premiums for over 12 years without a claim.
    So how come I didn’t get back 12 years of premiums? State Farm
    got back all the money they paid in my medical expenses, and
    then they get to keep 12 years of premiums. So in my opinion,
    they are the ones double-dipping. What did my premiums pay for
    then? By the way, the other driver was totally at fault for
    blowing a red light.

    In my opinion, the law should be changed that if an insurance
    takes a part of your settlement, then they should refund your
    premiums, at least for the part that was paid for medical
    coverage. Or else they come out ahead financially, instead of
    just breaking even.

  44. Paul says:

    @3DLADY: Car insurance covers situtations generally for things which are the policiyholder’s fault, and sometimes for things beyond thier control. The insurance carrier is not “double dipping” if someone else is responsible for your accident. You got a settlement from whoever was at fault…their insurance paid up. Why should you get your premiums back from your insurance company because someone else caused you harm and then paid up?

  45. ogman says:

    Oh good, now I can go back to not shopping there just because the place smells like ass.

  46. jenl1625 says:

    @Paul: It’s NOT fraud to sue for reimbursement of expenses you didn’t pay – that’s the way the system works. You get hurt, your insurance pays your bills (with a contract that gives them subrogation rights), you sue for *all* of your costs (including the subrogation).

    The insurance company has no right to sue directly for those costs – they HAVE to subrogate against you.

    As far as I can tell, the problem here is that their attorney settled the claim and disbursed money before getting something definite from WalMart about how much money had to be repaid. Generally, you work with a subrogation claim *before* you settle the case, so that when you settle, you already know whether the company is willing to work something out with you. (In most cases where there simply isn’t enough liability insurance, the health insurance will work out something proportional.)

    But it’s just crazy (and wrong) to hand money over to a client and let them spend it and only find out afterwards that a health insurer is insisting on full subro. . . .

    (Please don’t take any of the above as legal advice, as things differ from jurisdiction to jurisdiction, and this was based on personal experience.)

  47. EvilConservative says:

    @3DLADY: That’s one of the least-informed comments I’ve ever seen. Your premiums are your cost to push your risk off on someone else, not a bet placed at a casino. Every one of your 12 years paying premiums, you benefited by not being at risk for someone suing you personally for liability and knowing you could get your car fixed at their cost if you did something stupid (yes, less your deductible.) You also got the $6,675 up front for your medical bills — whether or not they’d ever get any settlement benefit or not. That’s what you got for your premiums.

  48. backbroken says:

    On one side: disabled woman. The other side: Wal-Mart.

    Is that all anyone sees?

    I guess its ok to commit fraud if you are a victim of circumstances and if you are defrauding a giant evil corporation.

    Or not.

  49. econobiker says:

    @bohemian: The insurance industry always tries to pawn off their responsibility onto a government entity if possible or available.

    In New Jersey (auto insurance armpit of the USA) this happened with car insurance back in the late ’80s early ’90s with a special government pool set up for “high risk” drivers who couldn’t afford regular insurance. Well, lo and behold, suddenly more people than before became “high risk” and were being shunted into the state pool by insurance companies. As many as they could the companies would try to get into the pool. When this was found out, and combined with other issues of financial liquidity, the insurance pool was phased out…(thank god).

  50. etc says:


    What kind of cockamamie nonsense is this? If the woman received compensation for her quantified medical costs, and they weren’t alloted for future medical expenses, then you can’t just arbitrarily appropriate the funds however you want. If she didn’t get future medical expenses as part of the settlement, that was her or her attorney’s fault, not Wal-Marts. The lawyer should have assumed there would be subrogation in the mix.

    Just because you, SuperJdynamite, decides that we “should consider” the money as paying for future medical expenses, unfortunately the world and reality doesn’t bend to your unsubstantiated desires.

  51. UX4themasses says:

    This is the exact reason why justice is blind. The courts ruled on fact, not on heart. I find it warming and frightening at the same time when reading the consumerist remarks.

    One simple thing remains… consider the FACTS.

    1. The court ruled in her favor.
    2. Supreme Court declined to act AT ALL (they agree by abstention IMO).

    I love how the consumerist is far smarter than the US COURT SYSTEM and how the FACTS are meaningless here if there is a good enough story.


  52. modenastradale says:


    Her comment isn’t misinformed at all. The price of the premium is large, and it reflects the carrier’s assumption that it will be absorbing the loss. I’ve talked to insurance actuaries before about this; the subrogation benefits are speculative and not normally priced into the premium.

    3DLADY’s point is exactly the same as mine: one cannot legitimately accuse the plaintiff of seeking some kind of unjust double compensation without also acknowledging that the insurer is seeking the same thing. Even though it received insurance premiums from policyholders, and even though it priced those premiums such that it would be able to absorb the loss, it now wants to use the subrogation clause to win an unexpected recoupment of all its paid-out benefits.

    That, I would imagine, is why, according to the article linked above, there is potential for regulation of the practice.

  53. girly says:

    I can’t imagine that the suit against the truck company was only for expenses already incurred and paid by insurance. Because then what would be the point? To get the lawyer and WalMart some money from the truck company?

    Maybe this lady has a nice malpractice suit against her lawyers?

  54. girly says:

    It seems like the exact opposite of what some people are suggesting could be occurring, depending on the purpose of the award from the trucking company.

    Rather than the woman trying to get money she rightly needs by the wrong means (double dipping), it seems that it could be the insurance/WalMart trying to take advantage of a greater percentage of the windfall than what was alloted from the trucking company for the expenses that had already been paid. Kind of like if you won the lottery after your claim and they tried to sue you for your winnings.

    Perhaps the insurance and WalMart were legally entitled to either none of it or only a smaller portion of it. Perhaps none of the award was for covered expenses, or only a portion of the award was for covered expenses and didn’t cover all of the expenses. Some of amount they are suing for may have been for other issues (future expenses beyond what insurance covers, pain and suffering, etc)

  55. girly says:

  56. girly says:

    Are there any laws about subrogation claims regarding lawyer expenses? If it’s doing the insurance a favor, shouldn’t they take half the hit?

  57. evilhapposai says:

    Nice they dropped the case against her but one point I cant seem to look over here. The family sued for something like $900K to 1Mil right? They only got $400K of that? What in the hell could the lawyers POSSIBLY be doing that could justify them taking 60% of the poor womans money? Walmart should go sue the pants off those scum sucker ambulance chasers for their money not the lady in the nursing home.

  58. boxjockey68 says:

    ” Wal-Mart deserves credit for doing the right thing.”
    Oh god, walmart must be THE most pitiful company out there, pitiful.

  59. synergy says:

    @Paul: Agreed. Walmart gave it up because it was bad PR that was going to cost them more than doing the legal thing.