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In particular, New Jersey U.S. Attorney Christopher Christie had "helped the Ashcroft Group -- the consulting firm of ex-Attorney General John Ashcroft -- obtain a contract worth between $28 million and $52 million to monitor Zimmer Holdings, a medical supply company accused of Medicare fraud." That story quite rightly set off a round of discussion and concern, both because of the dangers of political coziness in the choice of monitor and because the fee numbers seemed high. Last week, Democrats on the Hill introduced legislation to impose what it is hoped will amount to an "open, competitive process" -- going beyond the Justice Department, which had already adopted its own tightened guidelines for the picking of monitors in implicit acknowledgment that the concerns were genuine. It's funny how these things work, though. For a full decade now -- starting with the great state tobacco-Medicaid litigation, and never really abating since then -- debate has raged at the state and local level about the often cozy and uncompetitive process by which governments select outside counsel for the correction of business defendants. In this latter case -- exemplified by the gun, lead paint, drug-reimbursement, and many other public-nuisance and mass-tort actions, as well as a wide range of securities class action matters -- the lawyers are hired to sue the businesses, as distinct from monitoring them afterward, and they are compensated through contingency fees, which sometimes sets them up for lower fees than Ashcroft & Co., but often for fees that are very much higher. You may have noticed that many of the folks who have led the charge on the Christie-Zimmer matter display virtually no interest in this longstanding debate about state and local retention of outside counsel. The Times, for example, has gleefully seized on the Christie/Zimmer affair as a stick to beat the Bush Justice Department, invoking "the kindness of cronies", the use of monitoring positions "to throw patronage to friends and political allies", the danger that prosecutorial judgment will be colored by the chance to generate "a rich payday for a friend", and so forth. Yet the Times never shows the slightest editorial interest in the contingency-fee contracts that governors, mayors, treasurers, comptrollers, and attorneys general keep arranging for close chums and leading campaign contributors, whether it be lead-paint contracts in Rhode Island, Oxycontin contracts in West Virginia, securities and drug-reimbursement suits in many states, insurance cases on the Gulf Coast, or tobacco and gun litigation contracts nationwide including its own back yard of New York, Connecticut and New Jersey. Congress never did show much interest in investigating those contracting abuses either, and it shows essentially none now. So although groups like the U.S. Chamber of Commerce have pressed for transparency in the awarding of such contracts, they face a mostly uphill and unpublicized fight.Of course, one obvious difference between the two types of potential corruption is that there is not much partisan mileage to be had by going after the contingency-fee kind, because although plenty of Republican officials around the country are in on the game, even more Democrats are. But that can't be relevant. Can it? Posted at 12:05 AM | TrackBack (0)July 23, 2008Michigan court-stripping debaclePosted by Walter OlsonIt's gotten embarrassing enough that even the local trial lawyers' best friends, like Brian Dickerson of the Free Press, are telling them they'd be better off dissociating themselves from it. Posted at 9:47 PM | TrackBack (0)Senate Judiciary, decrying 'pro-business' Supreme CourtPosted by Carter WoodThe Senate Judiciary Committee has begun its hearing, "Courting Big Business: The Supreme Court's Recent Decisions on Corporate Misconduct and Laws Regulating Corporations." So far, only Chairman Leahy's statement is online, and it embraces the expected criticisms on cases such as Ledbetter, Stoneridge and especially Exxon Valdez. He also lays into the court for "blind devotion to corporation arbitration schemes." Leahy's statement also includes a political narrative:The Supreme Court has demonstrated its increasing willingness to overturn juries who received the factual evidence and weighed the arguments. Nothing is more fundamental to the American justice system than our trust in the wisdom and judgment of ordinary Americans who serve on juries.UPDATE: The prepared testimony is now available. Osa M. Schultz provides the perspective of a very angry Alaskan harmed by the Exxon Valdez spills, and she wants high punitive damages. Patricia Ann Millett, a former attorney in the Office of Solicitor General, gives a dispassionate assessment of the Court's opinions and judicial alliances on preemption, arbitration, employment cases and punitive damages.The target to come under the heaviest fire today was mandatory pre-dispute arbitration, as Harvard Law Professor Elizabeth Bartholet condemned its transformation into a mechanism biased toward corporate interests. In her lengthy prepared testimony, Bartholet cites her experience as an arbitrator dealing with consumer credit card cases for the National Arbitration Forum. Judging by the witnesses, testimony and his opening remarks, Chairman Leahy regarded today's hearing as especially useful in building the Congressional case against arbitration. The legislation with the most prospects is S. 2838, attacking arbitration in nursing home contracts; the House version, H.R. 6126, is moving quicker, though, having been reported out of the subcommittee last week. MORE: RTTNews carries a straightforward account of the hearing here. Mayer Brown had a legislative update last week on the anti-arbitration bills moving through Congress, focusing on the effects on international arbitration.Posted at 10:33 AM | TrackBack (0)New York Intermediate Appellate Court Says Punitives Not Possible in Tobacco CasePosted by Michael KraussThe New York Law Journal (via Law.com) reports on a very interesting New York appellate court decision, Fabiano v. Philip Morris Inc., in which the Appellate Division, 1st Department, holds that the $248 billion settlement with tobacco companies in which New York state was a party bars the estate and husband of a New York woman who died of lung cancer from collecting punitive damages from them. The court unanimously held that the massive 1998 settlement and the Fabiano wrongful death suit were predicated on "materially indistinguishable" transactions."[A] claim by a private attorney general to vindicate what is an essentially public interest in imposing a punitive sanction cannot lie where, as here, that interest has been previously and appropriately represented by the State Attorney General in an action addressed, on behalf of all of the people of the State, including plaintiffs and the decedent, to the identical misconduct," presiding Justice Jonathan Lippman wrote for the court. This is a most interesting take on the nature of punitive damages, which as we know have been limited by the Supreme Court.The Fabiano demand for punitive damages centered around the companies' alleged "targeting of young people in their advertising and marketing of cigarettes," (Ms. Fabiano started smoking at age 14). The court found this to be "materially indistinguishable," from the suit that culminated in the settlement/cartel agreement now well known. The court rejected the Fabianos' claim that they were not bound by the 1998 settlement because the attorney general failed to represent smokers' interests in the earlier litigation.Posted at 8:47 AM | TrackBack (0)"No discovery, no parade of expert witnesses, no jury, and loser pays"Posted by Walter OlsonIn an interview with Jane Genova at Law and More, attorney Joseph K. Hetrick of Dechert, a product liability specialist, looks at some of the contrasts between European legal systems and our own. Excerpt: ...Essentially, there are three key differences.One, is that the U.S. believes that the people are entitled to a risk-free life. There should be zero exposure to risk. That's now embedded in our national ethos.But that wasn't always how it was. It became a fixed idea when strict liability decisions were being made.And, this is certainly not the way most other nations think. Maybe other nations such as Europe had been through too many brutal wars and revolutions on their own land to ever embrace the idea that risk can be prevented from a life. In Japan, if you state that zero risk is your goal, they would laugh out loud. ...Most nations are conservative about what law should be used for. It should not be a tool to transfer wealth. ... You have to remember: Most suits in Europe begin as a criminal matter. ... our system [in the U.S.] is money-oriented.An earlier interview between the same participants was linked here.Posted at 12:04 AM | TrackBack (0)July 22, 2008Convict-lawyer sues AmEx for helping police find himPosted by Michael KraussAP reports that a disbarred Manhattan lawyer, who has been convicted of statutory rape, has sued the American Express Co. for giving police credit card information that he says led to his capture in Canada, where he had fled to avoid prosecution.44-year old James Colliton objects that American Express violated its agreement to withhold customer information from third parties. We haven't seen his contract with Amex, but doubt that it obliges the company to resist requests from law enforcement.This comes close to the definition of chutzpah, right?Posted at 12:14 PM | TrackBack (0)Pennsylvania: retreat from strict product liability urgedPosted by Walter OlsonIn the asbestos case Bugosh v. I.U. North America, the Pennsylvania Supreme Court is being urged to back away from the principle of strict product liability and instead adopt a standard imposing liability only when defendants have acted unreasonably. For decades the state has followed section 402A of the Restatement (Second) of Torts, which provides for more or less automatic liability once a jury finds a product defective and injurious -- the "putting the product on trial" approach. In the Bugosh dispute, the trial judge consequently excluded defense testimony intended to show that the product distributor had acted in accord with the state of the art of its day on safety. Business groups have filed amicus briefs urging the court to move toward the standard of section 2 of the Restatement (Third) of Torts: Products Liability, which gives wider scope for such defenses. More: K&L Gates, Legal Intelligencer blog, LexisNexis Mealey's, NAM, WLF (the latter two with amicus brief links). Posted at 10:56 AM | TrackBack (0)July 30: Chamber ILR event canceledPosted by Walter Olson[Replacement post]. This event, on discovery and employment law, has been canceled. Posted at 8:42 AM | TrackBack (0)Around the web, July 22Posted by Walter OlsonWorth keeping an eye on: "The Service Employees International Union and the Teamsters have sued six law firms (including Beasley Allen, Girardi and Keese, and Levin Fishbein) for their handling of the Vioxx settlement." [Beck & Herrmann]Paul Selzer, last remaining defendant in Milberg Weiss/Lerach scandal, pleads guilty; Milberg says government knew of its plan to turn over 15 percent of fees from pending cases to Weiss [NYLJ]Environmental Working Group and Fenton Communications lead campaign against plastic-softening bisphenol A and phthalates, and "trial lawyers sense a big payday" [Fortune]Early Chemerinsky hires for UC Irvine law school confirm that it won't "look like Orange County" at all, ideologically [Bainbridge]Dismissing more than 1,000 railroad asbestos suits for refiling elsewhere, West Virginia high court rejects argument that all Americans enjoy Constitutional right to take their disputes to WV courts [WV Record]Hong Kong, which has hitherto done without antitrust laws, now is considering one [proposal in PDF, press release] Posted at 12:09 AM | TrackBack (0)July 21, 2008Microsoft to pay law firms bonuses for reducing the number of white men on staff.Posted by Michael KraussThe National Law Journal, via law.com, reports that Microsoft's has informed its 17 "Premier Preferred Provider law firms", which collectively receive about $150 million in fees each year, that they will receive financial bonuses based on "improvements" they make in their diversity numbers.The preferred law firms must opt by Aug. 15 for one of two ways they want Microsoft to track their diversity "progress." Under one formula, they must demonstrate a two-percentage point increase in the percentage of Microsoft hours billed by "diverse" attorneys, compared to last year. Under the second formula, law firms must show a 0.5 percentage point increase in total "diverse" attorneys as a percentage of the firms' total attorneys, regardless of whether they work on Microsoft matters. Included in Microsoft's definition of diverse attorneys are women and those attorneys who are African-American, Latino/Hispanic, Asian, Native Hawaiian/Pacific Islander, American Indian, Alaska Native or "mixed race." Obviously, then, reducing the number of white men on staff is "progress" to Microsoft.Imagine if reduction in any other group was considered "progress".Posted at 2:54 PM | TrackBack (0)Sebok on Rhode Island lead paint decisionPosted by Walter OlsonFinishing up his three-part series for FindLaw, in which he calls the Rhode Island court's dismissal of the lead paint case "the right answer for the right reasons", the Cardozo lawprof singles out perhaps the most important point that distinguishes legitimate old from spurious new applications of public nuisance law: "the Court held that the law of public nuisance requires not only that the defendant be a substantial cause of the interference, but that the defendant still be in control of the instrumentality that caused the interference at the time when the suit is brought." (via Scheuerman, TortsProf). Posted at 6:15 AM | TrackBack (0)July 20, 2008Study: Pennsylvania AG destroyed "roughly $2.7 billion in shareholder wealth"Posted by Walter OlsonJonathan Klick of Florida State and Robert Sitkoff of Harvard have a new paper on SSRN entitled "Agency Costs, Charitable Trusts, and Corporate Control: Evidence from Hershey's Kiss-Off". Abstract (h/t contributor Mike DeBow): In July 2002, the trustees of the Milton Hershey School Trust announced a plan to diversify the Trust's investment portfolio by selling the Trust's controlling interest in the Hershey Company. The Company's stock jumped from $62.50 to $78.30 on news of the proposed sale. But the Pennsylvania attorney general, who was then running for governor, brought suit to stop the sale on the grounds that it would harm the central Pennsylvania community. In September 2002, after the attorney general obtained a preliminary injunction, the trustees abandoned the sale and the Company's stock dropped to $65.00. Using standard event study econometric analysis, we find that the sale announcement was associated with a positive abnormal return of over 25 percent and that canceling the sale was followed by a negative abnormal return of nearly 12 percent. Our findings imply that instead of improving the welfare of the needy children who are the Trust's main beneficiaries, the attorney general's intervention preserved charitable trust agency costs on the order of roughly $850 million and prevented the Trust from achieving salutary portfolio diversification. Overall, blocking the sale destroyed roughly $2.7 billion in shareholder wealth, reducing aggregate social welfare by preserving a suboptimal ownership structure of the Company. Our findings contribute to the literature of trust law by supplying the first empirical analysis of agency costs in the charitable trust form and by highlighting shortcomings in supervision of charitable entities by the state attorneys general. Our findings also contribute to the literature of corporate governance by measuring the change in the Hershey Company's market value when the Trust exposed the Company to the market for corporate control.Posted at 9:10 PM | TrackBack (0)Senate Judiciary to review 'pro-business' Supreme CourtPosted by Carter WoodNOTICE OF COMMITTEE HEARING The Senate Committee on the Judiciary has scheduled a hearing on "Courting Big Business: The Supreme Court's Recent Decisions on Corporate Misconduct and Laws Regulating Corporations" for Wednesday, July 23, 2008 at 10:00 a.m. in Room 226 of the Senate Dirksen Office Building.No witness list yet.Given last week's Capitol Hill rally by liberal women's groups, the Ledbetter decision could certainly be one of the rulings to be criticized.UPDATE: Guessed wrong, looks like. The witnesses are now listed: Osa M. Schultz, a plaintiff in the Exxon Valdez litigation. Professor Elizabeth Bartholet, Morris Wasserstein Professor of Law, with extensive arbitration and mediation expertise. Patricia Ann Millett, partner, Akin Gump Strauss Hauer & Feld LLP, who heads the firm's Supreme Court practice. Posted at 2:02 PM | TrackBack (0)"Finland's Class Action Law a Success Although Never Once Used"Posted by Walter OlsonCertainly one of the month's better headlines, and the blog post in question, at Class Action Blawg, is well worth reading too. It notes that the 2007 Finnish enactment differs from U.S. procedure in a couple of major ways. First, only the "Consumer Ombudsman" has standing to bring a class action. Second, only those class members who return a "letter of accession to the class"--in other words, only those who opt in--will become class members (not to mention that they get an additional chance to opt out later).As for why the law is considered a success although never once used, a report on a Finland-based website quotes a consumer agency official as saying that it has provided leverage for the conclusion of settlements without litigation in some cases.Posted at 12:04 AM | TrackBack (0)July 19, 2008"Deputizing Company Counsel as Agents of the Federal Government"Posted by Walter OlsonIn an update for the Cato Institute of a 2005 article (overview leads to PDF-format article), Washington attorney N. Richard Janis looks at the arsenal of methods, many relatively recent, by which federal prosecutors can arm-twist business defendants into submission. A portion of the executive summary: ...The combination of draconian sentences, lack of meaningful judicial control over the imposition of sanctions, and the impossible burdens on company officers have jeopardized the very nature of our adversary system of justice.To avoid the potential catastrophe of a federal indictment, business firms are taking extraordinary steps to placate federal prosecutors. And those prosecutors now regularly insist on the following: * That business firms surrender or "waive" their attorney-client privilege, * That firms must pressure their employees to waive their constitutional right against self-incrimination, * That firms facing indictment refuse to advance legal fees to employees under investigation -- even if a firm concludes that an employee was just following directions or is otherwise innocent of any wrongdoing, and * That embattled firms must discharge certain employees at the direction of the government -- even if a firm concludes that an employee was just following directions or is otherwise innocent of any wrongdoing.Any organization that balks at the government's demands risks months of negative publicity as prosecutors characterize a legal defense as "impeding" or "obstructing" the investigation. ...Posted at 12:06 AM | TrackBack (0)July 18, 2008Hoping to boost book sales, perhaps?Posted by Carter WoodNaomi Klein, eh? Just happened to see her name the other day. She's one of the plaintiffs in the ACLU's suit challenging the just-signed FISA Amendments Act (Public Law No: 110-261). From the lawsuit, page 29: "Nation contributor Naomi Klein has written extensively about the extension of radical free-market capitalism and the resurgence of imperial militarism following the September 11 attacks." Therefore, she will be monitored.Posted at 12:36 PM | TrackBack (0)More on the Michigan schemePosted by Carter WoodHaving spent a lot of time around state legislators over the years, just can't get enough of the news out of Michigan today. (See James Copland's post here.) Reform Michigan Government Now's proposed constitutional amendment is revealed to be a blatant scheme by organized labor and some Democratic politicians to take control of the three branches of government in time for the 2012 redistricting. This suspicion was confirmed when some (former-by-now) employee of the UAW posted the PowerPoint presentation online. Labor often overreaches, but boy, oh, boy. And what do you call rigging a court's political makeup by reducing, not increasing the number of justices -- court unpacking? More ... Continue reading "More on the Michigan scheme" » Posted at 12:23 PM | TrackBack (0)Worst book of the yearPosted by Walter OlsonClearly Naomi Klein's godawful The Shock Doctrine, with its conspiracy theories blaming free-market economists for every bad thing to happen in the world, is headed for that honor. Earlier here and here. More: Chris Bodenner @ Andrew Sullivan's. Posted at 10:22 AM | TrackBack (0)A depressing book on antidepressants?Posted by Walter OlsonIn yesterday's WSJ, Mark Herrmann of Drug & Device Law Blog fame reviews what he depicts as a lamentably one-sided treatment of the controversy over alleged side effects of Prozac and other antidepressants: "Side Effects" [by Alison Bass] belongs to a genre of investigative journalism that involves talking to plaintiffs, their lawyers and their expert witnesses, taking their stories as gospel and denigrating the opposing view because corporate money (apparently less pure than money from the plaintiffs' side) supposedly has a corrupting effect. Ms. Bass admires David Healy, for example, a British psychiatrist and expert witness whom the drug companies have been "unable to discredit." Surely a more even-handed account -- since corporate fees are routinely cited -- would mention the fees that Dr. Healy has collected for testifying for a dozen or more plaintiffs. She does not mention either that a court in 2002 rejected his testimony because of "glaring, overwhelming and unexplained" errors in his analysis.Posted at 9:33 AM | TrackBack (0)Some interstitial thoughts on judicial selection and electionsPosted by Ted FrankJim and Walter have done an excellent job of covering the waterfront (Jim even quoted my criticism of the "Missouri Plan"!), so let me restrict myself to some additional thoughts they haven't addressed: Continue reading "Some interstitial thoughts on judicial selection and elections" » Posted at 8:00 AM | TrackBack (0)July 17, 2008The story behind "Reform Michigan Government Now!"Posted by James R. CoplandLast week, Carter Wood noted the massive (19,000 word) ballot proposition slated to be before Michigan voters that would radically restructure the Michigan constitution -- including stripping away the two senior-most (conservative) supreme court justices, in an FDR-like reverse-court-packing maneuver. (The Wall Street Journal's John Fund wrote on the measure here; I've had an op-ed pending for a couple of weeks at the Detroit News, addressing the ballot measure as well as the broader litigation themes laid out in the recently released Trial Lawyers, Inc. Update on Michigan.)This afternoon, Dan Pero at the American Justice Partnership reveals the shocking story behind the ballot proposition:It turns out that all the suspicions about Reform Michigan Government Now's stealth plan to "reverse pack" the courts to benefit the state Democrat Party have now been shown to be right on target.The smoking gun is a PowerPoint injudiciously posted on one of the UAW's regional member websites and discovered by the Mackinac Center for Public Policy, which has now posted the revelatory document on its website. The UAW PowerPoint makes no bones about the purpose of the measure, boldly titling it: "Government Reform Proposal: Changing the rules of politics in Michigan to help Democrats." The emphasis is their own. . . .The UAW's PowerPoint lays out "the problem," which is that "Democrats in Michigan have not controlled the entire State Legislature in 25 years," and the Democrats "Must control Governor, Senate, House and Supreme Court" next time redistricting is to occur."The Problem," as slides 7 and 8 spell out, is that there is no way that Democrats can achieve this result fairly through the democratic electoral process. As the slides say, it is "a very long shot proposition." Nor, as the UAW concedes, will redistricting reform by itself be approved by the voters.The only hope then is to "change the rules," and do it by stealth . . . .The Detroit Free Press reports here.Posted at 6:20 PM | TrackBack (0)Judicial selection: additional thoughtsPosted by James R. CoplandI'd like to expand a bit more on the thoughts I briefly shared with Walter over email, and explicate my position more fully. In short: I agree that elections aren't good ways to pick judges, but let's be very wary of the push to replace them with "merit selection."To begin with, I agree strongly with Walter and Michael Krauss that in a vacuum -- if we were adopting a judicial system from scratch -- we'd never want to have the election of judges. The courts' function is interpreting the rule of law and safeguarding against oppression by the other branches of government, which control the sword and the purse. Those other branches are accountable to the people -- itself a critical safeguard of liberty -- but the passions of the moment might well undo the Rule of Law upon which liberty depends; and the majority of course might oppress the minority. The argument is laid out clearly by Alexander Hamilton in Federalist 78: Continue reading "Judicial selection: additional thoughts" » Posted at 2:11 PM | TrackBack (0)Judicial elections: some reactionsPosted by Walter OlsonMy post this morning arguing that prominent business advocates are wrong to crusade for direct election of state judges has stirred up considerable discussion. Continue reading "Judicial elections: some reactions" » Posted at 12:59 PM | TrackBack (0)In the Senate, anti-arbitration bills moving, tooPosted by Carter WoodJudging by the flurry of committee action, looks like there will be a congressional vote this year on at least one anti-arbitration bill. The Senate Judiciary Committee today is marking up S.2838, Fairness in Nursing Home Arbitration Act, which would vitiate arbitration provisions in nursing home contracts.On Tuesday, the House Judiciary Subcommittee on Commercial and Administrative Law reported out three anti-arbitration bills, including the House version of the nursing home legislation, H.R. 6126. The Naderific group, Public Citizen, issued a news release praising the action as an "important step toward protecting American consumers from companies that would take away their access to the courts." The U.S. Chamber of Commerce has been active in support of arbitration in contracts, arguing the provisions provide more affordable and reliable handling of claims for consumers and businesses both.Posted at 9:38 AM | TrackBack (0)Judicial elections: a dissenting viewPosted by Walter OlsonUpdate: Readers and bloggers have had many reactions, which I've summarized in a follow-up here. * * *As readers of this space may have noticed, some of our friends in the business community have lately been taking up as one of their big causes the direct voter election of state court judges. They argue in a populist vein that the common people ought to exert control over the judiciary and that methods such as gubernatorial appointment or "Missouri Plan" merit-screening panels are too open to influence behind the scenes from bar insiders, politicians, and trial lawyers. They also appear to believe that litigation outcomes will be fairer and more predictable from a business person's point of view when judges hold their offices by election than when they are appointed. The Wall Street Journal has published a series of editorials and other articles assailing the Missouri plan and talking up direct election.I must say that I find it really odd that business groups have gone off on this kick. Unlike them, I am not at all convinced that electioneering and noisy public campaigns make a good way of selecting judges. In fact, I think there's plenty of evidence that those practices contribute to some of the most serious problems of the state courts, and specifically to some of the worst problems facing business in those courts. In light of all that, crusading against appointive and for elective methods of judge-picking would appear -- at best -- a badly misplaced outlet for reform energy. Continue reading "Judicial elections: a dissenting view" » Posted at 1:25 AM | TrackBack (0)July 16, 2008AJP survey says public wants to elect state justicesPosted by Carter WoodThe American Justice Partnership, the state-oriented tort-reform group, has released a new national survey that indicates strong public support for elective state Supreme Court justices: 75 percent for electing the justices, 21 percent for appointing them. AJP President Dan Pero says: "While the American Justice Partnership Foundation takes no official position on this question, we believe the decision to abolish the peoples' right to select state Supreme Court justices - a right enshrined in many state constitutions - should not be taken lightly."The full survey, conducted by Ayres, McHenry & Associates, Inc., is available here.Posted at 1:45 PM | TrackBack (0)New areas for litigationPosted by Carter WoodAs the American Association for Justice concludes its annual convention in Philadelphia, we bid farewell by taking a look at the list of the 66 litigation groups , highlighting the proposed groups that met. Bisphenol - A/Phthalates Proposed Litigation Group Motorcycles Proposed Litigation Group Digitek Proposed Litigation Group Meeting Chiropractic Malpractice Proposed Litigation Group Walmart-Proposed Litigation Group Nuva Ring Proposed Litigation Group Chantix Proposed Litigation GroupSo I rode my motorcycle over to Walmart to buy some nice, soft plastic toys and refill my stop-smoking prescription. Man, threw out my back....Is there a lawyer for me? Continue reading "New areas for litigation" » Posted at 11:09 AM | TrackBack (0)Anti-arbitration bills moving in the HousePosted by Carter WoodOn Tuesday, the House Judiciary Subcommittee on Commercial and Administrative Law passed out three anti-mandatory arbitration bills, which will now go to the full committee for action.H.R. 6126, the "Fairness in Nursing Home Arbitration Act of 2008"H.R. 5312, the "Automobile Arbitration Fairness Act of 2008" andH.R. 3010, the "Arbitration Fairness Act of 2007"As noted in previous posts (here, here and here), the plaintiffs' bar has made pre-dispute arbitration clauses their No. 1 lobbying target in the current Congress, using emotional arguments about nursing homes to leverage other anti-arbitration bills. Monday's Wall Street Journal carried an effective op-ed arguing for the benefits of arbitration by a former Clinton-appointee to the FTC, Christine Varney (now at Hogan & Hartson): "Arbitration Works Better than Lawsuits." She notes the Arbitration Fairness Act, "is so sweeping that it wouldn't apply just to contracts consumers may sign in the future. It will cancel arbitration agreements agreed to in the past."The U.S. Chamber of Commerce's Institute for Legal Reform, which has been working diligently on arbitration, yesterday released a new analysis of California debt collection arbitration cases, demonstrating that arbitration is a better course of action for the consumer than going to court.Read the analysis (PDF) Read the press release Posted at 9:34 AM | TrackBack (0)Pennsylvania High Court To Hear Kia Class Action AppealPosted by Michael KraussThe Legal Intelligencer (via Law. com) reports that Pennsylvania's high court has agreed to hear an extraordinary case whereby Kia was condemned to pay almost $10 milliion (including over $4 million in attorney's fees) because a customer's brakes wore "too quickly."Shamell Samuel-Bassett's total cost for brake repairs during the warranty period on his Kia Sephia was $596.16. Brakes are not warranted (they are a "wear and tear" item), but Samuel-Bassett argued that his brakes wore too quickly. His attorney transformed his small-claims case into a class action by arguing that this amount should be awarded to each of the 9,402 people who had purchased 1995 to 2001 Sephias, for a total of about $5.7 million. Kia, not unreasonably, suggested that each case was different, and that not all drivers have similar braking habits. Nonetheless, trial judge Mark I. Bernstein entered judgment for the class without requiring individual proof of the breach of the class members' express limited warranty contracts; he then added $4.13 million for attorneys' fees, including a $1 million "risk premium." Kia protests that the class certification denies its due process rights, and that the "risk premium" violates relevant Supreme Court precedent about fee-shifting statutes.Posted at 7:21 AM | TrackBack (0)LeadPaintLawFirm.comPosted by Walter OlsonNo one bid on that domain name at its eBay auction (minimum bid, $999; ending date July 7), despite the seller's description of it as "great, keyword heavy for a law firm dealing in lead paint poisoning law suits" and the added attraction of free shipping (in case you were wondering how much it cost to ship a domain name). A reflection of a post-Rhode Island lull in the business, perhaps?Posted at 12:10 AM | TrackBack (0)More Scruggs trouble (Rigsby branch)Posted by Walter OlsonJudge William M. Acker Jr. has ruled that key Scruggs Katrina co-operators Cori and Kerry Rigsby must pay $65,000 in contempt fines, and Dickie Scruggs is continuing to fight those payments on the renegade insurance adjusters' behalf, with not much time left before Acker's deadline (Anita Lee, Biloxi Sun-Herald). Meanwhile, Scruggs says he is under no obligation to pay the high bills that law firm Zuckerman Spaeder ran up representing the Rigsbys (it eventually withdrew after going unpaid for too long). That prompted a post from the inimitable David Rossmiller, which begins as follows: Two questions.Number 1.Q: How close is this whole Rigsby mess to unraveling, like a crow swooping down, grabbing a loose thread on your suit and flying off?A: Apparently, pretty close.Number 2.Q: When is an agreement to indemnify someone's expense not an agreement to indemnify someone's expenses?A: Apparently, when Dickie Scruggs is involved....Posted at 12:02 AM | TrackBack (0)July 15, 2008In New Hampshire, a new business courtPosted by Carter WoodGov. John Lynch has signed Senate Bill 378, creating a specialized business docket in the New Hampshire Superior Court. From the governor's news release:"This legislation marks a significant reform to our court system. It is very important that our judicial system is equipped to handle efficiently the complexity of business statutes and conflicts, and this legislation will help them do just that," Gov. Lynch said. The new business court will be similar to other specialized courts in New Hampshire, such as the family court, where a superior court judge will handle the docket of all business and commercial disputes, allowing business disputes to be resolved quicker and adding efficiency to the judicial system."Businesses move at a different speed and they need this docket to make justice more accessible to them and accommodate the speed at which they move today. And this new business docket fits in with our goal of making the judicial process more affordable and understandable," New Hampshire Supreme Court Chief Justice John T. Broderick Jr. said. "This has been a collective effort and the beneficiaries are the businesses and the people of New Hampshire."The Union-Leader covers the story.Posted at 12:03 PM | TrackBack (0)Forum-shoppers' delight?Posted by Walter OlsonProf. Chemerinsky is out with a new book that (per John McGinnis's review in today's WSJ) proposes letting plaintiffs pick either a federal or a state forum, whichever they think will prove most favorable, to enforce their rights under federal law. He's not crazy about knocking out state law through pre-emption, either. More: Althouse.Posted at 10:55 AM | TrackBack (0)Louisiana expert witness reformPosted by Walter OlsonIt's not as if the Bayou State regularly produces good news on lawsuit reform, but a new measure applauded by Fred Shumate, executive director of Louisiana Lawsuit Abuse Watch, sounds like an exception: S.B. 308 "would establish a uniform system for eliminating 'junk science' and nonexpert witnesses from the courtroom. ... This legislation is similar to laws passed recently in Georgia, Mississippi and Michigan, and is already being called a model for possible legislation in West Virginia."Posted at 9:56 AM | TrackBack (0)Around the web, July 15Posted by Walter OlsonInjury lawyer Eric Turkewitz blogs one of his trials, a car accident case, in seven parts [last post links to the earlier ones]Joe Nocera, very often the best reason to read the NYT business section, has started blogging ["Executive Suite"]Arkansas governor Mike Beebe, when attorney general of his state, "suggested to [public employee] retirement systems they had a fiduciary duty to" hire private lawyers to file big securities suits, so now they do [Democrat-Gazette courtesy U.S. Chamber ILR]"Banana boomerang": Another weirdly tangled story of Nicaraguan pesticide injury being sued over in U.S. courts, this one involving Beaumont's Provost Umphrey, apparently different from the West Coast one that has gotten Girardi and Lack in such hot water [SE Texas Record]ADA sometimes obliges employer to accommodate disability even when employee does not ask for that to be done, rules Second Circuit panel in Wal-Mart case [NYLJ]"The SEC's Inglorious Role in Limiting Small Business's Access to Capital" [Campbell, Jr., Fed Soc's Engage] Posted at 12:08 AM | TrackBack (0)July 14, 2008"Pay gap" mythologyPosted by Walter OlsonSteve Chapman thinks Obama knows better.Posted at 9:25 PM | TrackBack (0)Big goings on in PhiladelphiaPosted by Carter WoodQuite a weekend in Philadelphia just past. The National Governors Association celebrated its 100th anniversary, with Pennsylvania Governor Ed Rendall taking over as chairman for the 2008-2009 year. As governor, Rendell has frustrated tort-reform advocates over the years, vetoing one reform bill (SB 435) in 2006. (Point of Law post.) But Rendell is making infrastructure his national NGA focus.Also in Philadelphia, the annual convention of the American Association for Justice continues today, with Minnesota Senate candidate Al Franken speaking at a townhall meeting. And, like every day, it's a big day for litigation groups, those bands of attorneys who join to share good ideas about suing people. From today's agenda, we see the activity:Birth Trauma Litigation Group Meeting Construction Defects - Property Damages Litigation Group and Toxic Mold Litigation Group Education ProgramResort Torts Litigation Group Education ProgramSchools: Violence, Misconduct, and Safety Litigation Group Education Program Aviation Law Section Education ProgramBad Faith Insurance Litigation Group Education ProgramHuman Bone & Tissue Recovered from Cadavers Litigation Group Elective Gastric Bypass Litigation GroupSecurities Litigation Group Meeting Nursing Homes Litigation Group Bring Your Files Forum and Roundtable Burn Injury, Crane & Aerial Lift Injury Litigation Groups Bring Your Files ForumChild Sex Abuse Litigation Group Roundtable Chiropractic Malpractice Proposed Litigation Group Gas Fire & Explosions Litigation Group Schools: Violence, Misconduct, and Safety Litigation Group Traumatic Brain Injuries Litigation Executive Committee Walmart-Proposed Litigation GroupOrthopedic Implant Litigation Group RoundtableAMO Complete Moisture Plus Eye Care Solution Litigation Meeting Bad Faith Insurance Litigation Group RoundtableNursing Homes Litigation Group Education ProgramMedical Negligence Information Exchange Litigation GroupFair Housing Litigation GroupLawn Mower Litigation Bring Your Files Forum and RoundtableTraumatic Brain Injuries Litigation GroupRailroad/Highway Crossing & Derailment Litigation Group and Railroad Law Section Joint Meeting and Roundtable Electric Blankets and Heating Pads Litigation Group Roundtable Continue reading "Big goings on in Philadelphia" » Posted at 10:59 AM | TrackBack (0)"Pan-European Organisation of Personal Injury Lawyers"Posted by Walter OlsonApparently with support from the European Union, personal injury lawyers cooperating across national lines maintain the ten-year-old organization PEOPIL, which last month (notes John Sullivan of the Civil Justice Association of California) held a conference in Valencia, Spain, at which it hosted the president and president-elect of the American Association for Justice (formerly ATLA). PEOPIL's website lists committees working in just five areas -- aviation, medical negligence, road traffic accidents and whiplash, occupational health, and tourism -- a far cry from the hundred-plus litigation groups under the AAJ/ATLA umbrella. More background is at the website of U.K. solicitors Russell Jones & Walker, and the report from the group's 2007 tenth anniversary conference in Prague is here (PDF).Posted at 6:53 AM | TrackBack (0)Around the web, July 14Posted by Walter Olson"We would say 'only in America' but for the fact that it's in Russia": travails of Bank of New York in Moscow courtroom show need to rethink RICO law [NY Sun editorial, earlier]New Hampshire is latest target for ABA-backed "Civil Gideon" push for blanket right to taxpayer-paid lawyers in noncriminal cases [Jonathan Baird, Concord Monitor via ABA Journal; earlier] Last December the Washington Supreme Court ruled against such a constitutional claim [Perkins Coie]Expect some hot contests in Mississippi high court races [Clarion-Ledger] "What do Dickie Scruggs' crimes have to do with you? Plenty." [Ziemba, Meridian Star via YallPolitics]Most dangerous kind of discrimination claim? Jury sets $10 million punitive damages in age-bias suit against telecom firm Avaya [NJLJ]Score one against litigation slush funds: after controversy over payout to Seton Hall Law in Bristol-Myers Squibb nonprosecution deal, DoJ adopts policy to curb deals "requiring a defendant to pay a third party unrelated to the defendant's criminal conduct" [Corporate Counsel, earlier]Texas Watch, a group whose views often seem to reflect those of the Lone Star State's litigation lobby, keeps firing blanks at the Supreme Court of Texas [SMS blog] Posted at 12:06 AM | TrackBack (0)July 13, 2008In Oregon and Michigan, ballot politicsPosted by Carter WoodTwo items from this weekend's reporting: The Statesman-Journal reports: Failing to make the fall ballot for lack of petition signatures are two proposed initiative measures, one to limit lawyers contingency fees and the other to make it easier to punish attorneys for filing "frivolous" actions. The measures were sponsored by the head of FreedomWorks in Oregon and Republican Party Vice Chairman Russ Walker. The Politicker blog declares the Oregon Trial Lawyers Association a political winner for the week, commenting: "Sending a team of trial lawyers down to Salem to police the signature counting, it looks like they are off the hook for a ballot measure aimed at cutting their salaries." John Fund of the Wall Street Journal highlights the proposed Michigan constitutional amendment (see below) as an example of left/liberal/progressive activism in a column, "Obama's Liberal Shock Troops." Fund writes: "There is also a direct attack on the judiciary. The initiative reduces the state's Supreme Court to five members, down from seven, and the state's Court of Appeals to 20 judges, down from 28. Saving money appears not to be the motive: Democratic Gov. Jennifer Granholm could appoint 10 newly created circuit court judges. The net result would be that conservatives would lose control of the state Supreme Court, because the two justices who would be removed would be the last two appointed by GOP Gov. John Engler. Of the eight appeals court judgeships that would be eliminated, six are now held by people with GOP backgrounds."And since we're on the WSJ's op-ed page, here's another Fund column on Justice Scalia's recent interview with Britain's Daily Telegraph, "Let's Be Rid of Half the Lawyers."Posted at 6:37 PM | TrackBack (0)Fannie Mae and Freddie Mac debaclePosted by Walter OlsonProf. Bainbridge, among others, saw it coming a long way back. Posted at 10:18 AM | TrackBack (0)"Jury misbehavior more common than thought"Posted by Walter OlsonYes, and thought's common enough (Daily Business Review). Seriously, there's some kind of a point to be made here about the artificiality of a fact-finding method in which looking up a word's meaning in a dictionary needs to be suppressed with rigor as "misconduct". But that's a point for another day.Posted at 10:08 AM | TrackBack (0)July 12, 2008Insurance: "Colossal class action hits Texarkana"Posted by Walter OlsonFiled just before the Class Action Fairness Act went into effect -- and therefore escaping its provisions -- a gigantic set of class actions against 581 insurers charges that their use of claims-management software is unfair to policyholders and beneficiaries. It's been grinding on for years since then in remote (but plaintiff-friendly) Texarkana, Arkansas. Our own Jim Copland is quoted extensively in the coverage by the Chamber-backed Legal NewsLine, and notes that the infliction of massive discovery costs as well as negative publicity has provided the plaintiffs' side with crucial leverage. Posted at 12:16 AM | TrackBack (0)July 11, 2008The Delaware advantagePosted by Walter OlsonIn an interview with Metropolitan Corporate Counsel, Delaware chief justice Myron T. Steele explains the reasons for the state's pre-eminent appeal to business litigants, including its Court of Chancery, run by experienced business judges without punitive damages or juries; adoption of federal Daubert standards on expert evidence, and use of summary judgment to narrow issues; merit selection of judges under an unusual constitutional provision requiring political balance; extensive use of arbitration and mediation; and relatively well-educated juries in cases arising from common law (as distinct from equity). At the same time, Steele notes, the state's courts are attractive for some plaintiffs in mass tort cases, at least in part due to factors such as speed and efficiency that also please business litigants.Posted at 11:59 AM | TrackBack (0)Just to wrap things up on FISA...more litigationPosted by Carter WoodPresident Bush signed H.R. 6304, the FISA Amendments Act, into law Thursday. His statement from the signing ceremony is here. The ACLU and aggrieved allies immediately filed suit in the U.S. District Court for the Southern District of New York, seeking a court order that declares the law unconstitutional and ordering its immediate halt. From the ACLU's news release:"Spying on Americans without warrants or judicial approval is an abuse of government power - and that's exactly what this law allows. The ACLU will not sit by and let this evisceration of the Fourth Amendment go unchallenged," said ACLU Executive Director Anthony D. Romero. "Electronic surveillance must be conducted in a constitutional manner that affords the greatest possible protection for individual privacy and free speech rights. The new wiretapping law fails to provide fundamental safeguards that the Constitution unambiguously requires." The complaint in Amnesty v. McDonnell is available here.As this New York Sun story notes, the ACLU suit does not take on the civil immunity for telecom companies included in H.R. 6304. The Electronic Frontier Foundation is not a party to the ACLU suit; perhaps the group takes the lead in the private-sector litigation. (The private sector issues are the ones that interested us.) For now, EFF is excoriating the new law as a means to raise money.More background following passage of H.R. 6304:President Bush's statement, "President Bush Pleased by Passage of FISA Reform Legislation." Sen. Jay Rockefeller news release, "Rockefeller Calls Final Pasage of New FISA Law Critical for National Security." Sen. Kit Bond news release, "Bond hails Senate passage of surveillance bill." ACLU news release, "Senate Passes Unconstitutional Spying Bill And Grants Sweeping Immunity To Phone Companies." Electronic Frontier Foundation news release, "Senate Joins House in Caving to White House Immunity Demands...Telecoms Let Off the Hook for Illegal Spying - For Now."UPDATE (2:05 p.m.): Orrin Kerr comments at The Volokh Conspiracy, "The New FISA Law -- and the Misleading Media Coverage Of It." Posted at 11:38 AM | TrackBack (0)"A history of lawsuit reform in Texas, part 2"Posted by Walter OlsonThe second part of Texas Public Policy Foundation's audio interview with former state Rep. Joe Nixon, a key architect of the state's reforms, is now up in MP3 format. Part I is here.Posted at 11:23 AM | TrackBack (0)"Barbarians on the bench?"Posted by Walter OlsonThe New York Times, E.J. Dionne, and others pretend that a right-wing cabal of "highly conservative" and "cold-hearted" justices now exerts near-control over the Supreme Court. In reality, notes Stuart Taylor, Jr. in his new column, the key decisions that were deemed triumphs for the right this term were joined by such justices as Stevens, Breyer and Souter and applauded by such public figures as Barack Obama. Even the exceptions typically came in cases where dissenting conservative justices stood closer to American public opinion than did the majority of the court. "it's misleading to brand as 'far-right' and 'radical' positions that in fact are more liberal than, or near the center of, mainstream public opinion. ... The explanation may be that media portrayals have convinced the public that the Court is more conservative than it really is."Posted at 11:14 AM | TrackBack (0)Around the web, July 11Posted by Walter OlsonOur own Ted Frank on punitive damages after the Exxon Shipping decision [yesterday's WSJ]. Also check out Gordon Crovitz's take [WSJ earlier]After acquittal of Mills, Kentucky fen-phen trial results in hung jury for Gallion and Cunningham; prosecutorial fumbles blamed [Ted at OL]Adventures in class action choice of law: New Mexico high court sees no problem applying its law to transactions in other states [Albuquerque Journal courtesy US Chamber]Alabama drug-pricing trial: Jere Beasley gets jury to award $114 million against Glaxo and Novartis, demand letters sent to 69 other drugmakers charged with the same supposed fraud [CNBC, FiercePharma]Abbe Lowell files Fifth Circuit appeal of client Paul Minor's conviction [White Collar Crime Prof Blog, appeal in PDF]WSJ on hurricane insurance models is stronger on hand-wringing than on analytical rigor [Salmon, Portfolio]Defense bar lagging plaintiffs' in new media involvement? [Genova] Posted at 12:07 AM | TrackBack (0)July 10, 2008eBay versus LVMH: gift recyclers beware?Posted by Walter OlsonThe verdict in a French court, if upheld, won't just compel the online auction site to police its listings for counterfeits of luggage, perfume and other status goods, but also will knock out "gray market" goods (product originating in authorized channels, but sold in a different market than intended). "It would even bar individuals from reselling LVMH perfumes that they had received, for instance, as unwanted Christmas presents, both lawyers say." (Parloff, Fortune). Posted at 7:28 PM | TrackBack (0)A Michigan leap of faithPosted by Carter Wood Reform Michigan Government Now, a political group of uncertain provenance, has submitted its petition signatures (more than 487,000, they claim) to qualify a proposed constitutional amendment for the November election. The measure sweeps through all the branches of government in its 19,000 words, cutting the pay of elected official, shrinking the Legislature and eliminating seats on the state Supreme Court and Court of Appeals, in the process kicking off Republican appointees. Here's the text. The petition gathering went on in relative obscurity, and organizers have kept silent about their funding, saying their backers don't have to be revealed until August. The spokeswoman for the group is Dianne Byrum, a former Democratic House leader, and other leading Democrats have praised the measures; scuttlebutt is that organized labor is the primary mover.Republicans have certainly geared up against the measure, with state GOP Chairman Saul Anuzis laying out the arguments against in this op-ed in the Detroit Free Press. As for the courts, he says, "This monstrosity proposes a wholesale special interest takeover of our state's courts. It purges two Supreme Court justices, with those justices chosen by one set of criteria. It wipes out seven Court of Appeals judges by a different set of criteria. It jiggers the pensions of more than 250 judges, potentially creating a real emergency in our courts if most or all of them decide to quit. "Which raises another sticky issue. Backers of the measure claim no sitting judge can review the legality of the ballot language because of inherent conflict of interest; they'd be ruling on their own pay. (Kalamazoo Gazette story.)Gov. Granholm, a Democrat, says she likes some parts, not so sure about others, and maybe a state Constitutional Convention is the way to go. (Detroit Free Press.)So, much confusion, no doubt litigation, and let the accusations fly. The measure promises months of theorizing, commentary and fun for political watchers, but it's hard to see any good government coming out of it. Posted at 5:20 PM | TrackBack (0)House Oversight used as a 'discovery proxy'Posted by Carter WoodOn Wednesday the House Committee on Oversight and Government Reform chaired by Rep. Henry Waxman held a hearing, "On Manufacturers of FEMA's Toxic Trailers," with testimony from four representatives of the travel trailer industry. The issue was formaldehyde levels in trailers that FEMA supplied to people displaced by Hurricane Katrina. It was your typical House Oversight hearing, full of attacks against industry and the Administration as bad actors.Thankfully, some balance come from the ranking member of the committee, Rep. Tom Davis (R-VA), who gave an opening statement that reflected the real world difficulties that FEMA and the industry encountered after the disaster. Davis recounted the different reports on formaldehyde levels from tests conducted by the CDC and commented (our emphasis):That leaves trailer occupants, already victimized by one storm, caught in a lingering tempest of post-Katrina political scapegoating, bureaucratic finger-pointing, and litigation. Once again the Committee risks being used as a discovery proxy for plaintiffs suing companies called to testify before us. Instead, we should be asking FEMA why contract requirements for habitable mobile units weren't more specific, why inspection procedures weren't consistent, and why heath concerns didn't trigger standardized testing and, where necessary, prompt remediation. We should be asking federal science and health agencies how to establish, and measure, workable standards for formaldehyde exposure in realistic settings.Along those lines, here's... An informative article on the lawsuits against one of the trailer manufacturers. It's from "Trial," the magazine of the American Association for Justice. ToxicFEMAtrailer.com, a website from a lawfirm soliciting clients in a class-action lawsuit. An MSNBC story on the hearing, "Congress names names in FEMA trailer probe -- House Democrats say manufacturers knew of high formaldehyde levels." The MSNBC story is a real piece of work, "Congressional Democrats for the first time named names Wednesday in their investigation of formaldehyde-contaminated travel trailers provided by FEMA to victims of Hurricanes Katrina and Rita, charging that manufacturers knew but did not disclose that the units were emitting high levels of the toxic gas that could sicken inhabitants." Named names...The media cannot resist making McCarthy-era allusions, no matter how ridiculous and strained. Anyway, it's the classic combination: "Investigating" politicians, industry-attacking class-action lawyers, and hyping, accusatory media. At least Rep. Davis identified the game being played.Posted at 11:23 AM | TrackBack (0)SEIU vs. private equityPosted by Walter OlsonDiana Furchtgott-Roth traces the union's relationship with Kohlberg Kravis Roberts and Henry Kravis (whom it's now demonizing in a high-visibility campaign) and also examines the union's stewardship of its own pension plans.Posted at 6:12 AM | TrackBack (0)July 9, 2008Public employee union sclerosisPosted by Walter OlsonNew York may display a more advanced stage of the malady, but Connecticut has come down with it too.Posted at 10:28 PM | TrackBack (0)Trophy federal courthousesPosted by Walter OlsonWhy, wonders Ron Coleman, must their design be so soulless and uncomfortable?Posted at 10:13 PM | TrackBack (0)FISA: So that's the end of the litigation, right?Posted by Carter WoodA news release from the Electronic Frontier Foundation, which is representing the plaintiffs in Hepting v. AT&T, a class action lawsuit, and is coordinating co-counsel in the 47 lawsuits outstanding against the telecoms: "Senate Joins House in Caving to White House Immunity Demands -- Telecoms Let Off the Hook for Illegal Spying - For Now""We thank those senators who courageously opposed telecom immunity and vow to them, and to the American people, that the fight for accountability over the president's illegal surveillance is not over," said EFF Senior Staff Attorney Kurt Opsahl. "Even though Congress has failed to protect the privacy of Americans and uphold the rule of law, we will not abandon our defense of liberty. We will fight this unconstitutional grant of immunity in the courtroom and in the Congress, requesting repeal of the immunity in the next session, while seeking justice from the Judiciary. Nor can the lawless officials who approved this massive violation of Americans' rights rest easy, for we will file a new suit against the government and challenge warrantless wiretapping, past, present and future."Interesting. The comments echo remarks made by Sen. Sheldon Whitehouse (D-RI) on the Senate floor yesterday (Page S6409): Today's effort is a naked intrusion into ongoing litigation. Where will that stop? Will Congress be able to rove at will through litigation anywhere in the judicial branch, picking winners and losers as we like? We don't just trespass on the separation of powers; we trespass onto dangerous ground. If I were a litigant, I would challenge the constitutionality of the immunity provisions of this statute, and I would expect a good chance of winning.So the telecoms were creating this public nuisance...Posted at 3:56 PM | TrackBack (0)FISA legislation passes, 69-28; telecoms get immunityPosted by Carter WoodThe Senate has just passed H.R. 6304, the FISA Amendments Act, to update the authority for intercepting foreign, electronic communications for intelligence purposes. Earlier today, the Senate handily defeated three amendments that would have undercut (and in the case of the Feinstein-Dodd amendment, eliminated) the legal immunity the legislation provided to telecom companies that assisted in the Administration's post-9/11 program of surveillance. The vote was 69-28.The legislation now goes to the President, and once it becomes law, the telecom companies can submit documentation to the U.S. District Court to demonstrate that they were, indeed, asked to cooperate by the Administration in the surveillance. (The usual phrase is "given a legal order" or words to that effect.) If the documentation satisfies the court, as most everyone expects it to, the court will dismiss the 40-plus civil lawsuits filed against the companies.This bill and immunity for the telecoms have been a cause celebre among civil libertarian groups like the ACLU and EFF, opponents of the Administration's foreign-policy, and the left-wing blogosphere. With litigation pending, and being in an unenviable PR position, the telecommunication companies mostly stayed quiet.Still, a very good explanation of the national security and legal reasons for the bill came from Sen. Orrin Hatch (R-UT) today on the Senate floor. (Prepared remarks here.)It's very simple - Congress should not condone oversight through litigation. The lawsuits seize on the President's brief comments about the existence of a limited program to go on a fishing expedition of NSA activities. But this is really worse than a fishing expedition; this is draining the Loch Ness to find a monster. Sometimes what you are looking for just doesn't exist. Yet we consistently hear as justification for the apparent paranoia that some wiretaps were warrantless. But lest we forget, the 4th Amendment does not proscribe warrantless searches, it proscribes unreasonable searches.The fact is the President created an early warning system to prevent future attacks; essentially a terrorist smoke detector. But rather than appreciate the protection it offered, critics rushed to pull out the batteries so that it couldn't work. My feelings of admiration and respect for the companies who did their part to defend America are well known. As I've said in the past, any company who assisted us following the attacks of 9/11 deserves a round of applause and a helping hand, not a slap in the face and a kick to the gut.The Senator also does a nice job of debunking the legal claims of those who sued the phone companies: "In the over 40 outstanding civil lawsuits, is there any proof that any litigant was specifically targeted by the government? Can any of the plaintiffs show that they are "aggrieved persons" under the definition of FISA? The answer to both questions is no. Rather, many of the lawsuits utilize the following logic: I have long distance service, so I am going to sue because I think you listened to my calls."I've been following this week's FISA debate over at Shopfloor.org. Start here.Posted at 3:36 PM | TrackBack (0)Columbus drops public-nuisance suit against paint companiesPosted by Carter WoodThe paint manufacturers hit by the lead-paint lawsuits have just issued a news release about the city of Columbus dropping its suit. Excerpt:COLUMBUS, OHIO - The City of Columbus has voluntarily dismissed with prejudice its public nuisance lawsuit filed in December 2006 against former manufacturers of lead pigment. With Tuesday's filing in Franklin County Court of Common Pleas, all ten public nuisances suits filed by Ohio cities since 2006 have been either voluntarily dismissed or rejected by courts."The City of Columbus followed settled law by asking the court to dismiss its lawsuit," said Charles H. Moellenberg, Jr., an attorney for The Sherwin-Williams Company, speaking on behalf of defendants Sherwin-Williams and Millennium Holdings, LLC. "The lawsuit was legally and factually wrong in suing companies that lawfully made products that the city, painters and consumers demanded historically as the best on the market."The City's action follows a series of significant decisions over the last two years, all of which have rejected public nuisance lawsuits against former manufacturers. On July 1, the Rhode Island Supreme Court unanimously rejected a public nuisance lawsuit filed nine years earlier, saying that the claim "should have been dismissed at the outset." Earlier, state Supreme Courts in Missouri and New Jersey, along with a jury in Wisconsin, also rejected plaintiffs' claims in public nuisance cases. As a result, public nuisance lawsuits against former manufacturers have been rejected by all courts in which the cases are resolved. We'll be watching for news from the Ohio Attorney General's office, which last week expressed its intention to continue the state's lawsuit. Seems an untenable position.Earlier post on Columbus' litigation here. Posted at 2:57 PM | TrackBack (0)Around the web, July 9Posted by Walter OlsonParis's Le Figaro warns Europe against going down the U.S. path on class actions [The Moderate Voice]Tennessee docs hoping new law requiring 60 days notice and expert attestation of merit will curb dubious cases [Minch/Tennessean]Not much chance lawmakers will investigate charges that business-bashing political group ACORN was promoting liar loans [Malkin; Adler @ Volokh]Reforming judicial selection a necessity if Alabama is to turn around its courts' poor reputation [Mobile Press-Register]Ignominious end to Eliot Spitzer's crusade against NYSE chief Grasso [WaPo, Ribstein]Since 1958 it has been unlawful to trade futures in onions, and a lesson lies therein about whether speculators are to blame for price volatility [Tabarrok]Illinois businesses manage to stop proposed "Structural Work Act" allowing suits against other contractors on work site to bypass workers' comp; New York said to have only such law [Akin/Madison Record] Posted at 12:13 AM | TrackBack (0)July 8, 2008Tomorrow: AEI/Brookings/GSU event on insurance regulationPosted by Walter OlsonPanelists at the D.C. event will include Point of Law's own Prof. Martin Grace and his Georgia State colleagues Robert Klein and Harold Skipper, along with Bob Litan of Brookings, Peter Wallison of AEI, Hal Scott of Harvard, and a host of others. Details here. Update: now with full-length video and audio links.Posted at 5:19 PM | TrackBack (0)"Milton Friedman debates Naomi Klein"Posted by Walter OlsonEven from beyond the grave, the eminent economist has no trouble refuting the mysteriously popular left-wing polemicist in this Reason.tv remix.Posted at 11:05 AM | TrackBack (0)Preemption: Meanwhile, back at the conventionPosted by Carter WoodApropos preemption, we note this session on Sunday, July 13, at the American Association for Justice's annual convention in Philadelphia:Preemption Law Litigation GroupAfternoon Theme: Federal Preemption: Fighting in Court and in Congress Preemption Update: Activity on the Hill Overview of Federal Preemption: Its Origins to Today's Most Popular Defense Against Liability Federalism: Agencies and Legislation Encroaching on States' Rights In the Trenches: Litigating Preemption in Pharmaceutical Cases FDA Discovery Arguing Against Preemption: Auto Defect and Other Cases The Role of Amicus Briefs in Fighting PreeemptionElsewhere, reinforcing the line of attack, a "Perspective" piece appears in the July 3 online issue of the New England Journal of Medicine, written by the journal's doctor/editors, "Why Doctors Should Worry about Preemption." The three anticipate the Supreme Court's ruling in Wyeth v. Levine and argue, "Why should doctors be concerned about preemption? In stripping patients of their right to seek redress through due process of law, preemption of common-law tort actions is not only unjust but will also result in the reduced safety of drugs and medical devices for the American people. Preemption will undermine the confidence that doctors and patients have in the safety of drugs and devices. If injured patients are unable to seek legal redress from manufacturers of defective products, they may instead turn elsewhere." "Unable to seek legal redress..." Well, the doctors certainly know their anatomy of a straw man.Posted at 10:31 AM | TrackBack (0)Preemption: The legislative undermining under wayPosted by Carter WoodThe attacks against federal preemption, a recurring topic of discussion around here, are stepping up in Congress.On June 26 Rep. Frank Pallone (D-NJ) and Rep. Henry Waxman (D-CA) introduced H.R.6381, the Medical Device Safety Act. Being sold as overturning the Supreme Court's decision in Riegel v. Medtronic, it simply amends the Federal Food, Drug and Cosmetic Act with a clause: "Nothing in this section shall be construed to modify or otherwise affect any action for damages or the liability of any person under the law of any State." Pallone's office issued a news release, "Health Leaders in Congress Introduce Legislative Reversing Supreme Court's Medical Device Decision."The introduction of the legislation coincided with a letter from Waxman's Oversight Committee to FDA Administrator Andrew von Eschenbach, a typical document hunt to demonstrate that the FDA colludes with the drug and medical equipment industries to prevent state tort actions. By July 11, Waxman demands, the FDA must submit (and this is just a small sample)...All documents since January 20, 2001, relating to communications between FDA officials and private persons, including representatives of drug or medical device companies, about preemption, including documents related to: (a) A intervention in specific product liability cases; (b) the development of Section D "Comments on the Product Liaiblity Implications of the Proposed Rule" in the preamble ot the 2006 drug labeling rule; and (c) policy documents and guidance relating to preemption.The food and drug trade press has noticed (here and here, for example). The letter follows an Oversight committee hearing in May on preemption, the one where Dennis Quaid and his wife testified. Posted at 10:12 AM | TrackBack (0)"What is the role of the courts in making social policy?"Posted by Walter OlsonFifth in the ongoing multi-sided discussion series "New Talk" from Philip Howard's Common Good, this one runs from today through Thursday and includes such names as Judge Edith Jones, Profs. Walter Dellinger, David Schoenbrod and Peter Schuck, Alan Morrison, Ken Feinberg, and our own Ted Frank, to name only a few. Posted at 10:07 AM | TrackBack (0)A road map for the Kivalina suitPosted by Walter OlsonThe Kivalina suit, backed by liberal foundation money and formidable plaintiff's lawyers, seeks to extract vast sums from energy companies on a theory that climate change can be construed as public nuisance. A Washington Legal Foundation paper (PDF) by Peter Gray and J. Benjamin Winburn of McKenna Long & Aldridge examines the hurdles and defenses the suit will likely have to overcome, including the political question doctrine, pre-emption, and standing, and most significantly causation, since the contributions of defendant oil, coal and utility companies to global warming cannot readily be disentangled from the contributions of entities not sued. Although the state tobacco recoupment precedent suggests that "civil conspiracy" and "concert of action" could be powerful theories for the plaintiffs, Gray and Winburn conclude that the atmospherics (so to speak) of sympathy are likely to be more favorable for the defendants in this case, in that their activities, unlike the sale of cigarettes, are essential to the functioning of modern society. Posted at 7:54 AM | TrackBack (0)July 7, 2008R.I. lead paint ruling: What happened to the yacht?Posted by Carter WoodFrom Stuart Taylor, National Journal, Feb. 19, 2003, "Perverting the Legal System: The Lead-Paint Rip-Off." [Attorney General Sheldon] Whitehouse signed an unusual "retainer agreement" with Ness Motley and another firm. It not only guaranteed the lawyers a contingent fee of 16.67 percent of any money recovered, plus all litigation expenses; it also gave them considerable control over whom to sue, what to claim, whether to settle, and on what terms. In other words, Whitehouse delegated a share of the state's sovereign power to a law firm whose best-known partner, Ronald L. Motley, had vowed that he would bring the paint industry to its knees within three years or give up his 156-foot yacht. Never mind the conflict between the interests of the lawyers in huge fees and the interests of Rhode Island's people, who might, for example, be misled and alarmed by the lawyers for their state, who claim that old lead paint in school buildings is a big threat to the students.With all the commentary over the R.I. Supreme Court's rejection of the state's public-nuisance lawsuit against the paint industry, there was comparatively little analysis of the ruling's section on the propriety/legality of contingency fee arrangements. LegalNewsline had a good examination of the issue, following up a story from May about Motley Rice's fee. Otherwise...eh. Probably because the court upheld the contingency fee, albeit with strong words of admonition. The section of the opinion on the continency fee arrangement, Track V, starts on page 60. The gist is on page 71.The Propriety of Contingent Fee ArrangementsAlthough we are keenly aware of the gravity of the issue and of the fact that thoughtful and potent policy-based arguments have been made on both sides of the issue, in the end we have concluded that, in principle, there is nothing unconstitutional or illegal or inappropriate in a contractual relationship whereby the Attorney General hires outside attorneys on a contingent fee basis to assist in the litigation of certain non-criminal matters. Indeed, it is our view that the ability of the Attorney General to enter into such contractual relationships may well, in some circumstances, lead to results that will be beneficial to society--results which otherwise might not have been attainable. However, due to the special duty of attorneys general to "seek justice" and their wide discretion with respect to same, such contractual relationships must be accompanied by exacting limitations. In short, it is our view that the Attorney General is not precluded from engaging private counsel pursuant to a contingent fee agreement in order to assist in certain civil litigation, so long as the Office of Attorney General retains absolute and total control over all critical decision-making in any case in which such agreements have been entered into.Bolded and underlined! And restated, more or less, several times in the opinon. A good sentiment, but hard to enforce in the real world, we think.As for Mr. Motley's yacht, the Themis was still on Power & Motoryacht's list of America's 100 Largest Yachts in 2007. But only #99. He's not keeping up. Posted at 4:38 PM | TrackBack (0)Land of the Ballot BuildersPosted by Carter WoodElectoral populism continues its decade-long battle against the elite polity in Oregon, with at least 10 citizen initiatives on the ballot this November, including two that go after trial lawyers.The Oregonian covers the activism, much coming from familiar advocates of smaller government, lower taxes, and less organized labor, Bill Sizemore and Russ Walker. The Statesman-Journal also has a story, suggesting as many as 14 initiatives making it to the ballot. Two of the qualified measures (as detailed at the excellent Secretary of State's online database): Protects Citizens From Excessive Attorney Fees Make Lawyers Accountable For Lawsuit AbusesThe first, Initiative 51, limits a lawyer's contingency fees to 25 percent for the first $25,000 and 10 percent above $25,000. The second, Initiative 53, requires the court to sanction attorneys who file frivolous pleadings in civil actions. Sizemore was the Republican Party's candidate for governor in 1998. Last week, the Oregon Supreme Court upheld a $2.5 million civil verdict against Sizemore, the result of a racketeering lawsuit brought by the state's teachers unions against Sizemore-organized groups that collected petitions for initiated measures in 2000. Statesman-Journal story here, and the Supreme Court's opinion in S054403 American Fed. Teachers v. Oregon Taxpayers United is available here.Posted at 10:07 AM | TrackBack (0)July 6, 2008Providence Journal summarizes the lead paint rulingPosted by Carter WoodRhode Island's dominant paper, the Providence Journal, summarizes the lead-paint litigation with a Sunday feature on the Liz Colon, the mother of a child who suffered from lead poisoning. Colon became the face of the litigation against the paint manufacturers, joining the activist group, The Childhood Lead Action Project, for which she now works.From "Court reversal on lead poisoning stuns a longtime advocate for lead poisoning victims":Colon says she can understand the Supreme Court's rationale for reversing the state's case. She still has trouble accepting why she had to pay so much financially and emotionally after her son got lead poisoning. Governments at every level are paying. Taxpayers are paying. And the companies walk away "scot free." The newspaper invested great time and effort in coverage of the lead paint issue as a public health crisis, in 2001 publishing a special, multipart report, "Poisoned." Among the installments: "Babies as lead detectors," and "Unsafe at home." And the wrap-up, "Enact new laws, enforce the old," with the teaser, "To shake Rhode Island out of its complacency and to stop the lead poisoning of our children, Atty. Gen. Sheldon Whitehouse is going after unresponsive landlords. He has also filed a precedent-setting lawsuit against the companies that manufactured paint containing lead. Some advocates are pushing for additional measures to curb lead poisoning."That's the kind of coverage that helps activist attorneys general get up in the morning.Speaking of AAGs, we missed the fact that Rhode Island Attorney General Patrick Lynch was elected last month to be president of the National Association of Attorneys General. Why? For the children:"I am enlisting the assistance of my colleagues and good corporate citizens, and marshalling the resources of NAAG and other organizations, to increase protections, decrease risks, and encourage a more just and secure world for our children," Attorney General Lynch said.Posted at 6:48 PM | TrackBack (0)July 3, 2008AAJ convention lists what's hot in class actions, politiciansPosted by Carter WoodThe annual trial lawyers convention is just around the corner, as members of the American Association for Justice gather in Philadelphia July 12-16th. The convention brochure, as always, makes for interesting reading. You get a good sense of new strategies and priorities from the various seminars and discussions. For example, from the Section on Toxic, Environmental, and Pharmaceutical Torts (STEP), page 8 in the brochure.Afternoon Theme: MDL--State Coordination Internal Struggle: How to Resolve the Conflict of Contingent Fees and Common Benefit Fees in Mass Tort Litigation (ethics) Ethics of Mass Tort Settlements (ethics) The Preamble/Supreme Court Preemption: An Update What's Hot: New Litigation--Bisphenol-A, Pain Pumps, ToxinsBisphenol-A, that's a hot topic right now in Congress, too, with Senator Boxer working on a federal ban. Pain pumps, though...new to us.On the political side, we've got a post over at Shopfloor.org that notes Gov. Rendell and Sen. Specter are speaking, logically enough given the Pennsylvania location and their legal interests. But the speaker who really catches our eye is Al Franken, the DFL candidate for U.S. Senate in Minnesota. He's not just the townhall speaker, he's the special guest for a "meet and greet" limited to the Platinum-level contributors to the AAJ's PAC.No political distancing there, and perhaps even a reconciliation? Prominent Minnesota trial lawyer Mike Ciresi originally sought the party's nomination before dropping out given Franken's advantages.Franken's fundraising strategy is also now apparent. He's relying on trial lawyers, labor bosses and the well-heeled liberal elite.Which makes for an obvious campaign slogan: Send lawyers, goons and money.Posted at 12:09 PM | TrackBack (0)In other West Virginia legal newsPosted by Carter WoodWest Virginia Governor Joe Manchin has taken the unusual step of filing an amicus brief with the state Supreme Court of Appeals, asking the court to clarify the ability of DuPont to challenge a jury's award of punitive damages against it. DuPont last week filed an appeal (news release) to the state's top court of last October's awarding of $196.2 million in Harrison County Circuit Court, the result of a class-action lawsuit by residents who charged a nearby zinc smelter was contaminated with heavy metals. (Previous news coverage.)AP now reports: Manchin urged the justices to clarify what sort of appellate review is to be afforded DuPont under its constitutional right to due process. His lawyers cited a 2003 U.S. Supreme Court decision to argue that the 14th Amendment guarantees appeals of punitive damages.The brief essentially questions whether consideration of a written appeal alone is adequate."Ensuring that West Virginia courts provide the appropriate level of appellate review to (DuPont), as well as all other parties seeking review of punitive damages awards, is an issue of vital public importance,'' the brief argued.The plaintiff's lawyers express outrage; Florida lawyer Michael Papantonio declared, "This just further delineates how badly the deck is stacked in West Virginia against people trying to recover when they're taking on DuPont. It's stacked against people who have been wronged by corporate America.''A recent survey Directorship Magazine and the American Justice Partnership ranked West Virginia as having the 49th best legal climate for business. Manchin, a Democrat, has been making good-faith efforts to reduce the state's legal capriciousness, and the new amicus brief can be seen as more evidence of the attempts.UPDATE (Sunday): The governor's amicus brief in DuPont v. Perrine is here.Posted at 11:38 AM | TrackBack (0)More West Virginia AG fee bounty; new featured columnPosted by Walter OlsonIn West Virginia, a state where government hiring of private lawyers to pursue public lawsuits has been particularly controversial, four law firms including Hagens Berman are set to split $3.9 million for prosecuting an antitrust suit against Visa and MasterCard that resulted in a settlement, per the Charleston Daily Mail. And Attorney General Darrell McGraw has appointed four lawyers to pursue a new suit against a variable annuity life insurance provider. Steve Roberts, who heads the state chamber of commerce, said it's particularly frustrating that the AG's office makes no disclosure about how the lawyers -- many of whom contribute to his campaign -- are selected for the task. Related to which: our newest featured column is by John Sullivan of the Civil Justice Association of California, and discusses the worrisome recent appellate court ruling that backed off from the state's significant Clancy doctrine, which had long prohibited lawyers pursuing public nuisance actions on behalf of local government from capturing fees contingent on the results of those actions. More on Santa Clara v. Superior Court here, here, and here.Posted at 12:06 AM | TrackBack (0)July 2, 2008Zach Scruggs Gets 14 MonthsPosted by Michael KraussThe government had suggested probation, but as the WSJ law blog (free!) reports, he has been sentenced to 14 months for misprision of a felony.The WSJ law blog says that this federal crime is committed by failure to report a crime of which one has knowledge, but that is not accurate. The federal crime of misprision of a felony requires concealment of the crime, not merely non-reporting of it.The young Scruggs' attorney was none other than former Mississippi AG (and mastermind of the great tobacco cartel) Mike Moore. Moore argued that Zach had "great love for the law", but somehow U.S. District Court Judge Neal Biggers failed to find that convincing....Posted at 2:19 PM | TrackBack (0)Around the web, July 2Posted by Walter OlsonKentucky jury acquits Melbourne Mills, the "too drunk to pay attention" fen-phen defendant, can't reach agreement on others [Ted @ OL]Related: Florida A&M says no one's proved $1 million law school donation from Ky. scandal's Shirley Cunningham came from tainted funds, so why give it back? [ABA Journal]Law of the land: Chicago's Daley isn't so hostile toward the Second Amendment that he'd defy the Supreme Court, or is he? [Chapman]"I don't hate lawyers. I hate the unfair legal SYSTEM." [docblog Fertility File]Southern Illinois forum-shopping: "None of the claimants reside in St. Clair County" but all seven have gone there to file contact-lens suits against Bausch & Lomb [St. Clair Record]Next up in cellphone early termination class actions: trial against Verizon in Alameda County, Calif. [The Recorder; earlier] Posted at 12:17 PM | TrackBack (0)Site outage fixed nowPosted by Walter OlsonPoint of Law's front page (though not its individual posts or inner pages) were down for about twelve hours. Anna D. and Tatiana K. of the Manhattan Institute have now caught and corrected the blog-software problem involved. Thanks for your patience.Posted at 11:13 AM | TrackBack (0)A Sensible Reaction from Columbus, OhioPosted by Carter WoodFrom the Columbus Dispatch:"Most everybody pinned their hopes on how Rhode Island moved," said Columbus City Attorney Richard C. Pfeiffer Jr. "I think it's fair to say, with Rhode Island's decision, we'll have to seriously re-evaluate this case and see if it should continue."The city estimates that cleaning up 150,000 lead- contaminated homes could cost $1.7 billion."Obviously, this ruling in Rhode Island does not bode well for our legal strategy," said Dan Williamson, spokesman for Mayor Michael B. Coleman.Columbus sued paint manufacturers in December 2006, (mis)using public nuisance law in the process. (Search for the docket for case 06 CV 016480 here.) In March, 2008, U.S. District Judge Edmund A. Sargus Jr. dismissed a suit filed by Sherwin-Williams that sought to block the city's litigation. (Columbus Dispatch story), so the city's suit is still alive. But in any case, the water-based writing is on the wall.The Attorney General's office is not reacting as post-factually as the city attorney's office. The Dispatch quotes Jim Gravelle, an AG spokesman, saying, "This in no way restricts Ohio's right to hold lead paint companies liable for the extreme harm they have caused Ohio citizens under public nuisance or other causes of action." We note the state's lawsuit was filed in 2007 by the disgraced, since-resigned AG, Marc Dann. His judgment obviously proved lacking in many things; the current, appointive AG could certainly renounce the lawsuit with no political harm, especially since she's not seeking the office in the fall election. And ultimately, it was politics that drove the suit.P.S. The Cleveland Plain-Dealer editorially called on the state and cities to face reality and give up the suits: "Paint companies should continue helping struggling cities abate this expensive problem, but those are deals to be struck at a negotiating table, not in a courtroom." Posted at 10:02 AM | TrackBack (0)July 1, 2008Federalist Society Supreme Court term review webcastPosted by Walter OlsonIt's happening live momentarily at this link.Posted at 12:07 PM | TrackBack (0)Rhode Island lead paint: big win for defensePosted by Walter OlsonWord is coming in that the Rhode Island Supreme Court, reversing a lower court, has ruled against the creative public nuisance theory suit seeking to hold companies that made lead paint and pigments decades ago liable for billions of dollars in housing cleanup costs. Ted is also covering the story at Overlawyered. (And see Mike Krauss's post just below.)More 10:30 a.m.: The court was unanimous and ruled "that the lawsuit should have been dismissed at the outset". Defendants now have a statement up: "Today's ruling is a landmark victory for common sense and for responsible companies that did the right thing," said Charles H. Moellenberg, Jr., an attorney for The Sherwin-Williams Company, speaking on behalf of defendants Sherwin-Williams and Millennium Holdings, Inc. "This case never should have been filed - it was factually wrong and legally flawed. A company should not be held liable when there is no proof that it did anything wrong. It has taken nine years and two juries, but the Supreme Court's decision today puts public nuisance law in Rhode Island squarely in line with the overwhelming majority of jurisdictions of the United States."For the aromatic politics behind the suit, including the role of South Carolina law firm Motley Rice (formerly Ness Motley), see OL, Jun. 7, 2001. For some background on the disputed epidemiology behind the controversy, see OL, Jun. 8-10, 2001. Eight and a half years ago, flush with billions in tobacco and asbestos fees, Ron Motley vowed, "If I don't bring the entire lead paint industry to its knees within three years, I will give them my [120-foot] boat". Continue reading "Rhode Island lead paint: big win for defense" » Posted at 10:09 AM | TrackBack (0)R.I. Supremes Overturns Plaintiffs' Lead Paint VerdictPosted by Michael KraussAssociated Press reports that the Rhode Island Supreme Court has unanimously overturned a 2006 jury verdict (the only one ever obtained against them) against Sherwin-Williams, NL Industries Inc. and Millennium Holdings, former manufacturers of lead paint.A jury found all three liable in 2006 for "creating a public nuisance" by manufacturing their then-legal product. The companies would have been required to clean up hundreds of thousands of homes built before 1978 (when lead paint was banned), at a cost of billions.The high court found that the trial judge should have dismissed the suit since the state had failed to prove that the presence of lead paint was a public nuisance. The requirement of wrongdoing seems finally to have been upheld in the Ocean State.The manufacturers had also noted that Rhode Island never presented any evidence that their products were used in any Rhode Island home or had even been sold in the state.Many of us have written about this abuse of tort law. Neither wrongdoing nor causation was ever established here. Lead poisoning is the result of ingestion following poor maintenance, and typically also results from poor childhood supervision. Holding companies liable because they happen to still exist, even though they have not wrongfully and proximately harmed anyone, is a perversion of tort law. I look forward to reading the Rhode Island decision.Posted at 10:00 AM | TrackBack (0)Nine years old todayPosted by Walter OlsonMy (and Ted's) other blog, Overlawyered, is celebrating its ninth anniversary today. Check out its recent posts on a lawn mower warning case against John Deere, Ted's experience as an objector at the Grand Theft Auto videogame class action settlement, another dubious class action settlement in a Time Warner Cable case, Jim Copland on asbestos screening (and more), and a tangential link between Chicago's Rezko scandal and the politics of Illinois's lawsuit-famed Madison County.Posted at 9:11 AM | TrackBack (0)June 30, 2008Hiring experts to keep them away from the other sidePosted by Walter OlsonMassachusetts attorney Bob Ambrogi, of blog fame, June 27, 2008Criminalizing asbestos casesPosted by Carter WoodGiven the Supreme Court's high-profile rulings in Heller and the Exxon Valdez cases, little national media attention was paid to the Court's June 23rd decision to not consider W.R. Grace's challenge to the criminal indictments of top executives. The Missoulian quotes W.R. Grace spokesman Greg Euston: "We are disappointed. We take this seriously. When Judge Molloy sets a trial date, we will be prepared to defend ourselves." (Washington Post story.)The criminal case begin with a federal grand jury indictment in Montana in February 2005, charging six executives and the company with conspiracy, Clean Air Act violations, wirefraud and obstruction of justice. (Indictment here; Seattle Post-Intelligencer story here.) As the case progressed, the Ninth Circuit overturned the trial court's decision to exclude evidence about those forms of asbestos that do not fall within the EPA's definition. The National Association of Manufacturers -- my employers -- the American Chemistry Council and National Association of Criminal Defense Lawyers filed an amicus brief in May (available here) asking the Supreme Court to hear the case. The brief argued that the prosecution used a definition of asbestos far broader than the long-standing definition in EPA's regulations, subjecting the defendants to potential jail time without due process. The brief also contended that the Ninth Circuit ruling threatened to treat defendants there more harshly than those elsewhere, using broad interpretations of hazardous materials, and refusing to recognize the rule of lenity, which requires that criminal statutes be clear and provide fair warning. It also undermines the requirement of mens rea when assessing blame, which will cause businesses to over-invest in regulatory compliance. The U.S. District Court in Montana maintains a website with all the case documents here. And, of course, the criminal case is separate from the civil personal injury claims, which W.R. Grace settled in April in a deal worth about $1.8 billion, settlements which will allow the company to emerge from the bankruptcy declared in 2001. The media coverage has been interesting in its own right. The W.R. Grace case is understandably high profile in Montana -- the vermiculite was mined in Libby - and the Seattle Post-Intelligencer has made the company the subject of an aggressive multiyear reporting initiative (i.e., campaign). There was a special report by the PI, "Uncivil Action," about the suffering of the workers and others associated with the Libby mine - health and economic pain - as well as the package, "Forgotten Killer," about the legacy of asbestos. And here's a lengthy chronological list of all the stories between 1999 and 2002. Putting my former cynical reporter's hat on, I'd say, "All designed to win the Pulitzer." (Hopes dashed.) But in any case, the coverage must have certainly influenced the major players.We mention the coverage after reading the blog post by the PI's national correspondent Andrew Schneider -- author of the book on Libby and W.R. Grace, "An Air that Kills" - in commenting on the Supreme Court's decision last week: "After almost three years of stalling, questionable court rulings and a flood of appeals, it looks like the criminal trial of W.R. Grace and six of its top executives may actually happen." One man's stalling is another man's due process, one might observe.Posted at 4:29 PM | TrackBack (0)June 26, 2008AZ Judges on expert witnesses: Don't tell us what to doPosted by Carter WoodThe Arizona Business Gazette catches us up on a ruling by the state Court of Appeals last week, overturning a limited effort at medical tort reform. In a unaminous opinion, the court threw out a 2005 law (ARS ¶ 12-2604[A]) that set requirements for experts witnesses in medical malpractice suits. As the paper described the law, "The person not only has to be licensed as a health-care provider but also must be a specialist in the same area as the defendant and actively practicing or teaching in that area."Judge Patrick Irvine wrote that the state's constitution generally gives the judicial branch the power to enact its own rules, and the law violated the separation of powers. The Legislature can determine court proceedings only if they are "reasonable and workable and do not conflict with, or tend to engulf, the rules promulgated by the (state) Supreme Court."The opinion in Seisinger v. Seibel, M.D., (CV07-0266) is available here. Gov. Janet Napolitano signed the bill, SB 1306, in April 2005, but in a signing letter expressed serious doubts about its constitutionality. UPDATE (1:30 p.m. Friday): On a related topic, a recent Washington Legal Foundation Legal Backgrounder, "Georgia Supreme Court Rejects Constitutional Challenge to Expert Testimony Law": "In 2005, the Georgia General Assembly enacted tort reform legislation that affected the state's existing laws on venue, medical malpractice claims, offers of judgment, and damage awards in certain civil actions. As part of Senate Bill 3, the General Assembly enacted O.C.G.A. section 24-9-67.1, which governs the admission of expert testimony in civil cases.1 In Mason v. Home Depot U.S.A., Inc. et al., 283 Ga. 271, 658 S.E.2d 603 (2008), the Supreme Court of Georgia upheld the constitutionality of the statute over challenges on several fronts. The decision in Mason provides for a uniform approach to the analysis of the admissibility of expert testimony in line with the Federal Rules of Evidence and also paves the way for Georgia's trial courts to require expert testimony to meet higher standards for admissibility than perhaps anyother state in the nation."Posted at 4:54 PM | TrackBack (0)DC v HellerPosted by Michael KraussA fundamental constitutional right was protected today, folks. Here is NPR's talk show on the subject, in which yours truly claims that the decision is the greatest civil rights case since Brown v Board.Posted at 2:19 PM | TrackBack (0)Inspector General report on DOJ hiringPosted by Ted FrankA perspective on the Inspector General report on DOJ hiring missing from the mainstream media coverage from David Frum:The Inspector General's report on political hiring at the Department of Justice was released yesterday. And yes it does seem to show that the Bush administration went to lengths to hire more conservative young lawyers into the Honors track. ...On pp. 20-21, we find the numbers that establish that the DoJ career staff in 2002 nominated twice as many identifiable liberals as identifiable conservatives for the Honors track program: 100 vs. 46.And on page 27, we read that the DoJ bureaucracy advanced nearly three times as many identifiable liberals as conservatives for summer internships that year, 81 vs. 29.If anything, the ideological bias of the DoJ bureaucracy seems to have become more entrenched with time. In 2006, it nominated five times as many liberals as conservatives for Honors track positions, 150 v. 28, and more three times as many liberals as conservatives for summer internships, 68 v. 16. (See p. 41 and p. 54.)The evidence suggests that DoJ hiring was contaminated by ideology long before the Bush administration came to town. The Bush administration may have erred and over-corrected. But let's not allow the permanent government and the Democrats (but I repeat myself) to get away with spreading the claim that things were done in a neutral fashion beforehand. Posted at 9:23 AM | TrackBack (0)Occam's walletPosted by Carter WoodFrom Politico: "Dems Who Flipped On FISA Immunity See More Telecom Cash": "House Democrats who flipped their votes to support retroactive immunity for telecom companies in last week's FISA bill took thousands of dollars more from phone companies than Democrats who consistently voted against legislation with an immunity provision, according to an analysis by MAPLight.org."From the American Tort Reform Association: "As Senate Debates FISA, ATRA Notes Trial Lawyer Political Giving": "So much of the media coverage of this developing story has, for months, all but ignored the obvious up-tick in trial lawyer lobbying and campaign contributions as they tried desperately to preserve dozens of potentially lucrative lawsuits against telecommunications companies that cooperated with the government in pursuit of terrorists after 9/11," began ATRA communications director Darren McKinney. "Reporters and editorial writers didn't hesitate to document the efforts of the telecoms to preserve in the legislation a degree of retroactive immunity from such lawsuits ....but a typical media consumer could have come away with the impression that such political activity was strictly one-sided." Darren's media analysis -- especially if extended to the blogs -- is accurate. (You can read all of ATRA's release in the extended entry.) But having closely watched the politics of FISA, it's an unprovable leap to suggest campaign contributions changed minds, either direction. The House Democrats moved away from the position of no immunity for telecoms mostly because their Blue Dog cohort feared the political consequences of blocking effective surveillance. Meanwhile, by a 80-15 vote, the Senate last evening voted to invoke cloture on the motion to proceed to H.R. 6304, the FISA Amendments Act. AP story here.UPDATE (9:55 a.m.): Some more thoughts, including on Sen. Hatch's legal analysis, are at the NAM's blog, Shopfloor.org, here. Continue reading "Occam's wallet" » Posted at 8:57 AM | TrackBack (0)DoJ Honors/Intern program politicizationPosted by Walter OlsonIt will surprise none of his friends that Civil Division chief Peter Keisler comes off among the few heroes in the mini-scandal, singled out for commendation in the Inspector General's report for the strong objections he raised to the subversion of merit/civil service principles. And of course it reveals a great deal about the U.S. Senate confirmation process that Keisler's name has for years topped the list of superbly qualified and fair-minded Court of Appeals nominees blocked by influential Senators as being too principled conservative for their tastes. More: Paul Mirengoff, PowerLine; Steve Chapman, syndicated/Chicago Tribune.Posted at 8:51 AM | TrackBack (0)June 25, 2008Carrie Lukas on the Obama equal pay panderPosted by James R. CoplandCarrie Lukas of the Independent Women's Forum had this to say on Obama's "equal pay" pander, to which I alluded Monday:For a "new" kind of politics, Barack Obama's rhetoric sounds awfully familiar. The senator from Illinois may decry his critics as practicing "old politics," yet he freely employs one of the most shopworn political tactics when pandering to women.At an event this week in New Mexico, Obama repeated the misleading claim that "women still earn only 77 cents for every dollar earned by men," and dismissed the notion that factors other than discrimination explain the wage gap as "just totally wrong." Yet even the organizations that champion the most aggressive government action in the name of equal pay acknowledge that most of the wage gap is a result of men and women's different choices related to work, not employment discrimination. A 2007 report from The American Association of University Women, for instance, found that most of the wage gap could be explained by factors such as employment, education and personal choices. Unlike the former editor of the Harvard Law Review, Lukas also gets the legal question right: Obama tars those opposed to legislation called the "Fair Pay Restoration Act" as opponents of equal pay for women. That's a gross mischaracterization. Equal pay is already required by law; it has been since 1963. The Fair Pay Restoration Act would extend the time period during which an employee can bring suit against an employer for discrimination. Instead of having to take action within 180 days of a decision about compensation, employees could sue within 180 days after receiving a check related to such a decision. As a result, lawsuits could be filed decades after a compensation package was negotiated. This longer period wouldn't discourage discriminatory behavior today - but would open the door for lawyers to unearth old grievances in pursuit of new legal fees.Posted at 6:31 PM | TrackBack (0)More on the Exxon Shipping v. Baker rulingPosted by Carter Wood A statement from ExxonMobil's Chairman and CEO Rex W. Tillerson, reaffirming the company's efforts and empathy for Alaskans, but not addressing the legal issues. Lots of coverage and background from the Anchorage Daily News. It includes a visceral, non-legal response from an attorney for the original plaintiffs: "'I prefer to think of it as five of the justices on the Supreme Court going out of their way to help big business,' said Brian O'Neill, one of the main attorneys for the plaintiffs. 'This is a huge favor for big business, that's what it is. They don't feel punished at all by this. It isn't even a mosquito bite. They're laughing.'" The Anchorage Daily News' editorial makes what seems to us the most substantive argument against the ruling, that of justices legislating. "With Wednesday's ruling in the Exxon Valdez punitive damages case, a 5-3 majority on the U.S. Supreme Court took it upon themselves to write new law that shields corporate wrong-doers." Except a $500-million-plus damage award hardly represents a shield's protection.Legal Newsline notes that the involvement of state AGs did not achieve its desired goals. Otherwise, there's the usual class-warfare inveighing from the left -- Mother Jones blog claims "a long-running campaign by Exxon and other big companies to try to abolish these sorts of awards entirely." Although heated, Doug Kendall at the Huffington Post does hit the top legal/political objections to urge a renewed battle by progressives to control the courts. Make it a textbook case, he says. He means a campaign issue, one infers.Posted at 5:51 PM | TrackBack (0)Legal Newsline on Exxon v. BakerPosted by James R. CoplandLegal Newsline writes up the case here, including comments from yours truly.Posted at 5:11 PM | TrackBack (0)Illinois, California AGs file suit against CountrywidePosted by Carter WoodIllinois Attorney General has now filed a suit against Countrywide ("mortgage giant" is just the nickname) and related parties. From the lengthy news release:Chicago - Attorney General Lisa Madigan today filed a lawsuit in Cook County Circuit Court against Countrywide, the nation's largest mortgage lender and servicer. The complaint alleges that Countrywide Home Loans, Inc., and its parent company, Countrywide Financial Corporation, engaged in unfair and deceptive conduct on a large scale in creating, originating, marketing and servicing unnecessarily risky and costly mortgage loans for Illinois homeowners.The complaint also names as defendants Countrywide's subprime lending unit, Full Spectrum Lending; the company's servicing arm, Countrywide Home Loans Servicing LP; and Angelo Mozilo, the co-founder and former CEO of Countrywide Financial whose name has become synonymous with the excesses of the subprime mortgage industry. The lawsuit is the result of a nine-month probe by Madigan's office into the lending practices of Countrywide.The complaint is available here.With the timing of the filing, Madigan has certainly magnified the PR and political impact of the suit. Countrywide's shareholders approved the company's purchase by Bank of America today, and there's a highly charged debate in the U.S. Senate about housing finance legislation, H.R. 3221, which received unflattering attention in a Washington Post story today, "Vital Part of Housing Bill Is Brainchild of Banks."Of course, California AG Jerry Brown has also sued Countrywide et al. From his news release.Brown alleges that Countrywide Financial used deceptive tactics to push homeowners into complicated, risky, and expensive loans so that the company could sell as many loans as possible to third-party investors. According to the lawsuit, the company marketed complex and difficult to understand loans with very low initial or "teaser" interest rates or payments. Countrywide employees, including loan officers, underwriters, and branch managers--who were under intense pressure to process a constantly increasing number of loans--misrepresented or obfuscated the fact that borrowers who obtained certain types of loans would experience dramatic increases in monthly payments.The complaint, filed in Superior Court, County of Los Angeles, Northwest District, is here. And Brown manages to find an environmental angle: The phrase "high pressure sales environment" appears six times in the complaint. Posted at 3:52 PM | TrackBack (0)Interesting analysis in Exxon v. Baker: Pt. IIPosted by James R. CoplandI also would like to point out the Exxon opinion's effective reading of statistics regarding punitive damages:The real problem, it seems, is the stark unpredictability of punitive awards. Courts of law are concerned with fairness as consistency, and evidence that the median ratio of punitive to compensatory awards falls within a reasonable zone, or that punitive awards are infrequent, fails to tell us whether the spread between high and low individual awards is acceptable. The available data suggest it is not. A recent comprehensive study of punitive damages awarded by juries in state civil trials found a median ratio of punitive to compensatory awards of just 0.62:1, but a mean ratio of 2.90:1 and a standard deviation of 13.81. Juries, Judges, and Punitive Damages 269.16 Even to those of us unsophisticated in statistics, the thrust of these figures is clear: the spread is great, and the outlier cases subject defendants to punitive damages that dwarf the corresponding compensatories. The distribution of awards is narrower, but still remarkable, among punitive damages assessed by judges: the median ratio is 0.66:1, the mean ratio is 1.60:1, and the standard deviation is 4.54. Ibid. Other studies of some of the same data show that fully 14% of punitive awards in 2001 were greater than four times the compensatory damages, see Cohen 5, with 18% of punitives in the 1990s more than trebling the compensatory damages, see Ostrom, Rottman, & Goerdt, A Step Above Anecdote: A Profile of the Civil Jury in the 1990s, 79 Judicature 233, 240 (1996). And a study of "financial injury" cases using a different data set found that 34% of the punitive awards were greater than three times the corresponding compensatory damages. Financial Injury Jury Verdicts 333.We have long argued that mean, not median, verdict statistics are the relevant data points: the outliers on the tail of the distribution are the tails that wag the dogs. The Supreme Court decision gets that point -- ironically citing to the summary statistics in a Ted Eisenberg et al. study that all-too-typically hypes up median awards ("Perhaps the most remarkable finding . . . is the stability in the median punitive-compensatory damages ratios for judges and juries over time.") while obscuring verdict spreads by using logarithmic data in its empirical analysis.Posted at 2:40 PM | TrackBack (0)Interesting analysis in Exxon v. Baker: Pt. IPosted by James R. CoplandWhile the precedential value of today's Supreme Court ruling in Exxon v. Baker is limited -- it's a maritime law case -- the analysis in part IV of the majority decision, which discusses punitive damages, is quite interesting. I first note the Court's comparative analysis of punitive damages:[P]unitive damages overall are higher and more frequent in the United States than they are anywhere else. See, e.g., Gotanda, Punitive Damages: A Comparative Analysis, 42 Colum. J. Transnat'l L. 391, 421 (2004); 2 Schlueter S. 22.0. In England and Wales, punitive, or exemplary, damages are available only for oppressive, arbitrary, or unconstitutional action by government servants; injuries designed by the defendant to yield a larger profit than the likely cost of compensatory damages; and conduct for which punitive damages are expressly authorized by statute. Rookes v. Barnard, [1964] 1 All E. R. 367, 410-411 (H. L.). Even in the circumstances where punitive damages are allowed, they are subject to strict, judicially imposed guidelines. The Court of Appeal in Thompson v. Commissioner of Police of Metropolis, [1998] Q. B. 498, 518, said that a ratio of more than three times the amount of compensatory damages will rarely be appropriate; awards of less than 5,000 are likely unnecessary; awards of 25,000 should be exceptional; and 50,000 should be considered the top.For further contrast with American practice, Canada and Australia allow exemplary damages for outrageous conduct, but awards are considered extraordinary and rarely issue. See 2 Schlueter SS. 22.1(B), (D). Noncompensatory damages are not part of the civil-code tradition and thus unavailable in such countries as France, Germany, Austria, and Switzerland. See id., SS. 22.2(A)-(C), (E). And some legal systems not only decline to recognize punitive damages themselves but refuse to enforce foreign punitive judgments as contrary to public policy. See, e.g., Gotanda, Charting Developments Concerning Punitive Damages: Is the Tide Changing? 45 Colum. J. Transnat'l L. 507, 514, 518, 528 (2007) (noting refusals to enforce judgments by Japanese, Italian, and German courts, positing that such refusals may be on the decline, but concluding, "American parties should not anticipate smooth sailing when seeking to have a domestic punitive damages award recognized and enforced in other countries").Posted at 2:25 PM | TrackBack (0)Court slashes punitives judgment in Exxon Valdez disasterPosted by Michael KraussYahoo News (among many others) has the details: the Supremes have decided, 5-3 (Alito conficted out, but would have been a 6th vote) that punitive damages should not exceed compensatories, and that Exxon's punitive liability for the Valdez disaster should be reduced from $2.5 billion to $500 million, an 80% reduction. (A jury had decided Exxon should pay $5 billion in punitive damages, but the 9th Circuuit cut that verdict in half in 1994.) Dissenters pointed out (not incorrectly) that the Supreme Court still has no principled way to intervene in state punitives cases....Posted at 11:46 AM | TrackBack (0)Around the web, June 25Posted by Walt | |
