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September 2004 Archives

Letter from a doctor

Prompted by our debate on medical malpractice and the presidential race, Steven T. Farmer, D.O. of Upper Sandusky, Ohio [sfarmer (at) wyandotmemorial - dot -com] writes us as follows:

I am a rural general physician, and the county coroner. My office is in the community hospital, next to the ER. My duties range from the simple, to critical care management and stabilization of major trauma. Sometimes my duties take me beyond description or imagination. I am a leading responder in nearly every catastrophic event in the county. I am the only physician in the region taking babies as new patients. I am a salaried physician; I have not seen an increase in my salary in over eight years.

There is so much pain and suffering I am engaged in, for so many reasons. Very few are �lucky� enough to have big money associated with their pain and suffering. When I hear people say that caps on damages �trivialize� people with pain and suffering I say the opposite. These select few who feel entitled to be rewarded for pain and suffering trivialize the vast majority of those who suffer profoundly without recourse.


A welcome Schwarzenegger veto

California dodges another bullet on its liability climate: "Gov. Arnold Schwarzenegger (R) has vetoed legislation sponsored by personal injury attorneys. ... The measure, SB 494 authored by Sen. Martha Escutia (D), would have given medical providers a direct right of action against insurers for the 'reasonable and necessary' costs incurred for medical treatment provided for an injury caused by a third party, when the injured person was a Medi-Cal recipient. ... 'This measure was touted as a way to help public hospitals that are struggling to keep up with rising costs and low reimbursements. In reality, SB 494 was a cash grab by personal injury attorneys looking to increase the amount of money they can sue for,' [Janine] Gibford [of the American Insurance Association] said." (Insurance Journal, Sept. 23).

Churchruptcy

As Tucson joins Portland, Ore. as the second Catholic diocese to file for insolvency protection (see Aug. 10), Seton Hall Law School is planning a Nov. 5 conference on Bankruptcy in the Religious Non-Profit Context (via Mirror of Justice). And from Amy Welborn, a vignette from a clergy-abuse case in a Northern California courtroom: "Arguing for the church, lawyer Paul Gaspari said the Constitution forbade punishing the church for the standards it sets for the ordination of priests" as distinct from its supervision of them in priestly duties. (also via Mo'J).

Dangers of firing your lawyer

Client hires lawyer on contingency fee in insurance dispute. Client fires lawyer and subsequently settles suit for no cash payment. Law firm seeks payment of substantial fee (under quantum meruit doctrine) even though there was no award to take a contingency share from. Held (by Second Circuit panel, overruling district judge): law firm entitled to fee unless client discharged it for good cause. Fair result? More: Blogger Beldar replies (see Oct. 5).

Oops dept.

Dickie Scruggs and other lawyers coordinating the courtroom assault on nonprofit hospitals over alleged failure to meet charitable obligations would love to get state AGs involved on their side. Inconveniently for them, the attorney general of Alabama, Troy King, plans to file a friend of the court brief on the hospitals' side. Check out the priceless last paragraph in the Birmingham News's Aug. 21 account:

Consejo de Latinos Unidos, a national consumer group, lauded King on Thursday as the first attorney general to join the legal fight against nonprofit hospitals. That was before the group understood his position. By Friday, the group issued a press release calling King a "stooge for price-gouging thugs."

Dr. Rangel is exasperated

...with funny numbers on malpractice. CodeBlueBlog is losing patience more generally. And DB of MedRants is trying to be fair.

Post-Dispatch on Illinois venue

The St. Louis Post-Dispatch, whose series on asbestos litigation we saluted earlier this month, has published much more since then, including an article by Paul Hampel on the tendency of the Illinois courts -- thus far unchecked by the state's supreme court -- to be very liberal in granting Madison County venue to cases that arose elsewhere ("Illinois Supreme Court has yet to weigh in on venue for asbestos suits", Sept. 19). A couple of highlights:

* "Edward J. Kionka, who teaches civil procedure at St. Louis University School of Law, said Illinois law 'starts with the proposition that the plaintiff has the right to try a case where he wants.'" Kionka "suggests that plaintiff lawyers who do not forum shop face the risk of being targets of lawsuits themselves. 'My view? That is what lawyers are supposed to do -- look for the best result for their client,' said Kionka, who in private practice has handled appeals on behalf of asbestos plaintiffs. "It would be legal malpractice if they didn't file in the place where they would get the most money.'"

* "Many SimmonsCooper clients are referred to them by the law office of James Sokolove, a Massachusetts firm that advertises heavily on television. The Sokolove firm gets a fee for the referrals; John Simmons, managing partner of SimmonsCooper, declined to comment on the fee." The paper also runs a "Graphic of asbestos suits in Madison County".

Stay open through a hurricane, go to jail

Many Florida employers were startled during Hurricane Frances (which now counts as two hurricanes ago for the battered state) when Dade county/city state's attorney Katherine Fernandez Rundle and Mayor Alex Penales "publicly warned employers that they could face criminal prosecution for forcing employees to work" during the hurricane. Employers in such lines as retail, hospitality and waste management -- all of which, of course, play important roles in affording help to hurricane victims -- "wanted to know whether they really could be arrested for requiring employees to come to work during the storm." Employment lawyers are hoping the state legislature clarifies the issue before next hurricane season.

West Virginia lawsuit reform

Citizens for a Sound Economy (which is merging with Empower America to form the new FreedomWorks) has been scrutinizing West Virginia's legal climate recently, in publications like this, this, this, this, this, this and this. The group assembles its work on litigation reform on a single handy page.

Tribe and his kindred

So it isn't just celebrated Harvard Law prof Charles Ogletree who uses others' words without proper attribution (see Sept. 14); the roll of shame also turns out to include even more celebrated Harvard Law prof Laurence Tribe, as Joseph Bottum reveals in the Weekly Standard, complete with parallel columns. Tribe's offense to be sure would appear less egregious than Ogletree's: rather than incorporate six verbatim paragraphs from the work of another law prof (Yale's Jack Balkin, in Ogletree's case) he merely did a whole lot of very close paraphrasing in his book God Save This Honorable Court of the earlier words of University of Virginia's Henry Abraham, without the courtesy of mentioning Abraham by name in more than a passing way. (One 19-word passage of Abraham's is actually reproduced verbatim.) In both Ogletree's and Tribe's case a proximate cause of the errors appears to have been overreliance on the work of underlings who (much circumstantial evidence suggests) did much of the actual work on the books while the celebrity law profs' names went on the cover, itself a remarkable and regrettable state of affairs given that scholars' reputations supposedly rest on their own thoughts and words.

For more on the controversy over Ogletree's borrowing, in which (as it happened) Tribe recently weighed in on behalf of his colleague, see University of Massachusetts law dean Lawrence Velvel's blog (first, second), Donna Wentworth and Larry Solum. Several of the above links are via a new anonyblog covering Harvard Law faculty plagiarism which is compiling lots of links on the matter. More: Tribe apologizes.

Tort reform works - Mississippi

Another success story: Mississippi, a state with a notoriously plaintiff-friendly judicial system, but which passed medical tort reform in 2002, and then more tort reform that took effect September 1, is seeing immediate results.

The Medical Assurance Co. of Mississippi, which provides medical malpractice insurance to about 60 percent of the doctors in the state, will not raise base premium rates in 2005.

Insurance Commissioner [and Democrat] George Dale said Friday that the decision shows that "those people who said that tort reform would not work and actively fought any civil justice reform, I think this indicates they were wrong."

MACM, like many malpractice insurers, is physician-owned and non-profit. (AP, Sep. 24).

Ohio med-mal crisis

Discussed by Sydney Smith at MedPundit, with connections to this fall's races for seats on the state's high court. For more on the Ohio Supreme Court, see Overlawyered, here, here, here and here, among other places.


Well, here's some news: the trendy anti-corporate group AdBusters turns out to believe there's a right to advertise after all, and even believes a free speech issue is at stake. It's suing Canadian broadcasters seeking to force them to accept its ads. ("Adbusters seeks court order to show its TV ads", Toronto Star, Sept. 14; "Adbusters takes Canadian TV networks to court", CBC, Sept. 15).

Spitzer and the mutual fund investor

The more severely you crack down after a market scandal, the better for customers, right? Well, not always: "it appears that the regulatory and legal response ...has made the small investor worse off in terms of cost, choice, and competition for assets", writes John Tamny at TechCentralStation (via Bainbridge). More on mutual funds from AEI: January conference (transcript/summary/video); Jim Glassman commentary.

Madison County magnifying glass

U.S. Rep. Charlie Norwood (R-Ga.) wants a federal investigation of the county's legal system (press release/coverage in Madison Record).

Laura Ingraham Monday morning

Spoke too soon! Despite my earlier confirmation that I'd be on the Laura Ingraham show later this morning (see my earlier post here), I've been bumped for a segment on Allawi's talk. Me -- the leader of Iraq -- who'da thunk it? But I am now rescheduled for Monday a.m. at 11:15. So, hopefully, that will hold -- and y'all can tune in.

Welcome debate readers

Our highly illuminating debate between Dr. Ron Chusid of Doctors for Kerry and our own Ted Frank has now gone for five energetic rounds (Chusid/ Frank/ Chusid/ Frank/ Chusid) with more to come. We're happy to say it's also attracted links, praise and many visitors from some of the most visible sites in the blogosphere, especially its medical and legal sectors. Among them: National Review Online's "The Corner", Eugene Volokh, Steve Bainbridge, Legal Affairs "Debate Club" (see left column), MedPundit (and again), KevinMD, GruntDoc, the official (comments) and unofficial Kerry for President blogs, and of course Overlawyered. Our thanks to everyone who's linked. If you'd like to read more about the medical liability system, try our page on Medicine and the Law, or Overlawyered's (in three series: most recent, earlier, earliest). And if you're interested in electoral politics, Overlawyered has a page on that too.

Ephedra retailer litigation

Can persons who sought out the diet supplement ephedra, and then were harmed by it, sue health food stores and other retailers for having made it available? In California at least, they can and do, resulting last month in a $4 million verdict against a sports nutrition retailer one of whose customers suffered a stroke after using the substance. Galen's Log covers the issue, prompting extensive comments including letters from both the plaintiff's sister and the plaintiff's lawyer, and further discussion after that.

Boeken: Campbell equals win for MO

Yesterday, Philip Morris won its appeal before the Los Angeles 2nd District Court of Appeal, Division 4, which held that the company's punitive damages in the case of Richard Boeken could not exceed $50 million. The court based its ruling on the Supreme Court's decision in State Farm v. Campbell, 538 U.S. 408 (2003), which held that "few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process." Id. at 425.

Boeken had been awarded $5.5 million in compensatory damages; hence, the Los Angeles court reasoned, $50 million in punitives -- nine times the compensatory award -- would be permitted under State Farm, but $100 million would not.

Those who have followed the Boeken case will recall that the original verdict was a major headline-grabber in that it gave the plaintiff $3 billion in punitives, or $5,133.47 per cigarette he'd ever smoked. Boeken had begun smoking in 1957 at age 14 and then smoked for 43 years before contracting lung cancer. Implausibly, Boeken claimed that he had "never heard or read about the health risks of smoking until congressional hearings were held in 1994."

The court was certainly not friendly toward the tobacco companies: it called the companies' conduct "reprehensible" and "repeated over a period of almost 50 years with an indifference to the health or safety of Boeken, a physically and psychologically vulnerable target." The court also gave a hat-tip to the most recent anti-tobacco theory by noting that Philip Morris "intentionally took advantage of the consumer expectation that 'light' cigarettes were safer."

But its anti-tobacco statements aside, the court's decision gives hope that the Supreme Court's decisions in Campbell may prevent the most extreme abuses of the litigation lottery. As Leah Lorber noted here last month, the Kentucky Supreme Court also recently relied on Campbell in vacating a $15 million punitive award against Ford. In contrast, as I noted in June, the Oregon Court of Appeals let stand a $79.5 million punitive judgment against Philip Morris, in a decision that essentially thumbed its nose at the highest Court in the land. We'll see how that progresses...

Meanwhile, in other tobacco-suit news, the government's case against the tobacco companies, which I mentioned yesterday, has now begun. For more commentary and links, see our editor's posting on Overlawyered.

Crime without intent?

The criminal-intent, or mens rea, prerequisite for criminal conviction has been eroding of late, especially in white-collar crime cases. Trent England of Heritage and Overcriminalized.com thinks the insider trading conviction of computer executive John Cassese -- which a judge threw out, but which prosecutors on appeal are trying to reinstate -- exemplifies the problem. A longer write-up appears on Overcriminalized.com. Susanna Cornett comments.

Warn about that sand, or else

After water, sand is the second most common substance on earth. Thousands of lawsuits, however, are premised on the notion that it should be plastered with warnings before being sold: the Sept. 15 National Law Journal has details. A defense attorney for U.S. Silica, the leading defendant in the suits, says the company has already "warned up and down the wazoo," which sounds uncomfortable, especially if sand is involved. See earlier reports here, here and here.

Tobacco trial starts today

Think that the state attorneys general suits against the tobacco companies resolved the matter? Think again. Today, finally, the trial begins in the federal government's own suit, on substantially the same theories. Regulation through litigation continues...

Another debate on the White House race

Our featured discussion on the presidential race, which has now gone one and a half rounds (Chusid/Frank; Chusid) is not the only such game in town. The magazine Legal Affairs is hosting a debate between Stanford's Larry Lessig and author William Tucker on the same general subject, but with the focus on V.P. candidate Edwards.

Employment suits, for profit or not?

The Wal-Mart sex discrimination case is one of a growing number of cases in which plaintiff's firms are forming joint ventures to sue employers and other corporate defendants, "often pairing nonprofits with more materially minded private lawyers". A big advantage of the latter approach, openly boasted of by some of its strategists: you can sell the lawsuit to the public as motivated by a selfless concern with fighting discrimination rather than the chasing of fees, even if many of the private firms involved in the action are indeed known for chasing fees. (Nathan Koppel, "Wal-Mart Suit Will Test Alliance of Public and Private Firms", The American Lawyer, Aug. 10). Only days later, an AP reporter obediently portrayed the Wal-Mart suit -- which is being pushed by four plaintiff's firms including Cohen, Milstein, Hausfeld & Toll -- as all about idealism rather than money (David Kravets, "Attorney suing Wal-Mart sees justice, not dollar signs", AP/San Francisco Chronicle, Aug. 22).

Upcoming AEI seminar on contingent fees

Coming up tomorrow: the American Enterprise Institute is holding a 2 p.m. conference on the theme "What Do We Know about Contingency Fees?" The speakers include Jonathan Klick and Alexander Tabarrok, describing new research, and Lester Brickman and Theodore Eisenberg, commenting.
Information and registration can be found here. Here's an excerpt from the description:

While capping contingency fees is still one of the most favored reforms, research by Alexander Tabarrok and Eric Helland suggests that rather than solving the "crisis," the caps increase the number of frivolous lawsuits. Further research by Jonathan Klick and Helland suggests that in federal class action suits judges in busier districts tend to allow higher attorney fees in an attempt to expedite the resolution of the case.

I wish I could attend, since the first paper sounds as if it reaches a conclusion that is anything but intuitive. As for the second paper, it would be interesting to see how the authors sort out the problem of causality-direction (it wouldn't be surprising if districts with heavier dockets prove more generous in awarding legal fees, but the first explanation that pops to mind is that lawyers seek to file suits more often in districts inclined to accord them high fees).

Proposition 64

Gail Heriot at the Right Coast has a posting on Governor Schwarzenegger, in particular his recent endorsement of California's Proposition 64. As Heriot explains, the proposition seeks to return the "standing" principle to California's notorious section 17200 law (i.e., to require that a plaintiff actually must show injury to himself in order to sue).

Our editor wrote a Wall Street Journal column last year, "The Shakedown State," that chronicled S. 17200 abuses against small businesses (see also Tim Sandefur's recent post here). Those wanting more background can look at the full transcript of an October 2002 conference we hosted for the Manhattan Institute, "Unfair Competition and Consumer Fraud Statutes: Recipe for Consumer Fraud Prevention or Fraud on the Consumer" (PDF). The panel discussions include leaders on both sides of the debate, such as Duke Law's Francis McGovern, plaintiffs' attorney Elizabeth Cabraser, and defense attorney Sheila Birnbaum -- not to mention our own Walter Olson (in a moderator's role). Among many postings at Overlawyered on the 17200 topic: Jul. 7, Jun. 30, and Mar. 12.

Laura Ingraham; featured discussion

For those interested, I'll be on the Laura Ingraham show this morning discussing the gender discrimination suits against Wal-Mart and Costco. Not sure the exact time, but expected within the hour. (See also my column on the topic in last week's San Francisco Examiner, and our earlier discussions here, here, here, and here.)

And our featured discussion on Bush and Kerry has begun, with Ron Chusid, founder of Doctors for Kerry, giving his initial case early this morning, and Ted Frank offering his initial response here. Check it out!

UPDATE: My Laura Ingraham appearance will come later this week; bumped for more Rathergate! I'll keep readers informed.

Beldar on the uses of experts

The Texas lawyer-blogger has been a prominent online commentator on the controversy over "60 Minutes"' use of apparently forged documents; now he contributes a post on the role of document experts in the affair. (Dan Rather's producers appear to have gone "authentication-shopping", as one critic puts it.) Trial lawyers are free to retain both "testifying experts" (fully disclosed) and "consulting experts" (kept secret, especially when they say unhelpful things) but journalists, whose loyalties are supposed to lie more with the advancement of truth and the public interest than with the advancement of clients' interests, should be held to other standards. The post is a useful primer on expert practice in litigation quite aside from the light it casts on the CBS affair.

First Enron criminal trial

Prof. Bainbridge recommends this post from Tom Kirkendall about the "Nigerian barge" prosecution against execs of Enron and Merrill Lynch; trial is set to start Monday. (Update Nov. 6: five defendants convicted).

St. Louis Post-Dispatch on asbestos

On Saturday the St. Louis Post-Dispatch ran a major investigation by reporter Paul Hampel of Madison County, Ill.'s asbestos-suit business (the county is in the Illinois portion of the St. Louis metropolitan area). The main article is accompanied by a profile of successful plaintiff's counsel Randy Bono, of the SimmonsCooper firm and an account of Bono's $250 million win against U.S. Steel (on which, see also Ted's earlier post). An overview of the paper's reporting on asbestos is here.

Some highlights from Saturday's coverage:

* Settlement, rather than trial, is the norm. "In the last decade, 5,150 asbestos suits have been filed in Madison County circuit court. Only five have made it to trial."

* Details on the revolving door by which lawyers move from plaintiff's firms to judgeships and other key government posts such as state's attorney and state senator, and then often back again.

* "Even conservative estimates" peg the payouts so far in Madison County asbestos litigation "in the multibillion-dollar range", and new claims plausibly expected to yield another billion in payouts are being added each year. According to a partner at SimmonsCooper, about 1500 new mesothelioma cases are filed each year nationally; Madison County had 457 of them, or 30 percent if the number is accurate. (Cases are taken there to be filed from around the country.)

* According to Morris B. Chapman, "the dean of Madison County trial lawyers", the county's history of political radicalism helps explain the anti-business leanings of its juries. Wobblies are mentioned.

* Filing fees are a cash cow for the county government: "Fees generated last year by all civil cases filed in Madison County were $4,187,848. By comparison, court fees last year for civil cases filed in St. Louis County, which has a population of 1.01 million, were $3,197,695."

Minimum wage hikes


...at least if you're planning to use a "Prozac defense" or "Zoloft defense" and argue that the pills you were taking ineluctably drove you to commit your crime. In the South Carolina case of Christopher Pittman, charged with first-degree murder after shooting his grandparents, plaintiff's lawyers Arnold ("Andy") Vickery of Houston and Karen Barth Menzies of Los Angeles, who've been suing antidepressant makers for years, stepped forward to provide Pittman with criminal representation on his Zoloft defense. They're asking the court to order Pfizer, the drug's maker, to release reams of documents which they say would be helpful to client Pittman's case. And not just helpful to him alone, either, it might occur to a cynic. The New York Times's Barry Meier covered the case last month. Update Mar. 11, 2005: jury convicts Pittman.

Law firm competes on price, cont'd

The "Fair Fee Promise" offered by an upstate New York law firm, discussed in this space Aug. 9, is the subject of a laudatory editorial in Denver's Rocky Mountain News: "We've always wondered why the lack of price competition doesn't draw the attention of the trustbusters, as it would in any other profession. We hope Colorado firms follow in the footsteps of Pennock, Breedlove and Noll," the editorialists write.

Next week: Election 2004

Next week, PointOfLaw.com will have an Election 2004 special as its third featured discussion. In this space, we've certainly criticized the Dems for their trial lawyer ties, especially those of former personal injury lawyer John Edwards (see here, here, here, here, and many others). But we're concerned about policies, not politics, and we certainly want to hold the GOP accountable, too (see here).

For next week's discussion, we're excited to host two contributors who are very well-versed in the topic of tort reform but come down on the opposite sides of the political fence. Dr. Ron Chusid, founder of Doctors for Kerry, finds much wanting in our status quo legal system, but argues that the Democratic ticket is more likely than the Republicans to enact meaningful tort reform (in the vein of Nixon-to-China, Clinton-welfare-reform, perhaps?). Our own Ted Frank will make the GOP's case. I expect that we'll actually see a lot of common ground here, so this forum should offer the opportunity to see beneath the political posturing and get some real insights. Bookmark us here, so you can join the discussion next week as it develops!

Errin' at the podium

The American Public Health Association isn't going to enhance its reputation for dispassionate scientific rigor by inviting as its conference keynoter Erin Brockovich (more, more).

Hayek and the common law, reconsidered

Due largely to the influence of the late Friedrich Hayek, a couple of generations' worth of libertarians and classical liberals have venerated the historic English common law as the most admirable of governmental institutions: evolved with glacial slowness from customary rules, free from influence by kings and legislators, infinitely flexible and sensitive to the facts of cases, a restraint on centralized state power, and so forth and so on. But, argues Ronald Hamowy in Cato Journal, this portrait is at best over-idealized: "Not only is Hayek�s account defective in that it does not reflect the severe limitations of the early common law, but his conclusions regarding the origin of its rules are questionable." A useful corrective to the "common law good, other forms of law bad" mode of pop-Hayekian argumentation (table of contents/article in PDF form).

Examiner piece

I have a column in today's San Francisco Examiner discussing the gender discrimination class action cases against Wal-Mart and Costco. Many of my arguments will be familiar to our readers who saw my earlier postings on the Wal-Mart case (Aug. 16, Jul. 8, Jul. 2). See also our editor's comments Jun. 29, and his links to further commentaries here and here.

Rule 11 reform clears House

As we've reported previously (Sept. 7, Aug. 17, Jun. 21), the House has been considering legislation that would revive tougher sanctions for Rule 11, which punishes attorneys who file frivolous claims. Yesterday, the House passed the measure 229-174. Now, of course, the bill goes to the Senate, where most tort reform legislation is doomed to die.

UPDATE: Our ever-active editor has more on overlawyered.


In 2002 it was discovered that 339 uncremated corpses had been scattered around the grounds of the Tri-State Crematory in Noble, Ga. The scandal led to criminal charges against T. Ray Brent Marsh, the crematory's operator, and also to many civil claims -- the problem being that the ruined Marsh is considered judgment-proof. So now there's been an $80 million settlement between Marsh and the outraged survivors whose family members' bodies were desecrated -- a whopping sum that one of the attorneys involved calls "Monopoly Money". The plaintiffs have no expectation of Marsh being able to pay; instead they "hope to collect the entire $80 million from the Georgia Farm Bureau Insurance Co., which provided homeowner's insurance for the Marsh family". Were you wondering why your homeowner's insurance has been getting more expensive lately? It's not just the hurricanes. (R. Robin McDonald, "$80 Million Crematory Settlement Is 'Monopoly Money,' Says Attorney", Fulton County Daily Report, Aug. 27).

Exploiting others' labor, indeed

It turns out Harvard Law School's Charles J. Ogletree, Jr., high oracle of the reparations litigation movement, grabs great chunks of other people's writing and passes it off as his own. Coverage: Library Journal, Boston Globe, Crimson. Ogletree is the Jesse Climenko professor of law and vice dean for Clinical Programs at Harvard Law School, and this spring was appointed director of the newly formed Charles Hamilton Houston Institute for Race and Justice at HLS.

Dial F for Fees

A Madison County class action against the big phone company Ameritech is being settled for (conjecturally) $12.4 million for consumers and (most definitely) $1.9 million for class counsel. There were some alterations to the original settlement terms, following objections by consumer advocates, but class counsel including Korein Tillery succeeded in preventing any award of fees to the consumerists. The St. Louis Post-Dispatch's coverage quotes Judge Nicholas Byron as saying to Ameritech lawyer Leslie Smith, regarding the county's notorious reputation: "I hope you're not agreeing [to the settlement] just because you're in Madison County." Smith's reply is unrecorded.

Home Depot's Bernard Marcus

The co-founder of the home improvement retailer speaks out on "Solutions for the Litigation Crisis" in a cover interview with Philanthropy Roundtable. And this subsequent letter to the editor from Kelly Young, vice president of the Claude R. Lambe Charitable Foundation, urges philanthropists to address the litigation issue and also has kind words for a certain pair of websites "that track the trial lawyers� constant assault on business, freedom, progress, and limited government". Yet more: Marcus has a San Francisco Examiner commentary reprinted by the Center for Individual Freedom.

Michigan Supreme Court

Thanks to former Gov. John Engler's appointments, the Michigan Supreme Court has by our lights the finest overall recent record of any state supreme court in the country (for coverage on some resulting controversies follow the links from Overlawyered Nov. 7 and Nov. 9, 2000; Jul. 3-4, 2001). Not long ago the state's Chamber of Commerce issued a report pulling together some of the court's greatest jurisprudential hits of recent years, entitled "Judicial Conservatism at Work: A Look at the Michigan Supreme Court 1999-2003" (Colleen Pero, author -- PDF). And the Washington Legal Foundation recently issued a paper praising the court's ruling upholding liability reform in the car rental field (Thomas J. Foley and Jill I. Zyskowski, State High Court Strikes Latest Blow Against Tort Reform Nullification -- PDF).

(Figures not adjusted for inflation.)

"We hear with surprise of the enormous fees and incomes of leading American lawyers, such as Webster, Choate, David Paul Brown, and others; but the practice of eminent British gentlemen of the long robe is more remunerative than even that of their American brethren. Sir Samuel Homilly realized an income of upward of $75,000 in the last years of his life; Sir Charles Wetherell received $35,000 for opposing the Municipal Corporations Bill at the bar of the House of Lords; the late Lord Truro's retaining fee in an important cause was $15,000; and these instances by no means stand alone."
("Legal Wit", Harper's New Monthly Magazine, Aug. 1859).
Madison County unreeled

As Evan Schaeffer reported Aug. 12 and Aug. 31, citing an Alton (Ill.) Telegraph account, a team led by documentary filmmaker Wayne Ewing is shooting a film about the intense controversy surrounding the courts of Madison County, Ill. (too many mentions on this site and Overlawyered to list). The filmmakers have a website here, and are making noises about presenting both sides of the story, despite the past involvements of director Ewing with both West Virginia chief justice Warren McGraw and PBS's Bill Moyers, neither of whom are exactly the objects of a fan club among litigation reformers.

California overtime suits

They're a great big industry for the plaintiff's bar, and that's unlikely to change no matter how the overtime controversy turns out at the federal government level, since California law is markedly more hostile to employers. Here are three recent Law.com articles on a settlement involving Farmers Insurance claims adjusters that could top $200 million, a green light for class certification in lots of other cases, and an effort by plaintiff's lawyers to organize wage-and-hour suits on behalf of stockbrokers in the state even though, as one of the lawyers puts it, they "earn so much money that nobody even thinks of them being entitled to overtime."


Employers in Missouri might not want to react hastily if a newly hired staffer wears an offensive political t-shirt into the office: according to the Kansas City Business Journal, a state law threatens a one-year prison sentence for employers that try to "prevent an employee from engaging in political activities." It seems the law has never been tested, but unless an employer prohibits its employees from displaying controversial messages of any sort on their person, it may not be free to prohibit electioneering messages. A bit of Google searching turns up the quoted phrase as part of a 1998 bill introduced into the Missouri legislature (PDF) which (if the article's account is accurate) we surmise may have passed in some form. (via Employer's Lawyer).


On a party-line 18-10 vote, the House Judiciary Committee gave its approval to Rep. Lamar Smith's bill reviving serious sanctions against frivolous litigation (see Aug. 17, Jun. 21); strong Rule 11 sanctions were in effect between 1983 and 1993 in federal courts but were then gutted after a determined campaign by the litigation lobby. Some Democrats said they were sympathetic to sanctions but objected to another provision of the bill curbing forum-shopping. (Reuters; Business Insurance).

Elsewhere on Capitol Hill, Reuters also reports, Federal Reserve Chairman Alan Greenspan commented on the tort issue, which we don't remember his having done in the past. Greenspan "said in response to Republican questioning that excessive lawsuits were like a tax on business activity. 'It has the economic impact which is similar to a tax,' Greenspan said in the House Banking Committee when asked by Pennsylvania's Rep. Pat Toomey whether tort claims 'beyond what is appropriate and necessary' could be described as a tax."

Asbestos: Pfizer's Quigley bankrupt

Latest in the endless succession: the Pfizer Corp.'s Quigley Co. subsidiary, which once made coatings for steelmaking equipment, filed for bankruptcy protection in federal court in Manhattan. As part of a deal, Pfizer "agreed to contribute $405 million over 40 years to a trust that will pay remaining and future claims against Quigley"; the parent company has been named in some of the 171,611 lawsuits against its subsidiary claiming injury from asbestos, silica or mixed dust. (Bloomberg; AP; Reuters; The Deal). According to Bloomberg, "Pfizer continues to face about 139,100 claims against American Optical Corp., a business Warner-Lambert bought in 1967 and sold in 1982. Pfizer inherited the liabilities when it acquired Warner-Lambert in June 2000. The unit made respiratory devices and safety clothing to shield against asbestos exposure." Those liabilities have so far been covered by insurance.

Meanwhile, Roger Parloff has a must-read article in the latest Fortune (subscriber-only, alas) on the "scandal" of prepackaged asbestos bankruptcies, also much explored in this space (see Aug. 3 and our asbestos page generally). It should be noted that early news reports on the Quigley bankruptcy do not indicate whether or not it shares some of the aspects of prepacks often considered most objectionable, such as side payments to the organizing plaintiff's lawyers, unfavorable treatment for claimants with the most severe ailments, and carve-ups of insurance proceeds that make it hard for insurers to contest liabilities.

Edwards's courtroom record...

Mike Fumento is on the warpath (see Jul. 26, Jul. 16, etc.).

Thanks to Leah Lorber

Our thanks to Leah Lorber of Shook, Hardy and Bacon who took time out of a challenging week of legal practice to join us as guest blogger last week. She's also guestblogged at Overlawyered.

Gun pre-emption: the Sullivan parallel

Readers who followed my discussion with Michael Krauss in July on federalism and gun-suit pre-emption may recall that I offered an analogy to illustrate one constitutional justification for such pre-emption: just as in New York Times v. Sullivan the U.S. Supreme Court pre-empted some libel suits brought under state common law in order to avoid a chilling effect on the First Amendment, so Congress is entitled to pre-empt some product liability suits brought under state common law in order to avoid a chilling effect on the Second Amendment. When raising the point I was dimly aware that this parallel had occurred to others besides myself, but I didn't realize that two noted scholars of firearms law, David B. Kopel and Richard E. Gardiner, had written a whole article exploring it. It's available online and is entitled "The Sullivan Principles: Protecting the Second Amendment from Civil Abuse".

Also: Stephen P. Halbrook, another commentator whose work we've admired on Second Amendment matters, has an article in the Chapman Law Review spring issue entitled "Suing the Firearms Industry: A Case for Federal Reform?", which is online at his site in PDF form.

Wal-Mart class certification

Michael, at George's Employment Blawg, has more on the arguments (see Aug. 16, Jul. 22, Jul. 8).


You never know what will turn up at Blog 702. Now it's a sonnet on Daubert-proofing a scientific witness's report. P.S.: Follow the comments for a response-poem from Ted.


"Despite common perceptions, business -- especially big business -- has never been monolithically Republican. Executives have been far too pragmatic for that. They have long used campaign giving to buy their way into the offices of both Republicans and Democrats." But between the vice presidential nomination of John Edwards, and Democratic efforts to defeat previously bipartisan litigation reform efforts, business is mobilizing like never before in support of the Republican ticket this year. (Jeffrey H. Birnbaum, "More Than Ever, Business Chooses Republican Ticket", Washington Post, Sep. 6; Glen Justice, "Businesses Plan Attack On Edwards", New York Times, Aug. 24; "U.S. Chamber to Fund Attacks on Edwards, Trial Lawyers", Bloomberg News, Aug. 25; Overlawyered, Jul. 6). Todd Zywicki of the Volokh Conspiracy comments.

Dowd's referral fee

Hartford Courant piles on with an editorial (see Aug. 31, etc.).


The state of New Jersey (see Overlawyered, Jun. 10-11, 2003) and various local government entities in California and elsewhere (Jun. 16, 2004) have been hiring private lawyers on contingent fee to sue private businesses for restoration of groundwater, river quality, and other environmental amenities. Paul N. Singarella of Latham & Watkins discusses the trend (PDF) in a still-relevant National Law Journal op-ed from last winter.

AGs' global warming suit

David Owsiany of the Buckeye Institute doesn't like it either.


James Tharin, founder of a company that purchases class action settlement coupons and certificates from class members and resells them on the secondary market, provides an interesting perspective on the need to reform coupon class action settlements in a paper recently posted on the Federal Trade Commission website. See James Tharin, Protecting Consumer Interests in Class Actions, available here. Tharin's paper is posted in advance of a joint FTC-Georgetown Journal of Legal Ethics workshop on improving consumer class actions.

Also available: papers on the pros and cons of coupon and cy pres class action settlements; notice to class members and opt-out issues; regulation of business through multiple and follow-on actions by government agencies, state attorneys general and private class action lawyers; and the need to overcome the lack of available data on class action suits.

A couple post-convention thoughts

It was nice to see President Bush mention tort reform twice in his acceptance speech last night. Based on his Texas record, I do believe he's sincere about the issue, and depending on the Senate, federal-level reforms might be possible in a second term.

That said, I was disappointed to see Mel Martinez taking the stage. Of course, he's now the Senate nominee from Florida, the swing state of all swing states--and he's a Latino immigrant--so I completely understand the political impetus behind the move. But it nevertheless strikes me as incongruous to attack John Edwards's trial lawyer background on the one hand yet support a different leading trial lawyer, Martinez, on the other, as a "testament of the American Dream."

And I seriously doubt that Martinez will be a friend of tort reform in the Senate...

For more political comments, see our editor's entry on overlawyered.

Seattle federal court cuts fees

Plaintiffs' lawyers (including the Lerach spinoff of the Milberg Weiss firm) in the InfoSpace securities litigation sought a quarter of the $34.3 million settlement fund, even though their ostensible clients would only end up with ten cents a share. This time, however, class plaintiffs The New York State Teachers' Retirement System, the Public Employee Retirement System of Idaho, and the Maryland State Retirement and Pension System objected to the fee request. The Western District of Washington noted that it was a "garden variety" securities case, that the attorneys never even had to file a response to the defendants' motion to dismiss before the case was settled, and that discovery resulted in the production of eleven boxes of documents. Thus, the court decided to award just under $4 million, or more than $900/hour for the 4200 hours billed by 29 attorneys. Remarkably, this is a step in the right direction, since the Ninth Circuit regularly awards 25% contingency fees to class lawyers as a "benchmark." (In re InfoSpace, Inc. Sec. Litig., 2004 WL 1879013 (W.D. Wash. Aug. 5, 2004); Lyle Roberts, The 10b-5 Daily, Aug. 30).

Lawyer contributions

Professor Bainbridge pulls from Karl Zinsmeister's excellent column in The Wall Street Journal (subscribers only) ("Today's most aggressive election donors by far are lawyers. As of July, law partners had donated $112 million to 2004 political candidates; by comparison, the entire oil and gas industry donated only $15 million.") and offers interesting analysis of his own. Money quote:

Neither the size of lawyer contributions nor their tilt to the left should surprise anyone. The business of government is producing laws and regulations. Unlike most industries, for whom new regulations can sometimes be a benefit or a cost, lawyers virtually always benefit from new laws and regulations. A new source of liability creates work not just for plaintiffs' lawyers, for example, but also defense lawyers.
Not quite beach reading but still good...

The Washington Legal Foundation has a variety of interesting new articles on its website, including one analyzing the new California law granting the state 75 percent of punitive damages awards. The article (written by three of my Shook Hardy colleagues) addresses problems with so-called "split recovery" laws but ultimately concludes that given the two-year operational window, the California law is unlikely to affect many cases. The issue bears watching, though, because the enactment of a split recovery law in a trend-setting state like California may encourage other states to adopt similar laws. See Victor E. Schwartz, Mark A. Behrens & Cary Silverman, Legal Opinion Letter: New California Law Grants State 75% of Punitive Damage Award, Sept. 3.

Other articles well worth reading include Rep. Lamar Smith's piece on the federal Lawsuit Abuse Reduction Act, H.R. 4571, which seeks to combat rampant nationwide forum shopping and frivolous lawsuits by identifying appropriate forums for the filing of personal injury lawsuits and strengthening sanctions against attorneys who file frivolous claims in federal court, and Jones Day litigator Chuck Moellenberg's piece on the potential for the use of public nuisance standards against obesity lawsuit defendants, in light of their earlier use in regulation through litigation suits against other industries. See Congressman Lamar Smith, Legal Opinion Letter: Stopping Frivolous Litigation and Protecting Small Businesses, Sept. 3; Charles H. Moellenberg, Jr., Legal Backgrounder: Heavyweight Litigation: Will Public Nuisance Theories Tackle the Food Industry?, Sept. 3.

The uses of securities regulation

One of the durable myths of American politics is that Franklin Delano Roosevelt exercised a stroke of brilliance when he appointed the notorious rogue Joseph Kennedy to head the Securities and Exchange Commission, supposedly on a "set a thief to catch a thief" maxim; having been involved in speculation and questionable business practice himself, Kennedy was the perfect person to catch others' chicanery, or so the theory goes. "Wrong," says Prof. Bainbridge. "Kennedy used his position at the SEC to settle old scores from his days on Wall Street, put potential future competitors out of business, and advance the political prospects of friends and family. But, heck, isn't that what the revolving door is for?"

 

 


Isaac Gorodetski
Project Manager,
Center for Legal Policy at the
Manhattan Institute
igorodetski@manhattan-institute.org

Katherine Lazarski
Press Officer,
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.