Over at Opinio Juris, Julian Ku relates that a new Agent Orange case is beginning today before -- who else? -- Judge Jack Weinstein (see also BBC article today). Agent Orange was of course the herbicide used in the Vietnam War by the U.S. military to clear out brush in the jungle better to enable our troops' safety. The product was alleged to have caused health problems in some veterans (but see Michael Gough's discussion, "Dioxin: Perceptions, Estimates, and Measures," in Phantom Risk: Scientific Inference and the Law), and the original class action on behalf of veterans made Weinstein a household name in some circles (read more about the tale in Yale law professor Peter Schuck's Agent Orange on Trial: Mass Toxic Disasters in the Courts).

So what's behing this new case? It's being brought under the Alien Tort Statute "on behalf of every Vietnamese national who was exposed to Agent Orange," a class of "not less than two to four million persons." Mind-boggling to think that a company could be sued for providing a product mandated by the federal government on behalf of a military action ordered by the commander-in-chief. Though, come to think of it, the military certainly ordered that asbestos be used during World War II...

Julian thinks that although the defendants should win the case, being before Weinstein substantially lowers their odds. Read the full post here.

In the same piece from Sunday's Times (sourced in large measure, on the face of it, by the malpractice bar, not that there's anything wrong with that) Prof. William Sage of Columbia is quoted as saying that while scholars agree that caps would reduce doctors' insurance costs, "there is a universal consensus that caps would do absolutely nothing to reduce medical errors or to compensate injured patients. If anything, caps on damages would make those problems worse."

That's a pithy sound bite, but it's rather misleading as regards the problem of "medical errors". Advocates of damage limits have adduced considerable evidence that the prospect of unlimited liability can seriously compromise the quality of medicine by 1) curtailing providers' availability and 2) encouraging resort to defensive medicine. If trauma centers and rural ob/gyns close their doors, and if doctors prescribe unnecessary antibiotics, CAT scans and caesarean sections for fear they will be blamed if something goes wrong, the number of "medical errors" may not be higher (depending on how those are defined), but the quality of care will nonetheless have suffered. Assuming for the sake of argument that damage caps reduce doctors' incentive to be careful, the question then becomes whether this effect outweighs or does not outweigh the benefits to the quality of patient care of improving availability and reducing the scope of defensive medicine. Notwithstanding the conclusion to which a casual reader might jump from Prof. Sage's comments, there is assuredly no "universal consensus" as to where this balance comes out.

From a report in Sunday's Times: "'There is a strong consensus among people who have really studied the issue that caps on damages would tend to keep costs down and make liability insurance more affordable for doctors,' Dr. Sage said [Dr. William M. Sage, a physician and a law professor at Columbia University]". Now they tell us! But not in time to save the gullible editorialists at papers like the Sarasota (Fla.) Herald-Tribune and the Berkshire Eagle (Mass.) from embarrassing themselves in reliance on the earlier Times report.

Business Week considers some of them.

Editor/columnist Paul Winston generously salutes our "excellent" recent coverage of the medical malpractice insurance issue, including Ted's semi-satirical column proposing a new insurance company run on ATLA principles, as well as my critique (first part/second) of the New York Times's coverage.

Following up on our Feb. 17 entry on the silicosis plaintiffs scandal unfolding in a federal courtroom in Corpus Christi: "U.S. District Judge [Janis] Graham Jack said testimony in a massive silicosis lawsuit raised 'great red flags of fraud' on the part of doctors and plaintiff attorneys involved in the case." A sanctions hearing is scheduled for March 14. (Neal Falgoust, "Case judge: 'Red flags of fraud' are raised", Corpus Christi Caller-Times, Feb. 18; Neal Falgoust, "Doctor decries testing process", Corpus Christi Caller-Times, Feb. 19; Mealey Publications, "Silicosis Cases At Risk After Daubert Hearing; Asbestos Litigation Could Be Affected", Feb. 22 (via Nordberg); In re: Silica Products Liability Litigation, MDL No. 1553, S.D. Tex.).

Reader Mark Arnold adds an important caveat to my earlier post on the desirability of federal vs. state class actions:

And thanks to Jonathan Adler for linking to our commentaries (first, second) taking the New York Times to task for its misreporting on medical malpractice insurance. (Thanks too to MedPundit and KevinMD.)

From reader James Ingram:

As usual the Times makes the mistake of not sufficiently distinguishing between short term fluctuations in rates -- which indeed tend to reflect developments in financial markets -- and long term trends -- which tend to reflect underwriting costs. Insurance markets tend to undergo periods of relatively "soft" markets, during which premiums remain stable or fall due to competitive pressures, followed by precipitous corrections, during which rates "spike." In this they resemble other financial markets where periods of growth tend to end not gradually but with sudden plunges, a la 1987. To say that this years' 30% (or whatever) increase in premiums is not the result of a similar increase in claims is true only in a trivial sense. As the chart shows, in the long run premiums must reflect claims (and other underwriting costs)

Making the rounds: this animated satirical lawyer ad. (Via, among others, Quan's World).

In addition to our regular blogging and our featured discussions, we've decided to introduce a new "POL Columns" feature to Point of Law. POL Columns will be more in-depth pieces, varying in length from longer op-eds to magazine-type features. Authors will include our regular blog contributors as well as other special guests, including those from our broader contributors list. We will still of course have some lengthy posts here in the Forum. Our posts here will be, in typical blog fashion, more informal and often written in response to breaking news or other opinion on the blogosphere. In contrast, POL Columns will be a bit more polished and of broader interest and application -- in some instances, the authors may wish to run the entries elsewhere in an abridged, lengthened, or otherwise varying format.

Our friend Ted Frank kicks off POL Columns today with his column "Malpractice Myths." In this satiric piece, Ted engages in a bit of a thought experiment to deconstruct the anti-tort-reform claims of the trial bar and its mouthpieces: i.e., the contention that escalating medical malpractice premiums are due to insurance company mismanagement and/or collusion rather than underlying litigation costs. Were that claim true, there's surely a profit opportunity to be had by entering the market with a new, properly managed, more competitive malpractice insurer. Ted challenges Trial Lawyers, Inc. to put its money where its mouth is and enter the malpractice insurance market it claims to understand so well. Read it all here.

As an example of how our regular blog entries and POL Columns will differ, compare Ted's column with our editor's rejoinder to yesterday's New York Times piece on medical malpractice, posted here earlier today. Walter's posting is more a specific analysis of the Times article, whereas Ted's column mentions the Times piece in the context of a broader portrait of the medical malpractice myths repeatedly hacked by reform opponents.

The New York Times, the same newspaper that believes that About.com is worth $410 million, claims in an article this morning that "legal costs do not seem to be at the root of the recent increase in malpractice insurance premiums." Check back tomorrow, by which time we expect to have posted some closer analysis of the Times's reasoning.

Late last year, by a 4-3 vote, the Colorado Supreme Court announced an end to the longstanding common-law doctrine which protected landowners from being sued over "open and obvious dangers" on their property. (Reversing the view of the courts below, it ruled that state legislation aimed at limiting landowner duties and liabilities had implicitly repealed all common-law defenses not explicitly endorsed.) (Vigil v. Franklin, summary). The case in which it acted was one in which a couple in Otero County were sued after a member of a gardening maintenance crew dived head first into their above-ground pool, paralyzed himself, then sued on the grounds that the "No Diving" signs should have been bigger. After the state high court ruled in favor of the suit's right to go forward, the defendant couple settled for an undisclosed sum.

That's not necessarily going to be the end of the story, however, as a Rocky Mountain News story explains. State Sen. Jim Dyer, a Republican of Arapahoe County, has introduced legislation in Denver that would restore the open-and-obvious danger doctrine, most likely blocking similar suits of this sort in the future. The bill narrowly passed the Senate Judiciary Committee against opposition from members such as Sen. Dan Grossman (D-Denver). It passed the full Senate by a healthier 24-11 margin and heads now to the House. (via Colorado Civil Justice League).

From a mini-profile ("Fringe Player: The Case Broker" by Jonathan Moxey) in The American Lawyer's 2004 supplement Plaintiff Power (this portion not online, purchase):

An East Texas lawyer once told Robert Steinberg that there are two kinds of civil litigators: chicken catchers and chicken pluckers. Steinberg is a chicken catcher.

Outside of East Texas, that means he's a referral lawyer. He makes his living signing up clients and then sending their cases to other lawyers -- the chicken pluckers -- to litigate. Steinberg hasn't been active in the courtroom since 2001. ...

When he meets his clients, he says, he admits up front that he won't be the lawyer handling their cases. He says that most of them don't care and that he's never been asked about how legal fees would be divided.

The student newspaper checks around with faculty and others at the university and gets a few reactions worth recording:

Charles Lockwood, chair of the [Yale School of Medicine] Ob/Gyn department, said rising insurance premiums, resulting from the field's high legal risk, have already forced large cutbacks in Yale's maternal fetal medicine staff. ... "Within two years we will be faced with a very real possibility of having to shut down our high-risk obstetrical practice -- a practice which cares for the sickest mothers in the state," Lockwood said. ...

...Yale School of Medicine Dean Robert Alpern said tort reform is needed to protect medical schools and doctors of all types. "There is no question that medical malpractice occurs, and the medical profession supports patients' rights to address this problem when they've experienced malpractice," Alpern said. "But the current legal system is very poor. Lawsuits are often filed in situations where no malpractice has occurred, but a patient has a bad and unpreventable medical outcome. Even when a doctor has done everything right, a court will find a guilty plaintiff, and the sizes of awards can be outrageous." ...

... Law School professor George Priest said quick fixes, such as capping damages, are second-rate solutions to wider problems in tort law. "I have never liked caps on damages, but on the other hand it is very difficult to control the substantive grounds on which people recover," he said.

Law professor Theodore Marmor said caps are not the best means of fixing the tort system's troubles because they do not address the heart of the issue -- the exorbitant scale of damages. "The mass tort area is beset by problems, and caps address some of the problems, but are neither a panacea nor are they to be thought of as the most important single action to engage in," he said.

University of Texas law prof John Dzienkowski, Cornell law prof Brad Wendel and Berkeley (Boalt Hall) law lecturer (and practicing lawyer) John Steele have launched Legal Ethics Forum, with early posts on topics ranging from the Lynne Stewart conviction to whether Harvard's Roscoe Pound, in writing one of his best-known works, over-borrowed from an earlier author; to whether class action lawyers can use one of their own number as a representative client (according to a California appellate court, they can't).

The much-criticized 1999 verdict in a consumer class action over the insurer's use of generic aftermarket parts, in which an Illinois state court returned a $1.2 billion verdict (later reduced to $1 billion and now on appeal to the Illinois Supreme Court), is the subject of an interesting discussion at Martin Grace's site. Prof. Grace criticizes the verdict, Evan Schaeffer and E.L. Eversman defend it in comments and at Eversman's site AutoMuse (more) (yet more), and Grace adds further thoughts. Update Aug. 18, 2005: State Farm wins in unanimous Ill. Supreme Court decision.

One major benefit of the Class Action Fairness Act is that it will require plaintiffs' attorneys in class action suits to receive benefits only equivalent to the actual value provided to the class. This, notwithstanding criticism from the litigation lobby, is clearly pro-consumer, because consumers, rather than lawyers, will be getting the bulk of any nuisance settlements resulting from meritless class actions. A second benefit is that it creates clear federal jurisdiction in nationwide class actions--an issue that was previously a huge problem for corporations sued in state courts. Such corporations couldn't guarantee that a nationwide settlement they reached in one state court would be recognized in another state court. Federal settlements, due to the Constitution's Supremacy Clause, don't have this problem. The infamous Hoffman class action (No. CV-91-1880 (Ala. Cir. Ct. Jan. 24, 1994)) illustrates both of these issues.

Robert Hahn's new book by this title was published recently by the AEI Press. For a description and ordering info, click here. To download the book as a PDF file, click here. Hahn explains his four "key points" as follows:

Summary measures of the impact of regulations have made important contributions to our understanding of the regulatory process�a point often overlooked by critics who call for abandoning scorecards measuring costs, benefits, cost savings, lives or life-years saved, cost-effectiveness, and net benefits.

Making refinements to scorecards rather than wholly rejecting them as an analytical tool could address many of the critics� concerns that the techniques and applications of economic analysis are fundamentally flawed.

Some of the suggestions made by the critics are legitimate, but many are not. Supporters of economic analysis of regulation agree that placing monetary values on the costs and benefits of regulation is difficult. But that does not mean we should abandon the tool.

The solution to legitimate concerns raised by the critics is not to eliminate quantitative economic analysis but to gain a deeper understanding of its strengths and weaknesses and to use it wisely.

"The [Class Action Fairness Act] is the first significant Congressional tort 'reform' victory for the radical right and a catastrophe for workers and consumers."

"Corporations may rue the day they fought for class-action reform."

Mencimer argues that federal jurisdiction should be restricted to issues of national importance (one looks forward to her call for the repeal of the IDEA), and that federal courts can't handle the influx of nationwide class actions because "In 2004, the federal courts saw a nearly 10-percent increase in new filings over the previous year." This is curious because she was recently lauded by many blogs for criticizing Stuart Taylor for disagreeing with Mencimer's earlier claim that filings are decreasing. An understandable oversight when, like a drunk and a lamppost, one uses statistics for support rather than illumination.

"A U.S. Food and Drug Administration panel meeting in Gaithersburg, Maryland, voted 17-15 that the benefits of Vioxx may outweigh its link to heart attacks and strokes in some patients. Earlier today, the panel voted to keep Pfizer Inc.'s similar painkiller Celebrex on the market, also with a warning highlighted in a black box on its label." (Bloomberg)

Back on Nov. 18, our editor linked to a Wall Street Journal editorial arguing that the Vioxx withdrawal might have been a mistake. See also our postings Oct. 4, Nov. 9, Nov. 18, Dec. 18, Dec. 27, Dec. 31, Jan. 5, Jan. 27, and Feb. 8.

Aside from allowing back on the market a drug deemed highly valuable by some of its consumers, what is the impact of the decision? The Bloomberg report quotes Steven Sean Hill, who manages a $3.5 billion fund at First Investor's Corp., as saying "I would think that it's going to make it harder for lawyers to make a legal case." One can only hope.

This morning, President Bush signed into law the Class Action Fairness Act, the first bill to become law in 2005. See coverage in the Washington Post, USA Today, and ABC News.com.

The recent Seventh Circuit decision in In the Matter of A.G. Financial Service Center, Inc. provides an excellent case study for abusive class actions and why they resemble Russian roulette to corporations. AG Financial issued private-label credit cards, which consumers could use to purchase products from single merchants. Some of AG Financial merchants were distributors of satellite television systems (presumably the big C-band dishes). This ended up being a money-losing line for AG Financial, but, worse, they found themselves ensconced in fraud claims. Why? A typical system sold for $2,354 at 19% interest; AG Financial's merchant offered a financing deal whereby customers could pay $40/month, about what they would pay for cable. As anyone with a calculator can figure out, it would take 13 years to pay off the financing. Some customers chose negative amortization--paying minimum amounts for less than the amount of interest accumulated, meaning the debts grew over time.

Objectively, for most people, this is not a great deal. On the other hand, some people prefer satellite to cable, and wanted a 19% loan to get it. In today's world, anyone offering a not-great-deal that consumers actually want is subject to consumer fraud suits. (If it's a not-great-deal that no one purchases, then there's no "injury".) As the Seventh Circuit wrote: "A.G. Financial contested the 500 or so suits filed against it and appears to have prevailed or settled the rest for small sums, though the single loss was a doozy." A Mississippi court issued a judgment for $167 million, mostly in punitive damages. (Actual damages are clearly miniscule, if existent at all.) A.G. Financial filed for bankruptcy.

Perhaps we as a society want to be paternalistic and forbid negative amortization or high-interest loans, even though some people want these financing arrangements for themselves. But shouldn't that be a decision for the legislature rather than one judge out of hundreds who didn't find it problematic? As a society, we would be justifiably outraged if a single person were charged and exonerated hundreds of times for the same alleged crime until a court could be found who would pronounce execution. But that's what happened here--and why so many magnet jurisdiction class actions result in immediate settlements before they can get to the point where a company is rolling the dice on whether it will survive the suit. (Troubled Company Reporter, "A.G. Financial: Files For Bankruptcy Protection", Aug. 30, 1999).

No surprise: the Class Action Fairness Act passes 279-149. The AP incorrectly says the bill "would ban state courts from hearing large multistate class action lawsuits", but I suppose "ban state courts from hearing" is sexier than "create federal removal jurisdiction for".

As we reported Feb. 2, the problem of "double-dipping"--doctors claiming silicosis (and only silicosis) caused injuries for which they previously diagnosed asbestosis has been endemic. Much was uncovered during an October 2004 deposition of Dr. George Martindale, a radiologist who withdrew his diagnoses for over 3000 patients in response to questioning; Martindale had been paid $35 an X-ray reading. Several doctors have followed suit. U.S. District Judge Janis Graham Jack ordered hearngs to determine whether false diagnoses had been used in the mass silicosis case before her in Texas. Dr. Barry Levy testified yesterday "he diagnosed more than 800 patients during a 72-hour period and that it was common for him to spend no more than a few minutes reviewing X-rays and writing a report for each patient." (Neal Falgoust, "Defense goes after doctors", Corpus Christi Caller-Times, Feb. 17; Neal Falgoust, "Doctors headed to court", Corpus Christi Caller-Times, Feb. 16; Lynn Brezosky, "Doctors ordered to back up thousands of diagnoses", AP, Feb. 16). More coverage: Feb. 27.

The Feb. 28 issue of Forbes magazine includes an interesting piece (registration required) by Scott Woolley that describes the antitrust challenge brought by International Tobacco Partners against the 1998 "Master Settlement Agreement" between 46 states and the four largest cigarette makers. The case was argued to a Second Circuit panel earlier this month. Woolley describes the scene: An attorney from the New York Attorney General's office

declared that to believe the states had sold out to Big Tobacco, you would have to assume that 46 attorneys general are liars.

"That's tempting," Judge Guido Calabresi shot back. "It may be that when the states were offered a stake in a monopoly, they took it."

In getting the four cigarette titans to agree to pay the states princely sums, which would require price increases, the states agreed to help the big brands avoid getting undersold by discounters. They did so by requiring even new off-price brands to pay roughly the same level of fees (now about 40 cents a pack). The states were disarmingly transparent about their intent: to "fully neutralize" the competitive advantage of the discounters, the settlement says.

Todd Zywicki has an even more systematic refutation of the oft-cited statistic from a Harvard study that half of bankruptcies are caused by illness or medical bills in his continuing series on bankruptcy reform. Dr. Rangel is also on the case. Earlier entry: Feb. 14.

Zywicki also persuasively demonstrates that credit cards have not worsened household financial conditions; rather credit cards are substituting for more expensive and less-attractive forms of debt and credit such as pawn shops and retail store credit. Too, Zywicki notes, people going into bankruptcy have an incentive to use the dischargeable debts of credit cards to pay non-dischargeable or secured debts.

Another reason why things are different in the United Kingdom: the Law Lords have just ruled that it is up to Parliament, not themselves, to decide whether to adopt the controversial "loss-of-a-chance" doctrine in medical malpractice cases. The doctrine allows patients to sue for damages even if medical misadventure most likely did not cause the bad outcome (so long as they can argue that it worsened their chances to some degree). Gregg v. Scott, Lords; Court of Appeal; The Lawyer. By contrast, it's common for state courts here to switch to the more liberal recovery rule simply on their own say-so, as the Wyoming Supreme Court did recently. (case/continuation, both PDF). Now doctors in Wyoming are talking about working through the state legislature to overturn the doctrine, but of course that's a lot harder than winning a legislative fight over whether to adopt it in the first place.

I have a column in today's Washington Times discussing the Class Action Fairness Act. Point of Law readers will be familiar with my sentiments (see, e.g., here, here, and here), as well as those of our editor (see Walter's comments here at overlawyered.com, which are also cited in my Times column).

In a Wyoming case,

several cases were consolidated because they all involved the same issues. The evidence was heard by multiple juries at the same time. Then the juries separated to make their individual decisions regarding the same issues of liability for each respective party. "The defense won some and the plaintiffs won some," Brega notes. To him, that's pretty clear support for the notion that "the person listening to the evidence has a huge impact on the way a case is determined."

There's a cottage industry of support companies specializing in how to use the voir dire process to manipulate both the composition and attitude of a jury to be more favorable. An ATLA "litigation tip" suggests plaintiffs' attorneys mislead the court by requesting to show photographs of an auto accident to "test juror eyesight" and then learn from juror reactions who is skeptical of soft-tissue injuries. (Larry D. Lee, "Use Photos to Identify Juror Bias", ATLA.org, Dec. 7).

As part of American Lawyer's Litigation 2004 supplement, entitled "Plaintiff Power", reporter Alison Frankel profiles Weitz & Luxenberg, the firm that brought mass torts to New York City (a town whose injury bar is still better known for one-at-a-time cases). W&L now boasts annual revenue "well in excess of $75 million", having branched out from asbestos into breast and hip implants, pharmaceuticals, toxic torts and water contamination. (The asbestos revenues fund continual expansion into other areas). Some highlights:

* Perry Weitz got his start at the tort law firm of his father-in-law, the famed Morris Eisen, but left well before the indictments which led to the conviction of numerous persons at the firm for fabricating evidence and bribing witnesses. Co-partner Arthur Luxenberg is likewise an Eisen refugee. The third partner -- there are only three, although the firm employs many attorneys as well as a support staff of about 300 -- is Robert Gordon, formerly of Philadelphia's Greitzer & Locks.

* The New York state legislature pretty much made Weitz & Luxenberg's fortunes when it reopened and liberalized the statute of limitations to allow the filing of old asbestos cases, a large share of which W&L scooped up; one sign of the firm's close ties with Albany is its hiring of Assembly Speaker Sheldon Silver as of-counsel, promising him a share of fees from cases he brings in.

* "It costs something like $25 million, Weitz says, to start up a new mass tort onslaught. "

The much-publicized new study is "more than a little bankrupt itself", according to MedPundit Sydney Smith (Feb. 12). See Gail Heriot, Misdiagnosed", National Review Online, Feb. 11.

See you in court, say Bill Lerach and Max Berger (via Roberts).

We'd get called intemperate if we used that kind of language:

But Delaware Democrat Sen. Joe Biden said trial lawyers and the suits they file were a defense against corporate misdeeds.

"I'll pay the bottom-feeders to go out and get these big fees to stop bad guys from doing bad things," he said.

The Senate Republican Policy Committee has a run-down (PDF) on CAFA, its provisions and history (via Lyle Roberts). And the centrist Democratic Leadership Council has published numerous articles calling for reform; a sampling is here (see May 14).

Last March the Chicago Tribune ran a major investigation of class actions which does much to show why the Class Action Fairness Act commanded such strong bipartisan support. Here's the lead story; a table of results in several class actions, some relatively good, others unsettling; and a story on the "lawsuit capital", Madison County. We've also mentioned the paper's excellent editorials on the subject; see Jul. 7. By the way, and by contrast, the New York Times's latest dyspeptic editorial rant on the bill's passage is here.

George has an article today in National Review Online explaining his new study (PDF)(see below) and offering some observations on the passage of the Class Action Fairness Act. The byline lists him as not only the John M. Olin Professor of Law and Economics at Yale Law School but also as blogger for PointOfLaw.com -- that sounds wishful on our part.

As the Senate passed the Class Action Fairness Act, the Manhattan Institute released a new study from George Priest, the John M. Olin Professor of Law and Economics at Yale Law School and a friend of this site. The study, What We Know and What We Don�t Know about Modern Class Actions: A Review of the Eisenberg-Miller Study (PDF), concludes that the Class Action Fairness Act "would constitute a helpful, but largely a modest reform."

Professor Priest's study is the result of a commission from MI to examine another study, Attorneys Fees in Class Action Settlements: An Empirical Study, released last spring by Cornell professor Ted Eisenberg and NYU professor Geoffrey Miller. Although it was not the principal focus of their study, Eisenberg and Miller made the curious finding that the average class action recovery had not increased over the 1993-2002 period in their data set.

The New York Times trumpeted this subsidiary result on the front page of its business section: Study Disputes View of Costly Surge in Class-Action Suits. ATLA's president said, "This empirical study comes out and says the system is working correctly." Senator Russ Feingold used the study to argue against the Class Action Fairness Act, saying it was "a solution in search of a problem." Even Eisenberg himself chimed in, saying "We started out writing an article about fees, but the shocking thing was that recoveries weren�t up."

In his new study, Professor Priest looks at the Eisenberg-Miller data and reaches a very different conclusion, namely, that "class action litigation is imposing extraordinary costs on American society," that these high costs have persisted over a long period of time, and that the case for reform is all the more compelling. Even taking the Eisenberg-Miller dataset on its own terms, Professor Priest finds the average class action recovery over the ten-year period they studied was $138.6 million, which works out to an aggregate class action recovery averaging $5.13 billion per year.

Moreover, Priest argues that the Eisenberg-Miller data set significantly understates the overall magnitude of class action litigation. Eisenberg and Miller only report data taken from published opinions, and their data set is highly skewed toward securities litigation, which constitute over half their sample. Over the entire ten-year period, their data set includes only 9 civil rights class actions, 23 employment class actions, 22 ERISA class actions, and 7 mass tort class actions. (By comparison, there were 2,133 class action cases filed in federal courts in 1999 alone. We don't know the number in state courts, but in 1999 there were 54 class actions filed in just 3 counties, Madison County, Illinois; Jefferson County, Texas; and Palm Beach County, Florida. See Manhattan Institute Civil Justice Report 3.)

Professor Priest also emphasizes that Eisenberg and Miller's study does nothing to challenge some of the main criticisms of class action litigation, such as the fact that mere certification of a class will force defendants to settle rather than "betting their company," regardless of the evidence. Priest points out, for example, that the Eisenberg-Miller data set includes the silicone breast litigation, which settled for $4.2 billion even though strong scientific evidence showed that breast implants did not cause the illnesses claimed in the suit (see this Manhattan Institute study by Point of Law friend David Bernstein).

In sum, Professor Priest finds that the case for class action reform is strong. He thinks, however, that even though the Class Action Fairness Act "will help" by "[m]oving class actions involving significant different-state parties from state to federal courts," that ultimately "it is not likely to solve the problems created by modern class action litigation," which are so entrenched that they require a broader, more systemic reform.

The following, from my June 2003 Wall Street Journal column, continues to represent a good summary of my views on today's Senate action:

One reason why class-action abuses have been so difficult to stop is that large classes of plaintiffs with members in multiple districts across the country enable suing attorneys to "shop" for the most favorable court. Quite predictably, the best forum winds up being a state "magnet court" well known for its hospitable treatment of class-action lawsuits. For instance, Madison County, Ill. -- recently made famous by handing out a $10.1 billion verdict against Philip Morris for allegedly insinuating that its "light" cigarettes were "safer" -- has seen a tremendous upsurge in class-action filings in recent years, as the Center for Legal Policy has documented in three recent studies. From 1998 to 2000, class-action filings in Madison County increased over 1,800%. Over 80% of these suits were brought on behalf of proposed nationwide classes.

Plaintiffs' lawyers admit the existence of magnet courts. Dickie Scruggs, one of the nation's foremost plaintiffs' lawyers, who pocketed hundreds of millions in the tobacco settlements, described it best at a conference last June: "[W]hat I call the 'magic jurisdiction' . . . [is] where the judiciary is elected with verdict money. The trial lawyers have established relationships with the judges that are elected . . . . They've got large populations of voters who are in on the deal . . . . And so, it's a political force in their jurisdiction, and it's almost impossible to get a fair trial if you're a defendant in some of these places . . . . Any lawyer fresh out of law school can walk in there and win the case, so it doesn't matter what the evidence or the law is."

The magnet court phenomenon not only costs our economy billions by generating increased settlement values for often tenuous claims; "magic jurisdictions" present a serious threat to the democratic and federalist principles underlying our constitutional design. County court judges -- elected by and accountable to only the several thousand residents of their home communities -- are making decisions that have a huge impact on the American economy as a whole, which clearly infringes on the power our Constitution's framers gave Congress to regulate interstate commerce.

Fortunately, Congress has the power to act, reclaim its constitutional powers, and stop the madness. The Class Action Fairness Act would remove to federal court any large national class-action cases (those over $5 million in the Senate version and those over $2 million in the House version). Decisions to certify a national class of plaintiffs could be immediately appealed -- to the Supreme Court if necessary -- to prevent rogue judges from abusing their positions. While not eliminating the "tort tax" or its harmful effects on the economy, the Class Action Fairness Act would thus stop some of the worst abuses in our increasingly wacky system of justice.

The Senate's resounding, bipartisan passage today of the Class Action Fairness Act represents a significant loss for Trial Lawyers, Inc. and its litigation lobby. ATLA president Todd Smith whined, "Every American's legal rights are diminished by this anti-consumer legislation."

But the class action reforms at the heart of the Class Action Fairness Act are among the most defensible federal reform proposals being considered, which is why 18 Democrats signed on to the measure. The Act is in many respects the policy culmination of substantial intellectual efforts here at the Manhattan Institute, this website's sponsor. We have previously published four different Civil Justice Reports on the magnet court phenomenon that the Act is designed to address:

John H. Beisner and Jessica Davidson Miller, They're Making a Federal Case Out of It . . . In State Court, Civil Justice Report 3 (2001)(showing very high incidence of nationwide class action filings in three county "magnet courts");

John H. Beisner & Jessica Davidson Miller, Class Action Magnet Courts: The Allure Intensifies, Civil Justice Report 5 (2002)(showing continuing growth of Madison County, Illinois magnet court, with filings growing 2,000% in three years);

Lester Brickman, Anatomy of a Madison County (Illinois) Class Actions: A Study of Pathology, Civil Justice Report 6 (2002)(case study examining a Madison County class action, showing how court abused plaintiffs' rights to benefit class counsel);

John H. Beisner et al., One Small Step for a County Court . . . One Giant Calamity for the National Legal System, Civil Justice Report 7 (2003)(showing growing "mass action" tort problem in non-class-action jurisdiction of Jefferson County, Mississippi).

For an overview discussion of the class action problem, see here. See also here for the discussion in Trial Lawyers, Inc.

See also our earlier Point of Law postings Feb. 3 (on committee debates), Jan. 24 (for panel discussion at AEI), Jan. 3 (for Bush visit to Madison County), Aug. 2 (for FTC conference on class actions), Jul. 9 (on Senate's inability to pass the Act last summer), Jul. 8 (discussing interlocutory appeal function of Act), Jul. 7 (for editorials and other bloggers' comments), Jul. 6 (several news links), and Jun. 2 (for discussion of Senate wrangling and the Act's merits).

Michael beat me to this by a little bit, but I'll send in a few more links on the Senate's passage today of the Class Action Fairness Act, by a vote of 72-26. The Washington Post reports here. In addition to unanimous Republican support for the measure, the following Senators supported the bill: Jeffords (I-VT), Bayh (D-IN), Bingaman (D-NM), Cantwell (D-WA), Carper (D-DE), Conrad (D-ND), Dodd (D-CT), Feinstein (D-CA), Johnson (D-SD), Kohl (D-WI), Landrieu (D-LA), Lieberman (D-CT), Lincoln (D-AR), Nelson (D-NE), Obama (D-IL), Reed (D-RI), Rockefeller (D-WV), Salazar (D-CO), and Schumer (D-NY).

The bill was presented to the Senate Monday and moved through quickly, as supporters rejected all attempts to amend the bill as it came out of committtee. Bush supported the bill's passage unchanged, and the House leadership has agreed to move the bill through quickly -- likely next week -- in unamended form, to get the legislation to the president's desk. It will be Bush's first big legislative win for the new term.

UPDATE: Over at the Corner, Kathryn Lopez posts an email noting that the only Republican voting for a Feinstein-Bingaman amendment to the Act -- which would not only have weakened the bill but have derailed the "fast track" for the bill through the House -- was the Judiciary Committee Chairman himself, Arlen Specter (see Nov. 18, Nov. 16, Nov. 11).

S. 5 adopted by a 72-26 vote. According to AP,

The House is expected to take it up next week and send it to President Bush for his signature.

As a young lawyer, John Lanius of TexasBestGrok defended asbestos cases. "I lasted in that job exactly one year. During that period of time, I attended 80 or so depositions of plaintiffs asserting that their lung disease had nothing to do with their 2-pack-a-day smoking habit and everything to do with the brief exposure they had to my then-client's insulating cement during a few-year period in the 1960s. ... It costs too much to take the cases to trial, so we settled for nuisance amounts." On the opposite side of the table: Baron & Budd.

Per the National Law Journal, the Judicial Conference of the U.S.'s Committee on Rules of Practice and Procedure is considering possible changes to electronic discovery which might actually (hallelujah) hold out some hope of reining in the enormous cost of that process. One idea, for example, is to require court approval before fishing expedition demands could be extended beyond the more readily accessible forms of data to every last cave-stored backup tape, floppy disk or other obsolete media form. Public comment on the proposals lasts only another five days, so readers who want to offer cheers or suggestions should do so promptly.

Last week, our editor noted that the Association of Trial Lawyers of America had hired PR-man Jon Haber as its new CEO. The Legal Times has more in an in-depth feature (courtesy of law.com).

On Mar. 9 and 10 in Washington, D.C. the Atlantic Legal Foundation (on whose advisory board I once served) is holding a conference on "The Attorney-Client Privilege: Erosion, Ethics, Problems and Solutions". The conference focuses on the erosion of attorney-client privilege in the context of corporate investigations, white-collar crime, accounting regulation, etc., and the lineup of speakers includes such luminaries as Geoffrey Hazard, Theodore Olson, George J. Terwilliger III, Sen. Arlen Specter, and Richard (Dickie) Scruggs.

Following up on our Sept. 10 report: this week Wayne Ewing, a documentary filmmaker from Aspen, Colo., is releasing a documentary about last year's Maag-Karmeier Illinois Supreme Court race and about the wider controversy over the courts of Madison County, Ill. Ewing "said Monday that his film sided with trial lawyers in the tort reform debate", according to the St. Louis Post-Dispatch. Ewing has also made films about the campaigns of West Virginia's Warren and Darrell McGraw (see Nov. 2, Nov. 3, etc.). (news release)(documentary).

The Illinois Civil Justice League is on the case, however, with a new report (PDF) (press release) showing that Ewing's film relies on various groups with longstanding ties to the plaintiff's bar. One quote:

According to the [1993 Chicago] Tribune article, 1985-86 Illinois Trial Lawyers Association President David Decker bragged about his group�s efforts at promoting anti-tort-reform causes, stating: "We aided in the formation of support groups like the Illinois Public Action Council and the creation of the Coalition for Consumer Rights."

American Enterprise Institute's Norman J. Ornstein and Boston University Law Professor Ward Farnsworth are debating Ornstein's proposal that a constitutional amendment be passed for new judicial appointments to be subject to term limits. (Ironically, Ornstein is well-known for opposing legislative term limits.) This reader thinks that Farnsworth has the better of it so far:

You also say life tenure has made it too tempting for presidents to nominate young ideologues. Again the strength of the argument depends on the size of the problem, which we shouldn't work with vague impressions. How often do you imagine Clinton picked a judge he wouldn't have chosen without the temptation of life tenure? How about Bush? Who do you have in mind? I don't think that happens often on the courts of appeals, except when someone is being set up for a possible later appointment to the Supreme Court�and that setting-up process would probably still occur under your proposal.

If anything, your plan would make it easier to put ideologues on the bench, wouldn't it? Their terms would be shorter, so (if you're right) the incentive to oppose them would be reduced and they would be more likely to sail through the Senate. (In effect that's the point of your idea.) What's so great about that? The stakes in the current system put pressure on presidents to nominate moderate judges so as to avoid rancorous opposition. Usually they do, though the few more extreme ones get the attention in the press.

I don't remember the editorialists of the Wall Street Journal ever having been as specifically favorable about loser-pays as they were in their Jan. 27 editorial "Tort Reform Roadmap" (sub - $) and their comments deserve to be memorialized for future reference:

The optimal fix would involve movement toward a British-style loser-pays system. That would curb incentives to bring the nuisance lawsuits that are bankrupting companies and individuals, driving up insurance premiums and increasing health-care costs. Of course, that sort of systematic reform is hard to accomplish, even with a Republican in the White House and larger GOP majorities in Congress. So Republicans are moving instead toward piecemeal reform, which can still be constructive if done right.

David Giacalone, guestblogging at Crime and Federalism, recently expressed surprise that loser-pays has not been the subject of more attention and experimentation. Jim Garven of Baylor also has a short post on the topic. For more on loser-pays, see posts here and at Overlawyered.

That's the philosophy of one plaintiff's lawyer handling Vioxx cases, reports the AP:

Lawrence E. Feldman, a Jenkintown attorney whose firm has been advertising on the Internet for people who took Vioxx, said most attorneys thinking about getting involved in the litigation are looking for any clients who had a heart attack or stroke within 72 hours of taking the drug, regardless of how much they took or for how long.

Feldman acknowledged that it may be tough for any client to show conclusively that their heart problem was caused by Vioxx, but he said patients, not the drug company, should get the benefit of the doubt.

"One man's pirate is another man's hero," Feldman said. "If you're talking about people who had a stroke or a heart attack within a few days of taking this drug, I don't think anyone has to look for any existential truth about whether they should be rewarded."

You are "Inclusio unius est exclusio alterius"! You presume that the legislature chooses words very carefully when it drafts statutes. Because they could have used a different word, but didn't, the word not chosen was deliberately excluded. You assume a lot based, not just on what's in front of you, but on what isn't. You have great faith in others' ability to know exactly what they want. Probably too much.


Which Canon of Statutory Construction are You?
brought to you by Quizilla (via Southern Appeal)

It's a time-honored publicity technique: prepare an ad likely to be rejected by media outlets, and when they turn you down, complain to the press that you're being denied a fair hearing. A trial-lawyer-allied group called US Action is playing this game at the moment. It prepared a broadcast ad supportive of med-mal lawsuits, and critical of those who would limit such suits, and sent it to the networks. NBC, ABC, CBS and Fox all turned it down, saying it violated their broadcast standards for controversial issue advertising; only cable-based CNN agreed to run it. Before long the New York Times ran a story about the denial, an undeniable publicity coup for US Action. And the organization has followed up with a seemingly ubiquitous blog ad campaign (we've seen it on InstaPundit, Nathan Newman's Labor Blog, Virginia Postrel, Tapped, Ernie the Attorney, etc., etc.) inviting readers to view the must-be-hot-stuff taboo ad. So far, so familiar; that's how the publicity game is played in these cases.

But the ad campaign does something sneaky and misleading. It entirely omits mentioning the three older networks, instead leaving readers with the impression that Rupert Murdoch's Fox News management is the primary obstacle keeping viewers from seeing the ad on air. In fact in a mere 38 words the ad manages to pack in four references to Fox News, three by name and one to the network's motto ("We report. You decide.").

Maybe the small space of the blog ad just couldn't accommodate the extra few characters needed to replace "the ad FOX won't run" with "the ad the broadcast networks won't run". Or maybe the devisers of the ad knew that their cause wouldn't seem as sympathetic if readers knew that CBS, ABC and NBC agreed with Fox in ruling the spot off bounds. Or maybe they knew a certain portion of readers who instinctively assume the worst of Fox would be more likely to click on the ad at the tingly thought of catching Rupert's minions misbehaving. Any of these are possibilities: we report, you decide. P.S. Brett Marston thinks he saw the ad on Fox's local affiliate in D.C.

In a recent column, Phyllis Schlafly surveyed the current landscape of constitutional challenges to the funding of public schools:

Without national media coverage, litigating lawyers and supremacist judges have been using the judiciary to take control of public schools. In the last 18 months, more spending has been ordered by state supreme courts in Kansas, New York, North Carolina and Montana, and by trial judges in Massachusetts and Texas.

Public schools in 24 states are facing lawsuits from special-interest groups trying to get activist judges to order taxpayers to spend more on schools, money that can come only from higher taxes. Courts are micromanaging schools, telling them how much money to spend and on what, right down to making decisions about computers and textbooks.

Among the most recent developments, the Kansas Supreme Court last month held that state's funding of K-12 to be unconstitutionally inadequate. Schlafly says that the opinion "implied that the state must spend an additional $850 million or more annually on public schools."

Yesterday a divided panel of the U.S. Court of Appeals for the District of Columbia Circuit rejected the U.S. Government's RICO-based theory of recovery in its lawsuit against cigarette manufacturers. The majority opinion (PDF file here), written by Judge David Sentelle, explains that

The relevant section of RICO, 18 U.S.C. 1964(a), provides the Disctrict Courts jurisdiction only for forward-looking remedies that prevent and restrain violations of the Act. Because disgorgement, a remedy aimed at past violations, does not so prevent or restrain, we reverse the decision below and grant partial summary judgment for the Appellants.

Judge Stephen Williams wrote a separate concurrence; Judge David Tatel dissented.

Assuming it survives en banc review, of course, the ruling will, as pointed out by the New York Times, eliminate

the government's biggest potential financial threat to the tobacco industry from the case. That is the government's calculation of $280 billion in profits it estimates that the industry garnered from cigarettes smoked from 1971 to 2000. Lawyers for the tobacco companies had contended that being forced to disgorge so great a sum could have driven some companies into bankruptcy.

Illinois Governor Rod Blagojevich (D) called for "real, meaningful medical malpractice reform" in his State of the State speech yesterday, though he didn't provide much in the way of detail, so doctors remain skeptical. The governor didn't refer to caps one way or the other. The Illinois Supreme Court has repeatedly held them unconstitutional, and lawmakers are generally divided on partisan lines on the subject, though some Democrats remain open to some form of cap; see Senate Bill 150. Republican lawmakers are also considering creating special malpractice courts in Senate Bill 151. (Matt Adrian, "Speech long on plans, short on detail", Decatur Herald & Review, Feb. 4; Caleb Hale, "Governor Makes A Renewed Call For Medical Malpractice Reform", The Southern, Feb. 4; "Governor's address calls for medical liability reform", Madison County Record, Feb. 4; William Lamb, "Special malpractice courts are sought", St. Louis Post-Dispatch, Feb. 3; Steve Whitworth, "New bills �will keep doctors in Illinois�", Alton Telegraph, Feb. 3; Kate Thayer, "GOP renews call for malpractice caps", St. Louis Post-Dispatch, Feb. 1). Chicago Tribune coverage featured a half-sentence.

One interesting aspect of Senate Bill 150 is its efforts to address criticism that non-economic damages caps result in too-low awards for the poor and for housewives; a jury is allowed to award "economic damages" to a plaintiff equal to the average wage in the county.

The trial lawyers' association, which likes to blame its every setback in public controversy on its opponents' alleged use of the dark arts of public relations, has hired as its new CEO Jon Haber, a senior exec with the Washington P.R. firm of Fleishman-Hillard. Haber's also spent a longstanding political career with several presidential campaigns and on the staffs of Sens. Kennedy, Leahy and Feinstein.

Coming up at Harvard Law the last weekend of this month.

Thus bringing to 27 the number of states that formally decline to accept the notion that it's better not to be born at all than to be born with a severe defect. Only California, New Jersey and Washington state accept the idea. (opinion) (via Matthew Heller's CourthouseNews blog). For more on wrongful birth, see Overlawyered, Sept. 16 and links from there.

The Florida state government's Workgroup on Mammogram Accessibility finds that lawsuits are a big part of the problem, and the state's trial lawyers are scrambling to get their own counter-message out, reports Miami's Daily Business Review. More: Dec. 14 and links from there.

The Class Action Fairness Act has cleared the Senate Judiciary Committee by a vote of 13-5. Majority Leader Frist may bring the bill to the floor of the Senate as early as next week.

For more discussion on the Act, see my posting July 9, and links therein.

UPDATE: Business Insurance has some of the lovely details of the committee's proceedings. Committee Chairman Arlen Specter did not support any amendments in committee markup, instead insisting that amendments be introduced on the Senate floor.

At one point, Sen. Joseph Biden, D-Del., began pounding the table in opposition to the bill as he praised plaintiffs attorneys, maintaining that their tenacity helps force corporations to clean up their operations. "This isn't the Class Action Fairness Act�this is the Class Action Moratorium Act," added Sen. Richard Durbin, D-Ill.

Sen. Specter said the Senate leadership intends to begin consideration of the measure on Monday. At that time, "there will be plenty of time for floor debate," he said.

Danny Whaley, a locomotive engineer who worked in Greenwood, suddenly stopped sweating one day in 2000. Doctors haven't figured out why Whaley has this condition, but recommended he stop working, since the condition led to symptoms similar to heat exhaustion when he exerted himself. Whaley found some lawyers who found some experts-for-hire to blame the condition on heat exposure at his job, and, through forum-shopping, sued in judicial hellhole Hampton County--even though he does not live there, and does not contend he was injured there. A jury awarded a million dollars.

Yesterday, the South Carolina Supreme Court recognized that the Court's earlier pronouncements on venue were broader than the statutes passed by the legislature, and put some minor limitations on forum-shopping. See Whaley v. CSX Transportation. The judgment was reversed and remanded for retrial. The Court held that CSX waived objections to the soundness of the expert testimony on causation of injury; presumably, CSX will do a better job of preserving those objections on retrial. Other incorrect, but plaintiff-friendly, evidentiary rulings were reversed. Occasional guest-blogger Leah Lorber was on the briefs for amici The American Tort Reform Association and The South Carolina Chamber of Commerce. (Jennifer Talhelm, "Location of trials in S.C. restricted", The State, Feb. 2).

Out of 8,629 plaintiffs claiming injury from exposure to silica, 5,174 have filed claims seeking (and probably receiving) recovery for injury caused by exposure to asbestos. In a "lawsuit under way in Corpus Christi, Tex., doctors who had signed documents saying that plaintiffs in the case suffered from silicosis backed away from those conclusions when questioned under oath late last year." (Jonathan D. Glater, "Companies Get Weapon in Injury Suits", NY Times, Feb. 2). The Senate Judiciary Committee is holding hearings this morning on asbestos litigation reform; Professor Lester Brickman's testimony is particularly interesting; it seems opponents of asbestos litigation reform are pushing for a loophole in the bill that would encourage such double-recovery.

Why, asks the Providence Journal's Froma Harrop, go to bat for something as essentially illiberal as the litigation industry? "Doctors in my community -- some [of] the most progressive people I know -- are tearing their hair out over exploding medical-malpractice premiums. They see the Democratic Party throwing them to the wolves."

From an October Forbes article: "You're to be forgiven if you thought the fen-phen crisis was over. Two years after it first emerged in 1997, Wyeth officials told investors it would cost a maximum of $4.75 billion to fix. As of the second quarter of [last] year the company had reserved $16.6 billion for the problem. Thanks to guys like [Houston attorney George] Fleming, it's a safe bet the costs will climb further." For more on fen-phen litigation, see Overlawyered, Aug. 28, 2004 and links from there.

Newly elected as junior senator from North Carolina, Richard Burr holds views that stand in "stark contrast" with those of the man he replaced, especially when it comes to med-mal reform.

New York Sun coverage.