The Coalition and Center for Ethical Medical Testimony has had a run-in with Stephanie Mencimer's journalism, too, last year.
March 2005 Archives
The morning sickness drug was driven from the market in 1983 by a wave of lawsuits even though health authorities and most juries agreed then and now that it does not cause birth defects; it has been available in Canada all along under the name Diclectin. Bright Line notices that the March of Dimes, which specializes in birth defects prevention, wants the drug back. See Overlawyered, Jul. 21, 1999 and Sept. 27-28, 2000.
In recent months the New York Times has given lots of space to a feature series by reporter Walt Bogdanich investigating litigation over railroad crossing accidents; each installment has flayed the railroads and their lawyers from a standpoint highly sympathetic to plaintiff's lawyers and their complaints. The latest came on Sunday, in a piece on the railroads' use of lawyer-generated affidavits signed by a state official regarding provision of warning signs at crossings. Trial lawyer-blogger Bill Dyer (Beldar) usefully fills in some of the background on how sloppiness (and worse) in this area may not be a sin peculiar to railroad defendants. (Corrected; original post erroneously described article as running on Saturday).
New York state trial court judge Leland DeGrasse has set a June 13 deadline for the state to inject huge new sums into New York City's already high-spending schools: $5.6 billion annually plus billions more in capital expenditures. Many Gotham commentators seem to think the governor and legislatures have no choice as a matter of constitutional law but to meekly fork over the taxpayers' money as the plaintiffs in the case demand. Not so fast, advise lawprofs Ross Sandler and David Schoenbrod, authors of the highly recommended "Democracy by Decree: What Happens When Courts Run Government." The Manhattan Institute's site has more commentary on the courtroom exploits of the so-called Campaign for Fiscal Equity. P.S.: more from the same authors in the Financial Times.
A recent federal revision to the wage-and-hour regulations doesn't seem to have dampened the boom in overtime lawsuits, say plaintiff's lawyers quoted in the NLJ, partly because it didn't resolve ambiguities in coverage (and may even have created new ambiguities), and partly because the whole process helped raise consciousness about the possibility of filing claims.
On June 30, we reported a verdict in favor of the flavoring manufacturer in the series of lawsuits over it allegedly causing lung disease to workers at a popcorn factory. The plaintiffs complained that a juror failed to disclose "her daughter's seven years of intermittent breathing treatments", and in November, the judge granted their motion for a new trial. Not surprisingly, International Flavors states they'll appeal this decision. (AP/SF Chronicle, Nov. 5).
Meanwhile, yet another jury has issued a decision, this one for $15 million. (Jeff Lehr, "Jury grants injured worker, wife $15 million", Joplin Globe, Mar. 26). Four other cases from the same factory have settled; another trial last March resulted in a $20 million verdict. Workers at an Iowa factory have also been bringing suits in the wake of the publicity from the Joplin County verdicts.
The more experienced among you may be wondering: Missouri plaintiff, New York and Virginia corporate defendants--what are these cases doing in Joplin County state courts? Simple: in each case, the plaintiffs also sued a Missouri doctor, an unfortunate innocent bystander, Rick Scacewater. The presence of a Missouri citizen on each side of the "v." meant that the federal courts did not have federal diversity jurisdiction. Not that the plaintiffs had any intention of really going after Dr. Scacewater; each time, after waiting more than a year in an effort to avoid the limitation in 28 U.S.C. � 1446(b), they dismissed the doctor from the case. (Benavides v. Int'l Flavors & Fragrances, Inc., No. 01-CV-683025, Circuit Ct. Jasper Cty., Mo.; dismissal filed Dec. 2, 2002, fifteen months after complaint filed). Unfortunately, if federal courts faced with a removal motion permit plaintiffs to engage in fraudulent joinder, plaintiffs have every incentive to harass local businesses and individuals to get the benefits of forum-shopping. Some courts are more tolerant of the gamesmanship than others; under 28 U.S.C. � 1447(d), defendants have no recourse if a federal district court incorrectly remands a complaint suffering from fraudulent joinder.
The Ciceronian Review blog suggests that insurance defense costs and insurance defense strategy are to blame for the rising costs of defending medical malpractice suits. "Those costs are controllable by insurers -- they should by now have a very good basis for determining meritless claims early on and making appropriate litigation decisions, including nuisance settlement. ... If insurers choose to spend a lot of money litigating, it is hard to see why anyone other than their shareholders should shoulder the burden."
This argument depends on the premise that the number of malpractice suits is static and plaintiffs' attorneys do not change their strategy in response to changes in defendants' litigation strategy.
Suffice it to say that this is false. If it costs an average of $200,000 to defend and beat back a meritless claim, can an insurance company reduce its overall expenses by offering to settle for $100,000 before much litigation gets underway? Clearly, the answer is no: if plaintiffs' attorneys learn that a particular insurer will offer a nuisance settlement when faced with a meritless case, suddenly, many meritless cases that were previously unprofitable become profitable to bring: instead of a negative expected value, they now have a nuisance settlement value, and the insurers find themselves writing out a lot more nuisance settlement checks. If, however, insurers stand firm when they have a strong case, plaintiffs respond by suing only when they have either (1) a strong case or (2) a weak case that is still profitable to bring because of a chance at a large verdict. The idea behind caps is the imperfect attempt to reduce the number of suits brought in that second category.
I hate to repeat myself, but I have to wonder: if it's really the case that medical malpractice insurers are mismanaging their business so badly that they can become more profitable by simply adopting the reforms of kibitzers, why don't insurance company critics solve the medical malpractice insurance problem by entering the market and undercharging the "gouging" "mismanaged" insurance companies?
The Legal Reader details how the language of Ohio's anti-gay-marriage constitutional amendment resulted in the invalidation of the state's domestic violence law. Judge Stuart "Friedman said that because Ohio's domestic violence law recognizes the relationship between an unmarried offender and victim as one 'approximating the significance or effect of marriage,' it represents a direct conflict with the amendment's prohibition against such recognition and is thus unenforceable." (Brian Albrecht, "Issue 1 conflicts with domestic abuse law, judge says", Cleveland Plain-Dealer, Mar. 24).
Overlawyered (Mar. 20) covered a similar bait-and-switch consequence of Michigan's anti-gay-marriage amendment.
Radley Balko notes that, as the legal blood-alcohol limit has decreased, drivers with BAC levels above .10 account for 77% of drunk driving fatalities, but only 33% of arrests. Balko suggests that the diversion of enforcement resources to go after social drinkers has had the perverse effect of increasing drunk driving fatalities, which are going up for the first time in years.
As part of its "Plaintiff's Power" supplement, mentioned in this space several times already, The American Lawyer offers profiles, with an accompanying article by Alison Frankel, of what (in accord with educated guesswork) it believes to be the largest plaintiff's firms by annual revenue. Though nothing has lately come along to equal the heady rush of tobacco fees in the period after 1998, during which hundred-million-dollar windfalls came to seem almost routine, eight firms are currently thought to top $75 million in annual income: Baron & Budd, Levin Papantonio, Lieff Cabraser, Milberg Weiss (now split into two successor firms), Motley Rice, Nix Patterson, Reaud Morgan & Quinn, and Weitz & Luxenberg. Another eight firms, according to American Lawyer's estimates, are between $50 million and $75 million: Berger & Montague, Corboy & Demetrio, Gary, Williams, Parenti (Willie Gary), Girardi & Keese, Kreindler & Kreindler, O'Quinn Laminack & Pirtle, Provost & Umphrey, and Williams Bailey.
Only one of the 16 firms (Chicago's Corboy & Demetrio) is headquartered in the Midwest, incidentally, while six (Baron, Nix, Reaud, O'Quinn, Provost, Williams Bailey) are based in Texas.
Martin Grace reports (Mar. 3) on a study (PDF) of medical malpractice closed claims in the state of Washington between 1994 and 2004. One striking finding (Grace's wording): "almost 50 percent of the defense costs go to claims with no payment". Despite much talk about how lawyers operating on contingency have no incentive to file weak claims since they don't want to risk nonpayment, someone out there sure seems to be filing a lot of weak claims.
One interesting reason why the drug war reduces consumption less than people imagine is that prohibition reduces some costs. Drug sellers, for example, do not pay social security taxes for their employees, they do not follow minimum wage laws and they do not obey costly FDA regulations. On net prices are still pushed up by the threat of prosecution but the lack of taxes and regulations is a countervailing factor.
According to a spokesman for Ford Motor Co., something like 120 Illinois police agencies have already dropped out of a class action suit alleging the Crown Victoria police cruiser is unsafe, and more police officials are likely to follow. The most likely explanation is Ford's refusal to sell new Crown Vics to police departments that join a class action. Explains the Ford attorney, "If you think the vehicle is unsafe � we don't � but if you do, don't expect us to supply you vehicles."
The Rolling Meadows Police Department is one of the departments that has dropped out of the lawsuit.
Deputy Police Chief Dave Scanlan said he did not even know his department was part of the lawsuit because he never saw a letter informing the city it would be included unless it expressly declined. The department found out about it when it was time to buy more squad cars.
"We woke up and Ford wouldn't sell us any Crown Vics," he said.
Don Babwin, "Many police depts. drop Crown Vic suit," AP, March 22.
Charleston (W.Va.) Daily Mail business editor George Hohmann wonders whether an average rate of $922 an hour might perhaps be over-bounteous compensation for the lawyers who extracted a large settlement over a spill of a chemical used in making the nonstick surface (see "DuPont's Teflon Travails", Mar. 8).
Boston Globe columnist Alex Beam caught this priceless one:
Here is a clip from the Harvard Crimson, reporting on the remarkable coincidence that landed the yappomatic Alan Dershowitz in the middle of a media scrum following Wednesday's contentious faculty meeting:
"Outside the Faculty meeting, Professor Alan M. Dershowitz -- who, as a member of the Law School faculty, was not invited to yesterday's session -- mingled with members of the press on the street in front of the Loeb Drama Center.
"The idea that you vote to censure, it's just not what you should be doing," said Dershowitz, who said he had been walking through the neighborhood with his family and stumbled on the meeting." (Emphasis added.)
(Previous entry: Mar. 16.)
"You mean I could go to Ocean Springs, Mississippi, and buy an X-ray machine and take it to Wal-Mart and start taking X-rays?" A round-up of press coverage: Mary Alice Robbins, "Judge in Silicosis Suits Critical of Plaintiffs Counsel", Texas Lawyer, Mar. 21; Lynn Brezosky, "Judge stunned at use of X-ray machine to diagnose silicosis", AP, Feb. 18. Dr. Todd Coulter's X-ray practice, the subject of controversy at the hearings, is, ironically, covered unironically as a wonderful new business model by the American Medical News, normally a proponent of litigation reform. (Mike Norbut, "Money woes solved with cash-only practice", Feb. 10, 2003). By some plaintiffs' theory of asbestos manufacturer liability, which asks unrelated corporations to pay for the fear of exposure, the plaintiffs' attorneys would be liable for the screening companies' exposure of potential clients to radiation. Any class action attorneys specialize in poetic justice?
From Automotive News, by way of trade group NADA:
Self-styled whistle-blower Duane Overholt is creating a nationwide referral service that will funnel complaints of dealership fraud from consumers and employees to trial lawyers. ... Overholt gained prominence last year when he was featured in a "Dateline NBC" report that criticized dealership F&I practices. As a former car salesman, Overholt says he cheated customers out of $33 million. NADA Chairman Charley Smith calls him "a self-described lawbreaker" who has "moved from fleecing consumers to fleecing dealers." Critics also note his participation in a fraud lawsuit against AutoNation Inc. that was thrown out of court in 2002. Overholt was a consultant to the plaintiff's lawyer. AutoNation spokesman Marc Cannon says Overholt seeks "to use the media as a tool to extract huge settlements from dealerships." Overholt says he plans to promote his service -- called Stop Auto Fraud Attorney Referral -- with a TV infomercial. The program will appear initially in California, New York, Texas, Florida and Maryland. He also has hired a public relations firm to place opinion columns in newspapers across the country.
More on suits against car dealers: Overlawyered, Nov. 30.
In a vote split 7-6 along party lines, with Republicans in favor, the Judiciary Committee of the Oklahoma House of Representatives has given its approval to a measure that would strip Democratic Attorney General Drew Edmondson of the power to file lawsuits without approval of the state's governor or in some cases its legislature. According to Edmondson himself and a second AP story, the move is a reaction to Edmondson's pursuit of a pollution lawsuit against poultry producers, a move that has riled the state Farm Bureau. The measure's future is uncertain, but if it passes, Oklahoma would apparently become the first state to rein in its formerly independent AG office in such a manner. The press release from the Oklahoma House is here. Private trial lawyers did especially well from the state's role in the 1998 AG-brokered tobacco settlement: see Jun. 7, 2000. For an indication that it might be prudent to keep Mr. Edmondson at a safe remove from involvement in securities litigation, see Overlawyered, Dec. 18, 2003.
Elizabeth Anderson, writing at Left2Right (scroll to heading # 2):
The libertarian Richard Epstein, following through on individualist intuitions about justice, has argued in favor of replacing our negligence system of torts with a system of strict liability ("A Theory of Strict Liability," 2 Journal of Legal Studies 151 (1973)). Such a system would ensure that whenever one person caused damage to another, they'd have to compensate them for it. Long before we reached this point, I'd be joining the critics of the tort system in crying "crisis!" The problem wouldn't be frivolous lawsuits. It's that when negative externalities are systematic, it's grossly inefficient to deal with them on a case-by-case basis, as the tort system does. The costs of litigation are too high, not in the amounts of judgments, but in lost production opportunities, as the valuable time of defendants and plaintiffs gets sopped up in lawsuits. That's why I prefer alternatives to litigation, such as regulations for worker safety and pollution, workers' compensation, and no-fault auto insurance, to cover systematic costs imposed on people by our advanced capitalist system of production. Excessive reliance on Individualized solutions puts too much sand in the gears of capitalist production.
Reader comments mostly deal with other aspects of Anderson's post, but commenter D.A. Ridgely responds in part as follows:
Strict liability makes some sense as private law when it comes to inherently dangerous activities. As public law it becomes the bludgeon of the nanny state. ... If it is true that litigation is too expensive (and I think it is), the solution is to find less expensive methods of litigation, not to turn private law into public law. In any case, litigation should be at least somewhat expensive because it should be the resolution method of last resort.
Just a note for those interested: My other website, Overlawyered.com, is temporarily down due to a hosting glitch. I hope to have it up and running again before long. Update: it's back up now (Sunday morning).
The Michigan Medical Malpractice blogger (Mar. 4) says the operation of this variation on loser-pays hasn't proved favorable to defendants in practice: "The sanctions under both rules are, in reality, a one-way penalty. They are covered by and paid by liability insurance when assessed against the defendant, so they represent an additional risk for the insurer. If they are assessed against the plaintiff, though, there is usually no effective way to enforce them. The costs are assessed against the losing party, not against his attorney. Most plaintiffs are financially unable to pay the assessments, and a vigorous effort to collect on the part of a victorious defendant usually ends in the bankruptcy courts."
The uncollectability of an award of costs is an obvious possibility when a case ends in an outright defense verdict, although it has been reported in Britain that the costs issue still is helpful to defendants in persuading a plaintiff who loses at trial to abandon a weak case at that stage rather than (as often happens in this country) demanding a settlement in lieu of appeal. On the other hand, it would be surprising if the offer-of-settlement rule does not assist a defendant in cases which result in a verdict for plaintiffs at a lower amount than had been offered. I would assume that the fee award to which the defendant is entitled is subtracted as an offset from the check it must write at the end of the case, thus sidestepping any problems of collectability. Perhaps someone familiar with Michigan procedure can confirm whether or not that is the practice.
Businesses under investigation are coming under strong federal pressure to waive the ordinary protections of attorney-client privilege in order to make it easier for the government to build its case, and also to cut loose employees and executives who face personal charges rather than furnish the costs of their legal defense:
In January 2003 then�deputy attorney general Larry Thompson promulgated "a revised set of principles to guide Department [of Justice] prosecutors as they make the decision whether to seek charges against a business organization." As Thompson made clear, "The main focus of the revisions is increased emphasis on and scrutiny of the authenticity of the corporation�s cooperation. Too often business organizations, while purporting to cooperate with the Department investigation, in fact take steps to impede the quick and effective exposure of the complete scope of wrongdoing under investigation."
Thus, companies that want to cooperate fully and not "impede" investigations must adhere to the "General Principle" articulated by Thompson: "In gauging the extent of the corporation's cooperation, the prosecutor may consider the corporation's willingness to identify the culprits within the corporation, including senior executives; to make witnesses available; to disclose the complete results of its internal investigation; and to waive attorney-client and work product protection."
Thompson further asserts, "Another factor to be weighed by the prosecutor is whether the corporation appears to be protecting its culpable employees and agents. Thus, while cases will differ depending on the circumstances, a corporation's promise of support to culpable employees and agents, either through the advancing of attorneys fees, through retaining the employees without sanction for their misconduct, or through providing information to the employees about the Government's investigation pursuant to a joint defense agreement, may be considered by the prosecutor in weighing the extent and value of a corporation's cooperation."
"My life has undergone a significant change since I last wrote. I picked up stakes and moved to South Dakota. After a number of years of increasing malpractice costs, increasing overhead, and diminishing reimbursement, we decided that the rats had won the rat race and we quit. It was an extremely difficult decision to leave a 20-year history in the northwest suburbs of Chicago -- friends, patients, and a geographic familiarity that made living everyday life easy. However, the increasing suburbanization with the concomitant increase in traffic was choking us off from using Chicago in any meaningful sense. More important, the constant threat of lawsuits crowned by a suit from a patient I had never seen nor treated was the driving force that uprooted us. It was the best thing I have ever done.
"If people tell you tort reform isn't important, don't believe them. The contrast between practicing in a highly litigious area versus a low one is incredible. While I knew it was taking a toll on my life and affecting my practice style, I had no idea how much until I got out here. Using my clinical judgment without the threat of second-guessing and Monday-morning quarterbacking not only improves care, but also drastically cuts down on CYA testing. It's great to be a doctor rather than a fearful technician wondering from where the next hit is coming. ..." -- Eric Sigmond (Calhoun '73) in the March/April Class Notes. And a few pages away, there's this from the Class of '65: "Frustrated by inadequate third-party compensation and exorbitant malpractice insurance premiums, Charlie Beaumont retired two years ago from private orthopedic surgical practice in Waterbury, Connecticut. However, he's still putting his skills to good use, doing missionary surgery/medicine abroad."
As I discussed in my column, ATLA frequently criticizes the insurance industry for supposed mismanagement. I suggested that if ATLA believes that the litigation crisis is solely a function of insurance company mismanagement, it should enter the insurance market. As it turns out, ATLA knows first-hand about insurance mismanagement.
For years, ATLA, through its mutual company, offered legal malpractice insurance to its members. But on October 14, 2004, the Illinois Office of the Special Deputy Receiver (OSDR) liquidated the insolvent "ATLA Mutual" (a/k/a Association of Trial Lawyers Assurance) in Docket No. 04 CH 16949, and various states' Guaranty Funds (i.e., the solvent insurance companies ATLA regularly criticizes) are now on the hook:
As the University of Illinois newspaper reported earlier this week, law professor Richard Painter, who's a prominent authority on legal ethics as well as a valued contributor to this website, will be leaving the University to join the White House in the capacity of chief ethics lawyer. John Steele at Legal Ethics Forum hails Prof. Painter's appointment as "Great news for all of us," adding that "Painter has been fearless and insistent when he's identified important ethics issues. ... I think Painter is the real deal and I hope he's allowed to have a major impact at the White House." Readers of this site will remember his colloquy with Lester Brickman last August on contingency-fee reform.
(Previous entry: Mar. 14.) Defense attorneys asked for over $1 million in sanctions at a hearing Monday. When Dr. Martindale first retracted his diagnoses, plaintiffs accused the defense of buying off the doctor and insisted the original diagnoses were correct; unfortunately for them, other doctors followed suit, and then the defense got access to the asbestors trust documents that were the smoking gun. Where's the brave plaintiffs' attorney who will take the cause of 10,000 people who have been falsely told they have silicosis (and who, apparently, were given X-rays by unqualified technicians (hired by plaintiffs' attorneys) who may have overexposed them to undue radiation)? (Neal Falgoust, "Silicosis attorneys want sanctions", Corpus Christi Caller-Times, Mar. 15; March 14 hearing transcript).
Judge Jack is expected to rule by the end of April, though she did issue a $50 sanction to an attorney whose cell-phone went off in court (pp. 36-37). As the attorneys debated appropriate sanctions, Judge Jack mused "I can sanction all the Plaintiff's lawyers to go to those doctors for the rest of their lives."
At Legal Affairs' "Debate Club" this week, Death of Common Sense author Philip K. Howard is outlining his case for specialized medical-liability courts, a proposal with which his Common Good organization has been closely identified, while ATLA-fave journalist Stephanie Mencimer, who "is writing a book on tort reform" according to her bio blurb, attacks the idea.
On February 16, at Northridge Hospital, Governor Sonny Perdue signed S.B. 3, an impressive package of tort reforms. (Chuck Williams, "Perdue signs tort reform bill", Columbus Ledger-Enquirer, Feb. 17; Mike Norbut, "Georgia enacts tort reform package", American Medical News, Mar. 7). Key provisions:
- joint and several liability eliminated;
- an offering party may recover its attorneys fees if the final judgment is not at least 25% more favorable than the offer;
- implementation of the Daubert standard (Nordberg comments);
- immunity for emergency rooms and ER providers in absence of "gross negligence" (Jan. 11; Oct. 25);
- non-economic medical malpractice damages capped at $350,000 per entity, $1,050,000 total; and
- medical providers may apologize without fear that apology will be used against them in court.
One unique provision permits the decision of whether a claim or defense is sufficiently meritless to require the payment of attorneys' fees to be given to the jury for decision (though the statute unfortunately leaves unclear whether this will require jurors to parse questions of law in some instances). There's also an interesting and apparently unique provison for venue transfer when all resident co-defendants are dismissed from the case. Unfortunately, this provision, � 9-10-31(d), appears to have some curious (and perhaps poorly-drafted) attributes that may permit or encourage tactical gamesmanship by both plaintiffs and defendants. I haven't seen any discussion on these two issues, but I'm happy to be corrected or edified.
The Georgia Senate has also passed by an overwhelming margin SB 19, which permits the interlocutory appeal of class certifications, as well as provisions that reduce the expense of pre-class-certification-decision discovery. (When judges let discovery on substantive issues go ahead for a purported class action that has little or no chance of certification, plaintiffs have an incentive to increases the pressure for defendants to settle by delaying the certification decision and conducting expensive discovery. The Georgia law now prohibits this tactic without substantial justification.) The bill now goes to the Georgia House for consideration.
"[M]ost state judges are elected, and for a variety of reasons this is an unsatisfactory method of judicial appointment, used nowhere else, as far as I know, in the world," he writes. Judge Posner's blog partner Gary Becker, meanwhile, comments on the lately publicized plan by law profs Roger Cramton (Cornell) and Paul Carrington (Duke) to eliminate life tenure for Supreme Court justices, on which see also PowerLine.
(Last entry: Mar. 2.)
On March 4, a moving van operated by Ed the Mover pulled up to a Pascagoula strip mall and, empowered by a court order, hauled away the contents of 80 file cabinets from the office of N&M Inc., said Jackson, Miss., lawyer Daniel Mulholland.N&M's 80 file cabinets represent 1.5 million pages of files of the pre-eminent "screener" for silicosis. A sanctions hearing is being held in Corpus Christi today to determine whether plaintiffs' attorneys will be required to pay for the audit, which came about after doctors recanted earlier diagnoses arrived at with cursory review. (Eddie Curran, "Doctor's testimony ignites legal storm", Mobile Register, Mar. 13 (via Bashman); Jerry Mitchell, "Silicosis screening process irks judge", Clarion-Ledger, Mar. 6; Neal Falgoust, "Lawyer to release silicosis suit files", Corpus-Christi Caller-Times, Mar. 4; Neal Falgoust, "Judge orders screener to appear today", Corpus-Christi Caller-Times, Mar. 3; motion for sanctions; Plaintiffs' opposition to sanctions).
"Ed's got a big ZZ Top beard," Mulholland said. "If you ask him what his last name is, he says, 'The Mover.'"
It was a day that N&M co-owner Heath Mason of Grand Bay and some of the country's leading asbestos plaintiffs' lawyers had been trying to prevent for more than a year.
Not too long ago it was frowned on for lawyers to charge contingency fees to clients such as big corporations that could readily afford to pay hourly rates. Now it seems to be too profitable to resist: "It's not often that an Am Law 200 firm doubles its revenue in the span of three short years. But that's exactly what Washington, D.C.-based Dickstein Shapiro Morin & Oshinsky has managed to do since 2001 -- and most of the jump is attributable to contingency fee plaintiffs work." Its key specialty: representing companies that opt out from settlements to file separate antitrust suits in cases involving vitamins, citric acid, commercial explosives, and graphite electrodes. In 2002 Dickstein's group of clients settled its case against vitamin makers for $2 billion, but the firm won't say what percentage of that sum it kept as its fee. (Ashby Jones, "Defense Firms: The Opt-Out Option", part of The American Lawyer's 2004 supplement Plaintiff Power (this portion not online, purchase)).
Two statutory interpretation cases argued at the high court in January, and covered by Legal Times' Tony Mauro at the time, are likely to have a major impact on the business litigation landscape: one of them concerns the extent to which federal regulation of pesticide labeling pre-empts claims of inadequate labeling brought under state product liability law, and the other will determine whether securities plaintiffs need to prove that company misstatements actually caused their losses before they can collect on them.
The shootings of a judge and four others by an escaped rapist has raised calls for increased courthouse security, a move I applaud. But none of the press is directly talking about a contributing cause to the breach of security. When 33-year-old, 6'1" 210-pound former college football player Brian G. Nichols was unrestrained for purposes of changing out of his jailhouse jumpsuit into civilian clothes for trial, he was being guarded by 5'0" 51-year-old grandmother Deputy Cynthia Hall. (Cameron McWhirter & Steve Visser, "Suspect in Fulton courthouse slayings captured", Atlanta Journal-Constitution, Mar. 12). (I see after I wrote this that Paul Cella has mentioned this at Red State, where he finds this New York Times story noting that District Attorney Paul Howard deflected reporters' questions on this issue. I haven't seen any other press accounts mention this.)
Fulton County, like almost every (if not every) jurisdiction, has watered down its strength requirements for police and firefighters for fear that they would be considered discriminatory towards women because of the disparate impact of those requirements. Once a plaintiff shows that job qualifications have a disparate impact, the burden falls on the employer to prove that the requirements are bona fide and that no other selection mechanisms can be substituted, regardless of discriminatory intent. San Francisco formerly asked fire recruits to carry a 150-pound sack up a flight of stairs and now lets them drag a 40-pound sack across a smooth floor. (Walter Olson, "Disabling America", National Review, May 5, 1997).
There are no doubt strong women capable of being deputies who can guard 210-pound violent criminals. There should be no bar to hiring them. The reduction of standards to achieve equality of result, rather than just equality of opportunity, can lead to tragic consequences. Perhaps, as a society, we value equality so much that we're willing to bear these additional costs (even as elsewhere, manufacturers are hit with punitive damages for daring to measure the additional benefits of the product against the costs of exposing consumers to minuscule amounts of additional risk). But let us at least make this an educated decision.
(Update, Mar. 13: Today's Atlanta Journal-Constitution very obliquely addresses this issue, if you carefully read between the lines. Steve Visser, "Judge faults security procedures", Mar. 13).
Last month a South Carolina jury found Christopher Pittman guilty of murdering his grandparents, rejecting his claim that the antidepressant Zoloft had distorted his judgment. As we noted last fall, a distinctive feature of the case was that civil litigators who've pursued product liability claims against Pfizer, the drug's maker, stepped forward to provide Pittman with criminal defense representation, presumably aware of the potential crossover effect on civil cases of advancing the blame-the-drug premise in a criminal context.
We somehow missed this at the time, but the federal Department of Health and Human Services in September launched a pilot "early offers" program aimed at resolving claims by patients of injury arising from the medical care provided at federally funded community and Indian health centers. (coverage: American Medical News, Insurance Journal; more). Both the patient and HHS will have the option of transmitting an offer within the suit's first ninety days to an independent third party, who will not notify the other side unless overlapping offers are in hand from both sides, in which case the third party will announce that settlement has been achieved at the level of the patient's demand. Participation by patients in the program is voluntary, and, as students of the subject will be aware, the program differs in several particulars from the widely known "early offers" blueprint for injury-suit reform advanced by Lester Brickman, Michael Horowitz and Jeffrey O'Connell (on which see our August featured discussion).
Thanks to Prof. David Hyman, now of the University of Illinois School of Law, for calling this to our attention.
Last week I noted, courtesy of Professor Julian Ku of Opinio Juris, that a trial had begun on behalf of Vietnamese individuals allegedly harmed by Agent Orange in the Vietnam War, before Judge Jack Weinstein of the Eastern District of New York (Weinstein managed the original Agent Orange case on behalf of U.S. soldiers and through his handling of mass tort cases has become, in Julian's words (I agree), "a hero of the plaintiffs' bar").
With help from our newly upgraded Movable Type program, we've now identified and deleted thousands of spam TrackBack pings that had been accumulating on our archived posts since Feb. 1, when this new spam method began hitting us. We've tried to be careful to save all the legitimate pings while getting rid of those promoting online poker, phentermine, mortgage refinancing and so forth. It was quite a job, but we feel cleaner already.
We did, however, leave up a couple of spam pings that seemed kind of poignantly topical: they're here.
National Catholic Reporter has a roundup of pending actions in U.S. courts against the Holy See of Rome (including a racketeering case). During Secretary of State Condoleezza Rice's recent European trip, she was approached by Vatican Secretary of State Cardinal Angelo Sodano urging that the U.S. government intervene in a pending class-action lawsuit in Louisville, Ky. which seeks to hold the Vatican financially liable for clerical sex abuse in this country. "At least two dozen previous attempts have gone nowhere, not only because the Vatican is a sovereign state, but also because American courts are generally reluctant to deal with religious matters on First Amendment grounds. Yet Sodano's decision to raise the matter with Rice suggests concern in Rome that sooner or later its immunity may give way, exposing the Vatican to potentially crippling verdicts."
For our first tale, we learn that a juror admitted using a coin-toss to decide to convict Isidro Reyes in 1995. (Actually, he used two coin tosses: the first "heads" didn't persuade Shakeed Fareed, but flipping two heads in a row was enough to convince him.) The Ninth Circuit refused habeas relief on the grounds that it's impermissible to inquire into juror motives. "'If you look into the subjective considerations that any juror may contemplate, it's hard to know the proper place to draw the line,' [Nathan Barankin, spokesman for California Attorney General Bill Lockyer,] said. 'Today's it's coin-flipping. Tomorrow, in an extreme example, someone might say there should be intelligence tests.'" (Peter Blumberg, "Ninth Circuit Doesn't Flip Over Use Of Coin In Verdict", Daily Journal, Mar. 1; James J. Kilpatrick, "Heads, You're Guilty!", Oct. 25, 2000; Bashman coverage).
Then again, that example might not seem so extreme when we look at our second tale, the story of the tribulations attorneys face when confronted with a confused Georgia juror. (Jonathan Ringel, "Flip-Flopping Juror Gives Med-Mal Win to Obstetrician", Fulton County Daily Report, Mar. 10).
A past tale: "The dream verdict" from the Aug. 24, 1999 Overlawyered.
Gail Heriot comments on the difference between the 19th and 20th centuries as reflected by the jurisprudence of the times:
I�ll confess that I don�t feel strongly about the strict liability vs. negligence issue. I can see arguments both ways. What I find interesting is the stark contrast between the way the two eras treat doers and the way they treat talkers. Nineteenth century judges had no special place in their hearts for talkers. Defamation, for example, was a strict liability tort, when just about every other tort required proof of the defendant�s negligence. If you opened your mouth and defamed someone, these judges were not in the least interested to know that you honestly and reasonably believed that what you said was true. In their view, you speak at your peril. If you don�t want to run the risk of liability, keep your mouth shut (or at least avoid saying defamatory things). Running one�s mouth off was evidently not in the same category as building railroads, tilling the land or even separating angry dogs.
Modern judges, on the other hand, evidently regard talk as the highest form of human activity. It needed "breathing room," they say. They held in New York Times v. Sullivan, for example, that in order for a newspaper to be liable for defaming a public figure it must have acted with "malice" (i.e. it must know of the statement�s falsity or act in reckless disregard of its truth or falsity). In particular, courts bend over backwards to protect newspapers, magazines and book authors�professional chatterers. Dilettantes received slightly less protection, instead of slightly more.
It�s certainly not obvious to me that all this talk about the need for First Amendment "breathing room" is false. What I don�t understand is why it doesn�t seem to occur to courts that other equally or more valuable human activities don�t also need "breathing room" in the form of legal standards that give them the benefit of a presumption in the actor's favor. Chattering is fine. I do it for a living myself. But it seems odd to elevate it over activities that receive no such presumption like the manufacture of life-saving pharmaceutical products. Don't they need "breathing room" too?
Read the whole thing here.
And the "winner" is . . . Delaware, which for the fourth year running was selected by senior corporate attorneys surveyed by Harris Interactive for the U.S. Chamber of Commerce Institute for Legal Reform as the state with the most favorable litigation climate. The state bringing up the rear, also for the fourth consecutive year, was Mississippi -- notwithstanding its recent reform legislation. But 96% of the attorneys surveyed who knew about the reform believe that the reforms will have a positive effect on the state's litigation climate.
I would call your attention to the local rules of the U.S. District Court for the District of Delaware (PDF). Not only does Rule 9.4 state that the pleadings in a case demanding money damages "shall not claim any specific sum" -- thus reducing the likelihood that the case will be sensationalized in initial press accounts -- but the second portion of the rule provides as follows: "Upon service of a written request by another party, the party filing the pleading shall within 10 days after service thereof furnish the requesting party with a written statement of the amount of damages claimed, which statement shall not be filed except on Court order." That helps to serve the legitimate interest of the adversary in being informed of the magnitude of the case. This apparently has been the rule in the D. Del. for quite some time; I can't say it's unique, but I've never come across such a provision before.
The giant chemical company has agreed to pay least $107.6 million to residents near one of its West Virginia facilities, plus $22 million in legal fees to plaintiffs' lawyers, $10 million to water utilities, $5 million for research and as much as $235 million for future medical monitoring, to atone for spillage of perfluorooctanoic acid, also known as PFOA or C8, an ingredient of its Teflon nonstick coating. As the judge noted, it's a pretty impressive settlement, since no one has shown that PFOA caused any disease. (Erik Schelzig, "Judge OKs 'Unprecedented' Settlement of DuPont Class Action", AP/Law.com, Mar. 1). Terrence Scanlon, a former chairman of the Consumer Product Safety Commission who now heads the Capital Research Center, doesn't think justice was well served and notes that the Environmental Working Group, whom we've met before, helped spearhead the campaign against the nonstick material ("The attack on Teflon won't stick", Charleston Daily Mail, Mar. 4). More: Mar. 22 (fees).
The intimidating $150 million lawsuit against CBS and some of its interviewees over a 2002 "60 Minutes" report had been dismissed by the federal district court (which assumed jurisdiction after it found that state defendants had been fraudulently joined in an attempt to defeat federal jurisdiction, 269 F. Supp. 2d 772 (S.D. Miss. 2003)). The Fifth Circuit affirmed in an unpublished opinion. (Gales v. CBS Broadcasting, Inc., No. 04-60710) (via Freeland).
"[Washington State Medical Association Executive Director Tom] Curry also noted that while I-336 backers claim a broad coalition of consumer and health advocates' support, all but 66 cents of the $727,500.66 raised by the initiative sponsors so far comes from the Washington State Trial Lawyers Association." I-336 is one of two initiatives competing in an anticipated lawyers-vs.-doctors ballot showdown in the Evergreen State. (Rebecca Cook, "How sick is malpractice mess?", AP/Tacoma News Tribune, Jan. 17). See Dec. 13.
We've been remiss in noting an extremely kind review we got last month from Robert Ambrogi, well known in the blawg world as author of the book The Essential Guide to the Best (and Worst) Legal Sites on the Web and who also writes a blog on media law. Another of his blogs heralds new websites on law and very generously recommends us as follows:
"If you like Web logs with a distinct point of view, then check out PointofLaw.com. Sponsored by the Manhattan Institute and edited by the person who also brings you Overlawyered.com, the point of view here is decidedly anti-ATLA. As an unabashed believer that tort lawyers wear white hats, I find much here to disagree with. But, disagree though I may, I know a thoughtful, thorough and well-executed blog when I see it, and this is one.....
That kind of compliment is actually much more gratifying than most of those we get from confirmed co-thinkers. Read the whole thing here.
You'd think mainstream politicos would want to keep their distance from hotheaded environmentalist Robert F. Kennedy, Jr., what with the way the celebrity scion routinely compares the present administration in Washington to the regimes of Hitler and Mussolini, opines that large-scale hog farms are a bigger threat to America than Osama bin Laden's terrorists, and tells audiences that the media "should all drink poison Kool Aid and restore integrity to their profession". And yet in Westchester County, north of New York City, Kennedy's Riverkeeper operation has now become a repeat recipient of taxpayer-driven funds, thanks to the actions of District Attorney Jeanine Pirro. Last year, as part of a settlement with the Englehard Corporation over violations at a Peekskill pigment-manufacturing plant, Pirro arranged for the company to pay an undisclosed sum to Riverkeeper; the arrangement was blasted by Dan O'Neill, mayor of nearby Buchanan, who assailed Riverkeeper for its "fear-mongering" regarding the Indian Point nuclear power plant in Buchanan, which it has been campaigning to close. And now a January settlement by Pirro's office with Domino Sugar over violations at its Yonkers facility includes, as one of its provisions, a $100,000 required payment from the sugar company to Riverkeeper.
Those of us who live in Westchester County and thus observe Kennedy's antics at close range can now have the dubious satisfaction of knowing that we helped pay for them. As for Pirro, she's reportedly interested in running for Eliot Spitzer's job as New York attorney general -- on the Republican line, incredible as that may sound. More: Amy Ridenour comments.
The state of California and private class action plaintiffs have reached an $80 million antitrust settlement with vitamin manufacturers to resolve charges of price-fixing, and as part of the deal (PDF) the court will grant nearly half a million dollars to the American Antitrust Institute "to educate California consumers and businesses about the benefits of the antitrust laws, including the production of a half-hour documentary video for a television audience and educational materials for high school classrooms." There's currently a hue and cry over revelations that Calif. Gov. Schwarzenegger's administration used taxpayer funds to prepare materials promoting its view of reforming wage-and-hour laws; one presumes the same critics deplore the idea of using publicly driven funds to sway public views in favor of more expansive antitrust enforcement. More: David Giacalone doesn't agree.
Jay Angoff, who is regularly blames insurance companies for the current malpractice crisis, is frequently quoted in the medical malpractice debate as the "former Insurance Commissioner of Missouri" without further ado. He recently testified to the Illinois legislature as such. The Illinois Civil Justice League blog reveals that Angoff was hired by the Illinois Trial Lawyers Association to lobby on the issue and practices with a firm specializing in medical malpractice.
I find this less problematic than ICJL--it's far more likely ITLA hired Angoff because he agrees with them than that Angoff changed his views to fit ITLA's agenda. But given the imaginary conflicts of interest Stephanie Mencimer or the New York Times charges Newsweek, Stuart Taylor, Philip Howard, my editor Walter Olson, or my colleague Walter Dellinger with, it's worth noting that the equivalent "bias" is never ascribed to someone like Angoff. Especially when Angoff is making the ridiculous accusation that "the business relationship between the non-profit Illinois State Medical Society and the non-profit ISMIE Mutual (the physician-owned medical liability insurer) [is] a 'conflict of interest.'"
Still, Angoff's experience in the industry and as a critic would make him an excellent CEO for a trial-lawyer-run medical malpractice insurer. Though I wouldn't invest myself, I look forward to ATLA starting that.
Once you get past the introductory section, which puts forth a wholly unconvincing defense of forum-shopping, the American College of Trial Lawyers has compiled (PDF) a highly useful survey of state provisions relating to "offers of judgment", which operate as a sort of scaled-down version of loser-pays kicking in when one party to a lawsuit turns down a settlement offer from the other and then does less well at trial. Most (but not all) such provisions around the 50 states allow only miscellaneous costs, and not attorneys' fees, to be awarded in such a case; most allow only the defense side to set the process in motion, but some extend the right to plaintiffs; a few states use such an offer as the trigger for the accrual of prejudgment interest; and there are many other local wrinkles which deserve consideration by states seeking to strengthen their own practice in this area.
Reader Ben Houston writes, regarding Ted's column on how to run an insurance company along Litigation-Lobby-approved lines:
Outstanding article, really enjoyed it. I'm a med mal attorney who has been on both sides of the table, defense now. I would love to represent the underinsured docs of Doroshow Insurance for some cause of action based on the mismanagement of the company (because failure of an insurance company must necessarily result from mismanagement according to ATLA) when some state guaranty fund gets stuck with the inevitable future claims of the failed company.
Senator Arlen Specter has a column in today's Washington Times on the asbestos bill being considered by his Judiciary Committee. It looks like he's working toward a $140 billion trust fund, with a workers' compensation-type schedule for payouts for various ailments--with the courts opening back up should the fund be exhausted. I'm not sure that in such a form the bill will get the necessary business support, but we'll see. In any event, the devil will be in the details of how claims are to be processed and what medical standards will be used (see my post on "Fen-Phen Follies" below to see how a misconceived plan can go terribly awry).
Alison Frankel has an extensive article in today's American Lawyer (available online at law.com) chronicling the extensive Fen-Phen litigation, which she calls "a disaster of a mass tort." Drug manufacturer Wyeth has already shelled out $14 billion in the litigation and has recently increased its reserves to account for a total expected cost of $21 billion.
But it's not the cost of the litigation that makes fen-phen so remarkable and disturbing a story. It's where the money went. The court records of the global class action by which Wyeth attempted to resolve its fen-phen problems are a veritable catalogue of ignominy. Law firms allegedly attempting to fleece a lawyer-built victims trust fund. Doctors working for contingency fees, filing questionable supporting reports. Corporate executives, facing the prospect of ruin, hurling money at claimants. The fen-phen class action approved in 2000 was supposed to be a new paradigm of how to resolve a mass tort equitably. Instead, the iron law of unintended consequences has ruled. Misconduct has not been punished, but rewarded.
In many respects, Fen-Phen litigation has resembled that for asbestos: "Some uninjured people have been paid to go away while thousands of claimants alleging real injuries still wait for compensation." How? Doctors at the Mayo clinic discovered a link between Fen-Phen and a heart valve disorder. The association was strongest for aortic valve damage, a rare condition. But, contrary to Wyeth's initial models, most claims wound up coming in for mitral valve damage, "a much more common condition among overweight people generally."
And as we've seen in asbestos litigation, there was lots of funny business in how the actual medical evidence of injury was collected. Two law firms were set to take in $50 million for 120 claimants when a whistleblower approached the trust fund administrator. The trust fund did its own review and found that only 7 of the claimants were eligible for recovery, for a much smaller sum of $3.2 million. An six-day inquiry by Judge Harvey Bartle III of the Eastern District of Pennsylvania focused on 78 claimants who had been screened by 1 of 2 doctors. The first of these "was working on contingency for the Hariton firm; he received an extra $1,500 whenever a claimant he'd evaluated submitted a green form to the trust." As for the second doctor, the judge stated that her "mass production operation that would have been the envy of Henry Ford," and her lead sonographer had been trained by an employee of the plaintiffs' firm.
Judge Bartle ultimately ordered that payment could be withheld from each of the 78 claimants until new doctors had reviewed their case. He also permitted the trust to audit every claim. The fund hired Richard Scheff, a former federal prosecutor, who "says he had never before encountered anything like the shenanigans in the fen-phen litigation. 'I was stunned,' he says. 'Stunned. Truly, truly stunned.'"
Those of us who've followed mass tort shenanigans in other contexts are less surprised. I encourage everyone to read the entire article.
The Feb. 15 edition of The Scotsman (reg) notes that the elaborate voir dire procedures in an American trial like Michael Jackson's are "a situation far removed from that in Scotland, where the 15-strong jury with no alternates is seldom subject to gruelling questions from either side." It seems they do things very differently over there:
The opposition within the Scottish criminal justice system to voir dire and to high-profile jury selection experts such as those in the Santa Maria courthouse - a profession worth $700 million a year in the US - was given in 1985 by the Lord Justice Clerk, Scotland�s second most senior judge, on behalf of the Appeal Court in McCadden v HM Advocate: "There may never be a process which eliminates the possibility of personal prejudices existing among jurors, the nearest practical one (and it is not foolproof) being possibly the 'vetting' of jurors, a system against which the law of Scotland has steadfastly closed the doors. Evidence of how it is used and abused in countries in which it is operated only tends to confirm the wisdom of that decision."
Herbert Kerrigan, one of Scotland�s leading QCs, says: "In Scotland, you run the risk of prejudice you don�t know about - somebody who will never convict. Alternatively, you could get somebody who will never acquit. But the random element of selection [in Scotland] means that neither side has an advantage or disadvantage. There is always going to be a problem with a high-publicity case; though [random selection] avoids having certain types of people packing the jury."
In Scotland, jurors thought to have a conflict of interest - a nurse in a trial involving an act of violence, for example - will be weeded out, although the final decision rests with the judge. Statutory disqualification of certain groups - police officers for one - also takes place.
The right of both legal teams to challenge up to three potential jurors without giving a reason - peremptory challenges - was abolished in 1995 as it was generally believed to favour the defence.
The Scottish approach assuredly gives lawyers less power -- and less work to do -- but it is not clear that it results in any less justice being done.
Center for Legal Policy at the