Subscribe Subscribe   Find us on Twitter Follow POL on Twitter  


April 2005 Archives

Texas Senate OKs asbestos reform

By a startling 30-0 vote, the upper house in Austin has given its assent to a bill requiring asbestos and silica claimants to demonstrate actual impairment as a condition of filing suit, while also suspending the statute of limitations for the benefit of claimants who do develop illness. In Florida, meanwhile, a Senate panel has given approval to a bill that would tighten standards for filing asbestos suits. The U.S. Chamber of Commerce earlier this month "asked the Justice Department to investigate 'compelling evidence of fraud' in asbestos injury claims filed across the country". Also on the national level, a newly formed organization calling itself the Senate Accountability Project "has purchased more than $200,000 worth of ads in Arkansas, Montana, Nebraska and the Washington, D.C.-area" urging opposition to the asbestos trust fund idea now pending in the U.S. Senate; the group is headed by a Texas lawyer named Mark Iola who has filed asbestos suits, and it would appear to have notably deep pockets, since it says it "plans to spend $10 million to $15 million in the 2005-06 election cycle".

Video: Wal-Mart and public policy

The Manhattan Institute's own Steve Malanga took part in a discussion on the public policy impact of Wal-Mart in what was billed as a debate between the magazines The Economist (represented by its American business editor, Ben Edwards, as well as by Steve) and The Nation (represented by Liza Featherstone and Jonathan Tasini). A video of the event can be found here.

Filibuster Update

Last week, our editor commented on the misleading "Constitution-In-Exile" theory, recently propounded by the New York Times. Those who have been following the increasingly heated wrangling over confirmations in the Senate know that the battle is just beginning. Today, Senate majority leader Bill Frist offered a compromise measure wherein the Judiciary Committee would, now and in the future, permit nominees to go to the floor of the Senate, and ensure that any nomination could be debated for up to 100 hours, but that thereafter a majority vote could end debate. (Frist had previously rejected a Democrat compromise offered by Minority Leader Reid -- effectively, that the Dems would permit two of seven obstructed nominees to pass in the Senate if the Republicans agreed to permit the remainder, and potentially more nominees in the future, be subject to the filibuster.)

There seems to be little room for compromise. Senate Democrats rightly note that, in effect, Frist's compromise is little more than the "nuclear" (or "constitutional") option, with a guarantee for a lot of debate. The promise that a nominee can get out of committee means little to Democrats now, when Republicans have control, and there's no guarantee that the GOP would hold to that commitment down the road (any more than Democrats like Barbara Boxer have held to their previous opposition to the filibuster when they were in charge -- though Boxer's not generally one for consistency).

Of course, Frist gains a significant rhetorical upper hand with this move -- since the filibuster is really a "debating" rule, ensuring full discussion in the body, the 100 hour rule would seem to give everyone quite a say (even windbag Senators can probably keep their comments to an hour...).

Frist's approach, for instance, effectively rebuts much of the rhetoric issued today by Al Gore, about the importance of "deliberative democracy" and the Senate's role as "the more reflective body of Congress." I note that Gore seems confused when he asserts, "Our founders gave no role to the House of Representatives in confirming federal judges. If they had believed that a simple majority was all that was needed to safeguard the nation against unwise choices by a partisan president, they might well have given the House as well as the Senate the power to vote on judges." A bicameral approval process would make it more, not less, difficult to approve judges. Gore's quite right that the Senate was the more deliberative body -- both because of six-year election cycles and, as he fails to mention, because Senators were not popularly elected. But the constitution does not require a two-thirds (or 60%) vote for the Senate's "consent," as the Constitution explicitly does elsewhere, so it's pretty difficult to argue with a straight face that a Senate supermajority requirement has any constitutional foundation tracing back to the Founders.

(Then again, Gore also claimed that strict constructionist judges, preferred by Bush, would bring back the "three-fifths rule," so nuance in constitutional argument isn't really his forte.)

I will note that Gore make a reasonable point when he argues that controversial decisions -- like Bush v. Gore -- would be viewed as less legitimate if "the majority . . . had not only all been nominated to the court by a Republican president, but had also been confirmed by only Republican senators in party-line votes." That's a policy argument, not a constitutional one, but it shouldn't be wholly brushed aside.

There are strong arguments against scrapping the filibuster, like that raised this week by Cato's David Boaz in the American Spectator.

In the context of presidential appointments, I for one am not convinced. Minority protections are key -- and the filibuster acting as a supermajority requirement and a slowdown for change in the normal legislative process may make some sense. There are plenty of places in our constitution in which supermajority requirements erect structural protections for the minority (e.g., the bicameral structure itself for normal legislation, the Senate's disproportionate representation to protect smaller states, the veto power). Other "extra-constitutional" anti-majoritarian measures -- such as committee structures and the filibuster -- are far less persuasive to me as protectors of the minority's interests: indeed, racist Senators (like Robert Byrd), primarily from the South, took advantage of precisely these tools to obstruct for years legislation designed to disenfranchise blacks. Fortunately, the confirmation process was much less controversial in days gone by, or you can bet that these same Senators would have filibustered judicial appointees in an effort to frustrate Brown v. Board.

Moreover, filling appointments is essential to the business of government, and presidents should, in general, be given broad deference. This principle applies much less for the judiciary, where appointments are for a lifetime, than for presidents' own administrations, where appointees are there to execute presidential policy (see, e.g., John Bolton). But allowing a minority party to hijack a president's judicial appointees -- either in committee or through a filibuster -- can have a dramatic impact on the judiciary branch's capacity to do its job. There's a real separation of powers aspect to this debate that gets left out of this discussion. I know firsthand, from having clerked for the then-Chief Judge of the Second Circuit, how the court was overburdened when Republicans stonewalled Clinton's appointments to that bench.

The Founders knew how to put supermajority requirements into place, and did so. They didn't for the Senate's advice and consent power. It will be interesting to see what becomes of this peculiar "traditional" procedure...

Batson: Scofflaw litigators

"Although a long line of U.S. Supreme Court decisions forbids packing juries based on race or gender, lawyers admit they do it frequently," reports Leonard Post in the National Law Journal. One lowlight: Gerry Spence expounds on the ethnic and racial stereotyping he brings to the jury selection process. Why the scarcity of Batson challenges? Often both sides are engaged in the forbidden discrimination; besides which, the regnant philosophy seems to be, "let the judge prove it by reading my mind".


It's on the march around the country, according to Radley Balko, and that very much includes Albany:

The all-time nanny might be New York State Democratic Assemblyman Felix Ortiz. In 2004 Ortiz introduced a law that would require every car sold in New York to come equipped with an ignition interlock device. Motorists would need to blow into a tube and pass an alcohol breath test before the car would start, then perform the test again every 20 to 40 minutes.

In just the first four months of 2005 Ortiz has introduced laws that would ban all cell phone use while driving (including hands-free); ban pornography from newsstands; force consumers to show two forms of identification when using a credit card; test all public school children for diabetes; ban expiration dates on retail gift certificates; ban alcohol billboard advertisements within a mile of every school and day care center; require nutritional labeling on restaurant menus; measure the fat of every public school student; and impose a "fat tax," not just on junk food but also on "videogames, commercials and movies."

Philadelphia: MOVE debacle

Following a $12.8 million jury verdict in favor of 24 plaintiffs, taxpayers of the City of Brotherly Love are on the hook for an aggregate $54.8 million so far -- and still counting -- over the destruction of 61 modestly valued row houses 20 years ago when the city ill-advisedly blew up a house being occupied by members of a radical group, MOVE. The editorialists at the Philadelphia Daily News are crying foul (reg): "it's hard to call it justice when it also serves as a nasty and unfair slap in the face to the 37 residents who accepted the city's offer of $150,000 to move" and now are left looking like suckers for not holding out for a million. "We hope this unfair verdict is overturned. If it isn't, we hope the city appeals. The tragedy of the original MOVE event should not be matched by the tragedy of an unfair ruling."

Good Samaritan obligations

The general rule in our law, much criticized over the years, is that there is no legally enforceable "Good Samaritan" duty to assist a stranger in distress. Earlier this month the California Supreme Court heard arguments in a lawsuit against a taco shop in a gang-ridden San Diego neighborhood whose employees failed to call 911 during an eight-minute parking lot altercation in which a man was beaten and stabbed. Charles Morris IV was not himself a customer of the restaurant, but his friends had gone inside to order. Morris's lawsuit was thrown out by a trial court but reinstated by an appeals court, and businesspeople are now wondering, if the Court sees fit to inch into the territory of newly created Good Samaritan duties, what the scope of their obligations will turn out to be. (appeals court decision in PDF; blogger Vagabondia comments).

Bill Lerach, screen star

A couple of weeks ago I attended an advance screening of the new agit-documentary "Enron: The Smartest Guys in the Room" (overdesigned website here), courtesy of the film's busy publicists. The film, which opened on Friday, derives tritely leftist lessons from the collapse of the Houston-based energy giant, which director Alex Gibney thinks illuminates "the predatory nature of 'business as usual'". Since I don't think Enron's collapse demonstrated any such proposition, it was perhaps inevitable that I would find the film's persuasive efforts coming up short.

Long (too long for most casual viewers, I'd think), slick, and replete with the now-standard array of manipulative techniques perfected by other advocacy documentaries, the film nonetheless didn't get into satisfying detail about the financial/accounting maneuvers Enron used, didn't persuasively sort out the evil from the foolish from the ordinary actors in the saga, and didn't provide credible guidance as to which aspects of Enron's operations will be buried and forgotten with the company and which if any will endure as important innovations (even as the junk bond market lives on long after the Milken scandals). And while we can all agree that events decisively discredited the misbegotten scheme that traveled under the name of electricity deregulation in California, other states deregulated power by way of different rules and got results which were neither disastrous nor unpopular.

Oh, and Lerach. The San Diego class action impresario, who's suing on behalf of shareholders, gets ample screen time to expound his views, which predictably are highly unfavorable toward banks and other deep pockets in the vicinity of the implosion. By the end, I must say, Lerach was actually beginning to come off as a voice of reason and moderation within the framework of the film, compared with other figures who also get pressed into service as on-screen experts, such as (groan) Kevin Phillips and Harvey Rosenfield. Pajama Guy also comments. For more on the Enron legal aftermath generally, Houston-based lawblogger Tom Kirkendall has had extensive ongoing coverage including two good recent posts (first, second) on sentencing in the Nigerian barge case (see also Sept. 20). And Lyle Roberts also devotes a section of his excellent 10b-5 Daily blog to Enron issues.

Emergency room admissions

"The fear of liability is why we send so many people to the ED." Kevin Pho comments on "a tirade for the ages" delivered by an exasperated emergency room nurse.

Arthur Andersen

A famous email on document destruction seized on by prosecutors as a supposed smoking gun actually is nothing of the sort, according to various lawyers who've followed the case, including Brad Wendel of Legal Ethics Forum, Tom Kirkendall, and several quoted by Tony Mauro in Legal Times.

Johnnie Cochran and Col. Sanders

After all, if the Colonel's visage can continue to be erected atop new chicken restaurants long after his decease, and Fred Astaire dance studios can keep opening their doors after the legendary hoofer has passed on, why shouldn't every big city have a franchised outpost of the Cochran Law Firm? (more)

David Hardy at Arms and the Law offers some further thoughts on how portions of today's anti-gun litigation may violate the so-called Dormant Commerce Clause, a topic previously broached by, among others, Dan McLaughlin and Profs. Sebok and Lytton (see Overlawyered posts here, here). (Under the "Dormant" Commerce Clause doctrine, courts strike down many state regulations that interfere with interstate commerce whether or not they tend to get in the way of an existing federal regulatory scheme.) Writes Hardy:

[Some pending gun suits] allege that a manufacturer should be liable because they sold guns to State A, where they are legal, and should have known that some would flow from there to State B, where they are more strictly controlled....

As a thought experiment, let's flip the setting around. State A is the place of business of a gun manufacturer, and it enacts a law imposing a civil penalty of $100,000 plus attorney fees for filing of a lawsuit (anywhere) seeking to impose liability on a manufacturer within its borders, for a lawful gun transfer. Or its courts evolve a comparable doctrine: such a suit is an abuse of process, rendering plaintiff liable for actual and punitive damages.

One would hear squawking from the other states in such a case, I think.

The Federalist Society is giving a half-day conference this Tuesday, Apr. 26 in Washington (details here) on the Bank Secrecy Act, which on a rationale of terrorism-fighting is invading bank depositors' privacy to an unprecedented extent, as well as inflicting onerous regulatory burdens on both banks and their customers. For more, see Overlawyered, Apr. 11, and the column I did some years ago in Reason. Further: Wired News follows up on the general issue.

"Pathological science"

Hoover's Henry Miller gets in some licks, while Michael Fumento catches us up on the latest in the silicone breast implant saga.

Soros, Pew and Joyce money

Plenty of it is sloshing around in "progressive" law circles, according to Allan Adomite of the Illinois Civil Justice League (first, second posts).

"Appearance-based discrimination"

...keeps growing as a category of workplace complaint, reports the NLJ's Tresa Baldas. For many examples, including some of those discussed, see Overlawyered's employment law archives.

The University of Miami's teaching hospital, Jackson Memorial, pays $40 million a year in malpractice insurance costs. The president of the university, former Clinton HHS Secretary Donna Shalala, is lobbying for what would amount to a $150,000 cap on damages -- total damages, including out-of-pocket economic damages from medical expenses and lost wages. The effect would essentially be to immunize teaching hospitals in Florida from medical malpractice lawsuits. The Miami Herald reports that the bill is likely to pass; if so, it will create an interesting experiment in the effect of malpractice liability on healthcare costs and results, since there will be two regimes side-by-side in the state, one for teaching hospitals and one for regular hospitals.

Also pending in Florida are efforts to narrow liability for slip-and-fall accidents and to establish medical standards for proving injury in an asbestos claim to ensure that it's the injured plaintiffs who recover. (Mary Ellen Klas, "Proposal to limit lawsuits against doctors advances", Apr. 21).

The D.C. Circuit's decision (Feb. 5) throwing out the federal government's RICO damage claims against the tobacco industry will not be subject to en banc review after a 3-3 vote from the judges on the D.C. Circuit. (AP, Apr. 21).

Litigation games and metaphors

Is litigation like a chess game? Or is it more like a round of poker? Evidence for one side of the question is that the current World Series of Poker champion is Greg Raymer, a (now-former) patent lawyer from Connecticut; on the other, Boston University Law Professor Ward Farnsworth (who's no slouch with a deck of cards) has an entertaining new website devoted to chess tactics.

National Doctors' Day

Tomorrow -- Wed., April 20 -- physicians and physician advocates will be rallying in Washington, D.C. for medical liability reform.

Barbie doll class action decertified

In their 2001 paper for the Manhattan Institute on state-court class actions and forum-shopping, John H. Beisner and Jessica Davidson Miller offer as one example of the kind of litigation that might better be assigned to a national forum the case of Cunningham v. Mattel, Inc., which

is a nationwide class action claiming that consumers paid too much for "limited edition" Barbie dolls that were later sold by Mattel at a lower price through other vendors. Plaintiff, a Madison County resident and purported Barbie doll collector, seeks to represent a class of "thousands" of people throughout the country who have purchased such "limited edition" Barbie dolls. The only explanation plaintiff's counsel provides for bringing this nationwide suit in Madison County is the statement that Mattel, a California corporation, is "engaged in the manufacture, sale and distribution of toys, including Barbie dolls, throughout the United States, including Madison County, Illinois." Plaintiff does not allege -- and there is no reason to believe -- that Madison County is a Mecca of Barbie collectors or otherwise has a particularly strong interest in resolution of this suit. And while on the surface, a suit about Barbie dolls may not seem to raise important civil justice policy issues, the case does present broader-ranging issues about the responsibility of a manufacturer to maintain the retail value of a product. Thus, once again, a locally elected county judge is being asked to set a policy for 50 states on an issue with potentially wide ramifications for consumers and businesses.

Since then the case has proceeded through much grueling litigation, reaching one milestone when the Madison County judge declared that he would apply California law to the entire class of sales nationwide, pleasant news for plaintiffs at the time since they could therefore invoke California's ultra-generous s. 17200 law. Oops: voters in the Golden State scaled back s. 17200 last year, and now, per the Madison County Record, the Cunningham case has at a minimum hit a speed bump, though plaintiffs don't seem much discouraged.

Constitution in Exile

Yesterday the New York Times Magazine published a cover article by Jeffrey Rosen on the supposed "Constitution in Exile" movement, a group of libertarian legal thinkers who it seems have been working termite-like in the dark to undermine the Constitutional foundations of the sorts of economic regulations that the Supreme Court has mostly upheld since the late 1930s. Early reactions -- the Volokh Conspiracy is the place to start -- are mixed as to the article itself, but often decidedly caustic as to the way the Times's editors set about framing and hyping its themes:

* "Constitution in Exile" is indeed an evocative phrase (I once quoted it myself) but there's next to no evidence that the thinkers Rosen discusses see themselves as part of a "Constitution in Exile movement" or, with one or two exceptions, use the phrase at all. (Orin Kerr, David Bernstein);

* Instead, what's being rolled together here is the work of rather disparate thinkers who over a period of 25 years or more have sought to reinvigorate or rethink a wide variety of Constitutional doctrines including the Takings Clause, Due Process, Commerce Clause, non-enumerated powers, non-delegation, the Compacts Clause, and others. The effect of pretending that this is all an organized "movement" is to conceal crucial divisions on the particulars; for example, Justice Scalia gets portrayed (very paradoxically by Times standards) as a good guy since he's been outspokenly critical of constitutional protection of economic liberty as a general matter. Yet in practice he has agreed with some of the key assertions of the supposed movement, such as that the Commerce Clause does not grant the federal government unlimited regulatory power (Kerr again, Ponnuru at NRO);

* Why the phrase "Constitution in Exile", then? Turns out it's been kept in circulation by the strenuous efforts of liberal lawprof Cass Sunstein (who, in the article's hilarious identifier, "describes himself as a moderate") and anti-property-rights activist Doug Kendall, both of whom appear to find it a usefully alarmist way of rallying opposition to ideas they dislike. (Kerr, Bernstein, Kerr again, Sullivan);

* The Times editors base their news hook, not to mention their hyperventilating tone, on the notion that adherents of the imagined movement are heavily represented among judicial nominees of the GWB administration, and are even now focusing with laserlike intensity on getting one of their own nominated to the next high court vacancy. (If you count Justice Thomas as sympathetic -- probably the only current Justice for whom such a case might be made -- these dangerous extremists are only four appointments away from controlling the Court!) Yet the record of the GWB administration offers scant reason to think it goes looking for members of this school as opposed to conventionally conservative nominees, and most of the Movement's supposed adherents are far removed from the fray of nomination battles (Bernstein, Kerr, Kerr again, Barnett);

* Despite the simplistic left-vs.-right framing, judicial theories which provide no check on government assertions of power are a menace to liberal and not just conservative values (TalkLeft, Bernstein).

* The Satan's-mug-shot photography gives away the game: the pictures of Michael Greve and Richard Epstein, unrecognizable to their friends, resemble outtakes from an early 20th Century medical school textbook on dermatological pathology. Back in the old days, it's said that Henry Luce would send out Time's photographers with a simple nonverbal instruction: thumbs up or thumbs down. More recently, David Brooks once wrote a funny piece about what the photo session is like when a liberal newspaper profiles a conservative: hmmm, why are they lighting me from underneath? (Althouse + comments, Sullivan, Palmer + comments).

"Workplace bullying"

Activists who've been pushing to create a new legal cause of action over "workplace bullying" are happy over an Indiana case in which a court allowed a damage claim to go forward over one such claim and admitted expert testimony about the phenomenon's nature and effects from an advocate; a jury then ordered a heart surgeon to pay $325,000 to an employee the surgeon had yelled and screamed at on the job in what the employee found to be a menacing manner. (Damon Adams, "Bully case verdict a warning to doctors", American Medical News (AMA), Apr. 18). Michael Fox of Employer's Lawyer has all the links and details. See also Overlawyered, Dec. 22.

Study on Connecticut federal juries II

Hillel Levin responds to my original post that remarked on a PrawfsBlawg post:

As the Sacramento Bee reported yesterday, California Attorney General Bill Lockyer is rightly coming under criticism for helping arrange for a dandy $200,000 chunk of a vitamin antitrust settlement (see Mar. 3) to fall into the lap of the Santa Monica-based Foundation for Taxpayer and Consumer Rights, an activist group known for its attack-dog tactics (such as mailing out pictures of its opponents' houses -- real sweet guys, these are). The Bee article rather misses the point, however, by painting the dispute as mostly partisan. It's true that FTCR has angered Republicans with projects such as "Arnold Watch", but its much more central preoccupation over the years has been to bloody the nose of anyone who crosses the interests of the trial lawyers in California, which can very much include lifelong Democrats. It continues to maintain on its website, for example, an almost hilariously vicious and inaccurate diatribe against Andrew Tobias, the well-known financial commentator who serves as treasurer of the Democratic National Committee (Tobias's sin has been to endorse various no-fault insurance schemes that would cut down on business for injury lawyers). By helping to spray publicly derived moneys at Harvey Rosenfield and his associates, Lockyer is acting in a way consistent with the tone of his entire political career, which since its inception has been noted for its close attention to the interests of the trial bar.

Study on Connecticut federal juries

Dan Markel is excited by a study of Connecticut federal juries that he says helps "debunk" the understanding that jurors are less educated than the general population. But the paper's results aren't quite that strong. (Hillel Levin, "Is There a Bias Against Education in the Jury Selection Process?", 38 Conn. L. Rev. ___ (2006) (forthcoming)). First, as the paper itself notes (p. 25), it did not look at any trials that lasted longer than seven days. But it's the bigger, longer, more complex trials that concern litigation reformers most; not only are these the trial where more is usually at stake, it's precisely those trials that tend to exclude more highly educated members of the venire. Indeed, to the extent jury service has a "one trial or one day" rule, one would expect shorter trials to have a more highly educated group; the paper does not note this substitution effect. Second, venue shopping isn't feasible in the federal district of Connecticut the way it is in a county state court. Forum-shopping plaintiffs pick state courts in part because it's usually harder to skew federal juries, and you usually won't find the plaintiffs' bar picking the counties with the highly-educated pool of jurors.

There's a third factor that's difficult to measure empirically, but plaintiff-friendly judges have the power to use the voir dire process to favor the plaintiffs by upholding challenges "for cause" promiscuously, effectively giving the plaintiffs many more peremptory challenges than the defense; judges have sufficient discretion that such a practice is effectively unreviewable, especially because a defendant faced with such a jury will quickly capitulate to a settlement. A study of the venire in the courtrooms of nine federal judges isn't likely to pick that up.

Update: Don't miss the continued discussion.

Following the introduction of legislated liability limits in Australian states and territories as well as a program of government assistance to physicians, the average cost of medical liability insurance dropped by 12 percent last year following three years of increases, the official Australian Competition and Consumer Commission (ACCC) has announced. "The ACCC's report shows that medical indemnity insurance is currently in a healthy and viable state, a significant change from two years ago when the largest medical indemnity insurer was in provisional liquidation," said ACCC chairman Graeme Samuel. The full report is here. For more on damage limits Down Under, see May 16, 2004.

For me but not for thee

If you follow class actions, you might be amused by the irony that plaintiffs' firm Napoli, Kaiser & Bern persuaded a federal district judge that a putative class action against it over fen-phen settlements should be dismissed because its contracts with its clients were governed by arbitration agreements. (Mark Hamblett, "Federal Judge Dismisses Fen-Phen-Related Action Against Napoli Law Firm", NY Law Journal, Apr. 14). Related story: Overlawyered, Feb. 14; "It's Trial Lawyers Vs. Trial Lawyers", NY Sun, Dec. 15 ($).

Trial Lawyers, Inc.: California

As Walter noted yesterday, the Center for Legal Policy at the Manhattan Institute -- which sponsors this site -- is today releasing a new report, Trial Lawyers, Inc.: California. The full report can be accessed online here.

More to follow -- but now I'm off to the event launching the report in San Francisco.

Construction supply, Esq.

From last week's WSJ editorial ("Leahy's Legal ATM" - $), describing the consequences of the asbestos-bankruptcy train wreck (see Jul. 21 and Aug. 3, 2004):

"If nothing is done," explains one business source, "the plaintiffs lawyers will own the world's largest wall board company in USG, the world's largest insulation company in Owens Corning, the world's largest ceiling and floors company in Armstrong, and the world's largest roofing company in GAF. It's like a hostile takeover by the asbestos trial bar of the construction industry. And tort reform is not going to fix that problem because these cases are already in the system."

Malpractice, state by state

The Coalition for Affordable and Reliable Health Care, an advocacy group supporting medical liability reform, has a clickable map of the U.S. on which you can click your state, or any other one, and get a pop-up with real-life stories, statistics, etc. from that state illustrating the problems of the liability system. Also on its site: texts of current malpractice reform bills in Congress, information on California's MICRA law, and much more.

The Justice who got away

That would be Ginsburg with a "u".

"Trial Lawyers Inc. -- California"

The Manhattan Institute Center for Legal Policy (which sponsors this site and with which I'm affiliated) this week unveils a "new comprehensive study of the devastating impact of California's lawsuit industry" entitled "Trial Lawyers Inc.: California". It builds on 2003's much talked-about "Trial Lawyers Inc." report and, like that one, has been assembled by Jim Copland of the Institute.

Tomorrow (Apr. 14) from 10 to 2 at the St. Francis Hotel in San Francisco, the Manhattan Institute and the Pacific Research Institute are sponsoring an event (details) to call attention to the new report. Panelists include Jim Copland, Steven Hantler of DaimlerChrysler, and John Sullivan of the Civil Justice Association of California; there follows a keynote luncheon speech by author/TV host Catherine Crier, introduced by PRI's Sally Pipes. P.S. The study has now been posted on the web, and is here. And Jim has an op-ed in the San Francisco Examiner (Apr. 13).

(cross-posted at Overlawyered)

Sandler and Schoenbrod

Democracy by Decree: What Happens When Courts Run Government, a book I'm always recommending, is now out in paperback (more).

Deferred prosecution agreements

Legal Times has more on the maneuvers (see Mar. 17) by which law enforcers turn corporations against their employees. "To be seen as cooperative and earn favorable treatment, companies must agree to broad waivers of attorney-client and work product privileges. Such waivers often leave the company exposed to expensive civil litigation."

FDA mulls breast implant return

Unfortunately, writes Sally Satel, feminist groups don't trust women to make decisions for themselves regarding their bodies, and "keep pumping out misinformation" on the devices' imagined hazards. More: my review of Marcia Angell's book on the implant fiasco is here, and I devoted a chapter to the subject in The Rule of Lawyers, not however online; Virginia Postrel rounds up recent links; and the Manhattan Institute published this 1995 paper by David Bernstein.

Argumentum ad nyaah-nyaah

Some Lawsuit Lobby groups (Center for Justice and Democracy, ATLA) have attempted to float the theme that anyone who favors reform of the litigation system, but files a lawsuit themselves or once cooperated in such a filing, must be a "hypocrite" and not worth listening to. For a recent example of the theme, see Dwight Meredith, inevitably filtering down to Kevin Drum.

No doubt some individual politicians and public figures do fall prey to inconsistency, but as Megan McArdle ("Jane Galt") points out in response, there's nothing inconsistent between willingness to press a legally valid claim and support for stronger steps to restrain the filing of weak, speculative or exaggerated claims. Writes McArdle:

The idea that Republicans, because they are in favour of tort reform, should never be able to file lawsuits, is about as stupid as the idea that Democrats, because they are in favour of some protectionist policies, should never be able to buy products made abroad. And while tu quoque may be brilliant for feeding one's righteous rage at people one already happens to hate, it's a really lousy guide to policy. Ideas are good, or bad, based on whether they will achieve our goals without trampling on other, equally important goals, not according to who holds them.

Read the whole thing. In comments (first, second) at Drum's Washington Monthly blog, commenter "Hubris" also delves into the factual background of several of the claimed cases of inconsistency, and finds the charges often don't pan out. Pejman Yousefzadeh also comments.

Hospital litigation: Scruggs rebuked

U.S. District Judge Loretta A. Preska of the Southern District of New York, in a strongly worded opinion, has thrown out claims filed by the law firm of Richard Scruggs against New York Presbyterian and the American Hospital Association, part of a wider campaign of hospital litigation spearheaded by Scruggs. (via SymTym). According to a press release from the Sills Cummins law firm (Apr. 1), the "decision is the first by a federal court to dismiss all of the state law claims, as well as federal law claims, with prejudice." According to coverage (Apr. 1) on the Wisconsin Hospital Association website, Judge Preska wrote that:

"Plaintiffs have lost their way; they need to consult a map or a compass or a Constitution because plaintiffs have come to the judicial branch for relief that may only be granted by the legislative branch." She further criticized the Scruggs' backed lawsuits as an "orchestrated assault on scores of non-profit hospitals, necessitating the expenditure of those hospitals' scarce resources to beat back meritless legal claims [that] is undoubtedly part of the litigation explosion that has been so well documented in the media."

The Bureau of National Affairs's Health Law Reporter furnishes a chart showing the status as of Nov. 22 of various lawsuits that are either part of the Scruggs-led campaign or advance parallel allegations.

More: yes, it's true, Judge Preska's opinion in Kolari (see p. 4 shortly after footnote 2) did cite my book The Litigation Explosion in support of the last-quoted passage, to the evident dismay of Evan Schaeffer. Thank you, Your Honor!

"I was feeding a lot of information to European and U.S. papers. ... It was part of my strategy to affect the stock price, which I was very successful at." -- plaintiff's lawyer Mikal Watts on his tactics in the Baycol product liability litigation against the Bayer company of Germany, as quoted by reporter Monica Langley in the May 3, 2004 WSJ. See, on "trial by press" more generally, a new article by Steven Hantler, Victor Schwartz and Phil Goldberg on "litigation communications", which they argue courts should recognize as enough of an organic extension of lawyers' functions to merit attorney-client privilege; the article is reprinted (PDF) by American Justice Partnership.

A New York federal jury ordered the Swiss-based bank to pay 44-year-old Laura Zubulake $9.1 million in compensatory damages plus $20.1 million in punitives in what the Times calls "one of the largest discrimination awards to a single plaintiff on record". Michael Fox of Jottings of an Employer's Lawyer has a post-mortem; among allegations brandished by the plaintiff's lawyers were that bank officials had taken clients to sporting events without inviting Zubulake, that they'd reimbursed a strip club bill arising from another client outing, that they'd tolerated sexist comments, and that they'd been unable to produce relevant emails during epic discovery battles. The six-female, two-male jury was also said to been unswayed by the bank's argument that the male boss in question had behaved unpleasantly toward both genders and had drawn complaints from male as well as female subordinates.

"The Limits of International Law"

Powerline recommends the new book, The Limits of International Law:

Goldsmith and Posner argue that "the best explanation for when and why states comply with international law is not that states have internalized international law, or have a habit of complying with it, or are drawn by its moral pull, but simply that states act out of self interest." If they are right, then the limits of international law are profound because states will not comply with international law when it is not in their self interest to do so. And Goldsmith and Posner make a compelling case for their thesis.

Peter Berkowitz reviews this book, and two others on the subject, for Policy Review. Elsewhere on-line: AEI conference; Peggy McGuiness; Lawrence Solum; Posner and Hathaway debate on Legal Affairs.

Tales of defensive medicine

[M]any physicians are skeptical that dotting every i and crossing every t improves health outcomes. As Fred Teichman, an ob/gyn in Lewisburg, PA, puts it, "It's sad to step back and realize how much money is being wasted on all this. Even the patients are getting tired of so much care, but we all know what will happen if anything goes wrong."

Medical Economics has a must-read article on how malpractice liability fears have distorted medicine for the worse. (Gail Garfinkel Weiss, "Malpractice: How fear changes practice", Apr. 8). And, as a commenter on Kevin Pho's site points out, doctors' refusal to give medical advice over the phone for fear of second-guessing has led to emergency rooms that are overcrowded because of overutilization for primary care purposes, with potentially fatal consequences ($).

"Learning from Asbestos Lawsuits"

AEI has a panel discussion slated for Thurs., Apr. 21 in Washington. "Anup Malani, associate professor of law at the University of Virginia, and Charles H. Mullin, an economist at Bates White, will present their recent study on liability in asbestos-related lawsuits. ...Malani and Mullin estimate that this insurance system for plaintiffs adds twenty-three to sixty-six cents in bankruptcy costs for every dollar awarded in compensation." Commenting will be AEI's John Calfee and Duke's Francis McGovern. Update: video of event is here.

"Tort Reform as a Moral Issue"

Mississippi Law Professor Ronald J. Rychlak's take on the issue.

Pfizer pulls Bextra

Today, drug manufacturer Pfizer has pulled its pain medication Bextra from the market. Bextra is a COX-2 inhibitor, the same class of drug as Merck drug Vioxx, which was pulled last fall (and, more recently, approved for reintroduction). (For more on Vioxx, see Feb. 8, Jan. 27, Jan. 5, Dec. 31, Dec. 27, Dec. 18, Dec. 2, Nov. 18 (II), Nov. 18 (I), Nov. 8, Oct. 4). As lawyers are likely to pile on to this one, as well, expect a lot more to follow. (Note: unlike the Vioxx case, in which Merck pulled the drug without FDA prompting, the FDA ordered this decision, with which Pfizer has said it "respectfully disagrees.")

Despite the hopes of some advocates and the fears of some employers, courts haven't opened the doors wide for ADA claims demanding that companies grant disabled workers a right to telecommute, writes Paul W. Cane Jr. of Paul Hastings. One important principle: an employer is not ordinarily required to relieve a disabled employee of the burden of a lengthy commute, because the legal obligation of reasonable accommodation applies to the job itself as opposed to the task of getting to the job.

Med-mal: Texas relief

Malpractice premium increases may be leveling off around the country, but as we've documented in this space (Aug. 25, Mar. 2, etc.), they're doing much better than just leveling off in Texas, where voters approved a constitutional amendment authorizing limits on damages. Some newer reports: TMLT, JUA, etc. There's a wider pattern, according to the AMA's American Medical News, of improvement in states that have recently enacted liability reform:

In Texas, for example, every insurer but one has lowered liability premiums in 2005, and the last one soon could follow suit, said Texas Medical Assn. President Bohn D. Allen, MD. Meanwhile, West Virginia has seen an increase in new physicians and a decline in defense costs for liability insurance companies, and Ohio has seen a moderation of premium increases and two new insurers enter the market.

Anne Linehan thinks she discerns evidence of the Houston Chronicle's discomfiture about some of this, on which see also Ted's post of last Aug. 25.

"Stupid-Syndrome Syndrome"

The Michael Jackson trial, already going through an unbelievable parade of prior-act testimony, suffers from another defect:

[Dr. Michael] Urquiza, called earlier in the trial as an expert witness for the prosecution, testified about something called "child sexual abuse accommodation syndrome," or CSAAS.

He had never examined Mr. Jackson's accuser. He didn't need to. [...]

According to CSAAS experts, not reporting abuse is thus consistent with suffering from child sexual abuse accommodation syndrome. So is bad behavior, trouble in school, the failure to tell an accurate story, and even the recantation of the entire allegation of abuse. In other words, every criterion usually used by the defense to discredit a witness is actually transubstantiated into evidence that is perfectly consistent with abuse.

And here's the genius: Not exhibiting these signs of CSAAS doesn't mean a child wasn't abused´┐Żjust that he or she didn't get the syndrome. In other words, a noncredible witness is suffering from the syndrome, but a credible one is merely a credible witness who was legitimately abused.

CSAAS is a prosecutorial silver bullet and a fabricator's best friend. Every mistake you make is consistent with it; every mistake you don't make further confirms your credibility. No wonder prosecutors rely on it to bolster disintegrating cases. By making credibility tautological, CSAAS makes it nearly impossible to present a defense or attack an incredible witness.

(David Feige, Slate, Apr. 6; Arthur H. Garrison, "Child Sexual Abuse Accommodation Syndrome: Issues of Admissibility in Criminal Trials", IPT Journal (1998)). Compare Commonwealth v. Dunkle, 602 A.2d 830 (Pa. 1992) with Wheat v. State, 527 A.2d 269 (Del. 1987).

"Alternatives to Litigation"

The U.S. Chamber is giving a conference in Washington on Apr. 14, a week from Friday, on the topic. Included will be discussions of arbitration, mediation and administered compensation schemes.

Harvey Rosenfield and no-fault

Ever ready to promote trial lawyer causes, the California publicist was recently in Massachusetts to pronounce on that state's auto insurance woes; it falls to Martin Grace's lot to sweep up after his misunderstandings.

Yesterday, Walter repeated Larry Ribstein's question: "The fact that a particular industry is especially subject to lawsuits by its very nature would seem to be a problem, unless there's something inherently wrong with the industry. Why should we want to subject tech companies to a litigation tax?"

But there are probably some good economic reasons for tech companies to be more susceptible to accounting fraud lawsuits, reasons that would account for some (though probably not all) of the observed difference.

1) Tech companies are much more likely than average to have outsized valuations tied to perceptions of revenue growth;
2) Tech companies are somewhat more likely than average to have executive compensation heavily tied to stock options;
3) Tech companies are more likely than average to be acquisition targets (or acquirers) in stock deals where short-term fluctuations in the stock price have long-term effects on the company's prospects;
4) There was also a stretch of time in the boom years where tech company executives were more likely to be fly-by-night and/or inexperienced. (See, for example, Lori Gottlieb's Inside the Cult of Kibu.)

If these perceptions are true, there would be a greater incentive for tech company executives to fiddle with the books, both in terms of expected benefit from the fraud and, in at least some cases, decreased costs of exposure (compared to the opportunity cost of being a failed tech company executive), which one would expect to increase the real fraud worthy of suit.

A testable hypothesis: are companies with with high price-to-revenue ratios more likely to have committed fraud?

Of course, these same reasons also create the effect of minor unintentional accounting mistakes (or missed revenue targets) having a greater chance of having material effects on stock prices, increasing the likelihood of being the target of profession litigation factories.

Please, not a doctor

"My worst nightmare would be if my son told me that he would like to be a doctor when he grows up. You see, his father is a doctor." Thus begins a Mar. 20 letter to the editor of the Philadelphia Inquirer; here's the whole thing.

Science and juries -- a UK report

From The Register (U.K.):

A group of British MPs has called for juries to be dropped from trials involving complicated scientific evidence. The Commons select committee on science and technology argues that jury members are often unable to evaluate this kind of testimony, and can be swayed by the charisma of the witness.

The British controversy over science in court, in contrast to much of that here, has arisen mostly in the context of criminal law; in a series of scandals, it has been brought to light that plausible-sounding but erroneous expert testimony promoted by crown prosecutors probably led to the criminal conviction of numbers of innocent Britons in infant-death and other cases.

Larry Ribstein:

Most disturbingly, the article [a WSJ article on securities class actions, which rose in number by 16 percent in 2004] points out that "technology companies almost by definition are more susceptible to lawsuits challenging their books." That's because many suits are based on accounting problems, specifically including revenue recognition issues, to which tech companies are most prone.

The fact that a particular industry is especially subject to lawsuits by its very nature would seem to be a problem, unless there's something inherently wrong with the industry. Why should we want to subject tech companies to a litigation tax?

Med students

Some in Pennsylvania are eyeing the exits. More on med schools: Overlawyered, May 28-29, 2002 and Oct. 1, 2004.

Not a new case, but one we've never had occasion to note properly: in 2002, in (sad to say) a rare occurrence as these things go, Texas state judge Nanette Hasette slapped a substantial fine ($500,000) on plaintiff's lawyers for engaging in forum-shopping of a particularly egregious sort. The prominent firm of Provost & Umphrey, Judge Hasette ruled, had -- to quote a WSJ editorial -- "filed four, single-plaintiff asbestos suits. But after the cases were assigned to random courts, as is the Texas practice, the Umphrey firm picked the court it deemed most sympathetic and then added 300 plaintiffs to its suit in that venue."

Arizona State Professor Michael Saks has an op-ed in the Milwaukee Journal-Sentinel that is notable for its use of misleading statistics.

Saks starts off by arguing that doctors aren't affected by high malpractice insurance premiums, because they can pass the costs on to patients--and then, in the very next sentence, argues that unlimited non-economic damages are necessary to deter doctors from committing malpractice. The inherent incompatibility of these two arguments appears to escape him.

He then repeats the "About 5% of doctors are the focus of half the lawsuits" sham statistic; we've refuted this innumeracy elsewhere, as well as noted the economic implications that would result if this were really a useful statistic.

But the most jarring statistic is one we haven't seen used before, and it's worth noting why it's bogus: "How well does the existing system screen out "frivolous" claims? One telling finding is that a doctor is 29 times more likely to be sued by a patient who has been injured by malpractice than by one who has been injured non-negligently."

Though there's no source for it, it sure sounds impressive; if one reads it too quickly, it sounds like 97% of medical malpractice suits are justified. But it deserves a closer look. Even if the 29x figure is true, it is hardly an endorsement of the current system.

What is an injured patient? Many malpractice cases result from patients being unhappy with adverse results; the cerebral palsy cases where doctors are blamed for birth injuries are the most notable examples. Imagine a world where doctors commit malpractice on 1 in 200 injured patients. Already, this seems awfully high--if every American man, woman, and child saw a doctor and had an adverse result only once every three years, that would be a half-million cases of malpractice a year. Let's now say that the odds of a doctor who hasn't committed malpractice being sued is pi. By the Saks statistic, the odds of a doctor who has committed malpractice being sued is:

pm = 29 * pi

With these assumptions, what are the odds that a malpractice lawsuit is meritorious? I'll show the work. Recall, for every malpractice case, there are 199 patients who have been seen without malpractice.

pm ÷ (199 * pi + pm)
29 x pi ÷ (199 * pi + 29 * pi)
29 ÷ (199 + 29) = 29 ÷ 228 = 12.7%

In a world that generously assumes over a half-million cases of malpractice a year, and generously accepts as true Saks's assertion that malpractice victims are 29 times more likely to sue, seven out of eight malpractice lawsuits will be meritless. Even if one disputes the 1-in-200 number, doctors would have to be injuring one in thirty patients before plaintiffs' lawyers got to the 50% level. That impressive Saks statistic turns out to be one that condemns the current state of affairs. "How well does the existing system screen out [meritless] claims?" Not very well at all.

The deep-pocketed trial lawyers' lobby is mounting a major drive to prevent the bill from moving forward. The Association of Trial Lawyers of America (ATLA) has been raising millions of dollars to combat the medical malpractice proposal and has hired additional congressional lobbyists to keep the pressure on lawmakers to reject the president's plan. [...]

Quick passage of the class-action bill, which Bush signed into law Feb. 18, was "both good and bad news," a senior business lobbyist said. It was good for industry that class-action legislation passed at all, he said, because it represented a small but meaningful victory over the hard-to-defeat plaintiffs' bar. But it was bad news, he added, because many lawmakers are loath to whack the powerful trial-lawyer lobby more than once in a single year.

(Jeffrey H. Birnbaum and John F. Harris, "President's Proposed Remedy to Curb Medical Malpractice Lawsuits Stalls", Washington Post, Apr. 3).

Mr. Spitzer's timid targets

"There is a nervous, ostrichlike mentality prevalent in the insurance industry at the moment, as company and association executives keep their heads down for fear of being targeted by Mr. Spitzer or other regulatory gunslingers looking to make a name for themselves. Mr. Spitzer already has several big notches in his gun belt, but, as in the proverbial Western morality play, perhaps now is the time for the honest townsfolk to defend themselves and make a stand." -- Paul Winston, editorial director of Business Insurance magazine, in his latest column. More: E.L. Eversman comments, and also see Larry Ribstein's remarks on Spitzer.

Once again a public/private litigation partnership yields yummy fees: Per the Charleston Gazette, "A Washington, D.C., law firm and a group of West Virginia lawyers will get $3.7 million of the state's $10 million OxyContin settlement under a court-approved deal that has the blessing of the state Attorney General's office. The lawyers will take their money from a fund that will pay for drug-education programs for doctors, law enforcement drug-prevention programs and community drug-rehabilitation programs." Attorney General Darrell McGraw defended the fees, saying they reflected market rates and that the lawyers had been selected on the basis of competence and not, as critics suggested, because many of them had been major contributors to his campaigns. Washington, D.C.-based Cohen, Milstein, Hausfeld & Toll was the state's lead counsel, and that firm "brought in lawyers from the Charleston law firm DiTrapano, Barrett & DiPiero, lawyer Bill Druckman's Charleston firm, and the firm of G. David Brumfield of Hurricane." (Charleston Gazette, Charleston Daily Mail). West Virginia was unusual in filing a public action against the drug's manufacturer; the great bulk of the OxyContin litigation (covered extensively on Overlawyered) has consisted of private actions.

Congress's Joint Economic Committee has published a new short paper (PDF), which emphasizes the extreme inaccuracy of today's system in matching litigation to actual cases of negligent medical injury.



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.