As many readers of this site already know, the state of Alaska has enjoyed the benefits of a loser-pays principle in its civil litigation since territorial days. The speaker of the Alaska House, Rep. John Harris (R-Valdez), discusses the re-strengthening of the rule (following a partial watering down) in a recent opinion piece reprinted as our newest featured column.
July 2007 Archives
The other day we got a little impatient with Columbia lawprof Michael Dorf for considering only the "separation of powers" critique of public-entity contingency fees and not the (seemingly stronger) "loss of neutrality" critique that has had success in California cases. Prof. Dorf has now responded here.
Despite the differences in emphasis and presentation, we don't seem to have any actual disagreement on the underlying point, namely that 1) these are two different theories and 2) the second one is likelier to gain traction with courts.
The Federalist Society is hosting a luncheon panel today on the subject in D.C. Scheduled panelists include former Nebraska AG Donald Stenberg, Virginia AG Bob McDonnell, Wisconsin AG J. B. Van Hollen, and Colorado AG John Suthers; Peggy Little will moderate.
More: Hans Bader has a report from the event.
This, from co-blogger Mindles H. Dreck at Megan McArdle's, is worth quoting in its entirety:
Radley Balko makes a good point:Spitzer denies any knowledge of what his closest aide was doing, which seems improbable.
But hang on. Even he didn't know, isn't this the same guy who wants corporate executives held criminally liable for the mistakes of their underlings, even if they had no knowledge of those mistakes? Isn't this the guy who wanted to make not knowing about those mistakes a crime in and of itself?
Hmm, perhaps we should make elected officials sign a certification or disclosure form under threat of large financial penalties, and stating that they know what all their underlings are up to.
Nah, too draconian.
Stuart Taylor, Jr. says Democrats would be short-sighted to block 5th Circuit nominee Leslie Southwick (temporary link, will rotate off).
If "too conservative" is reason enough for Democratic senators to block a floor vote on Southwick, who is no right-wing culture warrior, then "too liberal" will be reason enough for Senate Republicans to do the same when the shoe is on the other foot.
The long-term cost to the country is that bit by bit, almost imperceptibly, more and more of the people who would make the best judges -- liberal and conservative alike -- are less and less willing to put themselves through the ever-longer, ever-more-harrowing gantlet that the confirmation process has become.
- "Litigo": definitely not Michael Moore's next documentary [Placebo Journal via KevinMD]
- More on that "staunch Republican" trial lawyer quoted by a Chicago Sun-Times reporter [Taranto, Malkin; earlier]
- Columbia lawprof Michael Dorf is very dismissive of the separation-of-powers arguments against contingent-fee public representation, but appears unaware of the cases in California (Clancy and County of Santa Clara) striking down such representation as violative of the neutrality expected of government lawyers [Dorf on Law; Prof. Dorf responds]
- Following the asbestos model? Naming long lists of defendants, from BP Amoco to Turtle Wax, seems common in benzene suits [Madison County Record 2005 and lately]
- Vivas-Fresno State case, on Title IX retaliation, might have turned out differently had O'Connor departed the Court earlier [Michael Fox via Ambrogi]
Independent stock-watcher Todd Sullivan:
Had the lead paint defendants even broached the word "settlement," an avalanche of suits would have followed that would have bankrupted them. I have no doubt about that. The ferocity of their fight has essentially discouraged additional suits being filed and has lead to several localities dropping suits.
-- from an interview ("Litigation risk and shareholder value") at Jane Genova's Law and More.
Two days after a U.S. Attorney declined his request to prosecute attorney Dickie Scruggs for criminal contempt, federal judge William Acker on Friday appointed two Birmingham attorneys as special prosecutors. In a June order, Acker had said he would do just that if U.S. Attorney Alice Martin of Alabama declined to take the case against Scruggs, of tobacco and Hurricane Katrina insurance litigation fame.
The criminal contempt prosecution is an offshoot of Katrina litigation. Two sisters, Cori and Kerri Rigsby, worked for E.A. Renfroe, a State Farm contractor, and took documents they said showed the insurer was engaging in bad faith adjusting of Katrina claims. The Rigsby sisters then gave the documents -- some 15,000 pages -- to Scruggs and went to work for him at $150,000 a year each. Renfroe sued them for alleged breach of their confidentiality contracts, and Judge Acker entered an injunction in December requiring Scruggs to return the documents to counsel for Renfroe. Instead of doing this, just hours after the injunction was entered Scruggs called Mississippi Attorney General Jim Hood, who already had copies of the documents, and sent them to Hood rather than to Renfroe's attorneys. The apparent objective? To make sure State Farm was kept guessing about the documents' contents during a period where Scruggs, Hood and State Farm were involved in intense negotiations over large-scale settlements of insurance claims and litigation, and where both Scruggs and Hood mounted highly effective media campaigns to put State Farm in the worst possible public light and pressure the insurer. In the June order, Acker found that Scruggs willfully defied the injunction and referred Scruggs to Martin for prosecution of criminal contempt. If you care to know more, I've written lengthy posts here and here about this issue, with links to the pdfs of Judge Acker's orders.
Zach Scruggs, Dickie Scruggs' son and law partner, has tried to spin Martin's declination as equivalent to a finding that Scruggs did nothing wrong. Martin, however, in a letter to Judge Acker, did not give a reason why she declined.
This isn't the first time we've noticed Todd Zywicki's and Gail Heriot's critique of this study, but it's back in the news:
The study's central findings ["Illness and Injury as Contributors to Bankruptcy," 2005, by Harvard profs David Himmelstein and Elizabeth Warren] were that 54� percent of all bankruptcies have a "medical cause" and 46.2 percent of all bankruptcies have a "major medical cause." ...[T]he only way to make such a claim is to gerrymander the definition of medical bankruptcies to generate the desired results. ...
For example, the study classifies uncontrolled gambling, drug or alcohol addiction, and the birth or adoption of a child as "a medical cause." There are indeed situations in which a researcher may legitimately classify those conditions as "medical," but a study used to prove Americans are going bankrupt as a result of crushing medical debt is not one of them.
A father who has gambled away his family's mortgage payment is not the victim of crushing medical bills. Similarly, new parents who find they can no longer afford their previous lifestyle now that one of them has to stay home with the baby will usually find the obstetrician's bill the least of their problems....
The authors also classified bankruptcies as having a "major medical cause" if the debtors had more than $1,000 in accumulated, out-of-pocket medical expenses (uncovered by insurance) over the course of the two years prior to the bankruptcy, even if the debtors did not cite illness or injury as among the reasons for their bankruptcy.... A bankruptcy with $1,001 in uncovered medical expenses and $50,000 on a Bloomingdale's card would constitute a "medical bankruptcy" in their study.
The sequel: Profs. Himmelstein and Warren have just presented their study in testimony before an admiring House subcommittee building the case for further government intervention into health finance. Prof. Zywicki and Heriot take a severe tone in this Washington Times op-ed, while Josh Wright comments at Truth on the Market. Prof. Warren replies here, and her ally Bob Lawless, of Credit Slips, here.
More: See also this article by David Dranove and Michael L. Millenson which ran in Health Affairs last year (h/t reader Linda Gorman).
It's now been overshadowed by the Richard Milhous Spitzer affair, but there's a fairly grubby scandal in progress regarding the office of former state Comptroller Alan Hevesi, now under investigation for possible insider dealing and influence-peddling. Among the dramatis personae: Hevesi's sons Daniel and Andrew, both NYC politicians, and one-time "Mod Squad" star Peggy Lipton, described as a close friend of Hevesi chief of staff Jack Chartier.
The Tennessean, via the Institute for Legal Reform, reports that Caterpillar has sued the UAW for breach of contract.
In a suit filed in U.S. District Court in Nashville, Caterpillar claims that the union breached its collective bargaining agreement by backing ex-employees' litigation over health-care benefits. The same U.S. District court had granted class-action status earlier in July to retirees upset that the company no longer paid health benefits fully for life. Caterpillar's suit against the UAW has been added to that case as a so-called third-party complaint.
Unions have for some time sacrificed future employees to protect current ones. In this case, it seems they turned on past employees, then (if Caterpillar's complaint is accurate) encouraged those employees to sue. It will be most interesting to see how this suit develops.
Here's one way for a New York Times op-ed contributor (in this case Marshall University poli sci professor Jean Edward Smith) to get attention: propose dealing with the loathed Roberts Court by taking a leaf from FDR and packing the court with more justices. Some reactions: California Blog of Appeal, Orin Kerr & Volokh (commenter: "Among a great many other questions, I was hoping he would explain why a series of controversial 6-5 decisions would be clearer or more persuasive than a series of controversial 5-4 decisions. But nope. Oh well."), Anonymous Liberal, Althouse & readers, Brendan Nyhan (it would take sixty votes in the Senate, not fifty, unless the filibuster is also to be done away with). Democratic Strategist likes the idea.
Just before the case went to the jury, Conrad Black's two lead attorneys sent him a demand for an additional million bucks each. No messing around with billable hours and 15-minute increments and $27.59 for photocopying: just a nice round seven-figure sum by way of supplementary retainer.
A day or two before closing arguments to the 12 men and women who'll decide your fate is no time to pick a quarrel with your lawyers. Or, at any rate, yet another quarrel to add to those you're already having, and they're having with each other, and the American lawyer's associates are having with the Canadian lawyer, and the Canadian lawyer is having with his own associates, and your wife is having with all of them. So Conrad paid up....
when the U.S. Attorney in Chicago filed the criminal charges, Conrad Black found himself with a cash-flow problem: the feds had seized the $10-million proceeds from the Park Avenue apartment sale, and successfully tied up enough of his assets hither and yon that he didn't have the wherewithal for the big-time mouthpieces. That's a time-honoured technique of the United States government: they not only buy up the witnesses with plea deals and immunity agreements and SEC "Wells notices," but they like to ensure you don't have the wherewithal to do any legal shopping of your own. Hence, choking off the cash flow, without which your options narrow dramatically. Brendan Sullivan, for example, wanted a $25-million down payment to take the criminal case. Whether or not he would have won it for Conrad, the 10 mil from the apartment would have come in mighty handy toward the cover charge. Why did the feds seize the dough? Because, as the U.S. Attorney argued in this case, Black's purchase of the apartment from Hollinger was a theft from the company's shareholders. In case you're keeping score, the jury in Chicago found him not guilty on all charges relating to the apartment transaction. Yet the U.S. government is holding on to the money.
Just 'cuz. Because they can. And because the presumption of innocence which lies at the heart of English law is so corroded in modern U.S. jurisprudence that it seems entirely natural for the government to seize the proceeds of a "crime" before it's proved you've committed one.
- It's Spitzenfreude with New York's moralizing prosecutor-governor caught in his very own ethics scandal [Slate roundup]
- Antitrust critic Skip Oliva is guestblogging this week at our sister site [Overlawyered]
- "Corporate Defendant Wins Patent Litigation in Marshall, Texas" which in that Best Little Jurisdiction is apparently newsworthy enough to deserve its own headline [WSJ Law Blog]
- Dismissal of charges in KPMG tax shelter case is "a watershed event" in fight against prosecutorial excess [Kirkendall]
- Second Circuit refuses to stuff another plaintiff-friendly trademark interpretation into the Lanham Act, and an academic commentator grumbles [Coleman; Michael Atkins]
- More on unions that hire the jobless to picket at rather less than a "living wage" [Washington Post; earlier here, here, and here]
Citing the First Amendment, an upstate federal judge is allowing lawyers to once again televise gimmicky ads, scrapping the efforts of top state judges who banned much attorney advertising in the name of the dignity of the legal profession.
A decision yesterday sides with a Syracuse personal injury firm, Alexander & Catalano, whose television spots featured its lawyers consulting with space aliens over a dented flying saucer, and sprinting at superhuman speeds to reach clients. The eight-attorney firm has not aired these ads since February, when a statewide ban went into effect on advertisements that use attention-grabbing gimmicks, such as portraying lawyers "exhibiting characteristics clearly unrelated to legal competence."
Legendary tech columnist John C. Dvorak argues for SOX's repeal, bemoaning both its squelching of innovation and the corporate CEOs too scared to speak out against it. Of course, if one is a big-money CEO, one might not be entirely upset about a law that reduces the ability of a startup to obtain the capital it needs to unseat established players, despite the additional costs it imposes on one's company. The real victims are the consumers who miss out on that competition, and small investors who miss out on the opportunity to participate in deals that are now handled by private equity and foreign stock markets, but those sorts of unseen regulatory costs get undervalued in the policy debates by those who purport to speak on behalf of investors and consumers. See also.
Much like the housing bubble, the days of huge class action settlements providing millions in attorney fees may be ready to burst, at least in one fed�eral circuit.
The Philadelphia-based 3rd U.S. Circuit Court of Appeals is starting to take a hard look at settlements that provide for huge attorney fees while leaving in�surance companies stuck with the bill�and some�times leaving plaintiffs claiming they got less than their fair share.
For years, critics say, it worked like this: Plaintiffs lawyers would file mass tort class actions�such as those for asbestos, tobacco and other products found to cause grave harm. Then, when the company allegedly responsible for damages filed for bankruptcy protection in the face of the claims, plaintiffs lawyers would settle for an amount that provided millions of dollars in attorney fees, while leaving individual claimants with a relatively small recovery. The company was then absolved of further liability and could reorganize and emerge relatively unscathed.
But recently that structure has begun to show cracks. In some instances, insurance companies�which usually pay the bulk of these settlements�have cried foul. The companies are seeking to intervene in cases where they face huge liabilities, sometimes joining forces with unhappy claimants who feel their lawyers didn�t have their best interests at heart when they agreed to the settlements.
In one case, the 3rd Circuit revived a suit last Octo�ber that had been filed by a group of asbestos workers alleging their former lead attorneys had breached their fiduciary duty in negotiating a settlement. Huber v. Taylor, 469 F.3d 67.
The property insurance problem in Florida, which Gov. Charlie Crist and legislators supposedly improved earlier this year with new regulations and new government involvement in the insurance market, is looking decidedly unfixed. In fact, it looks more broken than ever. According to this story in the Miami Herald, legislators are stumped as to why, after all the government intervention, property insurance premiums not only didn't go down by as much as forecast, but in many cases are going up.
Hmmmm, do you think Gov. Crist or the Legislature will listen to what the market is telling them: that their insurance fix is like one of those mail-order Acme rocket packs so favored by Wile E. Coyote? You know, the ones that always blow up, whether from defective design or user error, it is not entirely clear.
It looks like the answer is no, and what's worse, that some legislators are ready to order another rocket pack. According to the story, even though lawmakers are perplexed as to why the new regulations have had the opposite effect of that intended, "some wonder whether government should take even a bigger role in the insurance market -- possibly taking over all windstorm coverage, for example." What was it Clausewitz said? "Never reinforce failure," I think is what it was. For more on this and other developments on Florida's insurance woes, check out this post and others I've written in recent months.
ABC News's Jan Crawford Greenburg:
...some of the liberal commentary on the Court since the justices packed up and left town has been almost breathtaking in its over-the-top hysteria. That does no one any favors: not liberals or conservatives � and certainly not the Court itself.
Greenburg proceeds to criticize Oklahoma lawprof Joseph Thai, Chicago lawprof Geoffrey Stone and (inevitably) Times editorialist Adam Cohen for "tabloid-style, Jerry Springer-esque" denunciations of the Roberts Court that evoke "Chicken Littles with their hair on fire", or perhaps a "wrestling smack-down". Both Thai and Cohen, she writes, overstate the significance of the Ledbetter decision on pay challenge time limits, "basically a reprise of a 20-year old decision written by Justice Stevens that had ruled against another woman on essentially the same grounds". Beyond that, many of the "pro-business" decisions denounced by the two were decided by margins wider than 5-4, or in other ways didn't track the liberal-conservative divide on the court ("Both Thai and Cohen write about how the court put limits on punitive damages in the Philip Morris case � and both conveniently fail to mention how the justices voted.") And that's aside from Thai's "preposterous" interpretation of the taxpayer standing case involving a challenge to expenditures on faith-based programs, and his claims that the Court has "made it dramatically more difficult, if not impossible, for ordinary Americans to have their day in court," which, writes Greenburg, "cannot be taken seriously."
Patterico has some further thoughts.
Moin Yahya's reflections last week on the Conrad Black trial prompted a comment from Canadian anonyblawger Pith and Substance, who shares Prof. Yahya's unease at the extraterritorial implications of the "obstruction of justice" count against Black (for personally removing boxes from the Toronto headquarters of Hollinger Inc., in arguable defiance of an order from a Canadian judge to the contrary).
The trouble is that -- for various obscure historical reasons -- Canada is a sovereign country. I realize that it is fashionable to emphasize interconnectedness and globalization and so forth, but the violation or non-violation in Toronto of the order of a Canadian judge is not the business of a Chicago jury. Laura Secord did not bravely sell chocolate, nor did Sir John A. down six bottles of whiskey in a single setting for this! While Pith & Substance views talk of military retaliation as premature, someone ought to have a strong word with our southern cousins on this subject.
Those who follow the Daubert/scientific evidence wars will want to catch the back-and-forth between Beck and Herrmann and Peter Nordberg on the question of whether expert witnesses should be required to testify to a "reasonable degree of professional certainty" as to their conclusions. The exchange begins here, when Beck and Herrmann take note of a surprising ALI restatement proposal that would water the standard down to "more likely than not"; continues with Peter Nordberg's detailed response of last month criticizing the "reasonable degree of certainty" threshold; and has now proceeded to an also-detailed rebuttal from Beck and Herrmann, concluding that watering down the old formula would do much to increase the quantity of expert testimony but would be rather perilous as to its quality.
- More on the California decision invalidating recreation waivers where gross negligence alleged [Korobkin @ Volokh, with good reader comments]
- FEMA on hurricane trailers: don't test them for chemical hazards, that'd start the clock on our obligation to respond [L.A. Times via Childs]
- Lawyers are mostly taking 40 percent of the L.A. priest-abuse settlement, and some payments "had little to do with what victims suffered" [L.A. Times via LawBeat]
- Who was the first legal blogger? [blush, blush]
- John Edwards swings through rural Virginia to commiserate over the shortage of doctors, as well he might [NY Post]
This recent story about how an elderly couple nearly lost their home over a $1.63 tax bill and then had to fight for seven years to keep their home is typical of many stories where a seemingly minor legal irritant mushrooms into a major nightmare. Certainty of title is the one thing that many Americans (and Canadians) count on when they buy a home or any property. No wonder decisions like Kelo generated such a backlash.
Certainty of title is what Hernando de Soto identified as the key impediment to economic growth in many developing countries. In the Mystery of Capital, de Soto documented how in seemingly poor countries, ordinary citizens were sitting on trillions of dollars in assets. The problem is that there was no way to tap into these assets due to uncertainty of title. No credit could be had or exchange be conducted for those assets if no one was clear on who owned them. Even in our developed system (unless your land title system follows the Torrens system), many homeowners will still purchase title insurance.
In Roper v. Simmons, The U.S. Supreme Court declared the execution of juveniles unconstitutional. They did so on 3 grounds, one of which was that the United States was the only country in the world that executed juveniles. Justice Kennedy stated:
Respondent and his amici have submitted, and petitioner does not contest, that only seven countries other than the United States have executed juvenile offenders since 1990: Iran, Pakistan, Saudi Arabia, Yemen, Nigeria, the Democratic Republic of Congo, and China. Since then each of these countries has either abolished capital punishment for juveniles or made public disavowal of the practice. .... In sum, it is fair to say that the United States now stands alone in a world that has turned its face against the juvenile death penalty.
Oddly enough, it seems that some of the listed countries are still executing juveniles. Next time a politician, judge, or lawyer argues "we are the only ones in the world to do X", a) do not believe that assertion, and b) say "so what!".
Originally this was a post summarizing the recent Benjamin Barton paper on judges and the legal profession, before it was called to my attention that Ted had beaten me by three months on that. So I'll just use the empty space to pass on a recent line from federal judge Lewis Kaplan, quoted by Peter Lattman yesterday: "There was a time in this country when we made steel. Now we make litigation."
Apropos of Walter�s post on the NLJ story regarding Class Action lawsuits under state consumer protection statutes, where plaintiffs claims they wouldn�t have paid the purchase price for the product if knew that it was defective or harmful. These are also known as no-injury lawsuits. The big one a few years ago was the $10 billion verdict against Philip Morris for their light cigarettes. The case was overturned on appeal at the Illinois Supreme Court, but currently there is a class action certification appeal pending in front of the Second Circuit.
If there was one area of economics that I wish lawyers would understand, it is the basics of price theory or consumer demand. Prices serve as an informational clearinghouse, an idea that is neither new nor novel. The Nobel Laureate in economics Hayek explained this over fifty years ago in his article The Use of Knowledge in Society, 35 Am. Econ. Rev. 519 (1945). There he argued that the price system was �a mechanism for communicating information�, i.e. the price mechanism allows the communication of information in a dynamic fashion without the need for a centralized information gathering mechanism.
Over at Houston's Clear Thinkers, Tom Kirkendall links to this story about a 74-year-old Houston businessman and founder of pipeline giant Enterprise Products Partners, who during a trip to Russia shot and killed a moose and a sheep while riding in a helicopter. Neither animal is apparently endangered, and the Russians didn't seem to care. The US attorney's office, however, had him answer questions at a grand jury hearing and they could indict him under the Lacey Act.
The Lacey Acy was also used to convict a group of lobster fishermen who brought in lobsters from Honduras allegedly in violation of Honduras law. For this, they received 8 years in jail. Here's the best part: the Honduran law they supposedly violated was NEVER actually the law in Honduras. Easy case for appeal, you may think! Unfortunately, the Eleventh Circuit affirmed the convictions. The Supreme Court denied cert, but if it is any consolation, there was a dissent in the Eleventh Circuit's decision.
The National Law Journal takes note of a trend:
Plaintiffs lawyers are filing an increasing number of class actions under state consumer-protection laws in conjunction with, or in place of, traditional personal injury class actions, which have become too difficult in recent years to certify.
The trend is so pronounced that in some litigation -- such as in recent class actions involving the potential health dangers of Teflon cookware and alleged hearing loss associated with Apple Inc.'s iPod -- plaintiffs lawyers haven't filed a single injury claim.
Suits alleging injury are typically too disparate in their facts and circumstances to warrant class treatment, but suits demanding, say, a refund of money spent on a product may be eligible for certification and thus roll up into a sizable financial ball.
The United States Supreme Court�s decision in Bell Atlantic v. Twombly received much support by academics and practitioners alike. An end to the madness of abusive litigation, sanity in antitrust pleadings, and other such claims were made heralding a new era of antitrust jurisprudence. Others attacked the case as erecting insurmountable pleading standards that would shut out plaintiffs seeking redress for violations of the Nation�s antitrust laws. (See e.g. Dodson)
I am finishing an article that I will post soon on SSRN and Bepress titled �The Law & Economics of Antitrust Complaints: A Post-Twombly Analysis� in which I argue that that the truth is somewhere in the middle.
Many lower courts for over two decades now (recall that Twombly resulted from a circuit split) have been fashioning standards of pleadings for antitrust (and other areas of law) that require more than simple conclusory allegations. These requirements are not �hyper-pleading� requirements as some have argued, nor are inconsistent with Conley v. Gibson and the Federal Rules of Civil Procedure�s emphasis on notice pleading; rather these requirements help shape the substantive law of antitrust at the pleadings stage. What Twombly did was allow the lower courts to go ahead and continue to fashion the law of antitrust in the pleadings stage, something some have called for to happen now.
In Twombly, the Supreme Court held that an allegation by the plaintiffs that the defendants �engaged in parallel conduct� and formed a conspiracy to prevent entry into local markets was an insufficient pleading. One could view this case as legislating from the bench and the creation of new complex hyper pleading requirements. I prefer to view his case in another way. In my article, I argue is that the Supreme Court has affirmed the lower courts� fashioning of the substantive rule of antitrust law concerning parallel behavior, namely that simply observing parallel conduct as a matter can NEVER prove collusive behavior.
Whether it is a conference on the subject of regulatory crimes, or blog I read on the subject, the message is the same: regulatory prosecutions are out of hand. Many times the dialogue starts like this �I used to prosecute these types of cases; in fact, I was on the taskforce that prosecuted the defendants in [Enron/WorldCom/Adelphia/insert your favorite corporation here], but I feel that it has gotten out of hand!� If the speaker is a legislator regardless of party the message is the same �American businesses need room to breathe and the climate is not conducive for this!� The question I feel like asking these speakers is �then why did you prosecute them?�, �why did you ask for that awful sentence?�, or �why don�t you change the law?�.
It is almost as if we have become trapped in this bizarre system that everyone seems to accept is flawed, unjust, and in need of change; and yet, the system seems to get worse. Who would have envisaged just a few years ago the Thompson/McNulty memo would be in force? It is almost as if each successive administration feels the need to outdo its predecessor. Like the human sacrifices of earlier so called civilizations that were meant to appease the gods and ensure continued prosperity that kept getting more and more gruesome over time, we as a society (more on we are in a bit) almost revel in how much we can extract out of the leaders of our industry. Unfortunately, if true, the parallels are ominous: the ancient civilizations came to a screeching halt. And why not ours?
After our country was attacked on 9/11, I published a dissenting essay in Forbes magazine, arguing strenuously against the government compensation board run by attorney Ken Feinberg to distribute tax dollars to the famiies of victims. My voice was drowned out by many others on the other side.
Now history repeats itself. The Washington Post reports that Virginia Tech students' families have hired an attorney to obtain state government compensation for the families of students injured in, or who witnessed, the murders committed by a deranged individual. As was the case for 9/11, no negligence or other wrongdoing by the state is alleged -- only the need to force taxpayers to subsidize this loss.
On Monday, the administrator of the $7 million Hokie Spirit Memorial Fund, which Virginia Tech established to receive voluntary donations in the days after the April 16 shootings, drew up recommendations for direct payments to the victims. Attorney Feinberg, the same man who administered the Sept. 11 fund, said he will recommend that the families of those killed at Virginia Tech receive $150,000 from the fund, and the injured get $25,000 to $75,000. Anyone who was in Norris Hall, where most of the shootings occurred, receive one year of free tuition or $8,000.
But the families' attorney said they deserve far more money, involuntariy "contributed" by taxpayers.
Whatever can be said about the 9/11 payments, they were made to survivors of wage-earners. Are these parents claiming that their livelihood has now been impaired by their children's injuries or death? Clearly not. Rather, their lobbying is another slow creep toward the socialization of all losses.
- Bad, bad news: By 6-1 vote, California high court invalidates recreational risk waivers in cases where plaintiffs allege gross negligence; Sierra Club had weighed in for defense [decision; L.A. Times; Egelko, SF Chron] More: Korobkin @ Volokh, with good reader comments
- After Democratic candidates' audition before trial lawyers, who's that supposed "staunch Republican" ready with a quote? [PowerLine, Chicago Sun-Times]
- Charlie Weis med-mal retrial in Boston is being guestblogged by Tom Kirkendall [Wizard of Odds]; Eric Turkewitz has a plaintiff's-side view [NYPILB]
- Provenance of Roberts's phrase about discrimination by race is rather different than New Republic seems to imagine [Volokh gang]
- Chrysler's Steve Hantler is guestblogging this week at our sister site [Overlawyered]
- Should juries get a closer look at relations between lawyers and their hired experts? [Childs]
One of the charges that the prosecution added against Black was obstruction of justice. This charge was added at the last minute and was not in the initial indictment. The charge related to the fact that Black removed boxes of documents from the offices of Hollinger Inc. (which was the parent company of Hollinger International the American company based in Chicago). The order not to remove the boxes had been issued by a Canadian judge in Toronto. (As an aside, wouldn�t a simple contempt of court charge have sufficed?)
What jurisdiction did the United States have over Black for an event that took place on foreign soil? Putting aside the question of whether the prosecution already had these documents, so it is not clear that his removal obstructed any investigation; the more important and troubling aspect of this case is the creeping federalization of American law not just inside the United States but abroad. There have been many cases where the American courts and prosecutors have begun asserting jurisdiction over events that happen abroad. Traditionally they found a nexus to some event in the United States. The Blackberry injunction by NTP against RIM affected a relay station located in Canada. The arrest of a British executive for running an offshore online gambling site was used by Americans in the United States. But now, the courts and prosecutors are asserting jurisdiction over events abroad unconnected to any local victims whatsoever.
An American faces charges in the United States for sex tourism abroad. The Ninth Circuit affirmed another conviction under the Protect Act against another individual who engaged in sex tourism, holding that it was within Congress�s authority to regulate foreign commerce to have jurisdiction over such activities. (United States v. Clark, 435 F.3d 1100 (9th Cir. 2006).)
The Rudy Giuliani for president campaign this afternoon unveiled its Justice Advisory Committee, which will be advising hizzoner's campaign on issues of legal policy. It's headed by former Solicitor General Ted ("no relation") Olson, and boasts a really stellar array of practicing and academic law talent, including lawprofs Charles Fried, Steve Calabresi, George Priest, and Ronald Cass, former Southern District chief judge Michael Mukasey, and former Justice official Maureen Mahoney, among others. The full list is here (campaign site) or here (PowerLine)
And, yes, that's my name on the list too. I try not to clutter the site overmuch with my personal candidate preferences, but I find the former NYC mayor to be the clear standout candidate in this year's White House pack, despite my disagreements with a number of his stances in the past. Early interactions between the legal advisory committee and the candidate have further strengthened my confidence in the kind of leadership he'd provide in office.
That's enough for the moment, but I just wanted to give readers fair warning and a chance to discount/make allowances in case I happen to mention the various candidates and their doings as the political season proceeds. (cross-posted from Overlawyered; and please note that this is a purely personal announcement, and that the Manhattan Institute does not endorse candidates)
P.S. Newsday has a story interpreting the whole thing as a Supreme Court short-list (which would truly make me the odd man out) but doesn't mention that most likely picks for the Court would be drawn from the ranks of sitting judges, whose names inevitably could not appear on a list like this.
The Conrad Black convictions have provided ample fodder for the press up here in Canada. After all, Lord Black is our native son who gave up his citizenship to take a seat in the British House of Lords. But apart from the human interest dimension to this story, there are some troubling legal implications for corporate governance. (Ribstein and Kirkendall offer their thoughts on the subject.)
I offer three:
I. Tort/Crime/Market � What Purpose?
The real problem with Conrad Black�s conviction and other such cases is that ordinary breaches of fiduciary duties have been converted into criminal conduct. In the realm of civil law, however, many safeguards that have developed over the years in the civil domain are hauntingly absent in the criminal arena. The �business judgment rule� for example insulates directors from civil liability when they take procedural precautions such as consult experts and document the rationale behind their decisions (I am simplifying, of course, so see Bainbridge or Ribstein for more on this). Recall that when Jamie Olis tried to use this argument (WSJ$)in his criminal case, namely that he relied on legal and accounting advice at Dynegy assuring him that the booking of loans as revenues was a valid accounting technique, he was found guilty and (initially) sentenced to 24 years! The sentence was based on a miscalculated notion of damages, again, something that would never have happened were this case in the civil litigation system. Olis� inability to raise adequate legal fees while the Feds had unlimited resources to pursue this and other cases is another imbalance in the criminal system (that some judges are trying to rectify as in the KPMG saga).
From The Recorder, in California:
When Los Angeles-based Thelen Reid Brown Raysman & Steiner partner David Aronoff wants to oppose a class action, he routinely hires private investigators to probe pre-existing relationships between plaintiffs and their lawyers, or the possibility that plaintiffs had been improperly solicited. His line of attack often works -- as recently when a federal judge issued a scathing ruling refusing to certify a consumer class in California. Even so, Aronoff's approach hasn't been widely adopted by the defense bar.
The celebrated success mentioned came in a case against vacuum cleaner maker Oreck, in which Aronoff demonstrated that a class representative had been recruited through an ad in the San Francisco Bay Guardian and had met his lawyer in person only the day before the deposition; Judge Marilyn Hall Patel refused to certify the class, making scathing reference to the "plaintiff's undeniable and overwhelming ignorance" regarding the nature of the action. "It is clear from the record that plaintiff's counsel, and not plaintiff, is the driving force behind this action." The plaintiff's firm, Long Beach-based Westrup Klick, says it did nothing wrong. (Lattman, CalBizLit, via Ted at Overlawyered). And more recently the Madison County Record has run an interview with Aronoff in which he cites details of some other cases in which his investigations have shown fakery or collusion in the selection of class representatives.
I would like to thank Walter Olson for giving me this opportunity to guest blog here for the next week. I am (and have been for the last four years) an Assistant Professor of Law at the University of Alberta, where I also maintain and post on our newly founded blog. I had the good fortune of attending George Mason Law School, where I obtained my JD (more on me at my CV; my website; my SSRN papers). You may also recall my discussion with PoL blogger Larry Ribstein on Short-selling Plaintiffs. Now that I am done with the self-promotion, I will start blogging.
During the next few days, I hope to offer some more thoughts on the Conrad Black trial, product liability class actions, and other items in the news.
As if to confirm the accuracy of the Harris Poll conducted on behalf of the U.S. Chamber Institute for Legal Reform naming West Virginia as the worst litigation environment to do business in, the West Virginia Supreme Court issued a fundamentally dishonest 3-2 decision announcing that it would be the only state to refuse to apply the learned intermediary doctrine.
As the Fifth Circuit stated in Reyes v. Wyeth Labs., 498 F.2d 1264, 1276 (5th Cir. 1974),
Prescription drugs are likely to be complex medicines, esoteric in formula and varied in effect. As a medical expert, the prescribing physician can take into account the propensities of the drug, as well as the susceptibilities of his patient. His is the task of weighing the benefits of any medication against its potential dangers. The choice he makes is an informed one, an individualized medical judgment bottomed on a knowledge of both patient and palliative. Pharmaceutical companies then, who must warn ultimate purchasers of dangers inherent in patent drugs sold over the counter, in selling prescription drugs are required to warn only the prescribing physician, who acts as a �learned intermediary� between manufacturer and consumer.
Beck and Herrmann have an impressive list of precedent of who has adopted the learned intermediary rule, a devastating critique of the West Virginia court's reasoning, and a defense of the learned intermediary rule.
Only one other court has used the excuse of the existence of direct-to-consumer advertising to justify so much as narrowing the learned intermediary rule. It, too, was dishonest, inventing a judicial exception to a statutory learned intermediary rule, NJPLA. L. 1987, c. 197, � 4. Perez v. Wyeth Laboratories, Inc., 734 A.2d 1245 (N.J. 1999). Given the benefits of direct-to-consumer advertising, these sorts of decisions are once again an example of how trial lawyers and the judges who aid and abet them are hurting consumers.
- Where a case settles quickly, is a big contingency fee reasonable? [Nebraska Supreme Court, Hauptman, O'Brien v. Turco (PDF) via Sipple]
- Kentucky is one of only four states whose lawyers aren't obliged to report misconduct by other attorneys or judges, and fen-phen scandal isn't going to change that [Courier-Journal]
- Critique of Manhattan attorney's would-be class action seeking to ban "Ladies' Nights" at bars [Adler & Somin @ Volokh; Coleman & more at Overlawyered]
- Lawyers want $58 billion-plus from ExxonMobil, other defendants over Greenpoint, Brooklyn underground spill [New York mag]
- Los Angeles archdiocese in record $660 million deal to settle sex abuse claims [Bainbridge]
- In the time it takes to get dressed, you could have filed a wage-hour suit against your employer over the time it takes to get dressed [NLJ]
They remain at relatively low levels for the second year in a row, reports Stanford's securities law clearinghouse (PDF). Prof. Grundfest offers two theories, not mutually exclusive: fewer frauds (real or portrayable as such) by management, and a stock market that has generally been strong with low volatility, depriving the bar of the sudden price drops that are its bread and butter (PDF of press release).
Some poor people accused of federal crimes are represented by full-time federal public defenders who earn salaries, others by court-appointed lawyers who bill by the hour. ...
... [A] study concludes that lawyers paid by the hour are less qualified and let cases drag on even as they achieve worse results for their clients, including sentences that average eight months longer. Appointed lawyers also cost taxpayers $61 million a year more than salaried public defenders would.
(Adam Liptak, NY Times, Jul. 13).
Kevin Lacroix of D&O Diary nominates them as the flavor of the year in financial litigation:
The most obvious center of concern [as to legal risk exposure] are companies in the subprime lending and mortgage backed securities industries. But investors owning the subprime mortgage-related financial instruments also carry a significant risk profile. This investor group includes not only hedge funds (and hedge fund investors), insurance companies, pension funds (and pension fund beneficiaries), and commercial banks, but others whose balance sheets reflect significant asset values from mortgage backed securities. This latter group could include some surprising players, as many companies (for example, high tech companies) that have carried significant cash or cash investments on their balance sheets may have invested in mortgage-backed securities to boost returns.
At George Lenard's site, guest author Consuela Pinto contributes a substantial run-down on this hot-button issue in employment law.
MindingTheCampus.com is a website from the Manhattan Institute's newly founded Center for the American University, and covers higher education issues, including some of the legal angles arising therefrom. The Race to the Bottom is a multi-contributor "professional-faculty-student collaboration" on corporate and securities law which will, it seems not-premature to assume, stand in contrast to much of our own thinking on those subjects. Jeff Lewis, known as the author of the longstanding Southern California Law Blog, has closed that site and replaced it with one called Nota Bene. And from Canada, the newly formed University of Alberta law faculty blog includes contributions from Prof. Moin Yahya, whose work is familiar to many readers of this site, as well as his colleagues.
Another bonbon from Robert F. Kennedy, Jr., speaking at the Live Earth concerts (via Surber):
�Get rid of all these rotten politicians that we have in Washington, who are nothing more than corporate toadies. This is treason. And we need to start treating them as traitors.�
More: Okay, you probably knew already about his wind farm hypocrisy, but did you know that he's also making money from that latest of environmental bugaboos, bottled water?
According to the Pittsburgh Tribune-Review (via KevinMD), physician Melanie Richman drives more than two hours each way from her Pennsylvania home to work at a Youngstown, Ohio emergency room. A major reason, she says: the chance to save thousands of dollars a year in malpractice insurance costs, which are markedly lower in Ohio than in her home state.
- An L.A. county hospital's emergency room is accused of gross lapses in care, which must be the fault of the state's med-mal reforms 32 years ago. Right? Anyone with me? [InjuryBoard]
- Gasoline expands and contracts with the temperature outside, which means mileage is a bit worse in summer and a bit better in winter; "hot fuel" class actions now seek damages over the former (with of course no offset for the latter) [USA Today]
- According to plaintiff's expert, at least, Coca-Cola's revenue-inflating bookkeeping ploys cost shareholders $1.3 billion [Fulton County Daily Report]
- Ex-clerks seem to view Judge Dolores Sloviter as Third Circuit's answer to Kathleen Battle [Rapoport][a contrasting view]
- Trial lawyers in Oregon gear up for legislative attack on state's eight-year statute of repose on product liability claims, which is shorter than other states' [Insurance Journal]
- What's the worst treaty? Law of the Sea [Rabkin/Goldsmith, AEI; other views via Adler]
Other things being equal, there might be a decent case for adopting a more "European" approach to financial regulation in which, rather than promulgating formalistic and rigid rules, agencies announced outcome-oriented principles to guide regulated entities in how to behave. But one big problem with the idea -- argues AEI's Peter Wallison in the Financial Times -- is that our legal methods of enforcement are so different from those that prevail in Europe:
A principles-based regime may work if the only enforcer is the regulator and if the regulator -- like the FSA [Financial Services Authority] -- is more interested in achieving compliance than imposing fines and penalties. But public companies and securities companies are subject to civil enforcement actions by the SEC, criminal enforcement by U.S. attorneys, criminal and civil enforcement by state attorneys-general and private class actions in both state and federal courts. Banks and insurance companies are subject to essentially the same array of public and private enforcers. In this unwieldy and enforcement-oriented structure, a principles-based system would open new doors to litigation and liability.
Nor can a compliance-oriented regime like the FSA's work in the presence of the private class action system that continues to flourish in the U.S. By definition, private class actions are outside the range of government or regulatory policy. The courts and Congress have found it almost impossible to restrict the scope and cost of private class actions under a single SEC rule -- the famous 10b-5. It is not hard to imagine the mischief that might be done by class action lawyers if they were gifted with a whole series of SEC rules that were similarly broad and malleable.
This raises the final point. A rules-based system, whether for accounting or regulation, has a safe harbour effect. If one complies with the rules there is some degree of absolution. This seems essential in the litigious environment of the U.S. Certainly, as in the case of Enron, rules-based regimes are subject to abuse by those who use the rules as a roadmap for deception, but given the political and legal system that prevails today in the U.S., most U.S. companies would probably prefer a fully transparent and certain system of rules.
Carter Wood at the NAM blog Shop Floor shares our longstanding fascination with the list of litigation groups (currently 77 of them) sponsored for members by the American Association for Justice, formerly the Association of Trial Lawyers of America, of "kitten-fish" fame. It can be viewed as a rough target list of which products and industries are currently getting the most attention from the plaintiff's bar. For urbanites who may wonder what "climbers and other tree stands" are, by the way, they're things hunters use.
Now this is the sort of thing likely to be of interest to some of our readers: the philanthropic Searle Freedom Trust concentrates on U.S. domestic policy and "aims to foster research and encourage public policies that promote individual freedom and economic liberty". It
seeks to pursue its mission through new media and invites interested parties to submit applications for grants of up to $250,000. All ideas are welcome and will receive consideration. ...
Proposals that may hold particular interest include fellowships for bloggers who focus on government spending, tort reform, or problems in higher education; projects that encourage emerging filmmakers and video producers and help them develop their talent; and podcasting.
Proposals must be submitted by October 1 and are being handled by John J. Miller, for whose bona fides we can vouch.
Yesterday, [the MilbergWeissJustice.com] webmaster discreetly deleted from the site the statement that Bershad�s lawyer had made for him on July 16, 2006, when he suggested that prosecutors brought the case as retribution for a life of �standing up for the powerless,� called the indictment �a disgrace,� and denounced the charges as �utterly baseless.�
The surge in applications from out-of-state doctors has led to a serious backlog at the Texas Medical Board. (David Hendricks, San Antonio Express-News; N.C.P.A.)(via Kevin MD). "Officials said many of the relocating physicians are filling shortages in areas such as Beaumont, where trauma patients previously had to be flown [to] other cities because there weren't enough surgeons to treat them," reports the Houston Chronicle. Ron Coleman of Likelihood of Confusion, who's guestblogging this week at Overlawyered, has some discussion.
Critical pieces in Forbes and in Canada's Financial Post about a curious lawsuit launched by the government of Russia against Bank of New York over its role in a notorious money-laundering scheme eight years ago. As Reuters summarizes the background, a former executive at the bank and her husband pleaded guilty in 2000 to a conspiracy to move $7 billion from Russian sources out of the country through money orders drawn on the bank. Per the WSJ's account (sub-only), "Much of the money was from Russian exporters who avoided paying Russian customs duties." A year and a half ago, the bank agreed to pay $38 million and overhaul its anti-fraud safeguards to end two U.S. criminal investigations.
The Russian government sued Bank of New York in May, and here's where things get curiouser: it sued in a Moscow court, but has hired American plaintiff's lawyers -- Podhurst Orseck of Miami -- who say (per the WSJ) that "the damages sought are calculated according to U.S. law." And that apparently means the application of treble-damage principles to the entire $7 billion that got sluiced through the back channels, adding up to a very cool $22.5 billion. Per the Financial Post piece, by Peter Foster, "It seems enterprising U.S. lawyers may have approached the Russian Federation and suggested applying U.S. triple damage laws" to produce the whopping damages demand.
The WSJ reports that in its statement, "Bank of New York said it had been approached by lawyers 'purporting to represent' the Russian government 'who claimed to be able to dispose of the matter for a tiny fraction of the amount now claimed.'" The executive at the center of the money-laundering scheme and her husband, incidentally, both of whom pleaded guilty at the time, are assisting the Russian government in the suit.
We've long been critical of state attorneys general hiring plaintiffs' lawyers on contingency fees. In today's New York Times, Adam Liptak writes a fair-minded investigative piece that implicitly agrees, at least on my reading:
In courts around the nation, in cases involving tobacco, lead paint and guns, state attorneys general have been outsourcing government power to private lawyers. Business groups hate the development, in part because they would rather not litigate against sophisticated plaintiffs� lawyers on a level legal playing field.
But the business groups make broader points as well.
�When someone who is exercising the state�s power stands to gain from that, it violates due process,� said Jay T. Jorgensen, a lawyer for one of the chicken companies. �If you got pulled over by a cop and the cop made more money if he gave you a ticket and less if he didn�t, no one would think that was fair.�
There is also the question of whether hiring lawyers by promising them a percentage of what they win � on contingency, in the legal jargon � violates the separation of powers.
It is, after all, the legislature�s job to decide how to spend the state�s money. But an attorney general who promises a percentage of a recovery to a law firm is giving away state money without legislative approval.
�These arrangements rob the legislature of its right to control what is in the public interest,� said Paul M. Pohl, who represents defendants in lead paint suits in which governments are represented by lawyers who will be paid a percentage of what they win. �And the last people you want to have to decide what good public policy in your state is are contingency-fee lawyers from out of state. They�re like groups of locusts looking for the next wheat field.�
That perspective seems to be gaining traction.
Let's only hope so. The entire article is available here, at Times$elect.
Further update: the WSJ has the plea agreement and the accompanying statement. Of particular interest is the admission that the slush fund used for paying kickbacks was funded by top Milberg Weiss partners in amounts "approximately proportionate" to their partnership shares: this is a strong indication that the indictment of Milberg Weiss is not the sort of Arthur-Andersen-type overreach of which many conservatives expressed concern, but, rather, an appropriate use of the criminal justice system to pursue an organization that was acting illegally. The WSJ reports ($) that Bershad will face fines and forfeitures totalling $8 million; it's unclear whether he will avoid jail time.
Some liberal lawprofs, along with writers at the New York Times and elsewhere who tend to channel their views, have been beating the drums for the formation of a popular movement to demand the appointment and confirmation of judges more disposed toward liberal activism than, say, Roberts and Alito. Ann Althouse thinks she's spotted the flaw in their reasoning:
This grand vision for a Court that would expansively and actively enforce rights will be seen by present day voters as a political proposal. If people today really want that vision, they can get it from the political branches. They don't need a reactivated liberal Court.
The liberal lawprofs' dream seems to be that you could get people to believe that the expansive vision of rights is the proper way to do constitutional interpretation and they'd be willing to go along with that even if they didn't want these rights enough to support enacting them into law through statutes. But what are the chances that people today would allow liberal academics to convince them of such a thing?
P.S. And this priceless Orin Kerr summary of the formula for an Adam Cohen commentary: "to condemn conservative decisions striking down legislation as outrageous activism and conservative decisions upholding legislation as abandonment of the judicial function, with as much discussion of Jim Crow and Lochner as will fit in an op-ed space." Ilya Somin tag-teams on the same piece.
- Jury-infallibility buffs, call your office: new study finds erroneous verdicts in one in six criminal cases, with wrongful convictions more prevalent than mistaken acquittals [forthcoming Northwestern study in JELS; draft article by Bruce Spencer in PDF format via Cernovich]
- Breaking a butterfly on the wheel dept.: Martin Grace takes up a silly Center for Justice and Democracy paper on the effects of litigation reform and reanalyzes its data in hopes of making it less silly [RiskProf]
- Pay up for "arbitrariness": California's ultra-liberal Unruh Act creates even more rights to sue than you may have realized [CalBizLit]
- Revisionism on the Tuskegee study? [Heriot on Spiked-Online 2004]
- Still seems weird that big law firms would pay for the privilege of doing pro bono work [Boston Herald edit; earlier]
The outrageous $1.2 billion Avery v. State Farm class action verdict, it will be recalled, penalized the insurer for its supposed fraud in using generic rather than original-manufacturer parts in fixing crash damage to cars, even though such a practice was widely endorsed by consumer advocates and state insurance commissions. The Illinois Supreme Court eventually reversed the verdict, but, as readers of this website know, that has hardly put an end to the litigation: lawyers could continue trying their luck against other carriers since the practice has been so common across the auto insurance field. In the latest of these, a Missouri state judge last month threw out (Associated Press; K.C. Star reprinted at U.S. Chamber) a jury's award of $17 million in a class action filed in that state against American Family Insurance. Trial lawyers continue to roll the dice elsewhere.
Incidentally, this article reports on a curious addendum to the Avery verdict: small businesses that distribute aftermarket parts were said to be "devastated" by insurers' reluctance to go on using them because of the courtroom hazards, and one of them in Fresno, Calif. reportedly tried to involve itself in the Avery litigation.
Not only can doctors' peer-review deliberations be laid open to the scrutiny of hostile lawyers in medical malpractice lawsuits, but now the Eleventh Circuit has ruled that they can be exposed to such scrutiny in employment-discrimination lawsuits too. "[E]ven if read narrowly, the case will lead to more lawsuits and a decrease in doctors' willingness to sit on peer review committees, said [Atlanta lawyer] Paul R. Koster, who represents the hospital sued in the case."
New Hampshire governor John Lynch has vetoed a trial-lawyer-sponsored bill that would have exposed multiple defendants to greater shares of each others' responsibility for an injury. The bill was sponsored by Sen. David Gottesman, D-Nashua and himself a trial lawyer; "The trial lawyers lobby helped financially elect the first Democratically controlled Legislature in more than a century." (Nashua Telegraph, Union Leader). The bill "would have allowed the jury to allocate fault only between those that remain parties to the lawsuit at the conclusion of the trial. It would have prohibited the jury from apportioning fault to those who carry significant degrees of fault for the plaintiff's injuries, but who either settled claims prior to conclusion of the lawsuit, or who are not parties to a particular lawsuit for other reasons." (Insurance Journal).
Perhaps to the disappointment of some of his lawyerly supporters, New York Governor Eliot Spitzer seems to be among those who recognize that the upward spiral in the cost of insuring doctors against malpractice is not just a figment of someone's imagination. His administration has just approved an average 14 percent rate hike, which will bring doctors' payouts to some remarkably high levels:
Offering a sample of what doctors will now pay, Ms. [Lynda] Adams of the Medical Society of the State of New York] says a Long Island neurosurgeon's insurance bill will be $309,000, a Brooklyn obstetrician's plan will cost $173,000 and a Westchester orthopedic surgeon's coverage will cost $108,679.
Spitzer and insurance commissioner Eric Dinallo have also appointed a commission to look into remedies for the crisis. E.J. MacMahon, of the Manhattan Institute's Empire Center for New York State Policy, has some advice for the panel (and cites the work of the Institute's Center for Legal Policy).
That's what Ohio Attorney General and YouTube traffic generator Marc Dann says his office is in effect becoming, according to this Cleveland Plain Dealer report (via Genova). The quote above, it should be noted, is the paraphrase the Plain Dealer's Sheryl Harris gives in her column, and not (so far as we know) a verbatim quote from Dann himself.
- Great minds think alike dept.: WSJ editorialists hail Judge Komar's order disqualifying contingency-fee outside lawyers for California counties [sub-only; my May op-ed for them]
- Bradley Smith on campaign finance and free speech in wake of Wisconsin Right to Life [City Journal]
- Yet more on U.S. class-actioneers' hoped-for expansion to Europe [Legal Times]
- Testimony to his fortitude: while at Harvard, Obama survived exposure to world-class mystifications from Prof. Tribe [Shapiro, NYSun]
- Go away, chewy-Starburst-candy lawyer, you're giving all of us injury attorneys a bad name [Day on Torts; Overlawyered]
Anthony Sebok's Findlaw column on the Pearson pants suit cites Overlawyered and repeats two points regular readers of Overlawyered and Point of Law have seen before:
- Meritless cases often settle for nuisance value, thus making them profitable to bring;
- Rule 11, as currently constituted, "has proven to be a very toothless weapon against abusive plaintiffs" and "does not effectively protect defendants from frivolous, or even, in some cases, fraudulent suits."
Yet Sebok concludes that there is no epidemic of fraudulent litigation. I suppose it depends on one's definition of "epidemic" and "fraudulent"; as we've noted before, Bill Lerach successfully swiped several billion dollars in nuisance settlements bringing meritless Enron litigation, helped by an erroneous district-court class certification. (Such erroneous class certifications helped make Madison County a judicial hellhole.) Sebok acknowledges that "lawyer-driven" cases where plaintiffs act as their own attorneys might merit loser-pays rules to deter meritless lawsuits that would be cheaper to settle than fight, but what makes most class-action litigation any less "lawyer-driven" such that they should be subject to different rules?
Famed Texas trial lawyer Stephen Susman, in the Dallas Morning News (via WSJ law blog):�You�re going to see some really serious exposure on the part of companies that are emitting CO2.� And: �I can�t say for sure it�s going to be as big as the tobacco settlements, but then again it may even be bigger.�
The Gray Lady's coverage of the health-privacy law leans heavily toward the "medical providers are overreacting, they just don't realize how easy they have it" school of thought, but at least it does air some of the law's many unintended consequences, which is better than no coverage at all. Further discussion: MedRants.
Texas Lawyer reports that Houston trial lawyer Warren Todd Hoeffner has been named in a federal indictment that alleges Hoeffner paid more than $3 million in bribes to two former claims adjusters for The Hartford Insurance Co. in connection with $34 million in settlements of silica-related suits.
Hoeffner's firm represented hundreds who claimed they had silicosis or other silica-related diseases.
The indictment notes that Hoeffner received over $5 million in attorney fees from the settlements. So he was apparently sharing 50% of his corrupt booty with his accomplices.
I am off on a 2500 mile solo motorcycle trip, so won't be posting for awhile. Happy 4th to all POL readers!
This particular muckraking report, in the news-side W$J (WSJ blog version), goes after a university-based expert who, while consulting with defendants, has published studies tending to exonerate companies sued over workplace hearing loss among firefighters, miners, railroad workers, etc. And of course mirror-image sorts of conflicts on the plaintiff's side are accepted as standard practice as well. Too bad the WSJ didn't delve into the question of what sorts of reforms -- such as wider court selection of experts -- might hold out hope of overcoming the temptations toward scientific expert partisanship.
The Michigan Chamber of Commerce has just put out a professionally produced 32-page booklet (PDF) listing some of the considerable progress that has been made in litigation reform in my native state, some of the areas that are under counterattack from the other side and need defending, and some of the work that remains to be done.
- Mel Weiss and Bill Lerach said to have turned down plea deals that would require prison time [L.A. & S.F. Daily Journals via WSJ Law Blog]
- How "representative" was Pearson pants suit? [Ted @ OL]
- Seems kinda late for Miss. AG Jim Hood to decide outside counsel should only be paid $150/hr. [Salter, Clarion-Ledger]
- Lawprof urges new wave of suits over lack of pharmaceutical efficacy, not just lack of safety; claims drugmakers' "business has not suffered much adversity in court" [Anita Bernstein, SSRN, via Childs]
- Woman sues Starburst candy maker, says product "too chewy" [also OL, where Christian Schneider of Wisconsin Policy Research Institute has been guestblogging]
- "Sicko is not a documentary; it's a cartoon, without animation" [Gratzer @ City Journal]