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August 2007 Archives

Insurers took a few hard knocks at the federal trial court level in Katrina litigation, but on appeal before the U.S. Fifth Circuit Court of Appeals, they have seen much better results. The latest example is Leonard v. Nationwide, a case of great importance where the Fifth Circuit ruled yesterday in favor of Nationwide and declared a key provision in its property insurance contracts -- the so-called anti-concurrent cause language -- unambiguous and enforceable. Because almost all insurers draft their property policies to include such language -- there are a few exceptions -- the industry was watching this case very closely. The result, however, is not much of a surprise: anti-concurrent cause language has widely been upheld.

It was not upheld, however, in the bench trial in Mississippi last year before Judge L.T. Senter Jr. The trial result was mostly OK for Nationwide: its contractual exclusion for flood damages was upheld, Senter basically agreed with the relatively small amount of covered wind damage the insurer paid to Paul and Julie Leonard, and Judge Senter said there were no misrepresentations or other factors that would justify reforming the contract, or in other words, altering the written terms to match a purported prior oral agreement.

However, Judge Senter also said that the insurance policy's anti-concurrent cause provision was ambiguous. Nationwide could not accept this, and had to appeal -- anti-concurrent cause provisions have been a feature of many property insurance policies for more than 20 years and were introduced to contractually prevent what insurers saw as judicial activism that stuck them with losses they never contemplated. As I have explained at great length in numerous writings, including this post today on the Leonard case at Insurance Coverage Law Blog, Senter did not need to rule on the anti-concurrent provisions of the contract at all, because the damage to the Leonard house did not involve concurrent multiple causes of the same damage: instead, the wind and the flood were two single causes of different damage. Single-force causation does not implicate the anti-concurrent cause language for an obvious reason: concurrent causes must be multiple causes, and a cause can't be concurrent with itself. Analysis of causation in property insurance contracts is tricky business, and taking off down the wrong path almost always leads to wrong results. The Fifth Circuit basically upheld Senter's rulings, except it reversed his verdict on the anti-concurrent language. Unfortunately, the Fifth Circuit, like Judge Senter, also said more than it needed to, and its own causation analysis was flawed and probably will lead to some confusion further down the road. The Leonards' attorney, of course, was noted tort lawyer Dickie Scruggs, who, true to form, immediately began spinning. He claims the case will be appealed to the U.S. Supreme Court, which is not much of a threat. The court will have no interest whatsoever in taking a case involving the interpretation of state insurance law.

In Defense of Off-Label Drug Use

As anyone who has investigated the subject seriously knows, off-label drug use (physicians' prescribing of a drug for a use other than the one for which the FDA has approved the drug's manufacture) saves thousands of lives. In fact, for many types of cancer, more than 50% of drug use is off-label. Off-label use is perfectly legal, though it infuriates some FDA mavens who regret their loss of control. Now, as the New Jersey Law Journal reports, Schering Plough is moving to dismiss a class-action lawsuit that claims a private right of action for the firm's daring to promote off-label testing. The defense should allow the issue of off-label use, as well as Pharma's free speech rights, to come to the fore.

Some shameless self-promotion: I discuss this issue at length in a law review article: �Loosening the Food and Drug Administration�s Drug Certification Monopoly: Implications for Tort Law and Consumer Welfare�, 4 George Mason Law Review 457 (1996).

Corporate governance law

The University of Denver's Sturm College of Law has assembled a large online resource collection on the subject.

New York orthopedic surgeons

The practice of orthopedic surgery is currently in crisis. ... Our recent survey shows that 70.2 percent refer high-risk patients to other specialists and are limiting their scope of practice. This hurts the most acutely ill patients.

-- letter to the editor, Albany Times-Union from Dr. James E. Striker, president of the New York State Society of Orthopaedic Surgeons (via KevinMD).

Curious doings in the Marshall, Texas rocket docket, as reported by the New York Sun's Josh Gerstein:

An attorney who is the son of a federal judge in Texas has withdrawn from a class action lawsuit over allegedly fast-running odometers after The New York Sun raised questions about the propriety of his involvement.

T. John Ward Jr. of Longview, Texas, made the request to back out of the case over Nissan automobiles on Monday, shortly after the Sun asked him for an interview and spoke with one of his co-counsel about whether the case might benefit from rulings by Mr. Ward's father, Judge T. John Ward, who is presiding over a nearly identical case against Honda in the same judicial district.

For a critical look at the odometer suits, follow this link and this one.

Edwards Watch: Do as I say...

While much of the political news attention has been focused on Idaho Senator Larry Craig's apparent hypocrisy, Glenn Reynolds and Professor Bainbridge note the gross hypocrisy in John Edwards' calling for a ban on SUVs. The guy not only has a 28,000 square foot estate, but as Glenn shows in a linked photo, that estate is surrounded by SUVs.

To which we might add that Edwards' campaign dished out $430,000 in the first half of the year flying around the country in the private jet of his friend, asbestos tort kingpin Fred Baron.

You probably realized already that stray remarks about age were a good way to get into deep trouble in subsequent job suits. But did you know that negative remarks about an employee's accent are dangerous as well?

Innkeepers' negligent security, cont'd

Following on to Deborah La Fetra's discussion the other week is this recent Pennsylvania case raising the question of whether leaving a fraternity in possession of an unsupervised motel room should put an innkeeper on notice of potential sexual assault. One of the three judges dissented. (Hat tip reader V.R.)

This may also be the place to mention my own nominee for the Innkeeper's Negligent Security Hall of Fame, a case that arose from a shooting in the parking lot of a Hialeah, Fla. Ramada Inn, and which was summarized here and here.

Lerach retires; nearing a plea deal?

Law.com reports in its summary:

Renowned plaintiffs attorney William Lerach, lead partner at Lerach Coughlin, announced Tuesday he's stepping down from the firm he started when he split off the West Coast offices of what is now Milberg Weiss. Lerach said he's planning to take some time off. That could include going to prison, or at least the U.S. Attorney's Office. Lerach is said to be nearing a deal with federal prosecutors related to legally questionable payments Milberg Weiss made to its lead plaintiffs and a former expert witness.

The WSJ Law Blog similarly reports that "Lerach has not been charged, but he is in advanced talks with prosecutors on a plea deal that could be announced in September and involve serving prison time, according to two people familiar with the investigation." It also has Lerach's departure memo to colleagues at the law firm that will now be known as Coughlin Stoia Geller Rudman & Robbins. Earlier Point of Law coverage of Lerach is here.

Liability reforms of two years ago are credited (more).

It's fabulous. Go read it right now. (Via Adam Liptak in the Times; see also Ted yesterday at OL). Judge Jacobs, the chief judge of the Second Circuit, delivered the remarks as a lecture at Fordham Law last November.

Almost the entire speech consists of quotable passages, but here is one of the most striking:

Unless we [judges] make an effort, we can become disconnected from the values and perceptions of the larger public. The more we obey the constraints that isolate us within a circle of legal culture, the more we are left to be judged, evaluated, and flattered (or not) by the nourishing, attentive, knowledgeable circle of lawyers, law students, and professors � which (to make matters worse) includes often the most charming and scintillating people in the community. The mystique of the judicial process, and its power and pretension in this country, is pretty much all based on the idea of neutrality. If that idea is deflated, by puncture or slow leak, it is bad for judges and for the larger community. Our work is subject to hostile critiques; and, if we do not acknowledge and restrain our bias, others will notice, and forces will marshal to rein us in.

These critiques are often classified as attacks on judicial independence, and resisted as interference, or dismissed as ignorant. Thus, a great theme of the legal profession is emphatic support for judicial independence. That is a good thing, and I enjoy my independence as much as the next judge; but judges should consider and appreciate that one effect (maybe a motive) of the bar�s avid support of judicial independence is to make judges �independent� of many influences (good and bad) that compete with the dominant influence over judges that is exerted by fellow lawyers, bar associations, and law professors. This support of judicial power by the bar may be a pillar of law, but it can also operate as group loyalty, the protection of turf, or a reciprocal commitment to the ascendency of judges and lawyers.

Florida trial-lawyer priorities

Marshall, Texas: save our special court

Some companies dragged into patent suits by forum-shopping plaintiffs have denounced the East Texas community as a defendants' nightmare, but to others it's Home Sweet Hellhole:

State Rep. Bryan Hughes (R-Mineola) urges local residents to join their national legislators in opposing patent legislation that would practically shut down Marshall's federal court.

Hughes met last week with city and county officials and those concerned with downtown development for a strategy planning session at Greater Marshall Chamber of Commerce.

The meeting was called after The Marshall News Messenger quoted local lawyers as predicting an amendment included in the Patent Reform Act of 2007 would reduce by 95 percent the number of intellectual properties cases heard here in U.S. District Court.

Proposed by U.S. Rep. Zoe Lofgren of California and U.S. Sen. Arlen Specter of Pennsylvania, the amendment limits venue in most patent cases to ...New York, Massachusetts and California.

The article, in the Marshall News Messenger, quotes Rep. Hughes as saying that Sen. John Cornyn and U.S. Rep. Louie Gohmert "are standing up for us." For more on the patent legislation, see the Jones Day site.

From $30M to $2M to 750K

The Supreme Court's directive to keep punitive damages within a single-digit multiplier of compensatories has borne fruit in a Third Circuit decision.

In the suit, a Pennsylvania physical therapy firm claimed that a Virginia nursing home management company had lured two Philly-area nursing homees to terminate its contract with the therapy firm, and had hired away five of its therapists afterwards. The resulting tortious interference claim has taken seven years now, with two trials and two appeals. A federal jury originally awarded $685K in compensatory damages and $30 million in punitives. The compensatory amount had earlier been reduced to $109,000 by the 3rd Circuit, and the amount of punitives that was allowed was in dispute. The district judge on remand this to $2 million, claiming that the 19:1 "is not constitutionally excessive given the facts of this case -- including the wealth of [the] defendant and the state's interest in punishment and deterrence.". The 3rd Circuit Court of Appeals had little sympathy for this reasoning, reducing the punitives award further, to $750,000, a 7:1 ratio.

Plaintiffs' lawyers' fees will likely be around $270K for seven years' worth of intensive litigation, and this will hopefully chill others similarly placed not to spin the punitives roulette wheel.

Municipal lead suits destined to fade?

National Law Journal's Amanda Bronstad suggests as much in a piece that quotes our own Jim Copland and cites recent setbacks for city and county suits in New Jersey, Wisconsin, Missouri and Ohio.

"In the overall scope, these were devastating blows," said Ronald Scott, a partner at Houston-based Bracewell & Giuliani who represented the city of St. Louis in the Missouri case. The rulings mean "the chances of winning in other places are very slim."

On the other hand, Jane Genova is reminded of some headlines only a few months ago that were very different in tone, and suggests that recent developments in Rhode Island, California and Wisconsin make complacency perilous on the part of the defense.

Around the web, August 27

  • Sorry, forum-shoppers, says New Jersey appeals court, but British Vioxx users have to sue Merck in Britain [NJLJ]

  • "As a general matter, we don't work with plaintiffs lawyers on a contingency fee." -- Maine assistant AG Peter LaFond, interviewed at WSJ Law Blog.

  • A no-liability Bermuda Triangle on the Montana and Idaho edges of Yellowstone Park? [Casper Star-Tribune]

  • Well, this should be fun: comedian/NYT business columnist/Milberg expert/bete noire of this site Ben Stein is narrator of a new movie promoting "Intelligent Design" [Orac, Panda's Thumb]

  • Outsourcing the picket line, cont'd: Miami carpenters' union said to pay only $20/day to homeless picketer, not exactly "living wage" [Miami New Times; earlier here, here, etc.]

  • "As much as I believe in the jury system, I routinely work to stay out of it -- and so does every good trial lawyer, at least part of the time." [Reed]

  • Prosecutors resubmit plea deal for disbarred Miami asbestos attorney/scamster Louis Robles [Daily Business Review]

  • More on defensive medicine and emergency room referrals [AngryDoc via KevinMD]

"Enforcement of the Clean Water Act"

Federalist Society is sponsoring a panel discussion Thursday afternoon, Sept. 6, on Capitol Hill, with panelists Prof. Jonathan Adler, Case Western; M. Reed Hopper, Pacific Legal Foundation; Prof. Patrick Parenteau, Vermont Law School; and Prof. Robert Percival, University of Maryland School of Law. Description:

In the 2006 plurality decision in Rapanos v. United States, the Supreme Court limited the scope of the Clean Water Act's protection of "navigable waters" to only include those bodies of water that are "permanent, standing or continuously flowing," and thus did not apply to channels through which water flows only some of the time. In the wake of the Rapanos decision, Rep. James Oberstar (MN) has sponsored the Clean Water Restoration Act of 2007 that would "fix the Clean Water Act," according to the Congressman's website. This legislation would allow the Environmental Protection Agency and the U.S. Army Corps of Engineers to enforce the Clean Water Act on wetlands, streams and ponds that are not part of a major "navigable" waterway. Please join us as a panel of experts discusses these issues.

Full details here.

California municipal liability costs

A survey (PDF) by Citizens Against Lawsuit Abuse finds that in fiscal 2005 the governments of California's four largest counties paid out $79.2 million in litigation costs, consisting of $38.4 million in verdicts and settlements and $44.9 million for outside legal fees. Three of the state's largest cities (Los Angeles, San Diego, Sacramento) paid out $49.1 million in the same year, consisting of $42.8 million in verdicts and settlements and $6.3 million on outside counsel. The numbers are small compared with the distinctive plight of New York City, with its more-than-half-billion yearly outlay, but are by no means trivial as a drag on public budgets nonetheless. Among control strategies detailed in the final pages of the paper: Los Angeles is deputizing more risk managers to guide city agencies, and Sacramento is pursuing a policy of greater transparency in city litigation.

Romney on liability reform

The former Massachusetts governor endorses, among other reforms, more disclosure in contingency fee arrangements (via Childs)(disclaimer).

New at Overlawyered

Things you've missed if you haven't been following our sister site: Sixth Circuit joins trend against alcohol marketing suits; guestblogger Jason Barney has a couple of posts on Washington state's Insurance Fair Conduct Act, on the ballot as Referendum 67; Judge Weinstein refuses to dismiss NYC Mayor Bloomberg's gun suits; Ted on delusional pro se cases (more), the Stoneridge amicus, the high cost of document discovery, and a survey of Texas judges being trumpeted by the Litigation Lobby; and defensive medicine in EMS/paramedic practice.

"Workplace bullying" legislation

Advocates haven't let up their push, as witness these L.A. Times and (sub) Forbes accounts. Legal battles are inevitable over the subjective meaning of such projected offenses as "repeated infliction of verbal abuse" and "gratuitous sabotage � of a person's work performance," and Forbes's Daniel Fisher adduces another example where the outrage is even more in the eye of the beholder:

...what about the library director in Pueblo, Colo. who had the gall to hand out copies of Winning, the management guide by hard-charging former GE chief Jack Welch? Something called the Workplace Bullying Institute in Bellingham, Wash. thinks this was outrageous behavior. Given Welch's reputation for fostering "destructive competition among employees," its Web site says, the manager was clearly trying to "encourage bullying at the library." So, yes, sue that bastard library director for handing out books.

Earlier here.

Around the web, August 24

  • Whatever happened to statutes of limitation dept.: Iowa pays $925,000 to atone for cruel stuttering experiment carried out on kids in 1930s [Bernstein @ Volokh]

  • Saveri, Hagens Berman & Co. split $81.5 million in fees as DRAM microchip price fixing case settles for $325 million [The Recorder](& Legal Reader)

  • Lisa Rickard on U.S. Chamber's campaign calling attention to ATLA/AAJ name change [TownHall]

  • What is voir dire even for, if not to rid your jury panel of those pesky tort reform types? [Blawgletter]

  • New audio interviews with state senators Glenn Coffee (Okla.) and Charlie Ross (Miss.) on legal reform [AJP]

  • Off-label promotion by Lilly of psychiatric drug Zyprexa has loosed a swarm of maddened state AGs [Legal NewsLine]

  • If you expect to pocket a percentage referral for hooking your client up with another law firm, maybe it's better for you to, like, tell the client that's happening [Legal Intelligencer]

Over . . . Dale

Just short of two years from the date Hurricane Katrina made landfall in Mississippi, the storm claimed a political casualty: Mississippi Insurance Commissioner George Dale, who got on the wrong side of gajillionaire tort, asbestos, tobacco and insurance policyholder lawyer Dickie Scruggs and was defeated earlier this month by a Scruggs-backed and Scruggs-bankrolled candidate.

Scruggs, who was a driving force behind many of the thousands of Katrina insurance lawsuits in Mississippi, employed his usual style of treating litigation as having three components: law, public relations and politics. Dale, he believed, was too soft on insurance companies and stood in his way. Particularly galling to Scruggs, it appeared, was that Dale put together a deal with State Farm for the insurer to voluntarily review some 36,000 Katrina insurance claims, after a similar deal Scruggs had reached with the insurer to certify and settle a class action was shot down by federal judge L.T. Senter Jr. One might note that Scruggs and other lawyers in the Scruggs Katrina Group lost a big payday when the class action deal did not work.

Dale was serving his eighth term as insurance commissioner when Katrina hit. Before the storm, he planned to retire, but said he felt obligated to see the storm's aftermath through. Scruggs came after Dale hard. He called Dale "political toast" and took out a full-page ad in a Mississippi newspaper depicting Dale as a pig with lipstick, lounging in a beauty shop while State Farm dolled him up to fool the voters, a reference to Dale's acceptance of insurance company money to finance his campaign and his alleged coziness with insurers.

Here is a post I wrote about Dale's defeat in the Mississippi primary. Insurance commissioner is a position that has relatively little power and is one that, normally, few people care about -- what's the name of your state's insurance commissioner? -- but the Dale race attracted more votes than any other on the statewide ballot. Despite the fact the Coastal counties hardest hit by Katrina went against Dale in a big way, he came within a pig's whisker of pulling the race out.

While Katrina litigation has brought further success to Scruggs, he, like Dale, has not remained untouched. As a result of his involvement with the "whistleblower" Rigsby sisters, who took thousands of pages of documents from a State Farm contractor that they and Scruggs claimed showed bad faith Katrina settlement practices, Scruggs allegedly violated an injunction by federal judge William Acker, who appointed special prosecutors to bring charges of criminal contempt against Scruggs.

Just asking

Isn't there something a little counterintuitive in environmentalists' suing to block offshore Alaskan oil exploration on grounds it might disrupt Eskimos' hunting of whales?

Global warming and the state AGs

Mark Obbie of LawBeat (Carnegie Legal Reporting Program) finds that Tuesday's breathless New York Times piece by Alex Berenson on Vioxx settlements "screams 'scandal' and 'surprise' where it shouldn't", a problem worsened by the piece's above-the-fold Page One placement. The Times piece holds Merck up to withering criticism for refusing to settle Vioxx cases, but it's not until paragraph seven that readers learn that the company has in fact won most recent jury trials on the drug, and not until near the end of the piece that they get specific numbers: Merck has "won five of the last six cases and seven of the last nine, including one mistrial". You'd think that might put a won't-settle policy in a rather less scandalous light.

As Obbie points out, the situation at present is if anything typical of past mass tort episodes. "Big verdicts for plaintiffs almost never yield immediate riches. Cases always are appealed. Big awards always get chopped down. Defendants always drag their feet." And while the piece quotes plaintiff's counsel fiercely blaming Merck for the protracted nature of the litigation, it is only by inference that readers may realize that the plaintiff's side has its own incentives not to let things come to a head too quickly, when Yale's Peter Schuck notes that a "faster trial calendar might actually benefit the company, which can coordinate its defense experts and trial teams more easily than the plaintiffs can". Some blog reactions: Ed Moed, Jay Dwivedi (buying the Times's slant); Joe Weisenthal @ DealBreaker (not buying it).

P.S.: The Ernst v. Merck case, which Times reporter Berenson relies on heavily and uncritically to give the story its emotional frame, is handled rather less sympathetically by Ted here and here as well as in many other posts.

P.P.S.: Ted wrote this devastating letter in response to Berenson's piece.

Toy recall and medical monitoring

Plaintiff's lawyers are hoping the much-publicized Mattel toy recall and related scandals arising from lead-tainted Chinese toys will boost their campaign to get courts to accept the idea of "medical monitoring" suits under which consumers with no signs of injury sue for the cost of periodic checkups to reassure themselves that they are still not ill. About 15 states, including California and Illinois, have shown favor toward such suits, according to experts cited in the WSJ law blog. Philadelphia's Legal Intelligencer and the ABA Journal have more. We've had considerable coverage of the medical monitoring issue, most recently by Deborah La Fetra last week.

Epstein replies to Relman

In PointofLaw.com's new Featured Column, our friend Richard Epstein responds to Dr. Arnold Relman's harsh review of his book Overdose in a recent New Republic. Relman is at Harvard and a former editor of the New England Journal of Medicine, but his understanding of basic economics is, shall we say, lacking.

Read the entire column for a penetrating look at the pharmaceutical industry, including regulatory and litigation issues.

(Cross-posted as a Spotlight feature on MI's Medical Progress Today.)

My Examiner column on Stoneridge

As those of you who read Overlawyered.com are aware, given Ted's posting there last week, the Bush administration filed its long-awaited brief in Stoneridge v. Scientific-Atlanta last week on behalf of the defendants. I comment in an op-ed in today's Examiner.

As Paul Davies notes at the WSJ Law Blog, Mississippi law firm Davis & Feder recently sent a letter to 50 of its 125 silicosis clients saying it was withdrawing from their cases because "unfortunately" reexamination of their files by trained pulmonologists revealed that they didn't have the incurable lung disease after all. The review of the cases' medical files was occasioned by Judge Janis Jack's now-famous order cracking down on mass production of silicosis diagnoses by pliant medical experts. One commenter is skeptical that an objective review would really yield as many as 75 legitimate cases.

Josh Gerstein in the New York Sun:

For as long as three years, a handful of law firms and individuals have battled against the $75 million settlement of a suit over American Express's fees for purchases its cardholders made in foreign currency.

Now the dissident group is retreating from the scene, after Amex agreed to pay it more than $3 million to drop appeals claiming that the deal shortchanged consumers.

Legal experts say the resolution highlights two potential abuses in class action litigation. Objecting lawyers can obtain legal fees by standing in the way of a settlement, whether or not their gripes about the deal have merit. And when a settlement is legally flawed, businesses can avoid having an appeals court review the matter simply by offering extra cash to those diligent enough to pursue an appeal.

The objections were also covered at an earlier stage on Overlawyered in Feb. 2005.

"My personnel records, please"
| No Comments

And woe betide the small, disorganized or bureaucracy-averse employer that hasn't been keeping methodical and consistent records.

Gail Heriot reports on an apology proffered by the Harvard panjandrum to the widow of the late San Diego lawprof and (unsuccessful) judicial nominee.

Prof. Childs has the details on a star-laden program coming up soon in the scenic Southern city; wish I could attend.

As has been reported here and elsewhere, France has been moving to adopt procedures permitting class action lawsuits. Business Insurance (Aug. 6, no free link) quotes Cedric Musso, manager for institutional relations at French consumer body Union Federale des Consummateurs -- Que Choisir, who is among the consumer advocates who have been consulted by the new Sarkozy government on the measure. Musso's group strongly supports such an expansion of the law, but at the same time approves of constraints:

"We don't want an American law with its excesses -- no contingency fees for lawyers or elected judges and jury trials. There would be a series of brakes on abuses with professional judges."

It's hard to imagine a major consumer group in this country expressing a similarly critical perspective toward those excesses.

WSJ on Kentucky fen-phen scandal

The Journal's lead editorial today (sub-only) is on the dramatic developments in the Kentucky fen-phen scandal, in which a federal judge has ordered three trial lawyers (Shirley Cunningham Jr., William Gallion, and Melbourne Mills Jr.) held in jail as flight risks pending trial on charges of doing clients out of $62 million in settlement funds. Ted covered the story at Overlawyered a week ago, and our extensive coverage of the issue is here and here.

Guestblogger thanks

Many thanks to Deborah La Fetra for her stimulating posts last week on negligent security/premises liability and other topics, which drew notice from Prof. Childs, Ted at Overlawyered, The Opening Brief, and Tim Sandefur, as well as the PLF Eminent Domain Blog. For more on the topic, be sure to check out her recent law review article, Moving Target: Property Owners' Duty to Prevent Criminal Acts on the Premises, 28 Whittier L. Rev. 409 (2006).

Hillary bashes Obama on CAFA

Josh Gerstein in the New York Sun:

With no particular prompting, Mrs. Clinton took a veiled swing at Mr. Obama yesterday by boasting about her vote against the Class Action Fairness Act. She called the measure, which became law in 2005 and directs many collective lawsuits to federal court, "just really another way of lining the pockets of big business."

What was that again about her being the centrist/DLC candidate?

Madison County improving

An article in yesterday's St. Louis Post-Dispatch describes how Ann Callis (daughter of plaintiffs' lawyer bigwig Lance Callis) has been cleaning up Madison County's courts as chief judge:

In 2003, and again in 2004, the business-backed American Tort Reform Association produced its ranking of "judicial hellholes" and put Madison County squarely at the top. The county had a rap as a venue where trial lawyers--mostly in personal injury, asbestos, class action and medical malpractice law--got a huge home field advantage.

But today, the civil court's caseload is far lighter. In 2003 more than 2,100 major civil actions were filed. Last year, the count was roughly 1,150....

There's plenty of debate as to just why things have apparently changed--culture, politics, new laws and more. But one possible reason stands out: Callis, the new, young face of the Madison County courts.

We described the positive trends in Madison County and a hopeful optimism about Callis in our Trial Lawyers, Inc.: Illinois report last fall. For more on how Madison County earned its reputation, see MI's reports here, here, and here.

Happy Trails

Well, my week of guest-blogging here at Point of Law has come to a close. Thanks once more to Walter Olson and the Manhattan Institute for the opportunity.

Pacific Legal Foundation's Free Enterprise Project does a lot of work in the civil justice area, promoting tort policies that serve the twin goals of tort law - compensation and deterrence - without generating unjustified windfall recoveries. We also focus on freedom of contract issues and the right-to-earn-a-living. Come check us out!

My Pacific Legal Foundation colleague, Tim Sandefur, argued before the Ninth Circuit yesterday in an economic liberty case challenging California's occupational licensing scheme for animal pest control operators who shun pesticides. As he explains

Alan Merrifield doesn't believe in pesticides. He thinks they're dangerous, ineffective and bad for the environment. In any case, he doesn't deal with bugs. He helps people keep common pests like raccoons and birds away from their homes, using only traps, screens and spikes.

Nonetheless, state bureaucrats insist that the 68-year-old Merrifield - who already holds five state pest control licenses - needs another license, called a "Branch 2 License," before he can install spikes on buildings to keep pigeons away. To get such a license, one must spend two years learning how to handle pesticides - pesticides Merrifield doesn't use - and then take a 200-question multiple-choice examination - which does not contain a single question about spikes or pigeons.

It gets worse. The law only applies to people who work on pigeon, mouse or rat problems. In other words, someone who installs spikes on a bridge to keep seagulls from roosting there doesn't need a Branch 2 License. But install the same spikes on the same bridge to keep pigeons away, and you do. The penalties can amount to fines of $1,000 per violation and even jail time.

Read the whole thing here and listen to the oral argument here.

The last post was very long, so this one will be short! There's a theory that to the extent that landowners are liable in tort for preventing crime on their property, they are essentially called upon to perform the functions usually associated with public law enforcement. Law Professor Barbara Glesner Fines wrote an influential law review article in 1992 making this case: Landlords as Cops: Tort, Nuisance & Forfeiture Standards Imposing Liability on Landlords for Crime on the Premises, 42 Case Western Reserve Law Review 679, 773 (1992) (available on Westlaw):

From a societal perspective, shifting responsibility for crime prevention to landlords is neither efficient nor effective . . . . [T]here is a danger of encouraging the "deputization" of the citizenry. Moreover, criminal law enforcement efforts become more hidden, thereby increasing the corresponding opportunity for corruption and discriminatory enforcement and inviting the practice of unrestrained vigilantism.

It is interesting to think about whether this is still a persuasive argument, when highly publicized incidences of prosecutorial misconduct and discriminatory enforcement diminish public regard for government law enforcement efforts and, at the same time, dangers presented by the War on Terror encourage private citizens to be watchful and respond to perceived threats to our safety (e.g., when civilian airline passengers restrain a fellow passenger who is perceived to be a threat).

Taking a short break from premises liability.... I recently filed briefs in three medical monitoring cases where the plaintiffs had no manifestation of physical injury. In the first, Meyer v. Fluor , the plaintiffs were children in Herculaneum, Missouri, who might have been exposed (even in utero) to lead contamination in the water supply. The Missouri Supreme Court decided to treat the request as one of remedy rather than a cause of action and held that medical monitoring is an acceptable potential remedy. In Sinclair v. Merck & Co., now pending in the New Jersey Supreme Court, the plaintiffs took Vioxx and now seek monitoring for "silent" heart attacks that may have occurred without the plaintiffs' knowing about it. Finally, in Lowe v. Philip Morris, pending in the Oregon Supreme Court, the plaintiffs are smokers who want to be monitored for adverse health consequences of smoking.

In researching these cases, I was dismayed, but not astonished, to discover the huge disconnect between the medical approach to monitoring for illness and the plaintiffs' approach. For example, the U.S. Preventive Services Task Force does not recommend using treadmill exercise testing, resting electrocardiograms, or electron beam computerized tomography to screen for heart disease in low-risk adults who do not have any symptoms of heart disease. The Task Force found that while treadmill testing, EKG, and electron-beam computerized tomography could identify persons at higher risk of heart disease, no evidence thus far exists to show that tests to screen adults has the result of improving health outcomes. Furthermore, the Task Force concluded that using these three technologies to screen for heart disease in low-risk adults could cause more harm than good because of the frequency of false-positive and false-negative results.

Potential harms of screening asymptomatic patients for coronary heart disease include unnecessary invasive testing (e.g., coronary angiography) and "labeling" of those who have had false-positive test results. In low-risk asymptomatic populations, most positive ECG test results occur in those who will not have a coronary heart disease event in the next 5 to 10 years. While the yield of screening is low in those at low risk for coronary heart disease, there is a high potential for harm from false-positive tests. The Task Force judged that the benefits of screening people at low risk for coronary heart disease would not outweigh the potential harms.

False-positive tests are common among asymptomatic adults, especially women, and may lead to unnecessary diagnostic testing, over-treatment, and labeling. Another study explains that false-positive results, in addition to causing a patient psychological stress and anxiety, often lead to invasive tests, such as coronary angiography or treatment with unnecessary medications. Although coronary angiography�a test in which a catheter is inserted into the patient and a dye injected�is considered generally safe, complications, such as internal bleeding, stroke, or infection, and even death, can occur. A positive result on exercise tolerance testing may also impel a patient to begin the use of therapies such as aspirin or statins to over-treat persons who would not otherwise require treatment. Meanwhile, false-negative results can mislead those with heart disease and result in delayed treatment. Both false positives and false negatives can be expected to result in psychological stress.

As I explained in Pacific Legal Foundation's brief in the Lowe case, the same concerns exist with regard to using CT scans to monitor for lung cancer. Here, too, the Preventative Task Force recommends against screening for most of the same reasons (e.g., the high incidence and consequences of false-positives and false-negatives). Perhaps most compellingly, the sad fact is that early detection does not improve the patient�s prognosis. Lung cancer kills. Even with modern advances in therapy, the average 5-year survival rates are less than 15% for all those with lung cancer. Five-year survival ranges from 70% for patients with Stage I disease to less than 5% for those with Stage IV disease. Standard medical practice is to refrain from monitoring (and the inherent risks of that monitoring) when the result makes no difference to the ultimate outcome for the patient. The American Cancer Society notes that "no organization recommends routine screening for lung cancer either among the general adult population or in individuals who are at higher risk due to tobacco or occupational exposures."

We'll see how the Oregon and New Jersey courts deal with these inconsistencies. The courts may well decide that the better part of valor is to punt to the states' legislatures, allowing representatives to take testimony from the array of interested parties and then balance the competing public policies.

Pass-Through Costs

In my last post, I mentioned insurance premiums as a potential pass-through cost from landowners to tenants. Landowners will seek to pass other costs on to tenants as well -- particularly the out-of-pocket costs needed to hire security guards. Judicial requirements of additional security always have the greatest impact in low-income, high-crime areas. When a landowner's duty to protect is expanded, there are identifiable societal costs that go along with it.

Since protection costs money, how would a business operating on a small profit margin fulfill its obligation in a high-crime area? If business owners absorb the high cost of protection by raising the price of their goods and services, how will the poor (who most often reside in areas where the incidence of crime is greatest) be able to meet their basic needs given the minimal financial resources available to them? In all practicality, would they not be singled out as the ones to pay for their own police protection? Would it not be more economical for businesses to close their doors and relocate to "safer ground" ? If so, how would indigent members of that community who lack adequate means of transportation be able to obtain needed goods and services? Sigfredo A. Cabrera, Negligence Liability of Landowners and Occupiers for the Criminal Conduct of Another: On a Clear Day in California One Can Foresee Forever, 23 Cal. W. L. Rev. 165, 188 (1987).

Businesses can absorb only a certain amount of additional cost before passing those costs onto the customers they serve. If the goods become too high-priced, they will not sell and the business will close. Or if the business decides that it cannot recoup its costs, then it simply will find another location where the clientele can afford the higher prices. This has a further economically depressing effect on residents of low-income areas who themselves wish to become entrepreneurs but find the entry costs too high. Because these entrepreneurs would hire other residents, the total effect of a business precluded from opening is increased joblessness; fewer available, affordable services; and a neighborhood that remains mired in economically depressed circumstances.


Another cost of landowner liability for third-party criminal acts is insurance. Because the landowners are sued on theories of negligence rather than for an intentional tort, they should be able to obtain insurance coverage for such lawsuits. This does not come cheap, however. According to Liability Consultants, Inc., the average settlement paid by insurance companies on behalf of landlords for crimes like rape and assault in the U.S. is more than $500,000 and the average jury award for cases that actually go to trial is $1.2 million. Landlords required to maintain insurance that adequately covers the risk of million dollar settlements will pass through the cost of that insurance to the tenants through increased rent. Of course, if the tenants cannot afford the increased rent, they will have to look elsewhere for housing, probably having to settle for an even worse neighborhood that has lower rents. The persons most harmed, then, are those on the lower rungs of the economic ladder, a consideration explicitly acknowledged in Miller v. Whitworth, 193 W. Va. 262, 267-68 (1995)) ("a shortage of low-income housing would ensue if landlords in high crime areas were burdened with a duty based merely on known criminal activity in the neighborhood").

Do Company Policies Create a Duty?

In a case now pending before the Kentucky Supreme Court, a licensed driver took a Chevy truck out for a test drive from the Moore Pontiac dealership on a rainy morning. While he was turning a corner, the truck hydroplaned and struck a car, injuring Candria Scott. Mrs. Scott sued the driver, as would be expected, but also sued the dealership on the grounds that it had acted negligently by failing to follow its internal policy that required a salesman to ride along on test drives. In our brief, Pacific Legal Foundation argues that if internal policies, regardless of their purpose or effect, serve as a hook for tort liability, the impact will extend far beyond car dealerships. Most ominously, a holding that internal policies, procedures, practices, rules or guidelines establish a cause of action will deter companies from establishing such policies, a particularly unfortunate result where such policies promote health and safety.

In Killian v. Caza Drilling, Inc., 131 P.3d 975, 978 (Wyo. 2006), a Wyoming Supreme Court decision turned on these policy considerations. In that case, the owner of a laborer's camp had a "no alcohol" policy that was routinely ignored. Two laborers got drunk after their shift and decided to take a drive. The drunk driver subsequently killed a bicyclist who was riding along the highway. The bicyclist's representatives sued, alleging that the "no alcohol" policy created a duty on behalf of the employer and that violation of that policy caused the accident. The court held that the accident was not a foreseeable result of violation of the policy, in large part because the whole point of the laborers' camp was that the workers should not have to drive at all; their needs were provided for on site. Finally, as a matter of policy, the court explained,

We, however, think it more likely that an imposition of a duty under these circumstances would merely result in an employer forgoing adoption of any safety rules to avoid the risk of liability. If it were even possible, let alone practicable, for an employer to monitor and control the conduct of their employees when they are off duty and off premises, the costs incurred to do so would be significant. An employer would be exposed to liability from an undefined, limitless class of potential plaintiffs. The community would suffer because employers would either abandon efforts to create a safer workplace to avoid liability or they would have to absorb the costs to protect themselves by cutting other expenses.

Imposition of a duty in these circumstances would have significant effects on litigation as plaintiffs seek a "deep pockets" defendant. The dockets of the trial courts would face an increase in the amount and complexity of negligence cases. Any safety benefits derived from enforcing the policy would be lost if the risk of liability is greater than the cost of enforcement and employers simply rescind or refuse to implement safety policies. The burden on the employer does not arise from requiring it to enforce its safety policies but from requiring it do so for the benefit of a limitless class of potential plaintiffs. Compared to the negative consequences of imposing a duty under these circumstances, the benefits of doing so are slight.
Ho, ho, ho?

Being called a prostitute was, classically, libel per se for a female plaintiff. What about being called one of a group of nappy-headed hos? Don Imus is about to find out whether this term, used by him, has a literal significance.

Rutgers basketball player Kia Vaughn filed her suit the same day that Imus settled with CBS in a deal that precludes his threatened $120 million breach-of-contract suit.

Live by the lawsuit, die by one, I guess....

New Innkeeper Liability Decision

A Point of Law reader alerted me to an interesting premises liability case just decided in Pennsylvania. On Monday, the intermediate appellate court of that state held in Paliometros v. Loyola that a motel that rents rooms to a fraternity for a party is liable if one party-goer sexually assaults another.

Appellants, as innkeepers, knowing that a fraternity party was going to take place where there undoubtedly would be underage drinking going on, owed to Appellee the affirmative duty to exercise reasonable care under the circumstances, and to take precautions by having some supervisory personnel physically present on the premises to monitor both the premises and the conduct occurring upon the same in order to prevent any possible injury to Appellee, as a business invitee on their premises. Consequently, we agree with the trial court's conclusion that Appellants breached their "duty of care under the circumstances and in [their] position as an innkeeper."

The dissent points out that sexual assault is not a reasonably foreseeable result of underage drinking and, moreover, that the assault took place in an unoccupied room rented by the fraternity, where motel employees would not have patrolled. Therefore, the dissent would find no liability because of lack of causation.

Homeward Bound

One of the latest frontiers in asbestos premises liability litigation is called "take-home liability." Say a laborer had a job relining blast furnaces in the 1950s and 1960s, which exposed him to asbestos dust, which got on his clothes. He goes home and his wife or daughter does the laundry, thus exposing herself to the asbestos dust. A few decades later, the wife or daughter develops mesothelioma and sues the laborer's employer on a premises liability theory, arguing that it was foreseeable that she would be exposed to the dust and therefore the employer owed a duty to her. The most recent decision on this issue is Miller v. Ford Motor Co., out of the Michigan Supreme Court, which properly held that because Ford had no special relationship with the daughter and because she never set foot on the premises, Ford did not have a duty to protect her from exposure to asbestos. Pacific Legal Foundation's brief in the case is here. The court was particularly wary of the flood of litigation that would result from a contrary decision, particularly in the context of the already-overwhelming asbestos cases.

Just as recognizing a cause of action based solely on exposure would create a potentially limitless pool of plaintiffs, so too would imposing a duty on a landowner to anybody who comes into contact with somebody who has been on the landowner's property.

Going once.... Going twice.....

In 2001, Jose Gonzales was killed in an accident in his 1993 Ford Explorer equipped with Firestone ATX tires. The Explorer was auctioned in 2000 by Big H Auto Action, who then sold it to Progreso Motors, who sold it Jose Gonzales. Gonzales's widow and children sued the manufacturers of the vehicle and tires, as well as all upstream sellers of the used vehicle, including Big H, alleging that the auction house is liable for strict products liability or negligence in auctioning the vehicle without replacing recalled tires. In writing an amicus brief on behalf of PLF to file in the Texas Supreme Court in this case, I learned all about the wide and wonderful world of remarketing, including used car dealers, pawn shops, and various forms of "thrift" or second-hand stores.

According to Manheim Consulting , more than 23 million used vehicles were wholesaled in the United States in 2005, with nearly 10 million remarketed through auctions, which accounted for 42% of all vehicles wholesaled. Governments conduct public auctions all the time to move seized and abandoned vehicles. Seller liability should not attach to auction houses, which simply provide a service to sellers. Rarely would a vehicle be on the block for more than a minute or two. And because the vast majority of auctions � including Big H � are dealer-to-dealer, there are sophisticated parties on both sides of the transaction, rather than potentially naive consumers. In fact, consumers are the ultimate beneficiaries of free-flowing goods and services, easily available and affordable even to low-income purchasers. Expanding "seller" liability to auctions undermines the public policy that favors greater choice and availability of goods to consumers, particularly poorer consumers who are the primary purchasers of second-hand merchandise.

Fences, Walls, and Barricades

In an awful case a few years ago (Wiener v. Southcoast Childcare Centers (88 P.3d 517 (Cal. 2004)), a homicidal maniac bent on killing children drove his Cadillac through the chain link fence surrounding a preschool playground and succeeded in killing two children and injuring others. The parents sued the preschool, arguing that the owner had a duty to provide a barricade against errant traffic. The court held that the purpose of the fence was to keep the children in, not to keep cars out, and that the preschool had no duty to erect a blockade. This raised an interesting question about the nature of barriers.

Plaintiffs often argue for bigger, stronger barricades, but these types of walls are not without problems of their own. For one thing, how immense must a wall be to keep out not only a Geo Metro (average weight: 1,840 pounds), but also a Hummer (average weight: four tons)? Moreover, assuming that all but the mentally ill driver do not intend to hit the barrier, the risk to the driver is increased depending on how the barrier is constructed: a thick planting of shrubbery is more flexible than a metal guardrail, which is more flexible than a concrete barrier. Fixed barriers � such as concrete walls � increase the possibility of harm to someone who crashes into them. So added protection to those within the walls increases the danger to motorists outside the walls.

What About the Guy Next Door?

Many of the negligent security cases castigate the property owner for failure to protect residents from criminals who are able to enter the premises. They ask the courts to demand that landlords provide security guards, locked gates, and special lighting. But none of these precautions against outsiders can prevent tenant-on-tenant crime.

If there is a duty on the part of the landlord to protect the tenant against criminal acts perpetrated by a fellow tenant, landlords of both residential and commercial properties may then be found to have a duty to investigate their tenants, both prospectively and continuously during the tenancy, to determine the tenant's propensity for criminal behavior. The landlord would have to decide whether to screen prospective tenants for criminal propensity, refuse to rent to such individuals, or evict tenants who are potentially dangerous to other tenants. If the landlord does take action to protect other tenants, the landlord may face claims from the dangerous tenant who has been subjected to the landlord's protective actions.

Predicting which tenants are likely to commit future crimes can be a complicated, if not impossible, task. It is difficult for landlords to find reliable crime predictors that do not invade the privacy of potential tenants or impermissibly discriminate against them. Public records often do not provide a complete story, nor are they necessarily easily and cheaply accessible. Assuming the landlord is liable for foreseeable criminal acts by one tenant against another for negligently renting to the offending tenant, does the landlord have a continuing duty to check the local police records for information regarding current tenants? Must the landlord regularly question other tenants or review criminal records during the tenant�s occupancy to determine whether the tenant had exhibited a criminal propensity that may not have existed at the time of first rental?

Tenants have privacy rights and protections based on personal characteristics, even if those characteristics may lead to violence. For example, statutes such as the Fair Housing Amendments Act protect the mentally ill, even those individuals who may show the potential for violence, from any adverse action based on discovery of the fact of the mental illness or violent propensity. State statutes usually provide similar or expanded protection. This is yet another reason why it is impractical and unwise to place landlords in the position of discerning their tenants' propensities for violence.

Jets Versus Sharks?

If a bar has its usual incidence of alcohol-fueled brawls, and hires a bouncer to assist in restoring order, can the bar owner be held liable if a gang-related assault occurs in the parking lot? In a case reflecting these facts, the assailant went to jail and the victim sued the bar, arguing that the existence of the bouncer meant that the bar assumed the duty to protect its patrons and, alternatively, that the bar had a duty once the victim's wife told a bar employee that she believed trouble was brewing. The bar argued that gang violence had never before occurred on the premises and therefore was not foreseeable.

Demonstrating the difficulty in accounting for gang violence in a foreseeability analysis, the same California Supreme Court that found no duty in Castaneda said yes in Delgado v. Trax Bar and Grill (113 P.3d 1159 (Cal. 2005)). The court concluded that the lack of prior similar incidents meant the bar had no duty to hire more security guards. But the court also held that the bar did have a duty to respond as events unfolded, specifically, the bar had a duty to attempt to prevent the assailant from following Delgado into the parking lot. This case seems to impose a duty to prevent a crime in process, without considering (as the dissent did) how quickly violence can escalate and that the bar did, in fact, promptly phone the police who arrived nearly instantaneously.

Caught in the Crossfire

In Castaneda v. Olsher, a bystander was struck by a bullet in a gang shootout in a mobile home park. The shooter was the invited friend of the resident son of the non-resident renter of the trailer space. The bystander sued the park owner, arguing that the owner had a duty to refuse to rent to gang members or to evict gang members. The court held that landowners do not have a legal duty to refuse to rent to suspected gang members or to evict suspected gang members where there has been no prior similar incidents of gang violence. As PLF argued and the court noted, imposition of such a duty likely would result in refusal to rent or eviction based on ethnicity, age, or other forbidden categories and also would run afoul of the Mobile Home Residency Law, which permits refusal to rent or eviction only under the most narrow circumstances.

Gang violence presents special difficulties for landowners. It is difficult, if not impossible, for mobilehome park owners to investigate criminal backgrounds of tenants, or minor children of tenants, much less guests of children of tenants (as was the shooter in this case), to determine whether a particular person on the premises poses a threat to residents. In California, criminal intelligence records are sealed such that police cannot even inform the delinquent's parents that he is affiliated with a gang. So while the presence of gang members may well suggest the foreseeability of gang violence, courts must consider the whole legal picture before imposing a duty based on that foreseeability.


Thanks to Walter Olson and the Manhattan Institute for inviting me to guest-blog this week. The impetus for the invitation was the publication of my most recent law review article, Moving Target: Property Owners' Duty to Prevent Criminal Acts on the Premises, 28 Whittier L. Rev. 409 (2006). Premises liability started with the reasonably uncontroversial notion that if a landowner invites people onto his property, he should take reasonable precautions to protect them from harm. Most states back then (and still some today) established a three-tiered analysis that offered varying duties depending on the relationship between the landowner and the person who came on the property. But property owners, by definition, have assets and thus became an increasingly common target for litigation. This is particularly problematic when the actual cause of the harm is by a third-party who had no right at all to be on the property, namely, a criminal. Pacific Legal Foundation�s Free Enterprise Project is very concerned with the expansion of tort liability to property owners, particularly for criminal acts committed by third parties. I'll be discussing some of the highlights from my article over the next few days, as well as commenting on some pending cases. But if I may immodestly suggest, read the whole thing!

Guestblogger next week

I'll be taking time away from the site for the next week or so, but stay tuned for an all-new guestblogger who'll be on hand starting Monday. See you the week of August 20.

This Houston Chronicle story on the state of medical malpractice litigation in Texas since the 2003 reforms (filings cut in half in Harris County) mostly quotes critics of the law, including a med-mal defense lawyer whose business has declined; this lawyer's not-exactly-zealous championing of his doctor-clients' legislative interests drew forth the tart comparison above (scroll to 3:42 p.m. August 6).

Around the web, August 10

  • Grudge match of the class action world: Roger Parloff on the firm that's suing Milberg [Fortune Legal Pad]

  • Decline -- and fall, one may hope -- of the peremptory challenge [Reed]

  • Conservatives hail N.Y. Gov. Spitzer (no misprint!) for veto of bill rolling back welfare reform [NY Sun]

  • "Loophole"'s a word suited for opinion columns, seldom straight news -- but then what would become of careers like that of the NYT's David Cay Johnston? [Shafer, Slate]

  • Vexing contract-law question in great-granddad's time: whether to enforce sale of piano to house of ill repute [Farnsworth @ Volokh]

  • Defensive medicine: Caesarean section rate in U.S. now 30 percent, double what World Health Organization considers optimal [ABC News; Scheie]

The new report published last week on favorable developments in the lead paint wars has drawn notice so far from the Examiner, the Chamber-backed Legal NewsLine (both news and opinion coverage), Jane Genova's Law and More, the Lynde and Harry Bradley Foundation newsletter, the Heritage Insider, and NAM's Shop Floor.

Atul Gawande, the acclaimed Boston surgeon/author who writes often on medicine for The New Yorker, was interviewed last month by the Times of India (via KevinMD):

Q: What are the best ways to tackle medical malpractice in public health?

Rule 1: Don't do it the way it's done in the US. It's a disaster. Rule 2: If compensating for malpractice is deemed a priority, then a public fund should be established for people who have rare but serious complications from medical care due to error. Rule 3: Perfection is not possible in medicine, but our responsibility in medicine is to tell the truth about error, to measure occurrence, and to constantly work to reduce it.

ATLA "hellholes survey"

The American Tort Reform Association is inviting supporters to nominate their (least) favorite unfair jurisdictions in its 2007 Hellholes Survey. On a less dramatic note, the latest (June) issue of the organization's biennial "Tort Reform Record", chronicling reform and anti-reform developments around the country, is here (PDF).

Massachusetts v. EPA implications

Prof. Jonathan Adler (via Hutchinson) explains in Northwestern University Law Review's Colloquy why he regards this year's 5-4 decision as "easily the Supreme Court�s most important environmental law decision in well over a decade", with implications for standing and administrative review of agency (in)action, as well as the topic more directly to hand, future greenhouse gas regulation.

Dissents on Milberg prosecution

Luke Froeb at Management R&D has a map illustrating which are which. Froeb recently "was struck by the realization that the four fastest growing economies in the world (India, China, Singapore, and Hong Kong) have had, until recently, no antitrust laws."

Credit scores and insurance rating

Alex Tabarrok: "The brute facts, however, are that credit scores are good predictors of auto claims."

The Tax Foundation has released a new paper (PDF) by Chris Atkins entitled "Appropriation by Litigation: Estimating the Cost of Judicial Mandates for State and Local Education Spending". From the introduction:

...Since 1977 courts in 27 states have held that spending on schools is constitutionally inequitable or inadequate. These decisions often lead to dramatic short-term increases in education spending as lawmakers comply with court mandates. In nine states lawmakers raised taxes by over $13 billion to meet these new spending obligations. Similar cases are currently pending in other states.

...few studies have attempted a comprehensive, state-by-state measure of the long-term fiscal impact of court education mandates and none have presented a state-by-state estimate of the cost of legislation approved to comply with court education mandates.

The study is billed as the first in what promises to be an interesting series called Appropriation by Litigation. Our coverage of school finance litigation in New York and other states is here.

The Westchester municipality has been governed by a six-member board of trustees and mayor, all elected at-large rather than from districts, since 1868 -- but the U.S. Department of Justice has decreed that it must now move to district-based elections so as to elect more Hispanics, and a federal judge is sufficiently impressed with this case that he casually canceled a forthcoming town election. Visiting AEI fellow Edward Blum, who's writing a book on voting rights law, asks: what's wrong with this picture?

P.S. On the many surprising consequences of the VRA, the best single-volume source is probably still Manhattan Institute scholar Abigail Thernstrom's 1987 Whose Votes Count?

Survey of law professor blogs

Daniel Solove at Concurring Opinions has compiled a 2007 update of this highly useful list.

Around the web, June 6

  • Prof. Bainbridge on global warming litigation [Examiner]

  • Oklahoma AG Drew Edmondson assailed for stance as state's plaintiff lawyer in chief [Spiropoulos in Edmond Sun, the newspaper's name being just one of those confusing coincidences]

  • Landry's Restaurants action against bondholders -- how'd it wind up in Galveston, exactly? [Kirkendall]

  • "Just a big ol' wet kiss": demagogic litigator Willie Gary profiled in moistly osculatory fashion [Mark Obbie on Miami Herald; another view of Gary]

  • "Off-label" pharmaceutical use sounds so cheap and sneaky, but it does happen to save lives [Beck and Herrmann]

Mortgage minefield?

Former fed governor Larry Lindsey, in Friday's WSJ:

One leading proposal is a bill called S. 1299, offered by Sen. Chuck Schumer of New York. Mr. Schumer is a senior Democrat on the Banking Committee and the third-ranking member of his party in the entire Senate, so any proposal he makes should be taken seriously. His proposal represents a regulatory and litigious approach to mortgage-market reform.

The bill requires that each mortgage originator act with "reasonable skill, care, and diligence" and in "good faith and fair dealing." It also requires that all loans are "reasonably advantageous to the consumer." Surely these are noble sentiments. But they are also vague and ill-defined legal requirements that open up the mortgage industry to endless litigation in an environment where juries comprised of homeowners must decide between families in the process of losing their homes and mortgage brokers, investment bankers and other financial intermediaries.

Mr. Schumer's bill makes the ultimate lenders legally responsible for "acts, omissions, and representations made by the mortgage broker." Remember that in the modern mortgage market, the mortgage broker is unlikely to be under the employ or control of the lender. The mortgage may be "owned" by someone who has never seen the borrower or the originator. So, anyone supplying money to the mortgage market may well be taking on uncontrollable and unquantifiable risk in the process....

The home mortgage industry has certainly been guilty of excesses in the past few years. It may be that Sen. Schumer's approach of restrictive regulation and turning the trial bar loose on the industry is the only way to reverse these excesses. But the cost of his approach to every existing homeowner and would-be homeowner is potentially staggering.

The Sunday magazine just ran a big feature (via Elefant) highly sympathetic to the campaign to promote "caregiver discrimination" suits against employers when they don't do enough to accommodate workers whose responsibility for kids, aging relatives, etc. gets in the way of their job effort. We've been noting the campaign with alarm for a year now.

Strine vs. Steyn

Prof. Bainbridge isn't at all convinced by the Conrad Black defense.

Paul Minor sentencing hearing

The immensely successful Mississippi injury lawyer, convicted on 11 counts including racketeering and bribery, has plenty of supporters who've been sending letters to the judge by the sackful urging mercy. According to one, for Minor to have funneled money to friendly judges should be viewed in the light of "his early efforts to champion the rights of those in south Mississippi who were unable to access the legal system". Minor's father, the locally famous columnist Bill Minor, declared: "If he had any practice of bribing people, you would have known about it before this." Wouldn't that depend on how careful he was about covering the traces? U.S. District Judge Henry Wingate's decision on sentencing is expected soon. Earlier coverage of the Minor affair here and, at Overlawyered, here.

Ohio product liability veto undone

In a major setback for the Litigation Lobby in Ohio, the state's high court by a 5-2 vote has undone Gov. Ted Strickland's highly unusual attempt to recall and veto a bill that his predecessor, Gov. Robert Taft, had intended to become law without his signature. Justice Paul Pfeifer, who often speaks for the pro-trial-lawyer viewpoint on the court, filed what the Cleveland Plain Dealer's news columns called a "venomous and personal" dissent against his majority colleagues. More from Jonathan Adler @ Volokh and from NAM's Shop Floor. Our earlier coverage is here, here, and here.

More on Dickie Scruggs

In other post-Katrina insurance news, Mississippi trial lawyer Dickie Scruggs, a major force in post-hurricane contract-shredding litigation, is continuing in his battle with Mississippi Insurance Commissioner George Dale. Scruggs recently donated $250,000 to a group called Mississipians for Fair Elections, in a further attempt to drive Dale from office.

Calling himself "an advocate for families who continue to be abused by big insurance," this latest action is par for the course for Scruggs. For the full story, go here.

This action comes on the heels of Scruggs' earlier foray into cartooning.

Classy as always, Dickie.

The Fifth Circuit gets it right

The Fifth Circuit Court of Appeals has overturned the district court's determination last year that flood exclusions in the homeowners policies of various insurers were ambiguous and unenforceable in relation to New Orleans canal breaches.

The case is called In Re Katrina Canal Breaches Litigation, and one astute commentator, Randy Maniloff, had labeled the underlying decision by Judge Stanwood Duval In Re Breach of Common Sense. Judge Duval's thinking was that the standard flood exclusions in most policies did not specifically refer to the type of flooding that occurs because of man's negligence in designing levees that crumble. He did acknowledge that they would exclude traditional "natural" flooding.

However, as I point out in a post today at my Insurance Coverage Law Blog (where a pdf of the appellate court's decision is available), the Fifth Circuit sliced right through this tortured reasoning, and said that human negligence was not really a cause of the flooding at all, in the sense that word is understood in analysis of first-party property insurance losses. The Fifth Circuit also said that once this type of negligence analysis gets started it has no logical end: due to extent of human flood control measures such as dams and levees, many if not most floods can be said to involve the human hand. This is an important decision that is in keeping with the interpretation of flood exclusions by the overwhelming majority of courts that have considered this policy language.

Our regular readers are well aware of recent judicial and jury decisions slamming the door on lead paint public nuisance abatement suits--in Wisconsin, Ohio, New Jersey, Missouri, and California.

For those who haven't noticed the box to the right, the Manhattan Institute's Center for Legal Policy has released a new Trial Lawyers, Inc. update summarizing these trends, as well as the history of such suits leading to last year's staggering Rhode Island lead paint verdict. A quick preview:

The spate of recent commonsense rulings throws into serious doubt earlier worries that lead paint might become the next asbestos. All eyes will now be on Rhode Island, to see whether its supreme court reverses the multibillion-dollar verdict or upholds the state's lead paint public nuisance claim contrary to the fundamental tort requirements linking injury to wrongdoing by a specific actor.

Alex Tabarrok in Forbes

The George Mason economist/blogger (and friend of this site) has a guest commentary in Forbes concentrating on the problem of local court bias, problem jurisdictions, and related "home cooking" ills. Excerpt:

Such awards help judges get re-elected. In a remarkably frank admission, Richard Neely, a West Virginia Supreme Court judge (now retired), explained the incentives that govern elected judges: "As long as I am allowed to redistribute wealth from out-of-state companies to injured in-state plaintiffs, I shall continue to do so. Not only is my sleep enhanced when I give someone else's money away, but so is my job security, because the in-state plaintiffs, their families and their friends will re-elect me."

When Neely's book The Product Liability Mess came out back in 1988, I reviewed it here.

Moller on Dukes v. Wal-Mart

Mark Moller of Cato, whose commentaries on the behemoth sex discrimination class action of Dukes v. Wal-Mart we've noted earlier, now has a nine-page article in Regulation on the case's implications. Part of the abstract, from SSRN:

...The retailer is the target of the largest certified class action in history: Dukes v. Wal-Mart, a case consisting of two million punitive damages claims filed under Title VII. While it has lost at each stage in the lower courts, Wal-Mart has litigated the case with an eye to Supreme Court review, by arguing, at each juncture, that the Constitution forbids certifying a punitive damages class action of such an unwieldy size.

Wal-Mart's innovative constitutional argument is significant because it implicitly challenges two under-examined commitments at the heart of class action culture: (1) that class actions, as a form of remedy, stand outside the scope of serious due process scrutiny, and (2) that Congress has delegated courts special quasi-legislative powers in the class context.

...A successful Wal-Mart appeal in Dukes, I suggest, just might shake the faith of class action "culture" in both commitments - with potentially far-reaching, and welcome, results for class action law.



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.