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September 2007 Archives

Judge Samuel Kent

Ilya Somin has a good rundown of publicly-available information in the growing Judge Samuel Kent scandal.

Examiner series on trial lawyers, cont'd

The multi-part editorial commentary series on trial lawyer abuses in the Examiner (Washington and other cities), previously covered here and here, continues this week with stories on "How they do it: Favorite tactics of liability lawyers that tip the scales for their fame and fortune", "How important are judges?", "Influential friends: Attorneys General can steer millions toward litigators", and "Judicial hellholes | Lawsuit magnets". The "How they do it" segment includes a discussion of how many asbestos cases are migrating to (of all states) Delaware; it cites a post by Steven Hantler of Chrysler during the week he spent guestblogging at Overlawyered. The "How important are judges?" segment cites the research of Alex Tabarrok and Eric Helland on the effects of partisan election of judges on liability climates, which Alex later summarized at Forbes.com. For a contrasting view, see Bob Ambrogi at Legal Blog Watch, which results in a comments exchange with Washington Examiner editorial page editor Mark Tapscott.

New York's ob/gyn crisis

Featured in a New York Post piece:

Nationwide, malpractice-insurance premiums for OB/GYNs constitute about 5 percent of expenses, Williams said. [Donna Williams of ACOG, the American College of Obstetricians and Gynecologists] In New York state, they are 36 percent.
(via Turkewitz)

Mississippi legal reform

Another thimerosal-vindicating study

This one's in the New England Journal of Medicine, and, like others, fails to support an association between vaccines and neurodevelopmental disorders. Orac comments, as does Paul Howard at our sister site Medical Progress Today.

Around the web, September 28

  • Insurers fight Referendum 67 with TV ads invoking fictional law firm of Sooem Settle & Kashin, Washington State Trial Lawyers Association says that's "slanderous" [Seattle Times, NW Republican]

  • Missouri judge rejects state-constitution challenge to school finance [AP/SEMissourian]

  • Touting of lawsuits to recoup public costs of meth abuse from OTC drug makers "sounds like a commercial for the Publishers Clearing House Sweepstakes" [Coyote]

  • When to settle your malpractice case as a defendant (even if you feel you did everything right) [Medical Economics via KevinMD]

  • Reactions to court's dismissal of the California automaker/greenhouse gas suit [WSJ Energy Blog, attorney Richard Faulk @ Law and More, Dan Walters]

  • "Very likely" that Madison County "will not be listed as a judicial hellhole this year," says ATRA's Darren McKinney [Post-Dispatch]

  • Law.com takes a look at Justice Department's stepped-up use of corporate monitoring in plea deals [Corporate Counsel]

The brochure (PDF) for the Hofstra legal ethics conference announces that "Hofstra Law School is an accredited NYS CLE [Continuing Legal Education] provider. Continuing Legal Education credits and scholarships are available." Yet in the discussion at Legal Ethics Blog, commenter "V. May" points to the New York regulations governing continuing legal education, which declare in one provision, Part 1500.4b (5), that "Continuing legal education courses or programs to be accredited shall comply with the following guidelines":

The course or program shall not be taught by a disbarred attorney, whether the disbarred attorney is the sole presenter or one of several instructors.

The Hofstra brochure designates Lynne Stewart among "Conference Faculty", but does not warn registrants of the danger of partial or complete loss of CLE credit. Lawyers are asked to pay $475 to attend the conference.

Incidentally, on the question of whether the unrepentant Stewart is being presented in a way inviting students to "come away viewing her not as a role model, but as a cautionary lesson", as Prof. Monroe Freedman has suggested, the brochure indicates that Stewart will be a member of the final panel of the conference, the other members of which will be attorneys Ron Kuby and Richard P. Mauro. Kuby, who probably needs no introduction to most readers, was Stewart's predecessor in representing "blind sheik" terrorist Abdel Rahman, and has, like conference highlighters Gerald Lefcourt and Michael Tigar, vocally defended Stewart in the press. Mauro, a criminal defense attorney from Utah, will speak on "Sanctions as a Deterrent to Post-Conviction Relief for Wrongfully Convicted Defendants". He will presumably warn about instances in which lawyers who have zealously represented unpopular defendants have for that reason faced dangers of personal legal jeopardy, a theme that Stewart's partisans would very much like to associate with her claims to martyrdom. At Legal Ethics Forum, Prof. John Steele of Berkeley/Boalt says he plans to cite Stewart as an example of "how not to lawyer". He's on an earlier panel, though, not on Stewart's. (& welcome Instapundit readers).

SEC roundtable on reform

Lyle Roberts has more detail on the SEC's plans to have roundtable discussions on private securities litigation reported by the Wall Street Journal and Bloomberg.

Annual Supreme Court Briefing

The annual Supreme Court Briefing of the AEI Legal Center for the Public Interest will take place 9 am Friday at AEI; registration is free. Speakers include frequent Supreme Court advocates Maureen Mahoney and Andrew Pincus, as well as AEI's Michael Greve and myself. Michael Greve's most recent Federalism Outlook looks at the most recent term, as does a recent Liability Outlook I wrote.

Trial lawyer earmark in FDARA?

AEI's Scott Gottlieb, the former FDA commissioner, writes in the Wall Street Journal:

Democrats staged an 11th-hour showdown this week over a bill that funds the Food and Drug Administration (FDA). Their aim: a huge handout to the trial bar.

The furtive give-away is buried in the Food and Drug Administration Revitalization Act (FDARA), a funding bill that needs to pass this week if the agency is to avoid a budget crunch that could force it to fire its drug reviewers. If drug safety is so critical, why would Democrats risk issuing pink slips at the FDA? The provision raises the question of whether the hyperbole and hearings over drug safety these past several years was about improving public health, or merely paying off the lawyers.

The key issue is whether state courts should second-guess FDA scientific decisions that are based on an exhaustive review of clinical data and the proposed drug labeling. This usually comes up when drug companies are alleged to have failed to warn consumers about emerging drug safety issues, which comprise the vast majority of product liability cases.

Companies and the FDA (under both Republican and Democratic administrations) have argued that when the FDA specifically addresses a safety issue -- often telling companies that they can't include certain warnings in drug labeling because it's not scientifically justified -- state courts are "pre-empted" from and have no business substituting their judgment for the agency's expert finding. Otherwise, drug labeling -- which is an important public health tool -- would get cluttered with dubious and confusing warnings aimed at only shielding firms from lawsuits.

One recent case where pre-emption was successfully asserted was Dowhal v. SmithKline Beecham in California. The company was sued for failing to warn consumers that nicotine-replacement products allegedly cause birth defects, even though there wasn't any credible scientific evidence establishing that link. The FDA not only forbade SmithKline Beecham from including the superfluous warning in the drug's label, it also said that the public health was best served by encouraging pregnant woman to use nicotine replacement instead of smoking.

A California court initially said that more warnings were always better. Fortunately, after the FDA asserted that its judgment should prevail, the California Supreme Court unanimously agreed.

Relatedly, AEI's Jack Calfee critiques FDARA.

If you're not reading Overlawyered...

If you're not reading my other blog (with co-contributors Ted Frank and David Nieporent) you might be missing stories like these:

Writing at Legal Ethics Forum, Monroe Freedman of Hofstra attempts to fend off criticism of the invitation of disbarred felon and terrorist-enabler Lynne Stewart to address the university's annual legal ethics conference. He suggests, though without quite saying so, that Stewart has been invited as an object lesson in the "risk of going over the edge, both ethically and legally", points out that she can expect to "be subjected to sharp questioning" after her remarks, and says: "Students are more likely, therefore, to come away viewing her not as a role model, but as a cautionary lesson."

A hasty reader might conclude from this that the decision to bring Ms. Stewart on board was a Bollinger-and-Ahmadinejad "invite her to refute her" sort of affair. But a look at the conference announcement tells a rather different story. The banquet speaker at the conference is leftist lawyer Gerald Lefcourt, one of Stewart's most vocal defenders in the media. And the keynote speaker? None other than Michael Tigar, Stewart's lawyer at her trial. Are we really supposed to believe that the point of inviting her is to send students away with the lesson that her actions "[went] over the edge, both ethically and legally"?

Justice Thomas and the rail-car coupler

We've seen this before: pundits flaying the Supreme Court for supposedly extreme conservative rulings that (it's mentioned only in passing, or not at all) also were joined in by leading liberals on the Court. So when Jeffrey Toobin takes out after Clarence Thomas for a ruling overturning an award to an injured railroad worker, suggesting that it sheds a lot of light on the conservative justice's supposedly hard-hearted character, you do wish he'd give a little more emphasis to the high court's having been unanimous on the case.

Hofstra Law School, and its Institute for the Study of Legal Ethics, are hosting Lynne Stewart, but their biographical blurb somehow forgets to note that she was convicted of providing material aid to terrorists and then disbarred. Must have been lack of space. (Hat tip: Taranto).

Much more
: from Monroe Freedman, John Steele, Glenn Reynolds, Michelle Malkin, and Oxford Medievalist (& see follow-up post).

Cert grant in Warner-Lambert v. Kent

You may remember the notorious Second Circuit case of Desiano v. Warner-Lambert, where the Court essentially said "We don't like the 9-0 decision in Buckman and are going to find disingenuous grounds to distinguish it." Well, the Supreme Court granted certiorari today, almost certainly so it could reverse. Such a reversal would affect other cases where lower courts have disregarded Buckman, most notably Judge Higbee's Vioxx trials in New Jersey (where she permitted a punitive damages claim forbidden by Buckman to go forward) as well as act as an affirmance for the Texas Ledbetter Vioxx ruling.

Nocera on Cuomo's climate change subpoenas

Freshly liberated from the Times Select dungeon, NYT business columnist Joseph Nocera is truly scathing about New York Attorney General Andrew Cuomo's "misleading and disingenuous", "grandstanding" recent legal action on global warming:

A few days earlier, Mr. Cuomo sent subpoenas � that�s right: subpoenas! � to five companies who have the temerity to want to build coal-fired electric generating plants....He added, �We are concerned that Peabody Energy has failed to disclose material information about the increased climate risks Peabody Energy�s business faces.�

In other words, Mr. Cuomo was going a good deal further than Ceres [an activist group that is petitioning the SEC to require increased shareholder disclosure on these matters]. He was claiming that under current S.E.C. rules, companies already had a duty to disclose �climate change risk� � at least as those risks are defined by the New York attorney general�s office.

(Never mind that none of the companies in Mr. Cuomo�s sights are based in New York. As his predecessor, Eliot Spitzer, proved, when you�re the attorney general of New York State you can pretty much investigate anything you want, anywhere in the United States, so long as you can make it appear to be somehow related to investor protection.)

Such steps, Nocera writes, are "an attempt to use regulation and litigation to force companies to toe the environmentist party line on global warming, and to change corporate business models in ways that are more pleasing to the environmental community. It�s environmental tyranny disguised as public policy."

It gets even better:

Of course, at least part of the risk facing Peabody Energy is the risk of being sued by environmentalists � who will use Mr. Cuomo�s �evidence� [extracted by subpoenas] to do just that. It�s lovely the way this works, isn�t it? You investigate them for not disclosing risk, even as you�re creating the risk through your investigation.

Read the whole thing.

"Contingency-Fee Con-Men"

Lester Brickman argues in the Wall Street Journal that plaintiffs' lawyers' arrangements with defendants negotiating the payment of attorneys' fees is unethical, a position he says is also endorsed by Deborah Rhode of Stanford and Thomas Morgan of George Washington University. (Update: our own Michael Krauss writes to let us know he is also one of the twenty signatories.)

September 2007 Class Action Watch

In the latest issue of the Federalist Society's Class Action Watch, Mark Behrens and Christopher Appel look at recent rulings from the New Jersey and Missouri Supreme Courts that reject lead paint public nuisance claims. James Beck looks at the American Law Institute�s �Principles� projects. Brian D. Boyle and Julia A. Berman look at fact-based scrutiny in securities and antitrust actions. Jessica D. Miller and Nina Ramos look at fluid recovery. Kenneth J. Reilly and Frank Cruz-Alvarez look at an Eleventh Circuit case that may have set a new standard for federal diversity jurisdiction. Last, but not least, there is a front-page article from me analyzing an omission in the Fair Credit Transactions Act (FACTA) that might provide a substantial windfall for the plaintiffs� bar.

Around the web, September 25

Ratings agencies and the subprime mess

Dealscape: "Maybe The New Republic should stay away from covering finance."

John Edwards' pension pretensions

At the AARP debate the other day, the populist presidential candidate is said to have delivered himself of the following sentiment: "We oughtta have a law that every CEO's pension, golden parachute, and everything else will be treated the exact same way as the lowest-paid worker's pension." Tom Veal, who actually knows something about pension law, has this to say:

If the law treated every CEO�s nonqualified deferred compensation �the exact same way as the lowest-paid worker�s pension�:
  • The CEO's benefits would be insured by the PBGC.

  • Benefits would have to be funded by his employer in a trust beyond the reach of the employer�s bankruptcy creditors and in accordance with the recently tightened minimum funding standards.

  • Benefits would also be protected from the CEO�s own creditors.

  • Benefits would be taxed only when actually received, without regard for the doctrine of constructive receipt.

  • Benefits would become fully vested after no more than six years of service.

  • Section 409A, which subjects nonqualified plans to a set of hyper-technical, trap-laden rules, whose violation is punished by a 20 percent penalty tax, would be repealed.

Most of these, of course, would be very bad ideas. Does Edwards agree?

Toobin tag-teamed

High-profile CNN-and-the-New-Yorker legal analyst Jeffrey Toobin encounters a hot reception for his new book on the Supreme Court, The Nine, from Ann Althouse and Mickey Kaus and Althouse again and Patterico and Althouse in an earlier round and Eugene Volokh and Kaus again and Althouse again and, for good measure, Althouse at review length in the New York Sun ("argument by impressionistic psychodrama").

P.S. And Ed Whelan and David Garrow and Whelan again and Orin Kerr and Whelan again...

Last year we took note of a paper presented at an American Law and Economics Association conference which found a relationship between limits on medical malpractice litigation and the percentage of the population covered by health insurance (the mechanism presumably being that curbs on lawsuits reduce upward pressure on the cost of providing insurance). Now (via Childs) comes word of an SSRN working paper by Jiafeng Sun and Joan T. Schmit, both of the University of Wisconsin Department of Actuarial Science, Risk Management and Insurance, entitled "How Do the State Medical Malpractice Laws Affect the Access to Health Care?" Abstract:

With 15 percent of the population in the United States lacking health insurance, significant effort is being made to identify solutions. A variety of responses have been implemented, ranging from changes to the insurance regulatory requirements to tax code revisions to legal system modifications. While a large body of literature addresses the effect of legal system modifications on medical malpractice claims and insurance as well as physician availability, we know of no prior research to investigate the effect on rates of uninsured. We test this relationship and discover that caps on non-economic damages are associated with decreasing rates of uninsured.

It is not clear from context which of the two investigations was conducted, or published, earlier, but their conclusions would appear to point in the same direction.

Examiner on trial lawyer money in politics

The second week of the Examiner's series "Lawyers Gone Wild" is now out, with a focus on trial lawyers' political clout. Included are: "Lawyers use campaign cash to buy friends in high places"; "Donations from lawyers sometimes spell trouble"; and "Main target: Congress is chief beneficiary of Liability lawyers� money". An excerpt from the "Congress" article:

During the past decade, AAJ has spent more than $30 million lobbying Congress and federal executive branch officials, National Journal reports.

Since 2005, AAJ has tripled the size of its communications staffs at the national and state levels, created a Clinton-esque �war room� to coordinate public-relations campaigns and brought in some heavy hitters from the top ranks of Democratic campaign professionals.
...[including campaign strategist Chris Lehane]. Lehane is a well-traveled campaign expert who has specialized in opposition research. The New York Times said Lehane �is such a shrewd practitioner of what one admiring strategist called �the political black arts� that lately, when a negative story appears, rivals point to him.�

From the "High Places" article:

�We are now in attack mode,� Chris Mather, AAJ�s vice president for communications, told National Journal earlier this year....Such contributions [to sponsors of the proposed Ledbetter Fair Pay Act of 2007] help explain why Alabama trial lawyer C. Gibson Vance so confidently told a Washington think tank seminar right after the 2006 election, according to National Journal, that �we are going to get things done.�

The Skilling appeal

Enron's Jeff Skilling's attorneys have produced a masterful brief on appeal. Kirkendall discusses in detail (and hosts the entire 200-page-plus brief), and Larry Ribstein has additional analysis. Also: Henning and Podgor; Ashby Jones; TalkLeft. Earlier: Jan. 10; Dec. 8.

The all-day event will be held at the offices of the U.S. Chamber of Commerce on Wed., Oct. 24. "Topics of discussion will include: * Suing Their Pants Off: Latest Trends in Business Litigation; * Liability Issues in the U.S. Supreme Court: A View from the Trenches; * Business versus the Plaintiffs' Bar: Assessing the State of Play featuring Ken Mehlman, Partner, Akin, Gump, Strauss, Hauer & Feld. The Annual Legal Reform Awards will be announced during the luncheon." More details and registration here.

San Diego courts hit with overtime suit

Pretty much everyone is vulnerable to wage-hour litigation these days, it seems, and "everyone" includes the courts themselves.

Spitzer stumbles in jockey-weighing case

The New York governor, when serving as attorney general, announced the racetrack prosecution with considerable hoopla, but a Saratoga County judge has dismissed all 217 counts. The action was being handled by the office of Spitzer's successor, Andrew Cuomo.

"It is not the Attorney General of Rhode Island (Patrick Lynch). He has handed it over to a major contingency fee firm." -- Victor Schwartz, on the trial lawyer-state AG alliance.

When he was campaigning for governor of Florida, Charlie Crist pledged to do something about skyrocketing property tax rates in the state. And do something he has -- unfortunately, none of it has worked. Crist backed the Legislature's insurance "fix" in January that put Florida government into the insurance business big time, dramatically increasing the amount of risk taxpayers will have to bear if a major hurricane hits the state. The trade-off for this risk was supposed to be that premiums for homeowners insurance rates would tumble. Crist has also lit into insurance companies every chance he gets, calling them out as robber barons and vowing to bring power to the people.

Not surprisingly, central planning and name calling haven't worked -- insurers are even more keen to avoid risk in the state and have dumped coastal policies by the hundreds of thousands, forcing the state-run property insurance program to take on even more taxpayer-backed risk -- Citizen's Property is the state's biggest insurer and keeps on growing. Property insurance rates not only didn't go down by as much as Crist and lawmakers said, most insurers have filed for rate increases, causing Crist to engage in further episodes of table banging and name calling.

Residents of Florida have begun to notice this is getting embarrassing, and one very influential resident -- Jeb Bush, Crist's predecessor as governor -- spoke out against Crist's policies this week, although Bush was careful not to denounce Crist by name. This Wall Street Journal editorial applauded Bush's statements. The Journal quotes from a story by Ray Lehmann, a reporter for A.M. Best who broke the story. Lehmann's original story, and more, is avaiable at this post I wrote at Insurance Coverage Law Blog earlier this week.

Riegel shenanigans

Beck and Herrmann have marvelous coverage of shenanigans in the important pre-market approved medical devices preemption case pending before the Supreme Court, Riegel v. Medtronic, including briefing.

Equal Remedies Act of 2007

Commerce Clearing House has details on a bill filed by Sen. Edward Kennedy (D-Mass.) "that would eliminate the caps on the amount of damages plaintiffs can recover in employment discrimination cases under the Civil Rights Act of 1991". Michael Fox at Jottings of an Employer's Lawyer has this to say about the proposal:

The stated reason -- to ensure equality for gender, disability and religious discrimination claims with those available to individuals who bring claims for race or national origin discrimination. Those claims can be brought under � 1981 which has no caps. (It also has a much longer statute of limitations and no requirement to file with the EEOC, so following the logic of this legislation, perhaps we could save some taxpayer money and abolish the EEOC.)

My only surprise is that it has taken this long to surface. Just from a political perspective it's a hard sell to argue that race and national origin claims are worth more than others.

The most appropriate action would be to place caps on �1981 claims to match those in Title VII. But that of course would violate the unwritten, but seemingly cast in stone, rule that no matter whether it is rational or not, no employee legislation is ever to be altered that could in any way be construed as adverse to a potential plaintiff. Congress can only give more; it cannot take away.

More from Paul Secunda at Workplace Law Blog. For more of our entries on employment and labor law, by the way, check out our category page on that topic.

Schumer's vanishing endorsement

Chuck Schumer was cited by almost everyone as having given the bipartisan seal of approval to Judge Michael Mukasey. But when the president actually went ahead and nominated Mukasey, it seems Schumer's position suddenly got a lot more ... complicated.

California bill on collateral-source rule

The Civil Justice Association of California is urging Gov. Schwarzenegger to veto SB 93 and AB 1456, passed by the Legislature, which (per the state's insurers) "would prevent a jury from receiving evidence that a Medi-Cal recipient who is a plaintiff in a lawsuit had his or her medical bills paid by Medi-Cal. This ban on evidence would increase damage awards, which in turn would increase liability insurance rates for drivers, homeowners and businesses." Plus: more detail on the sausage-making methods of the legislature in Sacramento here.

Well, sure it is, for him and his friends: "The reason I say the system is working is because it's a first-come first-serve basis," he tells the Hattiesburg American, of the process by which he's hired law firms that have generously donated to his campaign for lucrative contingency-fee work. Perhaps another way of saying "first-come first-serve basis" is "come and get it".

"Does the Court Mean Business?"

Michael Greve has an intriguing long-term perspective on the last two years of Roberts Court decisions in business cases that complements my earlier Liability Outlook on OT 2006. The two of us will be joined by Latham & Watkins's Maureen Mahoney (a former Deputy Solicitor General) and Mayer Brown's Andrew Pincus (formerly of the Clinton administration) to discuss the previous and forthcoming Supreme Court terms on Friday, September 28 as part of the annual AEI Legal Center for the Public Interest Supreme Court Briefing. Registration and breakfast is free and CLE credit in your state may be offered: contact Sara Wexler at AEI for more information.

Lithwick does it again

Dahlia Lithwick criticizes Justice Roberts' "less-than-spectacular record thus far on speech issues before the high court." Of course, she only mentions Morse v. Frederick, and not Wisconsin Right to Life v. FEC, thus implying that the ability for a high-school student to engage in disruptive conduct and sue school administrators for being disciplined is more important to free speech than, say, the ability to freely criticize elected officials.

Overlawyered previously noted the important legislation passed by Congress in 2006 to protect deep-pocket car-leasing companies against vicarious liability for the accidents of its customers. As a result, the price paid by New Yorkers for leased vehicles dropped $600. Of course, that was money out of the pocket of trial lawyers, and ATLA's litigation-lobby litigation arm, the Center for Constitutional Litigation, intervened with repeated efforts with judges to either ignore or strike down the statute. Several Florida state judges provided a tendentious reading of the statute to ignore it precisely when it was said to apply; a federal district judge refused, but instead struck down the regulation of the interstate transaction under the Commerce Clause.

One can applaud a narrower view of the federal government's scope under the Commerce Clause, but this judge's interpretation is contradictory to that of the Supreme Court's and narrower even than Justice Scalia's view, and perhaps even the view of the Supreme Court pre-Wickard: no court ever held that the federal government cannot regulate commercial automobile transactions. We're looking forward to hearing the paranoid Constitution-in-Exile complainers on the left speaking up about the attempt by ATLA to strip the federal government of its powers.

CCL's argument has been that the statute doesn't regulate automobile transactions, but intrastate litigation. This is tendentious enough in state court (does civil liability under the ADA not regulate employment, but rather the litigation over intrastate employment?), but utterly absurd in a federal court where the parties are of diverse citizenship.

The ATLA press release is excited that the decision "gives rental car companies a powerful incentive to assure that their customers are adequately insured"—by forcing customers to purchase insurance that they may not want to purchase. Of course, nothing in the Graves Amendment forbade states from setting regulations requiring such minimum insurance; it just forbade trial lawyers from doing so in state court without state legislation. The litigation is a vivid reminder that getting legislators to act to enact desperately needed reforms is only the beginning of the process of fixing a broken civil justice system: one also needs judges who will follow the rule of law. (Vanguard v. Huchon (via Turkewitz); see also Graham v. Dunkley (NY Sup. Ct.)).

"Transparency Code" for state AGs

American Tort Reform Association is proposing one.

Robert Litan, Director of the AEI-Brookings Joint Center on Regulatory Studies and vice president of Research and Policy at the Kauffman Foundation, will be giving a late-afternoon talk Sept. 24 at Northwestern's near North Side campus. Details here.

Around the web, September 20

September 25: Patent Reform Act of 2007 event

The AEI Legal Center for the Public Interest is featuring two panels on patent reform on September 25, in conjunction with the new monograph by AEI's Jack Calfee and Claude Barfield, Biotechnology and the Patent System. Speakers include the general counsels of Cisco, Eli Lilly, and AmberWave.

Beck and Herrmann ask some pointed questions about principal-agent problems in plaintiff-side litigation.

Posner on the changing role of law professors

Via Orin Kerr, Richard Posner has written, in honor of Bernard Meltzer, a must-read short essay on the changing role of law professors.

Lerach's guilty plea

Lerach should be proud of his lawyers: his plea deal is for a single count of mispaying Steven Cooperman, drops all of the Torkelson-related charges, will likely get him out of prison in under two years, requires the government to forgo prosecution of his current law partners, and doesn't require him to cooperate with the prosecution of Melvyn Weiss. He may well be disbarred afterwards, but he'll also be a multimillionaire in his late sixties who can retire comfortably even after paying an $8 million fine, and nothing stops plaintiffs' firms from offering small fortunes to Lerach to act as a "non-legal consultant." [plea agreement; WSJ; The Recorder; NY Times]

Relatedly, Wired reprints its 1996 "Bloodsucking Scumbag" article.

Judge Mukasey's Chinese-asylum ruling

Rumor has it that some discontented conservatives have griped about his ruling in Dong v. Slattery, which deferred to an executive-branch determination that China's coercive one-child policies do not constitute "persecution" for which political asylum is appropriate. Andrew McCarthy at NRO disposes of the criticism in a brisk but detailed fashion. "Our political representatives could have changed the [determinative] Chang rule at any time if there had been the will to do it. There wasn't, and it is not the place of federal district judges to conduct foreign affairs or make asylum policy." And: "I'm sorry, but I don't get conservatives who complain about judicial restraint until their own policy preferences are at stake -- at which point they want politically unaccountable judges to freelance on policy."

P.S. Various Volokhii are pointing out that early reports of supposed conservative misgivings about Mukasey may be much exaggerated, perhaps even for Machiavellian reasons.

In our newest Featured Column, Manhattan Institute senior fellow Abigail Thernstrom reviews the important new book by Stuart Taylor, Jr. and K.C. Johnson about the Duke lacrosse case, Until Proven Innocent. For more on the book and the case, see John Leo's coverage on our Manhattan Institute sister site, Minding the Campus, as well as a multitude of posts at Overlawyered.

"Lending to the less fortunate"

Seems suddenly to have become a sort of offense in itself, and Edward Glaeser warns against the legislative fallout:

For example, Senator Obama's Stop Fraud Act threatens lenders with up to 35 years of prison and $5 million fines if they use any "false or fraudulent pretenses, representations, or promises." Given the vagueness of the term "fraudulent pretenses," I would expect to see millions of borrowers use the threat of prison or the threat of a lawsuit to get out of paying back their mortgage. I would also expect to see lenders shun loans that can lead to such lawsuits. Perhaps, the law should be called the "Stop Credit Act."

Relatedly, Yaron Brook in The Objective Standard offers "The Morality of Moneylending: A Short History".

A 9th Circuit panel has confirmed that Caterpillar Inc. cannot be held legally liable for the use of its bulldozers in an Israeli military operation which Rachel Corrie�s family and supporters claim caused her death in Gaza four years ago. Protesters from the pro-Palestinian International Solidarity Movement allege that Corrie, 23, was crushed by Israeli military personnel driving the Caterpillar to demolish Palestinian homes. A lengthy Israeli investigation established that the bulldozer team was clearing debris on an anti-smuggling mission, was not destroying homes, and that the operator of the bulldozer never saw Ms. Corrie.

Because the U.S. government pays for all Caterpillar bulldozers sold to Israel, the lawsuit presented foreign policy questions best left to the White House and Congress, said the unanimous panel. "A court could not find in favor of the plaintiffs without implicitly questioning, and even condemning, United States foreign policy toward Israel," Judge Kim McLane Wardlaw wrote. "It is not the role of the courts to indirectly indict Israel..."

Stephen Plaut had a nice piece in FrontPage Magazine on l'affaire Corrie back in 2004: here's a snippet that the Corrie family would likely like to forget:

"What are we to make of this new Corrie family jihad? For those whose memories fail them in this matter, let me refresh things. Rachel Corrie was a young fanatic college student from Washington State, who decided she could make the world a better place by showing her solidarity with Middle East terrorism and Palestinian mass murderers. She joined the International Solidarity Movement, a communist-anarchist group who openly support Palestinian terrorism. Corrie set up shop in the Gaza Strip, where she and her ISM comrades spent their days trying to harass and provoke Israeli troops and interfere with Israel's anti-terrorist military operations. They would set up obstacles on roads to prevent Israeli troops and otherwise assist and defend the terrorists. The ISM is probably the campus organization most upfront about its support for the Palestinian �right� to engage in terrorism, and that is saying quite a lot these days!

In one confrontation with the Israelis, Corrie was trying to block an army bulldozer that was knocking down homes of terrorists and buildings hiding tunnels through which weapons and explosives were being smuggled into Israel. These tunnels brought weapons from Egypt to the Gaza city of Rafiah. One of these homes might have been that which Corrie's parents describe as that of an �innocent pharmacist.� Corrie and her ISM comrades wanted to help protect the Gaza smuggling tunnels. Rachel Corrie put herself in a position where the bulldozer driver could not see her, and she was dragged under the heavy machine. She died in a PLO ambulance or hospital shortly thereafter. The ISM then issued a host of "eyewitness" reports about the accident, which turned out to be fabrications. The simple fact of the matter was that Corrie had figured the Israeli bulldozer driver could be cowed into backing off if he saw her blocking his access to the terrorist house; she probably figured correctly, except that he did not see her from his limited-visibility window in the rig.

Thank you, 9th Circuit, for putting an end to the Corrie family's sad crusade against Israel.

Scruggs can stay on Katrina cases

Judge Senter rules that State Farm waited too long to object to his ethical transgressions. PoL contributor David Rossmiller has details.

Lerach to bite the dust

The Recorder in California reports that famed plaintiffs' attorney Bill Lerach will plead guilty and be sentenced to 1-2 years (a high-low agreement has been reached between prosecutors and defense attorneys) for arranging illegal kickbacks in his class action stock-move-related lawsuits. Lerach will also pay $8 million in fines. Hopefully other tort lawyers will help him relinquish the rest of his ill-gotten gains.

Yale Law Bites The Dust

The New York Law Journal reports that certain Yale Law profs' last hope, to get the 2nd Circuit Court of appeals to explicitly disagree with the Supreme Court's upholding of the Solomon Amendment, has been dashed. The Circuit agreed, in Burt v. Gates, that Yale Law (my alma mater) can be denied federal funding for barring military recruiters from its campus.

I am proud that George Mason, alone among all law schools, filed an amicus brief arguing that the Solomon Amendment was constitutional. A unanimous 2006 U.S. Supreme Court agreed that the government's policy of withholding money to schools that bar military recruiters does not violate the First Amendment.

The 2nd Circuit grudgingly conceded that Yale has "no First Amendment claim that is not either lacking in merit or that has not already been rejected by the Supreme Court."

The lead paint defendants, who lost an earlier trial over nuisance liability in a case now at the remedies stage, called the demand "ridiculous":

If the plan was adopted, he said [Millenium Holdings lawyer Scott Smith], it would benefit the very landlords who have done the least to maintain their properties and protect children.

What�s more, the state abatement plan would employ twice as many workers as Boston�s Big Dig and cost 4.5 times the state�s largest public works project, the combined sewer overflow system in Providence � all while the rate of poisonings plummets....

The report acknowledges that lead poisoning has dropped sharply in Rhode Island in recent years. In 1992, 29.6 percent of Rhode Island children were poisoned before they reached age 6. Last year, the number dropped to below 2 percent � or 790 children poisoned or re-poisoned.

If it seems hard to grasp that fifteen years ago fully 29.6 percent of the state's children would have counted as "poisoned" by today's standards, perhaps one reason is that the concept of "poisoning" has proved susceptible to retroactive redefinition over the years, as blood-level triggers are reduced to err on the side of caution. More: Jane Genova.

A major rebuke for former California AG Bill Lockyer and his successor, Jerry Brown, as well: "A federal judge in San Francisco today threw out a lawsuit filed by the state Attorney General's office against the six largest automakers in what had been billed as a novel attempt to hold the companies financially liable for global warming. ... U.S. District Judge Martin Jenkins said it would be inappropriate for the court to wade into issues pertaining to interstate commerce and foreign policy - matters that should be left to the political branches of government." The judge's order can be found here (PDF).

Lerach plea

The former class-action potentate will accept a prison term said to be in the 1-2 year range, but won't have to testify against his former partners.

Michael Barone's U.S. News column on The Overlawyered War quotes former Justice Department official Jack Goldsmith in his book The Terror Presidency:

The CIA today employs more than 100 lawyers, the Pentagon 10,000. "Every weapon used by the U.S. military, and most of the targets they are used against, are vetted and cleared by lawyers in advance," Goldsmith notes.

Goldsmith, incidentally, can be heard on a new podcast in Glenn and Helen Reynolds' series.

France's "model" health-care system

A "tort-averse legal system" helps out (via KevinMD).

Examiner series on trial lawyers

The Examiner, the newspaper chain with outlets in Washington, San Francisco and other cities, kicks off a five-part series on "Lawyers Gone Wild" with a package of articles including "Is There a Doctor in the House...Who Hasn't Been Sued?", "High-dollar settlements mark class action cases", "Little relief: Litigation costs rising as firms face fewer suits", and "Rogues gallery of class action attorneys". I'm mentioned in the last of these articles, and James Copland and the Manhattan Institute Center for Legal Policy are mentioned in the articles on class actions and litigation costs. The authors are Cheryl Chumley and Washington Examiner editorial page editor (and blogger) Mark Tapscott.

Four more installments are slated in the series. To quote the newspaper:

* Sept. 21 - Buying political power and friends in high places
* Sept. 28 - How they do it
* Oct. 5 - Hard times in super lawyer land
* Oct. 12 - Securities lawyers' heads we win/tails you lose deal for corporate America

Cost of discovery

A new Daniel Fisher article in Forbes that isn't online yet ("The Data Explosion", Oct. 1) has this vignette:

Forrester Research estimates the e-discovery business totaled $1.5 billion last year and is on track to hit $4.8 billion by 2011.

It's expensive, too. At H5's Washington conference Breyer was shocked to hear discovery in a routine case might cost $4 million. "We can't do that," the Supreme Court justice spluttered. "If it really costs millions of dollars, then you're going to drive out of the litigation system people who ought to be there." Some in the audience snickered; $4 million sounded cheap. A Verizon Communications lawyer told a federal judiciary panel in January that his company hired some 225 lawyers and spent $14 million to search 2.4 million documents just to determine if they were protected by the attorney-client privilege.

How Jane Fonda caused global warming

Dubner and Levitt say it's all because of a film. I note that this is part of the public policy impact of business-bashing movies.

Next lesson: how Al Gore boosted nuclear power.

And it's got Ted, facing off against Paul Bland of Trial Lawyers for Public Justice. More information on the after-work, downtown event here.

WLF on alcohol advertising suits

David W. Icheland and Bryce L. Friedman of Simpson Thacher & Bartlett have a new paper (PDF) for the Washington Legal Foundation on the fading prospects for lawsuits seeking to impose product liability on alcoholic beverage makers on the theory that the companies' advertising encourages underage drinking and thus leads to auto accidents and other harms. "Two appellate courts have now joined the seven trial courts" to have ruled against such theories. Earlier: Overlawyered here, here, here, here, etc.

Texans for Lawsuit Reform

Has put a video online recounting the triumph of liability reformers in the Lone Star State.

A valentine to Bill Lerach

As one Houston Chronicle business columnist appears to see it, a little lying and cheating in a good cause is hardly enough to blemish the California litigator's "classy legacy". Tom Kirkendall notes that the columnist's indulgence appears to be rather selective.

Ohio AG under fire

Yet another candidate for the job of "next Eliot Spitzer" may have given up some of his early bloom of idealism, or so one concludes from a Columbus Dispatch editorial subjecting state attorney general Marc Dann to some critical scrutiny: "One gambling-linked fundraiser for Dann took place even as the new attorney general was working to settle a state lawsuit against the company hosting the event. ...Considering how much fire and brimstone Dann called down on pay-to-play politics before his election as attorney general, Ohioans might be surprised at how quickly he dealt himself into the game." More: Genova, Right Angle Blog.

W.V. med-mal reform, four years on

So far so good, say panelists at a West Virginia Chamber event -- the problem being that the state's high court has not yet been presented with an expected challenge to the law from trial lawyers.

Rising litigation is one reason.

Here's the Capital Research Center's precis of a new paper by David Hogberg in its "Foundation Watch" series: "John Andrus made his fortune in mining, logging and real estate. Ninety years ago he created a foundation he named 'Surdna' by reversing the letters in his name. Today, the Surdna Foundation has reversed Andrus's priorities: It funds groups opposed to mining, logging and real estate."

State AGs versus Boston Scientific/Guidant

Dr. Wes is distinctly unimpressed with the settlement negotiated by 35 state attorneys general with the maker of implantable defibrillators, which he says tries to take credit for a problem-reporting system although one already exists. As for the $16.75 million payout, less than a million will go to affected patients, while the bulk appears destined to flow into the great circular fund that is the AGs' own litigation budgets. "Given how little is returned to the patients affected, our legal system should be embarrassed instead of gloating about their achievements in press releases. But at least our patients can expect higher prices for future defibrillator models to offset these predatory suits."

Irvine-Chemerinsky train wreck

The university administration -- which has behaved like the restaurant-goer who orders the best steak on the menu and then tries to send it back to the kitchen on a claim of vegetarian scruples -- is flayed by, among others, Profs. Bainbridge, Somin, Reynolds, Leiter, etc., etc. "Wow!" notes one WSJ law blog commenter. "A start-up even less competent than my alma mater, Ave Maria." Earlier coverage: Sept. 2, Mar. 28, etc.

P.S. John Leo has more at the Manhattan Institute's new Minding the Campus site. Pepperdine conservative lawprof Doug Kmiec blasts the decision. And Paul Caron rounds up some more reactions.

"Should Trial Lawyers Make Terror Policy?"

Ted has a new essay out by this title in AEI's Liability Outlook series (Sept. 11). To quote from the conclusion:

One can debate the appropriate role for each of the three branches in the post-9/11 world in coordinating domestic and foreign policy in responding to terrorism. But one matter should be beyond debate. Individual litigants in individual cases should not be able to use the combination of civil liability rules and the power of the civil courts to interfere with larger national policy. Congress can disagree with the executive branch, but should do so through legislation, rather than abdicating its responsibilities to trial-lawyer proxies. Civil liability is a poor tool for deterring suicide bombers, and civil anti-terrorism laws are bound to have their greatest effect when used against innocent parties.

(cross-posted from Overlawyered).

$500/hr is enough!

The Associated Press reports that bankruptcy lawyers for Northwest Airlines, who had requested $4 million in bonuses over and above the (on average) $500 per hour they had contractually agreed to receive to handle the airline's bankruptcy, have been rebuffed by the court.

U.S. Bankruptcy Judge Allan Gropper ruled their agreed-upon wages provided adequate compensation. The judge added that for attorneys to deserve a "fee enhancement," their work should have a remarkable result that couldn't be expected from lawyers paid their regular fees. Those objecting to the bonus (a flight attendants union as well as the U.S. Trustee and a creditor-turned-shareholder) noted that NWA's share price has dropped 22 percent since the company emerged from court protection on May 31, 2007. I'm not sure that stock fluctuations are as probative as the objectors claim, but I am nonetheless refreshed that the court has held attorneys to their contract.

The National Law Journal has a good summary of Exxon's cert petition in the infamous Exxon Valdez case. It is not compensatory liability that is being challenged, but the $2.5 Billion punitives award.

After the wreck, Exxon spent about $2.1 billion on cleanup. It paid $125 million in criminal fines and $900 million for environmental restoration. Exxon also paid $300 million in out-of-court settlements to parties claiming economic injuries caused by the 1989 oil spill.

At Exxon's urging, the U.S. District Court for the District of Alaska certified a multi-class action consisting of a compensatory damage class and a mandatory punitive damages class of 32,677 commercial fisherman and related individuals.

After a 1994 trial that lasted 83 court days, the jury assessed $5 billion in punitive damages against Exxon yet only $5,000 against the drunken Captain Hazelwood. The jury in an earlier phase had awarded $287 million in compensatory damages. The punitives award was sent back to the district court to reconsider in light of intervening Supreme Court rulings, and ultimately the 9th Circuit cut the jury award in half. That $2.5 Billion award against Exxon is the object of the latest appeal.

Exxon's attorneys have three claims. Their most important claim is that admiralty law does not permit a shipowner to be punished vicariously for the conduct of the ship's master when the owner did not countenance or participate in that conduct. Subsidiarily, Exxon argues that admiralty law cannot expand remedies Congress created in the controlling statute -- the Clean Water Act -- by adding a punitive damages remedy, even if one is available in admiralty. Third, Exxon argues that this $2.5 billion award is outside the limits of maritime law and of constitutional due process.

If cert is granted (and I hope it is -- admiralty law can ultimately emerge from no other source than our nine sages), this will the Supreme Court's most important admiralty decision in a very long time.

Heart attacks in public places

A Florida law firm wants to sue public facilities if they don't keep on hand defibrillators to revive heart attack victims, and is trolling for plaintiffs on that theory. ATRA assails the ad as "shameless" and "opportunistic".

Around the web, September 12

  • Sorry, you can't piggyback on Spitzer that easily: federal judge tosses antitrust class action alleging injury from insurance broker commissions [Hartford Courant via Chamber]

  • Are appointed judges really superior to the elected kind? New Choi-Gulati-E. Posner study [Chicago Faculty Blog via Elefant]

  • Ooooops: FDA mandates tough new warnings that curb prescribing of antidepressants to troubled youths, and then youth suicide rate soars rather than plunging [MSNBC, ChiTrib/MedProgToday]

  • Those NJ officials lately collared for corruption all came from "Abbott" (school-finance-suit) towns; you mean all that free cash sloshing around doesn't conduce to honesty? [Mulshine/Star-Ledger blog]

  • Ill. lawyer being sued by former class action colleagues says he can't sit for a deposition 'cause he'll be on a honeymoon for four months [Madison Record]

  • Yet more "living wage" hypocrisy [Reason "Hit and Run"; earlier here, here, etc.]

  • Remind us, please, how it is that Ronald Dworkin holds onto that wise-man reputation? [Althouse on the Supreme Court; my own contribution]

These days it starts at the med-student stage (via KevinMD):

This "art of defensive medicine" infiltrates the classroom too. We are taught how to ask questions of our patients and treat them in such a way that minimizes our risk of a lawsuit. We are trained what kind of patients to be wary of. Basically, we are taught that we can't trust our future patients, which is confusing to first-year medical students. How can we expect our patients to trust us if we can't trust them?

Inevitable, given the relentless accumulation of power in their offices:

At a panel discussion last month in Washington, D.C., Colorado Attorney General John Suthers (R) said lobbying of state law enforcers has become increasingly common since 45 attorneys general in 1998 forced tobacco firms into a record $246 billion settlement over smokers� health claims.

�A cottage industry has sprung up. There are now hundreds of people making a very good living lobbying attorneys general,� Suthers said at the forum.... �When the 50 state attorneys general get together to discuss issues, there are often 100 or more lobbyists in the back of the room looking for an opportunity to further their cause.�

Let's hope this description is exaggerated, it sounds like a parody of a private-attorney-general provision:

Among the myriad problems with the House [energy] bill[,] for example, is that it allows anyone "harmed" by global warming to bring suit against any federal agency that fails to reduce its greenhouse gas emissions as required in the legislation. Plaintiffs are specifically authorized to recover $1.5 million, and to be compensated for legal fees win or lose, as long as the court determines it to be "appropriate."

"Charities reaping lawsuit dividends"

A lengthy piece by Ameet Sachdev in yesterday's Chicago Tribune grants me a soundbite:

"This is a very inefficient way to get Pfizer to donate money to charity," said Ted Frank, a resident fellow at the American Enterprise Institute, a conservative think tank. "The lawyers got $20 million to give $20 million to charity. That's a pretty big commission."

I've written at length about the problems of cy pres, as has Walter.

Emily Bazelon on personal responsibility

Slate's Emily Bazelon doesn't read the owners' manual for her car, does something the owners' manual explicitly says not to do—recline a seat in a moving car—and hurts herself. Bazelon blames... the automaker and NHTSA for not doing more to warn her, and serves as a mouthpiece for plaintiffs' lawyers who specialize in such arguments, lionizing one who won a $59 million verdict against Toyota for his client's own foolhardiness.

The NHTSA official Bazelon talks to points out that she's taking one safety issue out of context; Bazelon pooh-poohs it because, after all, it happened to her and some other people, too! But Bazelon ignores that there are several dozen other dangerous problems addressed in the owners' manual, many of which would kill or injure far more passengers than reclined drivers' seats. One cannot just look at the idea of putting a single additional sticker on the dashboard: the car would have to be literally wallpapered with additional warnings to cover every warning of a matter at least as hazardous as car-seat reclining, at which point we're back to the problem of owners ignoring warnings. Bazelon simply fails to address this reality.

But, hey, I'll join Bazelon in telling you: don't recline your car seat in a moving vehicle. (Long-time Overlawyered readers already know this from two separate posts.) Also, don't drive with your windows open, your doors unlocked, or your seatbelt unfastened. Reattach your gas cap after filling the tank. Look behind you and ensure the path is clear before going in reverse. Keep your eyes on the road. Don't pass a car in a no-pass zone or drive twice the speed-limit. Sit up straight, especially in a front seat with airbags. Don't have loose heavy objects in the passenger compartment of the car. Don't permit children to play with power windows; don't leave children unattended in a car that is on; don't leave the car on when you're not in it; don't try to jump into a moving vehicle. Don't leave your shoes loose while driving. Be careful when shifting gears. Do not violently swerve an SUV, especially if there are unbelted passengers. Always be aware of the danger of pedal misapplication. Don't fall asleep while driving. Don't drive recklessly, and if you do, don't leave the road. Use your parking brake when you park. Replace a tire after repeatedly patching it; don't drive on bald tires in the rain; and replace your ten-year old tires before you have to drive on a spare. Make sure your floor mat isn't interfering with the pedals. Don't drive into the back of a truck at 60 mph without braking. Et cetera. (cross-posted from Overlawyered)

Autism from nasal spray?

A federal judge acts as Daubert gatekeeper in a case seeking to blame a boy's autism on a saline nasal mist that contained 0.00025% thimerosal as a preservative. "Ultimately, Judge [Phyllis] Hamilton (N.D. Calif.] excluded the testimony of all of the experts put forward by the plaintiffs; granted summary judgment in favor of the defendants; and dismissed the case on its merits." (Redfoot v. B.F. Ascher & Company et al.) Kathleen Seidel, who's done so much to cover this issue, has an extensive report.

Trucking on down to Marshall, Texas

The Lone Star State's most special jurisdiction is best known for attracting forum-shopping plaintiffs in patent cases, but it seems to be an important destination for automotive product liability cases as well.

Around the web, September 10

Once among the South's most financially successful and politically influential plaintiff's lawyers, attorney Paul Minor was sentenced on Friday to 11 years in federal prison following his conviction in a judicial bribery scandal we've covered extensively at Overlawyered. Two former judges convicted in the case, John Whitfield and Wes Teel, drew sentences of 110 months and 70 months respectively. Minor's lawyers had asked that he be sentenced to time served, and supporters had sent letters by the sackful asking for leniency. ("Gulf Coast lawyer Paul Minor gets 11 years in prison for bribing Miss. judges", AP/Natchez Democrat, Sept. 7; Jimmie Gates, "Minor, ex-judges sentenced in bribery case", Jackson Clarion Ledger, Sept. 7).

Judge Henry Wingate also fined Minor $2.75 million and ordered him to pay $1.5 million in restitution, not quite as telling a blow to his fortunes as one might assume, given that "Minor earns up to $2.5 million a year from a settlement with tobacco companies," not to mention all the other money he's made (Robin Fitzgerald, "'Lady Justice Is Sobbing", Biloxi Sun-Herald, Sept. 8). Minor is also being sued by insurer USF&G, which paid out a $1.5 million settlement to a bank represented by Minor in a case before Judge Teel. (Julie Goodman, "Minor's legal woes won't end when he goes to prison", Jackson Clarion Ledger, Sept. 8)(cross-posted from Overlawyered).

A Tacoma News-Tribune editorialist notices lots of "virtually identical" letters supporting the trial-lawyer backed Referendum 67, which would expand lawsuits against insurers, and sure enough, they turn out to track talking points on the website of WSTLA, the Washington State Trial Lawyers Association. "The letter writers fail to identify themselves as lawyers (or staff of legal firms), although a quick check of Google and the Yellow Pages confirms that that's exactly what they are. You'd think with all those law degrees between them that the mouthpieces could come up with their own words and not have to crib." National insurers active in the Washington market are spending heavily in an effort to defeat the November ballot measure, while lawyers expect to call on allies such as Public Citizen (no surprise there) and the Washington Education Association. More on Referendum 67 here and here.

The Washington Post documents some of the doings of the great P.R. machine that's geared up to keep the Ledbetter case before the public as a way of demonizing the current makeup of the U.S. Supreme Court. (The usual defenders of judicial independence against oversimplified populist attacks seem to have fallen silent). Still no word about why the Equal Pay Act wouldn't offer a way to sue over current pay differentials, if that's indeed the point of the campaign.

Important front-page article in today's Times applying some skeptical scrutiny where it's been overdue for a while:

Much of what is known about the health problems of ground zero workers comes from a small clinic in Manhattan that at the time of the trade center collapse had only six full-time doctors and a tiny budget....

Since then, the clinic, the Irving J. Selikoff Center for Occupational and Environmental Medicine, based at Mount Sinai Medical Center, has examined more than 15,000 workers and volunteers and has overseen the examination of 5,000 more at clinics elsewhere.

Those programs have received more than $100 million from the federal government for tracking and treating those workers. The clinic�s doctors published the largest and most often quoted study of recovery workers� ills. And they have testified about the health problems before city and federal committees.

But six years after the disaster, it is clear that while the center�s efforts have been well meaning, even heroic to some, its performance in a number of important areas has been flawed, some doctors say. ...The clinic�s doctors presented their findings in what other experts say were scientifically questionable ways, exaggerating the health effects with imprecise descriptions of workers� symptoms and how long they might be sick.

Researchers in this field say that the clinic�s data collection was so badly planned that its usefulness may be limited. Others say that doctors at the clinic, which has strong historical ties to labor unions, have allowed their advocacy for workers to trump their science by making statements that go beyond what their studies have confirmed....

While organized labor has steadfastly supported and praised the Selikoff Center�s efforts, other doctors say its missteps have heightened the anxiety of New Yorkers who expected the center to answer medical questions that have unsettled the city since 9/11.

Dr. Philip Landrigan, the Selikoff Center's best-known figure, is also known for his involvement in asbestos and lead paint controversies.

In a cheering blow for the cause of the rule of law, the New Jersey Supreme Court decertified the nationwide class in International Union of Operating Engineers Local No. 68 Welfare Fund v. Merck & Co., Inc., which sought "damages" of over $10 billion without alleging personal injury or even alleging that Vioxx didn't work. I discussed the case in the March 2007 Class Action Watch. Press coverage: Wall Street Journal; New Jersey Law Journal; AP/Washington Times; Bloomberg; Merck press release. Most significantly, the Court rejected the "fraud on the market" theory of damages for consumer fraud. The news wasn't all good for Merck; the Court did dodge the issue of extraterritorial application of state consumer fraud law, unfortunately, which means that plaintiffs can still attempt to go forward with a variety of individual suits on behalf of sympathetic union health plans on the questionable theory of overbroad application of New Jersey consumer fraud law.

Richard Epstein to be MI visiting scholar

News worth celebrating from the Manhattan Institute, sponsor of this website, in a press release yesterday:

Richard Epstein

Legal reform is one of the core issues of the Manhattan Institute. To strengthen this core competency, the Institute appointed Richard Epstein as a visiting scholar of the Center for Legal Policy. Epstein is one of the leading voices on legal issues and one of the most cited law professors in the country. Through a series of lectures and symposiums in the fall, he will explore topics ranging from the Supreme Court to securities litigation to health care.

Epstein is the James Parker Hall Distinguished Service Professor of Law at the University of Chicago, and longtime contributor to the CLP blog PointofLaw.com. He will be a visiting professor this fall at New York University. James Copland, director of the Center for Legal Policy said, �Richard Epstein was talking about liability reform long before there was a 'tort reform' movement, and he is one of the leading thinkers in many diverse areas of law. The Manhattan Institute has enjoyed a long-standing collaboration and friendship with Professor Epstein, and we look forward to a richer, more formalized relationship this fall."

In our newest featured column, UCLA law professor and Point of Law contributor (and prominent law blogger) Stephen Bainbridge says impending lawsuits seeking to exact damages for global warming are "a classic example of why tort reform is a pressing need":

Who is responsible? The only sensible answer is, everybody. We all contribute to the release of greenhouse gases, as did our ancestors going back at least to the beginning of the Industrial Revolution....

It's time for Congress and the president to step up with legislation that take the question of global warming out of the arena of ad hoc judicial decision making and put it into the hands of our elected officials. Both fairness and efficiency demand it.

The piece originally appeared in the Washington Examiner.

Deutsche Bank tower

The looming 9/11 relic should have been pulled down years ago, but Dan Henninger in the WSJ says politico-legal-regulatory paralysis, much of it based on hyper-avoidance of risks deemed "toxic", wound up setting the stage for last month's tragic fire.

Another data point (this time from a Pennsylvania dram-shop liability setting) for Ted's observations about how the actual legal exposure of liability insurers often greatly exceeds what newcomers might assume would be the case.

Canadian employment law heats up

Encouraged, no doubt, by the example set south of the border, Canada is experiencing a boom in wage-hour, discrimination and harassment suits, reports the Financial Post: "Employers are increasingly finding themselves being punished with expensive fines, court awards and tribunal rulings for infractions that several years ago would not have been considered in a legal forum." Easing of class-action procedure has facilitated suits as well, and of particular concern is a bill being introduced in the Ontario legislature that would remove limits on punitive damages in suits against employers, as well as authorizing courts to order employees reinstated and encouraging claims in other ways.

Around the web, September 6

  • Class-actioneer Michael Hausfeld steers $5.1 million antitrust cy pres payout to fund new Center for Competition Law at George Washington U.'s law school; from the description, sounds like the center will furnish policy ammo for antitrust plaintiffs' bar [GWU press release]

  • PoL contributor David Rossmiller slices and dices a naively credulous Bloomberg News report on insurance bad faith [Insurance Coverage Blog, here and (scroll) here]

  • Blawg Review #124 is a Labor Day special at George Lenard's [Employment Blawg; and check out other recent editions of the carnival]

  • Qui tam bar eyes False Claims Act suit against University of Phoenix as possible kickoff of college-suing bonanza [The Recorder]

  • Profile of a NYC birth-injury case [NY Mag, earlier this year]

  • Milberg Weiss, Grant & Eisenhofer, and Schiffrin Barroway Topaz & Kessler want $600 million -- $560 million in fees, $40 million in expenses -- for representing Tyco shareholders [Union Leader/U.S. Chamber]

The expense of document production...

...is only larger when it comes to preserving the attorney-client privilege. Attorney David Booth Alden writes an exceptionally perceptive post on the subject:

Merck produced an inspirational volume of non-privileged documents � over two million documents. It withheld based on claims of privilege or protection only a relatively small number of documents � 30,000 or 1.5% of the total. All of this occurred in time periods that, given the volumes of documents involved, were short.

Once the district court started down the road to resolving all of Merck�s privilege claims, whether by reviewing the documents itself or by having the special master review �sample� or �representative� documents that would serve as a basis for �extrapolating� to other documents, Merck had little or no chance. Given the volumes of privileged documents that are withheld in response to the sweeping document requests typically seen in major litigation � tens of thousands of documents in In re Vioxx � it is prohibitively expensive for a privilege-holder to explain and provide factual support for each privilege claim. Even properly logging that many documents is a major undertaking, particularly because, as the Special Master�s guideline required, each communication within in every multi-part e-mail string should be separately identified and logged, producing the non-privileged parts and redacting the privileged ones. While the In re Vioxx district court and special master repeatedly expressed surprise at Merck�s failure to provide more fulsome and timely factual support for its privilege claims, I don�t find it the least bit surprising. Indeed, I strongly suspect that Merck�s attorneys worked unbelievably long hours and, in their view, did all they could.

Read the whole thing. See also earlier discussion at Overlawyered on Aug. 16. Evan Schaeffer gives the Vioxx-specific perspective of a plaintiffs' attorney with an inventory of Vioxx cases.

China introduces antitrust law

Roger Parloff has details. Earlier: Aug. 8. And Skip Oliva has some background on an official U.S. role.

Geneva Hager, 60, isn't a pro se claimant making up her own numbers as she goes along; she was slated to be the named plaintiff in a class action accusing the giant insurer of employing computer formulas, scripted decision trees and similar horrors to avoid paying adequate sums for soft-tissue injuries in low-speed collisions. A Fayette County, Ky. judge denied class certification last year, so now Ms. Hager wants $475 million in compensatory damages for mental anguish plus an added $950 million in punitive damages to punish the carrier. "Allstate, which has said that greedy trial lawyers are using Hager as a pawn, says [Lexington, Ky. attorney Dale] Golden is simply trying to grab headlines. 'When the case was first filed, her attorney alleged the damages were under $20,000,' Allstate spokesman Mike Siemienas said." For much more on the "Colossus" claims-handling program, the "McKinsey documents" and related matters, see Business Week's decidedly trial-lawyer-friendly account of last year.

California class action initiative

The Civil Justice Association of California has decided not to proceed this year with a ballot initiative intended to bring the state's class action procedures closer to the federal CAFA model. Trial-lawyer-allied groups had boasted of putting pressure on the Intel Corp., a CJAC supporter, with threats to attack the company as anti-minority because of the supposedly discriminatory impact of regulating class action procedure. Among the iniquitous elements of the initiative, according to one such account, was a provision "requiring evidence of wrongdoing before a case can move forward". And you wouldn't want that, would you?

AEI Legal Center for the Public Interest

AEI and National Legal Center for the Public Interest Establish New Research Center on Legal and Constitutional Issues

FOR IMMEDIATE RELEASE: Tuesday, September 4, 2007

American Enterprise Institute president Christopher DeMuth announced today that the National Legal Center for the Public Interest (NLCPI) has been merged into AEI, forming a new research division named the AEI Legal Center for the Public Interest (AEILC).

The National Legal Center for the Public Interest was founded in 1975 to foster knowledge about law and the administration of justice, especially with respect to individual rights, free enterprise, property ownership, limited government, and a fair and efficient judiciary. It has pursued its educational and intellectual missions through publications, conferences, and the annual Gauer Distinguished Lecture in Law and Public Policy, which will continue at AEI. Further information on the NLCPI is available at its website, www.nlcpi.org.

The American Enterprise Institute has conducted similar work for many decades as part of its domestic policy research program. AEI�s research staff has included such eminent legal scholars as Robert H. Bork, Robert A. Goldwin, and Antonin Scalia. It currently sponsors work on legal and constitutional issues by resident and visiting scholars such as Walter Berns, John R. Bolton, Theodore (Ted) Frank, Jack Landman Goldsmith, Michael S. Greve, Peter J. Wallison and John Yoo as well as adjunct scholars including Richard A. Epstein and Jeremy Rabkin.

The new AEI Legal Center for the Public Interest will pursue an expanded program of research, publications, and conferences drawing on the traditions, interests, and people of both institutions. The AEILC will be directed by AEI resident fellow Ted Frank (www.aei.org/frank), who has been director of the AEI Liability Project for the past two years. Mr. Frank clerked for Judge (now Chief Judge) Frank H. Easterbrook of the U.S. Court of Appeals for the Seventh Circuit and, prior to joining AEI, practiced law with Kirkland & Ellis and O�Melveny & Myers in Washington, D.C. He writes AEI�s Liability Outlook and is a frequent contributor to several national publications and websites, including The Wall Street Journal and PointofLaw.com.

The AEI Legal Center�s website, www.AEILegalCenter.org, part of AEI�s constellation of more than a dozen websites, will feature publications, event notices, and conference and lecture videos and will incorporate the archives of both the NLCPI and AEI�s legal research programs. The NLCPI is being fully merged into AEI and will discontinue separate operations. Several of its directors and legal advisers will join a new AEILC Legal Advisory Council.

The AEI Legal Center has already planned several conferences, seminars, and publications for the coming fall. On September 28, it will host a Supreme Court Briefing, to be held annually at the beginning of the Court�s October Term; the September 28 session will focus on longstanding interests of AEI and the NLCPI that are attracting increasing attention from the justices�corporate law, antitrust, administrative law and regulation, intellectual property, and preemption and other federalism issues. Two additional AEILC seminars will concern cases of particular importance on the High Court docket: a September 27 session on Medellin v. Texas and an October 5 session on Stoneridge v. Scientific-Atlanta. The Center�s first seminar, on September 25, �Patent Reform, Biotechnology, and Other High-Technology Industries,� will concern important aspects of the Patent Reform Act currently pending in the Congress. Further information on these sessions is posted at www.AEILegalCenter.org.

Rick Hess reports in the American that a coalition is suing the Department of Education under the No Child Left Behind Act to shut down alternative certification for teachers, which would end effective programs like Teach For America. The problem stems in part from NLCB's certification standards, despite the lack of evidence that traditional teacher certification does anything other than promote cartelization.

Berenson on Vioxx litigation

Two weeks after Alex Berenson's hit piece on the status of the Vioxx litigation, the New York Times hasn't run my letter, so we might as well see an annotated version of it here:

To the Editor,

Alex Berenson's August 21 article noting that Carol Ernst has not yet received any money two years after her $253 million Vioxx verdict against Merck distorts the story by omitting a critical fact. Ernst's own attorney, Mark Lanier, is responsible for most of the delay by refusing to ask the trial court to enter judgment until June 2006. Because of this, Merck was prevented from appealing until September 2006. Berenson misses the real story by failing to ask Lanier why he waited so long: the most rational explanation is that Lanier expects his victory to be reversed on appeal because of the numerous irregularities that led to the verdict (including the admission of conclusory expert evidence in direct contradiction of Texas Supreme Court precedent barring such junk science), and wanted for tactical reasons in other cases to delay having his first win thrown out in the hopes that it would increase settlement pressure on Merck—a goal furthered by the article's insinuation that Merck is doing something wrong by defending itself. Berenson is further incorrect when he implies that only twenty cases have been decided: courts have dismissed with prejudice over a thousand meritless cases against Merck, often because the plaintiff was not even taking Vioxx yet sought to recover from Merck.

House's anti-Ledbetter legislation

The Washington Post has some sympathy for efforts in Congress to overturn Ledbetter v. Goodyear Tire & Rubber, the case where the Supreme Court found a sex discrimination plaintiff had waited too long to sue over pay. Even so, the paper says the House-passed bill goes too far: "[it] would all but eliminate a statute of limitations, which was not Congress's original intent".

Madison County: no more judge-shopping?

Jim Copland posted a little while back on the recent indications that the formerly notorious courts of Madison County, Illinois, may be improving in fairness under the court's relatively new chief judge, Ann Callis. According to the U.S. Chamber-backed Madison County Record, Callis gave a speech in Chicago in July "before a gathering of national industry leaders and tort reform advocates" to outline some of the progress being made against abuses. Among measures taken "with unanimous support from the circuit bench":

She said the first reform, introduced only three days after she took over as chief, was done to put an end to "judge shopping" in class action cases.

Callis said plaintiffs' attorneys were adding potential class representatives in cases so that they could keep filing change of judge motions until a judge the attorney liked was assigned to the case.

While the first reform focused on judge shopping, Callis said the second round focused on forum shopping.

Callis said limits were needed for out-of-state attorneys filing cases in Madison County, but who had no connection to the county.

She also told the group that she opened many cases that had been previously sealed.

The forum-shopping phase of the reforms pretty clearly hasn't been implemented yet, since virtually every issue of the Record reports on cases from around the country that are brought to Madison County with no evident local connection, in such areas as asbestos, benzene, and class actions. P.S. More from St. Louis Post-Dispatch, reprinted by Institute for Legal Reform.

The editors of the San Diego Union-Tribune discover too late that they got sweet-talked by the California governor-turned-AG:

Last summer, attorney general candidate Jerry Brown met with the Union-Tribune editorial board and barely had to be prodded to take shots at the grandstanding ways of then-Attorney General (and fellow Democrat) Bill Lockyer. Brown said he would be a pragmatic, tough-minded attorney general. In a later interview, the former governor was more specific, rapping Lockyer's decision to sue automakers on the grounds their vehicles' emissions contributed to global warming.

�One of the principles of tort law is that damages should not be speculative,� said Brown, a Yale-trained attorney. He wondered how the suit could posit �causation� between emissions and the size of mountain snowpacks.

After he was elected, however, it became obvious that Brown had told the editorial board what it wanted to hear. He picked up Lockyer's lawsuit and ran with it.

Looking back, maybe we leaned too far over to give him the benefit of the doubt, too (more). P.S. Jane Genova has further thoughts. And Warming Law, published by the left-of-center Community Rights Counsel, thinks we are unfairly slighting Brown's announced reasons for his change of heart on the automaker suit.

Fined for speaking against the president

The danger of McCain-Feingold can be seen in a recent FEC ruling against Americans Coming Together, which fined them $775,000 for "express advocacy" against President Bush. I still haven't seen a good distinction for why Americans Coming Together's express advocacy should be treated differently than the New York Times. Of course, with the election over, the group disbanded, and the sum relatively small compared to the assets of its founder and itself, the FEC ruling is essentially just a tax on advocacy.

The name of high-profile Duke lawprof Erwin Chemerinsky is being bruited about for that post, and Thomas Lifson at American Thinker thinks he might be the perfect choice (alas) given the school's likely role as a flagship of the Left in legal academia. See Mar. 28, etc.

The lawsuit alleged that negligent audits by the accounting firm made it possible for principals of a Florida factoring firm to defraud Banco Espiritu Santo ("Holy Ghost Bank", at a guess), Portugal's third largest. Are accounting firms really capitalized in such a way as to withstand this kind of financial hit? The firm's total revenue (not profit) last year was $526 million, according to one report.



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.