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October 2007 Archives

FACTA's billion-dollar problem

My latest Liability Outlook looks at the abusive litigation created by a statutory drafting oversight: a bill designed to protect against identity theft has instead become a mechanism for the entrepreneurial plaintiffs' bar to attempt to bankrupt innocent businesses that haven't harmed anyone.

Following up on our Oct. 25 item: Bret Stephens of the Wall Street Journal brings to light all sorts of facts about this pollution dispute that you might not have known had you only read the 13,000-word Vanity Fair takeout by William Langewiesche.

Parade of new blogs

Or at least newly mentioned in this space:

  • Connecticut criminal defense lawyer Norm Pattis, of the much-lamented Crime & Federalism, is blogging again at bibliophile.blogs.com;
  • "Need to fire someone? ... Need to explain to someone why, even after working their rear end off all year, that their annual increase is 2.7%?" Come to Evil HR Lady;
  • The Brennan Center for Justice at NYU Law, our opposite number on many but by no means all issues, has a New York-centric blog they call ReformNY.

Was it the 9/11 dust he inhaled?

Or was it the non-soluble binders in the crushed-up prescription tablets that New York City officials say he injected into his bloodstream? Explosive allegations in the case of New York police Det. James Zadroga, who "became a symbol of post-Sept. 11 illness," his death last year becoming "a rallying cry for many 9/11 worker advocates who became similarly sick." Or maybe, if the new charges pan out, let's hope not "similarly" sick after all.

Privacy law madness

Our latest featured column is my Times (U.K.) piece from earlier this year on the tangle of health and student privacy laws that puts universities in a tough spot when they see one of their students beginning to spiral into destructive madness. More here.

Workplace defamation suits

They continue to be highly troublesome to employers in the brokerage business who are obliged to fill out a form ("U-5") explaining why they are terminating a broker-dealer. Michael Fox has details on a recent case against Merrill Lynch. A New York appellate decision recognized (as to terminations in that state only) a privilege for such statements by brokerages, grounded in the public interest in not chilling revelations that might protect consumers in the future, but there are signs arbitrators may be finding ways to get around that ruling.

No, it's not covered under the auto insurance policy of one of the perpetrators (as arising "directly or indirectly" from the use of an automobile), per Canada's supreme court, reversing a lower court. The supposed trigger for coverage found by the lower court was that one of the miscreants "transported rocks to the overpass in the back of his truck". In a separate case, the high court also ruled that a hunting accident is not brought within the terms of auto insurance coverage just because the hunter's headlights were illuminating possible game (which turned out to be a fellow hunter). PoL contributor David Rossmiller has details.

The Law of the Sea Treaty

Slate's Christopher Beam suggests that Republican candidates are opposing ratification of The Law of the Sea treaty for trivial reasons. But as the very serious Jack Goldsmith and Jeremy Rabkin report (and as the late Jeane Kirkpatrick testified to Congress in 2004), the treaty is a bad deal for America.

Cert grant in Exxon case

SCOTUSblog has details, including links to briefs; see also Stuart Taylor's take and our earlier coverage. The Court is ruling on narrow technical issues of the interaction between maritime law and the Clean Air Act, but not on the general constitutionality of punitive damages; Justice Alito is recused, which means plaintiffs will need only four justices to obtain an affirmance of the Ninth Circuit's lawless decision. The Court denied cert on the cross-appeal for even higher punitive damages.

In UAW v. Johnson Controls, 499 U.S. 187 (1991), the Supreme Court held that sex discrimination laws prohibited employers from making decisions about fetal safety that took the choice to work in dangerous conditions away from pregnant women. Still, even though the Supreme Court held that "Decisions about the welfare of future children must be left to the parents who conceive, bear, support, and raise them rather than to the employers who hire those parents," and the Supreme Court rejected the idea that civil liability could be an issue for such employers, state courts are still holding employers liable when women claim their unborn children suffered injury while they were working. Michael Starr and Christine Wilson look at the issue in the October 29 National Law Journal.

If you're not reading Overlawyered...

If you're not reading my (and Ted's) other site, you're missing out on stories like: lawsuit against mutual insurer moves money expensively from policyholders' left to right pocket; Oregon suit targets truck's previous owner over accident resulting from alleged under-maintenance; Mikal Watts drops Texas Senate bid; personality tests for physicians who want insurance; does media criticism count as "abnormal working conditions" for workers' comp purposes?; N.Y. attorney-bride sues over wedding flowers; Federici v. U-Haul, joint and several liability in action; Illinois Civil Justice League on presidential candidates' stands; generous West Virginia jury; wrong doctor sued in Mississippi med-mal case, which didn't mean he was going to get off easy; class-action forum-shopping isn't over; more on Washington's anti-insurer Referendum 67; and much more.

Per the AP (via Erichson), markets are shrugging off the $134 million Nevada judgment (see Oct. 11) against the maker of the hormone-replacement drugs Prempro and Premarin. Earlier coverage of Wyeth victories is here, here and here. One stock analyst, citing expectations that the new award will be reduced or reversed, called it "more of a headline risk than a long-term financial risk".

Dept. of New York Times self-parody

A recent entry on the new blog written by the NYT editorial board, The Board, begins: "We recently came across a Web site, governmentisgood.com, that is worth checking out...." Commenters agree that it is worth checking out, but perhaps not for the reasons the Times thinks.

Electronic fetal monitoring in the WSJ

Friday's WSJ has a (sub-only) article "chronicling one doctor's rise and fall as an expert witness for plaintiffs against his fellow obstetrictians", as our sister site Medical Progress Today puts it:

[Dr. Barry Schifrin] has testified against other doctors hundreds of times in the past three decades. In 2004, the American College of Obstetricians and Gynecologists censured Dr. Schifrin, for testimony he gave in a malpractice case. He later resigned from the organization.

In particular, Dr. Schifrin is a champion of the use of electronic fetal monitoring (EFM), which he helped develop, and he believes that the device produces good information, which doctors and nurses negligently misinterpret.

The WSJ article is somewhat inconclusive in tone, but readers who would like a more thoroughgoing critique of EFM will find that Manhattan Institute fellow Peter Huber devotes much of a chapter to the subject in his landmark book on science in the courts, Galileo's Revenge (buy). More here and (scroll) here.

California wildfires

George Wallace at Declarations & Exclusions has an overview of the resulting insurance issues, as well as questions of fire suppression and forest/chapparal management (see also here and here). And Point of Law contributor Prof. Martin Grace of RiskProf joined NPR's "Marketplace" to discuss the topic.

The False Claims Act, which permits bounty-hunting qui tam recovery by those who whistle-blow against fraud against the government (Jun. 2, Feb. 9), has a number of protections to prevent trial lawyers from swooping in and parasitically laying claim to government recovery when the government was already aware of the alleged fraud. In the latest Congressional earmark for trial lawyers, Senator Grassley (Oct. 2006) is attempting to undo many of these protections. But since the False Claims Act already permits meritorious bounty-hunting in spades (the vast majority of government recovery comes from a small fraction of suits brought, with gigantic jackpots paid to private litigants and their attorneys), the only effect of the amendments will be to increase meritless qui tam actions (e.g., Oct. 26, Feb. 2006, Jul. 2005, OL Aug. 2006, OL May 2006).

Former Acting Attorney General Stuart Gerson has an excellent analysis of the legislation for the Washington Legal Foundation.

I don't know the details of this case, in which DuPont has just been condemned to pay $200 million in punitive damages, but one quote in this very brief West Virginia Record is priceless:

"Plaintiff Waunona Crouser told the Associated Press that things have been stressful since the suit was filed three years ago, but she never doubted the jury would do the right thing. "They're West Virginians and that's how we are in the state of West Virginia."

'Nuff said.

Long jury trials

A study in which jurors in long (more than 20 days) and short (1 to 6 days) federal trials (albeit civil rather than criminal) were interviewed found a number of disquieting differences. Jurors in the long trials were substantially more likely to be retired or unemployed and substantially less likely to have a college education. Nearly three-fourths of the jurors in the lengthy trials said the evidence was �difficult� or �very difficult� to understand, compared to 30 percent who reported the same in short trials. Of course the length of the trial might be correlated with the complexity of the evidence, and the latter might be the befuddling force. But this would not adequately explain why twice as many jurors in long than in short trials reported their attention wandering during the presentation of evidence either �occasionally� or �quite a lot,� and why more than twice as many (amounting to almost half of all the jurors who were interviewed) found it difficult or very difficult to understand how they were supposed to reach a verdict. Joe S. Cecil et al., Jury Service in Lengthy Civil Trials 1, 9, 11�13, 28 (tab. 7), 33 (tab. 8) (Fed. Judic. Center 1987).

United States v. Warner (Posner, J., dissenting from the denial of rehearing en banc) (7th Cir. Oct. 25, 2007). Howard Bashman has a linkwrap of the coverage of the decision on the George Ryan case.

United States v. City of Boston

In March, AEI's Ed Blum was highly critical of United States v. City of Boston, a Section 203 Voting Rights Act lawsuit complaining about the lack of bilingual assistance notwithstanding the absence of any complaints from Spanish-speaking voters, resulting in the federal government spending about $250/voter for the 210 who received "language assistance." A complaint to the Inspector General alleges ulterior geographical motives for bringing the lawsuit. (Via Lat.)

Around the web, October 26

  • Annals of qui tam law: Justice Department says drug co. "whistleblower" merits no bounty because he "personally planned and initiated the fraudulent scheme" he later sued on [Meier, NYT]
  • Law firm somewhat grandly billing itself as "National Legal Scholars" includes stars like Erwin Chemerinsky, Richard Lazarus, and Stephen Saltzburg, but you defendants are out of luck -- it only takes plaintiff's work [website via Childs]
  • Many docs asking patients to sign binding arbitration agreements, and trial lawyers naturally want to shut down that trend [American Medical News]; Chamber-led Coalition to Preserve Arbitration is trying to fend off Litigation Lobby attacks in areas ranging from financial services to agriculture [Investment News]
  • Plea deal by expert witness who falsely exaggerated his experience to bolster his credibility [OL Sept. 26] renews calls for hired-testifier reform [White Coat Rants via KevinMD]
  • Trial-bar allies at FTCR already stoking anti-insurer sentiment on California wildfires [CNN Money]
  • Welcome Glenn Reynolds readers [Instapundit linking this post]
  • More on "Texarkana Triangle" (w/Marshall, Tyler) as forum-shopping magnet for auto product-liability claims [Southeast Texas Record; earlier]

If you follow international business controversies at all, you've undoubtedly seen any number of stories that follow a recurring formula. Shocking human rights abuses are reported from some locality in the developing world, such as Nigeria, Colombia, Burma/Myanmar, or Indonesia. The tales of abuse, which may relate to labor relations, the environment, or the provision of security for private worksites, are by their nature hard for western news organizations to check out. The accused culprits -- typically deep-pocketed multinationals like Shell, Coca-Cola, and Unocal -- deny everything. But never fear, a hardy band of attorneys is on hand to expose the truth by filing lawsuits for damages, not in the courts of the foreign nations where the abuses are said to have taken place, but in U.S. courts under the Alien Tort Claims Act. And if you follow these stories with any regularity, you almost certainly recognize the name of Terry Collingsworth, an attorney who serves as executive director of an outfit called the International Labor Rights Fund. He's been involved in many of the highest-profile ATCA suits, his work showcased everywhere from Foreign Affairs to The Nation to Mother Jones to the Carnegie Council ("The Voice for Ethics in International Policy").

So it's news when, as the Associated Press reports, a federal judge in San Francisco rules (PDF) that the suits filed against the Chevron Corporation by some of Collingsworth's clients, based on cancer said to have arisen from its chemical pollution in Ecuador, were, in a word, bogus. Bogus as in: some victims alleged to have had cancer actually never had it, and didn't even know a U.S. lawsuit was going forward in their names. While the judge, William Alsup, a Clinton appointee, accepted the avowals of Collingsworth and his co-counsels that they didn't know the claims to be false at the time they filed them, he said the absence of even basic medical documentation should have served as "warning flags": "Counsel were obligated to investigate first and sue second, not the other way around." When fuller documentation as to one client showed no evidence of leukemia, "Plaintiff�s counsel continued the pretense � instead of doing right and dismissing the claim." When a second plaintiff informed the lawyers that she did not in fact have cancer, "counsel continued the pretense through artfully worded interrogatory answers." Judge Alsup imposed a $45,000 fine on lead counsel Crist�bal Bonifaz of Massachusetts, but said that if Bonifaz does not pay co-counsels Collingsworth and Paul Hoffman will have to make good the fine. (The controversy, it should be noted, has spawned a second legal proceeding against Chevron, and the promoters of that legal action have taken pains to point out that they are not connected with Bonifaz, his co-counsel, or the case before Judge Alsup.)

Roger Parloff at Fortune Legal Pad expertly untangles the whole sorry episode and mentions the wide attention that the Ecuador pollution allegations have gotten in the press, including a "13,000-word article by Bill Langewiesche in Vanity Fair, which barely hints at what Chevron's position might be in the matter". Collingsworth's defense is most notable for his claim that Parloff's interest in covering the story demonstrates that "the mainstream media is in the pocket of major advertisers like Chevron" (& welcome Glenn Reynolds readers). More: Oct. 31.

U.S. Chamber Legal Reform Summit

Today's event is on live webcast, and the agenda is here in PDF format. The Chamber has also released more information on its proposed code of conduct for state AGs: press release, code and summary, report, column.

As Ted noted in this space last month, our friend Lester Brickman of Cardozo School of Law has been calling attention to the ethically ultra-dubious practice of some plaintiff's lawyers of obtaining their fee compensation from defendants in a supposedly separate negotiation, at the clear risk of creating an incentive to sell out the interests of the class or individual client they represent. Prof. Brickman has drafted a letter to the ABA Standing Committee on Ethics and Professional Responsibility requesting an opinion declaring that this practice is unethical. He's posted the letter on his website and, as hinted before, its twenty signatories represent a group of remarkable ideological diversity as well as much distinction in the field of ethics and professional responsibility. They are: Richard Abel, UCLA; David Barnhizer, Cleveland-Marshall; Lester Brickman, Cardozo; Robert Cochran, Pepperdine; Roger Cramton, Cornell; Leonard Gross, Southern Illinois; Allison Hayward, George Mason; Michael Horowitz, Hudson Institute; Michael Krauss, George Mason; Lisa G. Lerman, Catholic; Judith Maute, Oklahoma; Tom Morgan, George Washington U.; Jeffrey O�Connell, Virginia; Deborah Rhode, Stanford; Howard Rosenberg, Denver; Ronald Rotunda, George Mason; George Schatzki, Arizona State; Peter Schuck, Yale; William Simon, Columbia; and Bradley Wendel, Cornell.

P.S. We at the Manhattan Institute were among the first to call public attention to abuses in "separately negotiated" fees more than a decade ago -- see the second half of Lawrence Schonbrun's Civil Justice Memo #30.

Defending state AG activism

The American Constitution Society, which aims to be the opposite number of the Federalist Society, has published a defense of state attorney general activism -- sorry, strike that, a defense of the AGs' "exercising their legitimate authority ...in order to serve the citizens they represent." The authors are former Wisconsin Attorney General Peggy A. Lautenschlager and former Wisconsin Deputy Attorney General Daniel P. Bach.

Illinois trial lawyers

They've had a busy, if stealthy, year, writes Ed Murnane (more: Backyard Conservative).

Cause in Fact and Vioxx, part N

This Newark Star Ledger [thanks to ILR] report on a case to be argued before the New Jersey Supremes today is a significant one.

You might have caused me damage (though you probably didn't cause me any). Must you pay for testing to check to see if you caused me damage? No, says traditional common law "preponderance of the evidence" doctrine.

"Due Process for Exxon"

Ted Boutros in the Wall Street Journal (h/t S.W.) why the Ninth Circuit's affirmance of a $2.5 billion punitive damages award against Exxon is unconstitutional. Earlier: Sep. 12; Jan. 19.

House Democrats have introduced legislation that would hold third-party banks liable for packaging and reselling mortgages that the borrower decides to sue on. Back in April, I wrote in the Wall Street Journal why this earmark for trial lawyers would be disastrous to the economy and make the subprime crisis far worse than it is now.

Around the web, October 23

  • Parents, homeowners, landlords targeted for wider civil and criminal liability for underage drinking [U.S. News via Obbie].
  • New pamphlet and video on Egilman/Gottstein/NY Times unlawful disclosure of Lilly Zyprexa documents [AJP CEO Alert series; earlier]
  • More on what happens when docs settle malpractice suits they'd rather have fought [Medical Economics; see earlier]
  • In little-known footnote to New Deal history, Eleanor Roosevelt and friends decided to create new town of Arthurdale, W.V. as a grand social experiment; maybe you can guess how it turned out [Cyd Malone @ Mises via Coyote]
  • Alien Tort Claims Act cases on the upswing, helped along by liberal Ninth Circuit ruling [NLJ]
  • Trace amounts of lead have been found in lipstick, so on no account should you let your kid eat 71 tubes of it [ValJonesMD via KevinMD]

Colorado med-mal rates

Denver-based COPIC, which covers about 80 percent of the state's privately insured doctors, will hold rates stable for a second consecutive year and also "return $12 million in distributions to physicians in 2008" in the nature of a policyholder dividend. Liability reforms and doctor training are credited, reports the Denver Post. More: Colorado Civil Justice League.

Antivaccine mythmongering

Sure, you run into it all over the Web. But wouldn't you expect better from the Chicago Tribune and its associated blogs?

Med-mal at the Texas Supreme Court

Texas's landmark liability reform law, H.B. 4, seems on its face to require a signed expert report before med-mal litigation can proceed -- or do trial lawyers have a right to take depositions first from medical personnel in hopes of developing enough for an expert to sign off on? Backers of the reform fear, and some trial lawyers hope, that the question could blow a great big hole in the much-discussed law. The National Law Journal, which has the story, quotes defendants' lawyer R. Brent Cooper, a partner in Dallas' Cooper & Scully: "If you allow the process that the Tyler Court of Appeals allowed, virtually all of the safeguards on discovery that were imposed by H.B. 4 could be bypassed".

New York's Taylor Law

Had Albany legislators consciously sought to run the state's public-sector labor costs up to unaffordable levels, they could hardly have done better than with this 40-year-old law. A new report from the Manhattan Institute' Empire Center for New York Policy recommends, inter alia, "rigorous community 'ability to pay' standard to guide arbitration panels towards more affordable contracts for police officers and firefighters, and elimination of the so-called 'Triborough amendment' that now requires continued payment of automatic salary 'step' increases even after a contract has expired." Coverage: NY Sun, Lawrence Levy @ Newsday, Binghamton Press & Sun-Bulletin.

Asbestos awareness pre-Selikoff

Following up on our earlier correspondence, attorney Nathan Schachtman of Phillips Lytle LLP writes:

There is a widespread misconception that the dangerousness of asbestos to end users was somehow not known before Dr. Irving Selikoff publicized it with his work in 1964. Not so. The insulators union's publication, Asbestos Worker, shows an awareness of the hazard before then; indeed, that's why the union approached Selikoff to conduct studies on their membership. The U.S. Navy was also well aware of the hazards (and thus did not need to be warned by anyone), as can be seen in an article entitled "Asbestosis" by Capt. H.M. Robbins & W.T. Marr in the October 1962 issue of the Navy's Safety Review.

We've posted the Robbins/Marr article as a two-page PDF here.

I was going to complain about the tens of millions attorneys will take for the parasitical settlement in a California class action, but Josh Wright has beaten me to it with a post analyzing the underlying Conwood billion-dollar mugging; he's also done much more extensive work on the subject.

Law Review Forum Project

Concurring Opinions has had the good idea of aggregating posts from the blogs/online companion sites associated with major law reviews, such as Yale's Pocket Part, Penn's PENNumbra, and Michigan's First Impressions, into a single site. The other five participating sites at present are Harvard, GW, UCLA, Northwestern, and Virginia. Check it out here.

Federal Judge Peter Beer yesterday dismissed a Louisiana "whistleblower" lawsuit filed under the federal False Claims Act that alleged massive insurance company fraud on the government in Hurricane Katrina claims adjusting. Beer cited an earlier-filed, similar lawsuit brought by prominent Mississippi trial lawyer Dickie Scruggs on behalf of his clients, the Rigsby sisters, as a jurisdictional bar to the Louisiana case. Both the Louisiana case and the Scruggs-Rigsby lawsuit, Ex rel. Rigsby, have been discussed in recent evidentiary filings by special prosecutors appointed by another federal judge, William Acker, to pursue a charge of criminal contempt against Scruggs. Click here to read my post at Insurance Coverage Law Blog about the two False Claims Act lawsuits and how they factor into the criminal case against Scruggs.

Quoted in NYT today

The Washington Legal Foundation is briefing the subject of climate change litigation October 29. Penn Law Professor Jason Johnston, and attorneys Richard Faulk and John Gray will be speaking.

Ed Whelan on Southwick

Ed Whelan ably defends Judge Leslie Southwick against another attempted borking by the New York Times.

Islamo-Fascist Libel Suits Founder

The New York Post has a good summary by Judith Miller of the now-waning efforts to silence critics of Islamo-fascism through American or English libel suits. The counter-attack by publishers and authors depends crucially on the willingness of attorneys to aggressively defend the truth. The article's depiction of the lack of courage of Cambridge University Press is its only disheartening element.

Department of truly bad ideas

"Private attorney generals" as the tax farmers of tomorrow? The IRS whistleblower program was recently expanded to make the role of informant significantly more lucrative. Now American University law professor Dennis J. Ventry, Jr. (via Caron) proposes to expand the program still further to authorize qui tam private lawsuits accusing others of tax underpayment, with the entrepreneurial complainant getting to keep a portion of the spoils.

Public Citizen, "The Arbitration Trap"

I've got some thoughts at Overlawyered about a Public Citizen report assailing credit card arbitration clauses, the centerpiece of which is a "consumer win rate" number that might, if one were being charitable, be termed extremely misleading.

Yet more on Lynne Stewart

From this New York Post report, it appears that Ms. Stewart's message to the Hofstra students is that "I would do it again, but this time I would make sure I wasn't caught."

Is Hofstra trying to put on a "postmodern legal ethics" class here? If you don't get caught it's not unethical?

Lynne Stewart appearance at Hofstra

John Steele liveblogged it at Legal Ethics Forum. From Steele's account, it would appear that -- despite the presence of several strong Stewart supporters on the program, which made it easy to expect the worst -- she did face the right sorts of pointed questions from both faculty and students, and the strained rationalizations she put forth for her gross misconduct were not allowed to pass without challenge.

None of which retrospectively makes Hofstra's decision to designate her as conference "faculty" anything other than the wince-making mistake it was. But it's certainly much preferable to the uncritical reception Stewart has been accorded on some of her other campus stops.

More: The New York Times finally notices the controversy, now that it's winding up. The Post's coverage is here ("Terror Lawyer Says She'd 'Do It Again'"). Earlier coverage here.

Plus: Candace DeRussy, NRO "Phi Beta Cons".

An asbestos expert's Beaumont background

Two weeks ago in this space, Ted flagged Adam Liptak's Times coverage of Mississippi-based pulmonologist Jay T. Segarra, whose testimony has come under challenge in a big Philadelphia asbestos proceeding. Wrote Liptak, "According to the records of the Claims Resolution Management Corporation, which oversees asbestos claims, he participated in almost 40,000 positive diagnoses for asbestos-related illnesses over the last 13 years, or about eight per day, every day, including weekends and holidays. There were about 200 days on which Dr. Segarra rendered positive diagnoses for more than 20 people, and 14 days with more than 50." Now the Chamber-backed Southeast Texas Record reports that Segarra was "used heavily as an expert throughout the late 1990s by Reaud [Wayne Reaud of Reaud, Morgan & Quinn], Provost Umphrey, Brent Coon and other plaintiffs' firms in Jefferson and Orange counties." A related editorial is here.

Mississippi AG contracts

Election challenger Al Hopkins lays out some numbers on how incumbent Attorney General Jim Hood regularly awards legal representation to large donors.

Brendan O'Reilly, the editor-in-chief of the Hofstra campus newspaper The Chronicle, criticizes the Lynne Stewart invitation, and stirs up reaction. More coverage at Newsday. Candace de Russy also weighs in at NRO. Our earlier coverage is here.

Yet more: an editorial in the Daily News says Hofstra "should know better" and says Stewart's record "should have disqualified her from participating in a seminar meant to educate both future lawyers and today's practicing professionals." The editorialists at Newsday, meanwhile, see nothing wrong with the invitation.

United States v. Dickie Scruggs

The special prosecutors in the criminal contempt of court case against prominent Mississippi lawyer Dickie Scruggs have unveiled more of their evidence against Scruggs in federal court filings in Alabama. Prosecutors accuse Scruggs of willfully violating the terms of federal judge William Acker's injunction in a civil case brought against his clients, Kerri and Cori Rigsby, who took 5,000 to 15,000 pages of State Farm Hurricane Katrina claims files and gave them to Scruggs. The civil case, for breach of their confidentiality agreements, was brought by the employer of the Rigsby sisters, E.A. Renfroe and Co., a State Farm claims contractor.

Prosecutors accuse Scruggs of devising a "sham" strategy of pretending to misinterpret the injunction so he wouldn't have to return the documents as ordered. Instead of sending them back to Renfroe's attorneys, he had at least two conversations with Mississippi Attorney General Jim Hood, a close friend, right after Acker entered the injunction, about fears that Renfroe's attorneys would violate a protective order accompanying the injunction and tell Renfroe and State Farm of the documents' contents. So Scruggs sent Hood the documents, even though the Rigsby sisters had previously provided copies of all the documents to Hood. Scruggs allegedly was trying to find safe harbor in an exception in the injunction for cooperating with law enforcement.

Scruggs did not represent the Rigsby sisters in the civil action, which is ongoing. Instead, the basis of their attorney-client relationship was the documents, as well as a qui tam "whistleblower" claim the sisters brought against several insurance companies, and a wrongful discharge suit they brought against Renfroe, which was filed and then voluntarily dismissed a short time later. Unusually for an attorney-client relationship, Scruggs also hired the two as litigation consultants, after they quit their jobs at Renfroe, at salaries of $150,000 a year. Prosecutors claim Scruggs' motive in violating the injunction was profit -- the documents were valuable to him in litigation and as leverage, particularly as long as he could keep State Farm in the dark about which documents they were and what they said. For recent posts I've written at Insurance Coverage Law Blog on prosecutors' filings, click here and here.

Medtronic recall litigation on the horizon

Defenders of the status quo in product liability point to the deterrent effect of such liability, and argue that manufacturers would misbehave without such liability. This, of course, assumes that manufacturers care nothing for their reputation in the marketplace, or that the marketplace does not care about safety and quality.

So the recent Medtronic recall of a lead for its defibrillators—undertaken in an abundance of caution despite the lack of statistically significant evidence—will provide an interesting test case for the plaintiffs' bar. As the New York Times reports, Medtronic's quick disclosure and recall contrasts favorably with the slower recall by Guidant three years ago. Will Medtronic be rewarded in the courtroom, or will they face the same degree of liability and litigation expense (or worse) as that of Guidant? And if the latter, where does the supposed incentives of the modern-day product liability system come from? Advertisements in Google keyword searches (see also yesterday) suggest that the plaintiffs' bar is already jumping on this as a mass tort. Of course, individual plaintiffs' attorneys have no incentive to treat a good-behaving corporation differently than a badly-behaving corporation: so long as there is the possibility of finding documents to take out of context to make the former seem like the latter, so long as for-pay experts are willing to testify as to the dastardliness of the defendant, and so long as juries look only at individual cases in isolation from the larger public policy questions, the two types of cases are indistinguishable in likely profitability. Which suggests somewhere else where incentives can be changed.

(Expect the third-payer consumer-fraud, shareholder litigation, medical monitoring, and other all-too-typical class actions to reflexively follow the advertising blitz.)

Taxation of employment-law damages

The proposed Civil Rights Tax Relief Act of 2007 is the latest effort in Congress to make the tax code more favorable to employment-law plaintiffs, by (among other steps) declaring damages for emotional distress in job-bias cases to be tax-free (via Caron). The argument is that plaintiffs in conventional tort cases can already exclude such damages from taxable income, and so employment-law plaintiffs should get to do so too. (The possibility of bringing uniformity to the scene by subjecting the conventional tort claimants to taxation is, of course, unthinkable). Note Prof. Berger's perfectly cool-headed invitation for plaintiff and defense interests to collude against the interests of the public fisc: plaintiffs and their lawyers are of course supposed to favor the tax break for the obvious reasons, while defendants are urged to favor it because it would "encourag[e] lower (because less taxable) settlements". Can you spot a possible flaw in that logic from the defendant's point of view? Maybe the possibility that by making employment lawsuits more lucrative it will encourage more of them to be filed in the first place? (& welcome Prof. Caron readers).

Around the web, October 16

Adam Liptak at the Times looks at the heavy lawyer-ad presence on Google sponsored links (�Oakland personal injury lawyer� costs $58.03), and quotes both me and Ted. �Instead of competing on price,� Ted says of plaintiffs� lawyers, �they compete on Google.� And I point out that the family in search of information on, say, cerebral palsy, will run into plenty of medically tendentious material posted by lawyers as part of their client-intake efforts. (New York Times, Oct. 15)(cross-posted from Overlawyered).

White-collar attorney privilege waivers

Through the so-called McNulty memo (earlier coverage), the Department of Justice has made a show of responding to criticism about its arm-twisting of corporate defendants to waive attorney-client privilege in white-collar crime investigations. According to a report to a Senate committee by former Delaware chief justice E. Norman Veasey, however, that effort falls short.

In the mail: Northwestern lawprof (and old friend) Steven Calabresi has edited this volume to mark the 25th anniversary of the Federalist Society. From the flap copy:

What did the Constitution mean at the time it was adopted? How should we interpret today the words used by the Founding Fathers? In ORIGINALISM: A QUARTER-CENTURY OF DEBATE, these questions are explained and dissected by the very people who continue to shape the legal structure of our country. Inside you'll find:

*A foreword by Justice Antonin Scalia and speeches by former attorney general Edwin Meese III, Justice William Brennan, Judge Robert H. Bork, and President Ronald Reagan

*Transcripts from panel discussions and debates engaging some of the brightest legal minds of our time in frank, open discussions about the original meaning of the Constitution of the United States and its impact on the rule of law in our country

*A debate on the original meaning of the Commerce, Spending, and Necessary and Proper Clauses

*Concluding thoughts by Theodore Olson, forty-second solicitor general of the United States and a fellow at both the American College of Trial Lawyers and the American Academy of Appellate Lawyers.

ORIGINALISM: A QUARTER-CENTURY OF DEBATE is a lively and fascinating discussion of an issue that has occupied the greatest legal minds in America, and one that continues to elicit strong reactions from both those who support and those who oppose the rule of law.

The book is by no means a mere compendium of like-minded thought, but includes extensive commentary from such noteworthy critics of conservative originalism as Cass Sunstein, Akhil Amar, Larry Kramer, and Jeff Rosen. It can be purchased (update) from the Federalist Society here. Incidentally, Prof. Calabresi has weighed in a couple of times in recent days in popular debates on the Constitution, including this op-ed in the WSJ and this letter to the editor correcting the ever-correctable New York Times.

"Legislating to the fringe"

A California statute (the Investigative Consumer Reporting Agencies Act, or ICRAA) requires that consumers be provided on request with copies of the investigations done on them at the behest of insurance underwriters, which in turn deters insurers from trying to check out whether applicants might suffer from alcoholism or live in conditions of firetrap squalor. Researching the law's history, Bookworm Room is reminded of the many unplanned consequences spawned by a seemingly unrelated enactment, the Americans with Disabilities Act (ADA).

"On vaccines, immune to reason"

My Manhattan Institute colleague Paul Howard, who runs the Medical Progress Today website, has this opinion piece in Friday's Washington Post.

The Daily Business Review reports that U.S. District Judge Cecilia M. Altonaga has rejected a proposed settlement concerning allegedly defective air purifiers sold by The Sharper Image. The settlement would have given $19 coupons to over two million owners of "Ionic Breeze." The judge concluded that the proposed settlement violated the Class Action Fairness Act of 2005. That law was intended, inter alia, to curb coupon-only settlements.

Sharper Image's "precarious financial situation" did not affect her decision, Altonaga said.

Apple iPhone lawsuit

Roger Parloff reports that Apple is faced with a billion-dollar-plus lawsuit against Apple alleging antitrust violations over its software restrictions on its iPhone product.

Antitrust? you might ask. Doesn't that only apply to monopolists? How can Apple have market power when they have less than 1% of the market for cell phones? The plaintiffs get around this by claiming that Apple iPhones are a market in and of themselves, and that Apple has a monopoly over the sale of iPhones. This raises the question why Apple had to reduce the price of its product by $200 shortly after introducing it if it didn't face any competition. But who says the legal system punishes innovators?

Note also that the suit is brought as a class action on behalf of all iPhone owners, even though people with common sense knew when they bought it that they were restricted to Cingular/AT&T phone service and software, and made the decision to buy it regardless. The class even absurdly includes people who will buy the iPhone in the future.

The suit makes no economic or legal sense, but it's been brought in California, home of the Ninth Circuit, which has countenanced the irrational theory of leverage before in such cases as Image Technical Serv., Inc. v. Eastman Kodak Co.

Was Paul Minor framed?

In a commentary that's longer on insinuation than on proof, New York Times editorialist Adam Cohen contends in Thursday's paper that prominent Mississippi trial lawyer Paul Minor, sentenced last month to eleven years in a long-running judicial bribery scandal, was framed by a Republican conspiracy. Cohen's argument runs more or less as follows: Minor may have arranged loans and financial favors for local judges, but "everyone" in the justice system down there does similarly "questionable" things, so "a prosecutor can haul any lawyer and judge he doesn�t like before a grand jury and charge corruption". Really? Any lawyer, and any judge? There are no lawyers in Mississippi who refrain from funneling money under the table to judges as Minor did, and no judges who refrain from accepting money of this sort? Names and particulars would be most welcome here, but are quite absent from Cohen's account.

Minor, of course, was not just hauled before a grand jury but convicted by an actual trial jury of the charges Cohen dismisses as "unconvincing". But let that pass. The point is that since anyone could be prosecuted but only Democratic donor Minor was, the explanation must lie in political favoritism; on this point Cohen cites Minor's own lawyers, no doubt a very objective source, who "say prosecutors were not interested in going after similar activity by trial lawyers who contributed to Republicans". Which trial lawyers are those? Again, Cohen mentions none.

Much heavy breathing ensues about how the whole thing was a plot to knock off the trial lawyers as a political base for Mississippi Democrats. Indeed, "the case intimidated trial lawyers into stopping their political activity." That must be why the Times reported on Wednesday that the Mississippi Democratic Party is running a successful plaintiff's lawyer for governor, why another successful plaintiff's lawyer has captured the Republican (!) nomination for attorney general against an incumbent who is himself joined at the political hip with trial lawyers, why trial lawyer donations just knocked off an incumbent insurance commissioner who was not sufficiently cooperative with the wishes of Katrina litigators, and so forth. If Minor's downfall occasioned a collapse of the political clout of trial lawyers in Mississippi, someone must have forgotten to tell the trial lawyers about it.

If you think Cohen might be going a bit out on a limb in asserting a scandal based on this evidence, wait till you see the version of the same argument on offer at Harper's, where Columbia law lecturer and Balkinization contributor Scott Horton wholeheartedly endorses a master-key set of conspiracy theories in which villains that include Antonin Scalia and his duck-hunting partners, in concert with many other sinister interests, gleefully manipulate Magnolia State politics from afar. Horton relies heavily on unnamed secret informants, such as "two sources, one of them inside of the Justice Department" who assure him that the conspiracy is even worse than he could imagine, and that trial lawyers nationwide are being maliciously brought up on technicalities in a manner reminiscent of an Eastern European dictatorship.

Any account of prosecutorial favoritism in the Minor affair, of course, must begin (and perhaps end) with the success of Richard ("Dickie") Scruggs at dodging charges, despite having taken part in some questionable transactions. Scruggs's defenders would maintain that his role in the transactions was simply less egregious than Minor's. Horton prefers the alternative explanation that Scruggs, who is the brother-in-law of Trent Lott, wields more political clout than Minor. To make the favoritism story fit, Horton presents Scruggs as a figure who "tends to support the Republicans, not the Democrats", which at the least oversimplifies the complicated bipartisan political persona of the self-identified Democrat, "almost exclusively a supporter of Mississippi Democrats" and a key backer of national Democrats as well. And it also seems to miss the point that if national Chamber of Commerce types had been secretly pulling the prosecutorial strings, as Horton repeatedly hints, you'd think they would infinitely have preferred to nail the big-league national player (Scruggs) and let the locally famous one (Minor) get off than the reverse. But why let such complications get in the way of a good story?

Professor Bainbridge has some comments ("We are talking about a New York law school hosting a facilitator, aider, and abettor of terrorists who targeted New York", as does alumnus Mitchell Rubinstein of Adjunct Law Prof, who's "disappointed" in his alma mater's invite:

Students do not need to see to see or hear a convicted criminal speak to learn that what she was wrong. Indeed, you do not even have to go to law school to know that! Stewart's attendance does nothing to further the legal profession or legal scholarship.

The New York Law Journal assigned the task of writing up the controversy to a reporter who's also a student at Hofstra Law; the resulting piece does not exactly come across as zealously adversarial toward the position of the Hofstra administration. For two contemporaneous views of Stewart's conviction, see John Steele at Legal Ethics Forum ("Stewart betrayed the criminal defense bar itself. ... because the tapes in Stewart's case showed such awful behavior, it will be harder to criticize the DOJ for taping and prosecuting defense lawyers. Stewart, not Ashcroft's DOJ, is to blame for that. Stewart poisoned the well for other defense lawyers.") and Andrew McCarthy at NRO, her opposite number in the Blind Sheik trial ("I like Lynne Stewart. ... I can feel justice but no joy is seeing her brought low. ...As some of New York City's most distinguished defense professionals explained to the Times after Stewart's conviction, there are lines between proper advocacy and misconduct, and they are well known. Here, Lynne was so far over them that, to be blunt, it is insulting for her and her allies to suggest otherwise.")

Earlier coverage here.

The three plaintiffs found success in front of a Nevada jury. [WSJ Law Blog; Reno Gazette-Journal; Erichson] The WSJ reports: "The Reno case is the seventh to reach a verdict since trials began last year. Three of the other six trials resulted in verdicts in favor of Wyeth. Of those favoring plaintiffs, one was overturned and judgment entered in favor of Wyeth, and verdicts in the two others were thrown out and new trials ordered. None of the victorious plaintiffs in those cases had been awarded damages greater than $3 million." Thousands more cases are pending.

The hormone replacement therapy drug is said by two studies to increase the risk of breast cancer by 22-26%. Thus, about 80% of Prempro-taking breast cancer victims, by definition, did not have their cancer caused by Prempro. So how, without junk science, can plaintiffs possibly prove that it was more likely than not that Wyeth's actions caused the plaintiffs' injuries? And that is before we get to the question of outsized "compensatory" damages to the three plaintiffs, the fact that the warning label did mention the breast cancer risk, the fact that the warning label was FDA-approved, and the questionable procedure of yoking together three unrelated cases in a single trial, a mechanism that has been shown to increase juries' likelihood of finding liability. The jury returns to consider the question of punitive damages, though the award already given plainly has a punitive element, showing the futility of constitutional checks on punitive damages when non-economic damages are unfettered.

Around the web, October 11

  • Wish I could attend dept.: on this coming Monday Oct. 15 NAM is hosting afternoon seminar in D.C. on civil procedure reform. "Key topics include: notice pleading, streamlined discovery, expedited summary judgment process, frivolous lawsuits, forum shopping by domestic and foreign plaintiffs, and rationalizing punitive damages." [NAM "Capital Briefing", scroll; register]
  • Battle continues in Washington state over insurer bad faith Referendum 67 [AP, Insurance Journal, Seattle Times, Sue Evans & Dana Childers @ The Olympian, Seattle P-I, chamber head Don Brunell; earlier here and here]
  • Oklahoma Gov. Brad Henry says his Brazilian fishing trip with trial lawyers was just pleasure, not business [ShopFloor]
  • Plop, plop, fizzle, fizzle: lawsuits alleging injury from ingredient PPA (phenylpropylalanine) in Alka-Seltzer Plus, Contac, etc. mostly strike out [NJLJ; OL last year]
  • Harvard's Arthur Miller, whose "longstanding relationship with Milberg Weiss" was noted previously, has a pro-liability piece out on Stoneridge [NLJ]
  • Florida injury lawyers eager to follow up on Engle with more tobacco suits [AP/Chamber, Jacksonville Daily Record]

Why think tanks work

AEI head Chris DeMuth explains in today's Wall Street Journal—and discloses that he is stepping down in 2008. "The search for a successor has begun—this being AEI, it will be a competitive search."

CNN Headline News/Glenn Beck show today

I'm scheduled to join Glenn Beck today on his CNN Headline News show, on the 2:30-3:00 p.m. Eastern segment, to discuss the Lynne Stewart/Hofstra affair.

Age rating in auto insurance

It's fair in Canada, as Prof. Grace notes, and it's fair everywhere else too. Related: here.

The latest entries in the newspaper's multi-week series of special reports by Cheryl K. Chumley and Mark Tapscott include "Hard times descend on super-lawyer land" (Lerach and Milberg Weiss), "Tainted campaign donations will be kept, Democrats say", and "Defrauding justice: Should Congress investigate the liabilities lawsuit industry?" Ted and Jim are quoted in the "Hard times" story, and I'm quoted in the "should Congress investigate" story.

Richard Epstein on the Stoneridge saga

We're delighted to publish an original article on the Stoneridge case by Manhattan Institute visiting scholar (and University of Chicago law professor) Richard Epstein. Its title: "Primary and Secondary Liability Under Securities Law: The Stoneridge Investment Saga". Prof. Epstein's podcast of last week on the same subject is here, and our other coverage of Stoneridge is here.

Top Ten thanks

Various people have been offering lists of their favorite law blogs. We're honored that Point of Law is named by two very fine bloggers, Anne Reed of Deliberations (juries and their behavior) and Nicole Black of Sui Generis (New York law). That's aside from one in the family, David R. at Insurance Coverage Blog (and see Ted at Overlawyered).

Deliberations and Sui Generis are both on my regular reading list, both exemplifying one of the most fundamental formulas for good blogging, a constant flow of fresh and varied material presented in an entertaining way.

Upcoming Common Good conference in Washington Nov. 5, at the offices of the Human Rights Campaign. Description (N.B.: updated from earlier version):

Around the web, October 10

  • Generic charges of statistical disparities, unconscious bias and too-wide managerial discretion fuel current wave of employment-bias class actions -- and rare is the big employer not vulnerable on one or more of those fronts [Parloff, Fortune]
  • Kentucky officials sue maker of Oxycontin seeking recoupment of money spent on drug abuse programs, policing [AP]
  • One perspective on the tainted-hamburger scare [Szwarc]
  • Underplayed angle in Stoneridge hubbub: law firms themselves are a prime target for suits alleging aiding and abetting [NLJ]
  • Three members of San Antonio family are indicted on charges of submitting fraudulent fen-phen charges [USDoJ]
  • Washington state's unique sovereign un-immunity rules keep generating big suits over crimes committed by ex-cons [Seattle Times (Algona hit/run, $1.8 million settlement), KOMO (murder in Tacoma, family seeks $45 million)]
  • More attention for Ohio AG Marc Dann, scourge of subprime lending and much else [WSJ law blog, Columbus Dispatch via Chamber]

Doug Baird vs. Lynn LoPucki

At the University of Chicago Law Faculty Blog, they're debating LoPucki's recent Michigan Law Review article (with Joseph Doherty), Bankruptcy Fire Sales, which concluded that "during the period studied at least, the bankruptcy courts were selling large public companies at fire sale prices", in part because of forum-shopping in the "market" for reorganization filings.

In today's Wall Street Journal, SEC Commissioner Paul Atkins is yet another voice warning about the dangers of a reversal in Stoneridge v. Scientific-Atlanta. John Engler weighs in at USA Today. In the Legal Times, Richard Booth correctly asks who really gains from the alleged Stoneridge fraud.

Warren Richey has a fair overview of the facts in today's Christian Science Monitor, and Kara Scannell in the Wall Street Journal covers Bill Lerach's lobbying campaign. And, interestingly, Roger Parloff, who previously called for reversal, has changed his mind:

These issues were decided in 1994, and Congress has twice consciously chosen not to overrule the part of that Court decision that barred private suits against aiders and abettors, which is what Scientific-Atlanta and Motorola really were (if anything) here. Congress decided � reasonably � that shareholder litigation is so fraught with abuse, and is such a grotesquely inefficient and ineffective way of reimbursing fraud victims, that it was wiser to leave the deterrence and punishment of aiders and abettors to the SEC and federal prosecutors.

Earlier on Point of Law: Epstein podcast and column; Bainbridge; Copland; and Frank.

Arkansas drug suit, cont'd

The Chamber's Southeast Texas Record reports that Arkansas AG Dustin McDaniel has hired Houston-based Bailey Perrin Bailey on a 15 percent contingency to go after AstraZeneca, Eli Lilly and Johnson & Johnson, the makers of Seroquel, Zyprexa and Risperdal respectively, for Medicaid damages arising from alleged mismarketing. The hoped-for damages apparently reach $600 million, though that would seem to assume that all sales of the (powerful and highly useful) psychiatric drugs to state purchasers were illegitimate. Earlier: Oct. 4.

The U.S. Navy and the asbestos calamity

I recently received this note (which I reprint here with his permission) from Philadelphia toxic-tort attorney Nathan Schachtman of Phillips Lytle LLP (and formerly of McCarter & English LLP). It responds to and elaborates on my article of earlier this year on government and risk, "Dangerous When In Power":

Thank you for your essay in Reason on the government's role in the asbestos health crisis in this country. There is, however, one important fact you omitted from your narrative.

In the mid-1970s, amidst economic turmoil and declining military budgets, the US Navy found itself with a big problem. Payments to civilians under the FECA (Federal Employees Compensation Act), a statute that gives civilian employees of shipyards the equivalent of workers' compensation benefits, came right out of the Navy's budget for shipbuilding. The Navy had no insurance for FECA payments, and suddenly it found itself facing a large uptick in the number of claims made by civilians for asbestos-related injuries.

About the same time, many states adopted some version of strict product liability, some stricter than others. None was likely stricter than Pennsylvania's version.

The FECA gives the government liens against any recovery in third-party actions. The JAG lawyers, faced with a blooming docket of FECA cases, started to encourage the workers compensation plaintiffs' lawyers to file third-party actions. Indeed, in Philadelphia, the lawyers who stepped into the forefront of asbestos personal injury actions had been workers comp lawyers with a large FECA docket (Gene Locks; Joe Shein).

The cruel irony of the FECA (or workers' comp) statutes is that the employer pays regardless of fault, that the employer can't be sued in civil actions, and that the employer can recover ~80% of its payments from settlements or judgment proceeds from a civil defendant.

Ultimately, the plaintiffs' bar found that recoveries and settlements were too certain to encumber themselves and their clients with government liens, and they stopped filing their FECA cases altogether.

The government's role in fueling the explosion of asbestos civil actions has never, to my knowledge, been discussed in the media. When I was a young lawyer, my first trials were in defense of companies that were dragged into litigation over having sold asbestos products to the Navy, often pursuant to government specifications. These cases, filed in the late 1970s, up for trial in the mid-1980s, often had a letter in the claimant's personnel file from the JAG officer, noting that the man had been diagnosed with asbestosis and urging him to seek legal counsel to consider a civil suit against the Navy's suppliers. Unfortunately, I don't have any of these documents anymore, but they may not be too difficult to obtain.

What a story is hidden away in those old files! Not only did the Navy know of the asbestos hazards, hide them from its civilian workers, but when those workers got sick, the Navy turned on its outside suppliers by encouraging its workers to sue the suppliers, while hiding behind the exclusive remedy provision of the FECA.

More linkage and discussion of "Dangerous When In Power" here.

On Fox News Tuesday morning

I'm scheduled to join Fox News tomorrow (Tues.) morning around 9:40 a.m. Eastern to discuss the Lynne Stewart/Hofstra affair.

On Bloomberg TV today

I'm scheduled to be on Bloomberg TV at 5 pm Eastern talking about the Stoneridge case. See also Point of Law October 6 for more links.

Mark P. Robinson Jr. of Newport Beach, Calif.'s Robinson, Calcagnie & Robinson, known for lawsuits against automakers and tobacco companies, is being obligingly munificent toward the new "public interest" law school starting up under Erwin Chemerinsky. More: Thomas Lifson, American Thinker (calling tort lawyers a "natural constituency of the new school"); Stephen Bainbridge (quoting Chemerinsky maintaining that public-interest law cuts across ideological boundaries).

Yet more: This recent profile by Amanda Bronstad of the NLJ notes Robinson's leading role in pharmaceutical litigation and the political clout associated with his firm; California State Sen. Joe Dunn, closely identified with trial lawyer interests in Sacramento, worked for Robinson, Calcagnie & Robinson for ten years. And it also notes that at UC Irvine, "Robinson was one of only two lawyers on the dean search committee," though he "often shuns the spotlight".

No CLE credit for Stewart panel

Hofstra's Monroe Freedman announces the news. (Earlier coverage).

Frank Rich vs. Clarence Thomas

Orin Kerr catches the Times critic neglecting his fact-checking in snarking on the Justice's job stint in Missouri state government.

Pennsylvania Supreme Court races

Trial lawyers are pouring in money to this fall's races for two seats on the court (via Keystone Politics).

N.Y. Times recusal standards

They're at best extremely peculiar, and perhaps Clarence-Thomas-specific.

Stoneridge-fest in the WSJ

A backgrounder (with Senator Specter on the wrong side once again), and an extensive op-ed seeking affirmance. Lyle Roberts has other links to press coverage, and one can expect more on Monday and Tuesday.

My Monday talk-radio discussion with Hugh Hewitt about the Stoneridge case (and other class action and legal reform issues) is on-line. Pete Yost of the Associated Press also quotes me.

POL personnel on Stoneridge: Epstein; Bainbridge; Copland; and Frank.

The magic of employment class actions

They keep the initiative with the plaintiff's side, says California class action plaintiff's attorney Brad Seligman:

Individual cases rise and fall on your client. On some fundamental level, you're defensive. The defendant is going to challenge your client and say, "He was a terrible, awful employee blah blah...." In class action, the focus is on the defendant. I can really be on the offensive, looking at the defendant's conduct and keeping the searchlight on that.

-- Civil Justice Association of California 3Q07 "Balance" newsletter (PDF), quoting article by Stan Sinberg in "Northern California Super Lawyers" magazine.

Refik Kozic v. Merck

50-year-old Refik Kozic suffered significant atherosclerosis and coronary artery disease and high cholesterol, but blamed his heart attack on his nine weeks of Vioxx usage. A Tampa jury (the first in Florida to hear a Vioxx case) didn't buy his argument and took just two hours to find for Merck after three weeks of trial in Hillsborough County.

Richard Epstein podcast on Stoneridge

Yesterday, after Richard Epstein addressed a Manhattan Institute luncheon on the topic of the pending Supreme Court Stoneridge case, our Jim Copland interviewed him for an eight-minute podcast about the case. It's very much worth listening to, and can be found here. Look for more Epstein podcasts at Point of Law as the fall proceeds.

Lynne Stewart/Hofstra furor

I've got a new piece up at City Journal (a slightly different version appears in today's New York Post) on the controversy over the disbarred lawyer's role as designated faculty at the upcoming Hofstra legal ethics conference. Thanks for links to Instapundit, NRO "The Corner", Brothers Judd.

Our latest featured column is Jim Copland's from the Examiner, on this summer's favorable defense rulings in lead paint lawsuits.

Trial lawyers' lobbying week

One of their most effective techniques, as Lisa Rickard observes, is to help advance little litigation time bombs in seemingly unrelated bills. Who knew that they were working on the Hill to "[i]nvalidate arbitration agreements in meat packer and producer contracts, so that more business disputes become lawsuits"?

Where are the bar authorities?

They claim to be the means by which the legal profession regulates itself, but they've done precious little to help out in the recent spate of litigation scandals from Milberg Weiss on down, argues Dan Popeo in the Examiner.

Parallel Stoneridge events October 5

Case Western Reserve Law in Cleveland is hosting along with the Federalist Society a conference tomorrow on Stoneridge; speakers include Stephen Bainbridge and POL's Jim Copland, and it's hosted by my law school classmate Craig Boise.

In Washington, the AEI Legal Center for the Public Interest is putting on its own panel discussion Friday morning. Former SEC chair Harvey Pitt will speak, as will a number of other attorneys from both sides of the amicus briefs. I'll also be on the panel. The AEI site has a number of documents on the subject.

Elsewhere, in the Wall Street Journal, the UK's former Chancellor of the Exchequer expresses outrage at the liability theories in Stoneridge.

Around the web, October 4

Prof. Bainbridge on Stoneridge

He's got new commentaries on Stoneridge Investment Partners v. Scientific-Atlanta, "arguably the most important securities law case to reach the Court in a decade," here and here.

So now everybody's happy

Following breathless press exposes of the "payday lending" business near military bases (they charge high interest rates! It's a bad deal if you've got access to conventional credit!) a new federal law sharply restricts the interest that can be charged to military borrowers. This report from Utah finds lenders responding by simply refusing to make loans to members of the military. A critic of the industry, Linda Hilton of the Coalition of Religious Communities, says she's glad the option is disappearing and recommends that if service personnel find themselves in financial straits "then they ask their church, military relief groups, family or others for help". More great moments in predatory lending law: Overlawyered, Oct. 17, 2006.

Ave Maria School of Law...

Switching sides in the BP case

Prominent Texas attorney Ronald Krist represented four clients who filed claims against the oil giant over the 2005 Texas City explosion, then after negotiating settlements for them switched over to begin representing BP against other claimants' suits. But did he take proper care of the first set of clients' interests? Former client Jose Elizondo claims he didn't, Krist disputes the allegations, and as Brenda Sapino Jeffreys reports in Texas Lawyer, messy litigation is underway over the whole episode, with none other than John O'Quinn representing Elizondo.

Supreme Court biography, cont'd

A couple of years back I reviewed reporter Ken Foskett's account of Justice Thomas's remarkable life story. I liked that book reasonably well, but it was clear that the big splash was going to be reserved for the Justice's own memoirs.

Maureen Martin of the Heartland Institute has a very fine op-ed in today's Providence Journall on the damages plan developed for Rhode Island's groundless lead paint public nuisance suit.

A snippet: Under the plan, windows will almost always be replaced with new, energy-efficient ones, and new drywall will cover existing lead-based paint. The plan can call for new doors, new flooring, new kitchen cabinets, and new stairways, banisters, spindles and newel posts. If these items are unique, they will be stripped and refinished rather than replaced. If the housing unit is part of the state historic-preservation program, replacements will have to be custom-made. The interiors will then be repainted. The choice of color is up to the homeowner. Surprisingly, the state doesn�t include Martha Stewart as a color consultant.

"Milberg Weiss faces the music"

In the October 1 Fortune, Peter Elkind summarizes where matters stand, with three of the four leaders of the "lawsuit factory" pleading guilty, and Mel Weiss taking his chances at trial.

Mississippi state auditor Phil Bryant "has issued a demand letter for recovery of the $14 million in legal fees paid by MCI to two law firms in the wake of the state's $110 million settlement with MCI in a 2005 tax fraud case." The Langston and Lundy & Davis law firms "were hired as outside counsel to represent the state by current Attorney General [Jim] Hood. Langston has been identified as one of Hood's largest campaign contributors, a reality that Langston doesn't deny." The two firms were then cut into the $14 million as part of the negotiated settlement, but Bryant says the money belonged to the public and should have gone through the appropriations process. The twist: to enforce the state's rights in the matter, Bryant will apparently have to call on legal support from the office of AG Hood himself, and you have to wonder how cooperative he'll be. (Sid Salter, "Langston: State asks recovery of legal fees", Jackson Clarion-Ledger, Sept. 23; "State parties bring smack down", Biloxi Sun-Herald, Sept. 23). More on the furor: Point of Law, May 13 and May 23, 2005 (cross-posted from Overlawyered).

As happened last time around, John Edwards is garnering some mostly favorable press attention by endorsing a "certificate of merit" prerequisite for the filing of medical malpractice suits. If the AP coverage is accurate, his latest thinking may include a couple of new details; in particular, he told a Families USA/Federation of American Hospitals/Kaiser Family Foundation gathering last month that he would require lawyers to obtain not one but two expert opinions before suing, something I don't recall seeing in his 2004 proposals (a quick search of Edwards's campaign website yields little detail about either his old or his new proposals in this area).

Here's what I had to say last time around:

Certificates of merit: Before a malpractice suit could go forward, under this idea, the lawyer would have to get a qualified medical specialist to sign off on it. Already in effect in roughly a third of the states, this proposal almost certainly does more good than harm. Its main effect seems to be to inhibit filings by amateur-hour lawyers who have little experience suing doctors but figure they'll give it a try. It does little to cramp the style of seasoned malpractice lawyers: Those with choosy case-selection standards already arrange for their cases to get a vetting beforehand, while those with laxer standards can retain rubber-stamp dial-a-medics who'll sign whatever they're asked to. (In Illinois, amazingly, the medical reviewers can even remain anonymous.) Not surprisingly, some of the states which already have certificate-of-merit laws, like Pennsylvania, are also states suffering severe malpractice crises. In a 1995 interview, Mr. Edwards himself suggested that this rule would not make much difference.

As we've noted on several occasions, certificate-of-merit proposals vary a great deal in strength, from many that are almost vanishingly weak to others that probably succeed in reducing the incidence of groundless suits. It will be a question worth exploring to what degree the two-expert idea moves Edwards's proposal along the spectrum from "weak" toward "strong". The AP story, by the way, quotes AAJ spokesman Bill Schulz as saying of the certificate of merit idea that for trial lawyers "generally speaking it's been a kind of nothingburger".

P.S. Eric Turkewitz, of the New York Personal Injury Law Blog, emails to say: "The idea of needing two doctors for a certificate of merit instead of one is, I believe, brand new. When I covered the Edwards position on the subject back on June 14th, it wasn't there."

Edith Efron on Justice Thomas

With Justice Thomas very much in the news with the release of his memoir, Edith Efron's 1992 analysis of his confirmation hearings for Reason is worth rereading.

Adam Liptak's latest Sidebar column reviews the case of an asbestos plaintiffs' lawyers' doctor who should know better, as he testified in the Judge Jack silicosis proceedings. I have uploaded the motion to exclude Dr. Segarra's testimony.

Steven Calabresi on originalism

Dr. Egilman "accepts responsibility" and agrees to pay Lilly $100 thousand. His statement recognizes that it "was not in the public interest to only put out one side of the story" in leaking selected documents to the New York Times. Bill Childs has details, as does Avery Johnson. Egilman spins the story to Pharmalot. Eric Starkman is less than impressed with the Times coverage.

(Earlier: Dec. 20, Jan. 8, Jan. 30, Feb. 6, and Feb. 13.)

Not seen or reviewed yet, but coming well recommended, is this new volume from Vanderbilt lawprof Richard Nagareda, now available on Amazon. Here's the book description given there:

The traditional definition of torts involves bizarre, idiosyncratic events where a single plaintiff with a physical impairment sues the specific defendant he believes to have wrongfully caused that malady. Yet public attention has focused increasingly on mass personal-injury lawsuits over asbestos, cigarettes, guns, the diet drug fen-phen, breast implants, and, most recently, Vioxx. Richard A. Nagareda�s Mass Torts in a World of Settlement is the first attempt to analyze the lawyer�s role in this world of high-stakes, multibillion-dollar litigation.

These mass settlements, Nagareda argues, have transformed the legal system so acutely that rival teams of lawyers operate as sophisticated governing powers rather than litigators. His controversial solution is the replacement of the existing tort system with a private administrative framework to address both current and future claims. This book is a must-read for concerned citizens, policymakers, lawyers, investors, and executives grappling with the changing face of mass torts.

Those who've followed the past coverage on this site won't be all that surprised by last week's cover story on the fastest-growing area of employment litigation, but it's a good introduction to the subject for those new to it, with some nuggets worth memorializing:

No one tracks precise figures, but lawyers on both sides estimate that over the last few years companies have collectively paid out more than $1 billion annually to resolve these claims, which are usually brought on behalf of large groups of employees....Wal-Mart Stores is swamped with about 80 wage and hour suits, and in the past two years has seen juries award $172 million to workers in California and $78.5 million in Pennsylvania.

"This is the biggest problem for companies out there in the employment area by far," says J. Nelson Thomas, a Rochester (N.Y.) attorney, who, like [Reno attorney Mark] Thierman, switched from defense to plaintiffs' work. "I can hit a company with a hundred sexual harassment lawsuits, and it will not inflict anywhere near the damage that [a wage and hour suit] will." ...

While violations appear widespread, employees themselves rarely think to make wage and hour claims. Instead, they usually have it suggested to them by lawyers. "Ninety-five percent of our wage and hour cases are a result of someone coming to us complaining about something else," says Thomas. "I can't tell you how many people have come into our office with employment disputes that are meritless and would be thrown out of court and walk out with an FLSA claim."



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.