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May 2008 Archives


Per the folks at Common Good: "The Boundaries of Litigation forum, co-hosted by Common Good and the Kauffman Foundation, brought together [last month at the Brookings Institution in Washington, D.C.], as presenters and audience participants, some of the most expert and insightful leaders in law: judges, legal scholars and practitioners, policymakers and business leaders. Together they examined whether our civil justice system properly aligns with our social goals, the need for clearer boundaries in litigation, and solutions for restoring reliability to civil justice." The panels are available as webcasts here, as are many of the papers, and although I haven't had a chance to check them out yet, the stellar array of talent behind them virtually ensures that they'll contain a great deal of interest.

Greenwich Village's choice...

...between a blighted and mediocre modernist building that clashes dismally with its historic surroundings, and the future of a working hospital, St. Vincent's, the only one handy for emergency care for most of the West Side. An account by MI's Julia Vitullo-Martin leaves you wondering how many bodies have to fall -- economic and perhaps otherwise -- to satisfy extreme concepts of historic preservation.

Hey, P.R. guys...

Like other legal bloggers, I now get a steady stream of inquiries from public relations people angling for coverage. A few guidelines, speaking for myself and not the other contributors to the site:

Best bet: review-copy offers for relevant non-fiction books. Please don't pitch fiction, even when law-related. If in doubt whether a non-fiction title is relevant to our interests here, spend a moment using the site's search function.

Also a good bet: launches of new free online media entities relevant to our interests (such as, or again).

Not a good bet: Newsmaker interviews, even when relevant. I don't think I've ever done a newsmaker interview as such for the site. (Of course this doesn't mean newsmakers or anyone else should hesitate to email us if they think we should know about something, just that the interview format isn't our thing.)

Even worse bet: Vendors of services purchased by law firms, compliance and document-management software, etc. Not our area at all.

There's Going to be a Showdown

The trial has now started in the city of New York's public nuisance suit against a Smyrna, Ga., gun dealer, Jay Wallace, sued for illegally selling guns later used in crimes in the city. Last week federal Judge Jack Weinstein refused to let Mayor Michael Bloomberg testify, saying it would create a media circus. Wallace and his store, Adventure Outdoors, were among the 27 targets sued by the city last year; all but three have settled.

Wallace is defiant in the face of Bloomberg's litigation, as this good Atlanta Journal-Constitution profile reports:

New York is not asking for damages. Rather, it wants to oversee gun sales records via a court-appointed monitor, at New York's expense, for the next three years.

"The city has unlimited wealth, and they know individuals can't afford [to fight]," Wallace said, adding he is "standing up for the customers and the other poor gun dealers" by fighting the suit.

Wallace said "straw purchasers" New York sent to his Smyrna business simply found a way to entrap him and his business in a publicity stunt to draw attention to Bloomberg, should he run for another elected office.

A court appointed monitor for a specific group of businesses? What a great model to apply throughout the private sector.

The gun dealer has a website devoted to his legal and political case, with daily updates of his trial: Bloombergfightbackfund.com. A good window on the proceedings.

Bloomberg used the public nuisance suits to kick off the Mayors Against Illegal Guns Coalition, which has a website here. The selection of stories in its news roundup certainly demonstrates a political movement at work.

The NRA covers the anti-Bloomberg efforts here, part of its category, "Reckless Lawsuits."

The case is The City of New York v. Adventure Outdoors Inc., Eastern District of New York, 06cv02233. The complaint is available here via the City of New York's website, which takes you to Mayors Against Illegal Guns.

Around the web, May 30

  • Ted has an exclusive: Alabama federal judge strikes down FACTA as unconstitutional, with many implications for other fields of "harm-less" consumer litigation [Overlawyered]
  • WSJ lands hard on Rep. Rangel's $1.6 billion tax cut for trial lawyers [editorial today; earlier]
  • Fruits of cy pres? "Most of our money comes from lawsuits" says Greenlining Institute which is leading scary new "diversity" assault on California philanthropy [Heather Higgins/WSJ; more, scroll to fourth item]
  • "Mother Teresa, move aside": Arthur Miller, David Boies, Stephen Susman among those hailing Mel Weiss's philanthropy and character in plea for sentencing clemency [OL]
  • Don't assume suits against Wall Street over auction-rate securities are a slam dunk [Bloomberg via WSJ law blog]
  • West Virginia Supreme Court refuses to hear appeals in two gigantic business-dispute punitive awards [WV Record]
  • Grasso/NYSE case could test limits of state AGs' powers [NYLJ]

Did Merck settle too generously?

The drug company's stunning victory yesterday in two Vioxx appeals has led to speculation that it may have been too generous in reaching a $4.85 billion settlement with many other claimants last November. But the WSJ law blog talks to Kirkland & Ellis product liability specialist David Bernick, who emphatically disagrees:

Bernick explained that at the time Merck made the settlement, it was staring down a flood of cases nearing trial that threatened to overwhelm the company. "At that point, there was a shared incentive to reach a global deal," he says. For that reason, says Bernick, "you can't look at a track record that precedes or follows a settlement because it doesn't capture the dynamic facing a company at that point, which is that it won't be able to defend itself" against an onslaught of cases.

Shorter version: when it comes to mass torts and their settlement value, quantity is its own kind of quality. Can anyone still be confident that such a system yields optimal incentives for either defendants or the lawyers suing them? More: Jane Genova has some interesting thoughts from another defense attorney, this one anonymous.


The American Enterprise Institute sponsored a talk yesterday by law professor Michael Perino of St. Johns University, who presented his new paper, "The Milberg Weiss Prosecution: No Harm, No Foul?" The Examiner's Quin Hillyer was on hand, and his summary in today's editorial hits the highpoints:

Class-action lawsuit fraud is not a victimless crime. At the very least, it harms the clients on whose behalf the lawyers are supposed to be working. So concludes respected St. John's University law professor Michael Perino in a new data-driven analysis that shows a clear correlation between the incidence of corruption within disgraced law firm Milberg Weiss and higher fee requests and fee awards by and to the firm. Of course, if a law firm receives a larger portion of a court settlement, the firm's clients receive proportionally less -- which, in Perino's words, is indeed "a real economic harm" to those same clients.

Ted Frank hosted the event and AEI's Peter Wallison interlocuted. The paper and related materials are now online:



AP reports a Texas court has thrown out the infamous Ernst $26 million judgment; a New Jersey court has tossed part of the judgment in McDarby. More details as available.

Ernst was the first Vioxx suit to go to trial. A jury awarded $253 million. Mark Lanier waited months before asking for a final judgment; at the time, I suggested that this was because he knew the case would be reversed on appeal, and did not want the bad publicity. Indeed, the appellate decision perhaps comes too late for Merck: the number of lawsuits increased from 6000 to 60000 in the months following publicity over the jury verdict, costing Merck billions of dollars in the later extortionate settlement.

With these two decisions, only three plaintiffs' verdicts in favor of Merck remain.

Update: I still haven't seen the McDarby decision, but an updated AP story indicates that it upheld the compensatory damages of $4.5 million, overturned the $9 million punitive damages verdict, and overturned the consumer-fraud judgment (which also saves Merck millions of dollars in plaintiffs' attorneys' fees). The New Jersey court also affirmed Merck's victory in the Cona case against Mark Lanier.


In finding a temporary replacement for the disgraced and resigned attorney general, Marc Dann, seems like Gov. Ted Strickland decided to identify the anti-Dann. In his statement, Gov. Strickland described Ohio State law dean Nancy Rogers as "a woman of great integrity, accomplishment, intellect, humility, dignity, experience and maturity."

From the Ohio AP:

Newly appointed Ohio Attorney General Nancy Hardin Rogers is no wimp.

But her style couldn't be more different than that of her predecessor Marc Dann, the firebrand, press-seeking politician who succeeded by his political passions and failed by his personal ones.

By all accounts, Rogers, 59, is even-tempered, soft-spoken and deliberative. She rarely raises her voice. She doesn't swear.

One infers that Marc Dann did swear.

And here's an historical note. Wow.

Rogers and her husband, attorney Douglas Rogers, met at Richard Nixon's first inaugural in 1969 _ she, the daughter of Secretary of Agriculture Clifford Hardin, and he, the son of Secretary of State and former U.S. Attorney General William Rogers. The two were married in 1970, and have three daughters.

Rogers, who identifies herself as a Democrat, will serve about six months. Voters will choose the replacement to fill Dann's remaining term at the November general election.



The Supreme Court's two rulings this week in employment discrimination cases brought a startling and welcome response today from the Washington Post's editorialists in an opinion piece, "Flawed Victory." The cases were CBOCS West, Inc. v. Humphries -- in which a court majority created a law to ban employer retaliation -- and Gomez-Perez v. Potter, Postmaster General, in which the court found reasons in the Age Discrimination in Employment Act (ADEA) to give federal employees the right to sue claiming retaliation. The Post concluded:

Protecting employees from retaliation makes sense, but it is not the province of judges to create such protections on the basis of their own beliefs of what is right or wrong, or even on the basis of their intuitive sense of what Congress meant to do or should have done. And those who today praise the outcome shouldn't be upset if in the future justices read into the law new principles that lead to results they may find less acceptable.

The New York Times, meanwhile, had the predictable editorial point of view. From "In Defense of Workers":

The Supreme Court handed down a pair of well-reasoned, fair-minded rulings this week upholding the rights of employees who charge age and race discrimination. The decisions, which forbid employers from retaliating against such workers, are a welcome break from some of the recent rulings by this court that have ignored precedent and common sense to throw out legitimate claims of unfair treatment.
Cripes. It's like they've got AP reporters writing their editorials now. More...

And a Washington Post news analysis by Robert Barnes, headlined, "Justices Show Ability to Move to the Center." And, after all, being in the center is what counts, right?


To widespread applause from some quarters, state legislatures have passed bills retroactively reopening lapsed statutes of limitations to revive defunct causes of action over asbestos exposure. But does retroactive tinkering with tort law have to be favorable to plaintiffs to be legitimate? Trial lawyers have now prevailed in a Florida appeals court on the argument that the state legislature acted improperly when it sought to apply to existing asbestos legislation new criteria defining credible medical injury: plaintiffs have "vested rights" to sue over old exposures, it seems, under the less demanding criteria of injury that formerly prevailed. Since the ruling conflicts with that of another Florida appeals court, it may be headed for review by the high court in Tallahassee. More details in the Daily Business Review.


Summary of a new issues paper (Legal Memorandum #24) by Andrew Grossman from the Heritage Foundation:

Rather than "restore public accountability in the judicial system by restricting court secrecy on matters that affect public health and safety," as proponents claim, the Sunshine in Litigation Act (S. 2449) would cause complex litigation to grind to a halt and actually make it more difficult for personal-injury plaintiffs to obtain favorable settlements. The real beneficiary of the bill is not the public or tort victims, but the trial bar, which would have an easier time harassing companies with strike suits, fishing for evidence to use in unrelated cases, and filing "follow-on" lawsuits en masse.


New paper (PDF) by Georgia State insurance prof (and sometime PoL contributor) Martin Grace and Iowa business prof J. Tyler Leverty, for a Northwestern Searle Center conference, finds empirical evidence to bolster the commonsense view that the prospect that liability reforms will be challenged in court, and perhaps overturned, weakens the effect of those reforms in relieving strains in the liability insurance market. Abstract:

A critique of tort reform is that promised declines in insurance prices do not follow the enactment of significant tort reforms. This study examines whether insurance prices reflect the uncertainty of the reform since they are subject to judicial challenge. We undertake a two stage approach to investigate the effect of tort reform on insurance prices. In the first stage, we investigate the likelihood tort reforms will be found unconstitutional and the expected duration of reforms. We then use the estimated survival probability as an explanatory variable in a regression which estimates the effect of tort reform on state liability insurance markets. Our results indicate that as the estimated survival probability of tort reform increases, the premiums and volatility of losses in the insurance market decrease.

Prof. Grace also discusses at his own site, RiskProf.


Mark Sherman of the Associated Press on yesterday's Supreme Court decision adopting broad leeway for employees to file retaliation claims in discrimination suits, even though the statute is silent on the subject (via Taranto, whose emphasis is added):

In two employment cases, one involving race and the other, age, the court took an expansive view of workers' rights and avoided the narrow, ideology-based decisions that marked its previous term.


As reported here earlier, Albany lawmakers have taken it into their heads that what New York really needs at this point in its budget-strapped history is to subsidize the establishment of three new law schools in Binghamton, Stony Brook and Rochester. Today the controversy hits the WSJ law blog and lawyer-commenters there appear not much more welcoming of the proposal than we, though perhaps for different reasons. (The New York Law Journal is also covering the story, but not online for nonsubscribers.)


Gov. Ted Strickland has appointed Nancy Rogers, the dean of Ohio State University's Moritz School of Law, as the temporary attorney general, replacing Marc Dann, who resigned rather than be impeached.

From Rogers' bio:

Professor Rogers became Dean in August 2001, after serving for two years as Vice Provost for Academic Administration for The Ohio State University. She is the Immediate Past President of the Association of American Law Schools.

Professor Rogers received her bachelor's degree with highest distinction from the University of Kansas in 1969 and her law degree from Yale Law School in 1972. After law school, she served as a law clerk for U.S. District Judge Thomas D. Lambros in Cleveland and practiced law in the Glenville-area office of the Cleveland Legal Aid Society.

She was appointed to an endorsed professorship in 1995, and Rogers currently holds the Michael E. Moritz Chair in Alternative Dispute Resolution.

Rogers does not intend to run for the remainder of Dann's term, which voters will determine in November. The parties have until Aug. 20th to select their candidates. The Toledo Blade reports that Republicans are looking at an AG candidate as a way to repair the party's scandal-damaged reputation in the state.


The Civil Justice Association of California is promoting AB 1905, a bill in Sacramento that would provide defendants an interlocutory right of appeal against rulings certifying class actions. "Current law only allows the plaintiff to appeal the denial of class certification. The defendant can only appeal the judge's ruling after the class action lawsuit is complete and the defendant has lost -- a long and costly endeavor. ...This bill would bring the same balance to class action litigation that exists in federal courts and many states." More here.


Here's a scientific study with legal implication for business: "Carbon nanotubes introduced into the abdominal cavity of mice show asbestos-like pathogenicity in a pilot study." Published last week in the journal, "Nature Nanotechnology," the report prompted a rash of news coverage, which from what we've seemed, carried a reasonable sense of balance, caution and caveats.

The basic finding was that long carbon nanotubes -- in contrast to the short or curly ones -- created conditions in mice abdomen that resembled lesions that lead to mesothelioma in humans.

Prominently featured in all was the study's coauthor, Andrew Maynard, a physicist and chief science adviser to the Project on Emerging Nanotechnologies at the Woodrow Wilson International Center for Scholars in Washington. In The New York Times, Maynard said, "I think there is clear evidence for caution in how they are used and handled." He told The Los Angeles Times that the greatest danger was to workers involved in the manufacturing of nanotubes who might inhale the dust.

The LAT story included useful perspective from a business source:

Sean Murdock, head of the NanoBusiness Alliance, an industry trade group based in Skokie, Ill., said precautions were now in place in many factories, usually requiring workers to wear respirators. Nanotubes are largely made in closed chemical reactors, he added.

"The good news is that we're understanding the potential hazards before we have large-scale use of these products and not four decades later," he said.

NPR's "Science Friday" carried a 24-minute segment on the study, again, pretty balanced. But several of the callers displayed the kind of uncertainty and anxiety that can produce a cultural and political environment that invites litigation. The thought kept recurring: When do the suits start?

In reading up on the study, we encountered this blog, Nanotechnology Law Report, written by John C. Monica, Jr. and Michael E. Heintz of Porter Wright Morris & Arthur. In this post, Monica excerpts a 2005 paper he co-wrote for Nanotechnology Law & Business, "Preparing for Future Health Litigation: The Application of Products Liability Law to Nanotechnology." And here, Heintz discusses a recent GAO report, ""Nanotechnology: Better Guidance Is Needed to Ensure Accurate Reporting of Federal Research Focused on Environmental, Health, and Safety Risks." Looks like a good site to keep up on, nanotechnologywise.


Ted is moderating in Washington tomorrow, Wed., May 28, from 9 to 10:30 a.m.:

Milberg Weiss Bershad & Schulman and a spinoff firm led by William Lerach dominated securities class actions over the last twenty years. But in 2006 and 2007, prosecutors indicted the Milberg firm, Lerach, Mel Weiss, David Bershad, and Steven Schulman for paying kickbacks to "class representative" plaintiffs, who were supposed to protect the interests of the class over those of the attorneys. The indictments solidified the argument that class representatives in securities class actions were not effective principals overseeing the work of their attorneys. On May 19, Lerach reported to prison in Lompoc, California; on June 2, Mel Weiss will be sentenced. But even as all of the attorneys have pleaded guilty, many argue that the crimes in the indictments were victimless. Did these kickbacks affect the amount of money that absent class members received from settlements? Did Milberg Weiss's inappropriate relationship with their lead clients allow them to receive higher attorneys' fees at the expense of investors? What does the Milberg Weiss indictment say about the benefits to investors of securities class actions? Will Democrats heed House minority leader John Boehner's call for congressional hearings?

At this AEI event, law professor Michael Perino will present his new paper, "The Milberg Weiss Prosecution: No Harm, No Foul?"--published as part of the AEI Legal Center's Briefly series--which seeks to objectively answer these questions. Using a database of approximately 730 class action settlements and fee awards, Perino examines the Milberg Weiss indictment in detail and analyzes whether these kickback payments harmed class members. AEI's Peter J. Wallison and AEI Legal Center director Theodore H. Frank will comment on the paper and the Milberg Weiss indictment. Frank will moderate.

Details here.

Blawg Review #161

It's at Patent Baristas. Other recent installments of the traveling carnival of legal blogging can be found at Ruthie's Law (U.K., #160), Whistleblower Law Blog (LaBovick & LaBovick, #159), The Mommy Blawg (with special midwifery-law theme, #158), Thoughts from a Management Lawyer (Canadian, #157), and Virtually Blind ("Legal issues that impact virtual worlds", #156).

Around the web, May 27

  • Our practice of making judgeships an elected office strikes the rest of the world as bizarre if not preposterous [Liptak, Tabarrok recalling his work on bias against out-of-state litigants on which more, Josh Patashnik @ Plank]
  • Bush Administration loses often in defending its environmental decisions in court; some reasons why [Adler @ Volokh]
  • More on California high court's adoption of sophisticated-user defense in product liability cases [Marilyn Moberg & James Neudecker for WLF, PDF; earlier]
  • Business defendants have little choice but to cop plea with federal prosecutors even when they think their defense is strong. What to do? [Joan McPhee, Legal Times]
  • Debate in Japan about whether to increase the number of new lawyers from its low annual level [Tillers on Evidence]
  • Punitive damages and jury second-guessing of expert agencies: why "regulation by lightning bolt" is no way to run a safety regime [Mark Herrmann @ KevinMD]
  • Law firms doing booming business in Foreign Corrupt Practices Act these days [Pearlstein, WaPo via Elefant]


Veteran legislator Joseph Nixon is the author of this extensive report (PDF) for the Texas Public Policy Foundation (via); a short spinoff piece on doctor-recruitment has been making a stir lately, but as the title implies, the full report offers a much broader view of its subject.


Roger Parloff notices a loose end still dangling in the story of the disgraced Mississippi lawyer's war against State Farm.

"The cost of Spitzerism"

Tom Kirkendall has some thoughts on AIG's tailspin, as does Larry Ribstein.

Inherit the Wind, the Sequel

Such a strange coincidence in Friday news releases about trial lawyers with new books.

"Tragic Blessings:"

(May 23, 2008) -- Every day, trial lawyer Bret Merkle wakes up and wonders whether or not he'll make it through another day. One thing he knows for certain; if he hadn't discovered that all things are possible with God, he would have given up the struggle by now.

"Beyond Reasonable Doubt: A Lawyer's Case for Disbelief in God":

Dallas, TX (PRWEB) May 23, 2008 -- A lawyer with an upcoming book denying the existence of God is releasing excerpts from the work.

In Beyond Reasonable Doubt: A Lawyer's Case for Disbelief in God, Geoff Henley makes a sweeping indictment of scripture and organized religion.

Calling the serpent of Eden a Muppet, the former prosecutor writes that creationist accounts in the Bible and Koran are "bad alibis" that are no more reliable than myths like the Apache creator who descended to Earth on a sun-like disk or Ancient Egypt's god that created the universe by masturbating.

So who's going to organize the national debate tour?

New at Overlawyered

If you're not reading Ted's and my other blog, you're missing commentary on a terrific new Stuart Taylor Jr. column on the South Africa corporate reparations suit, global warming, lead paint, etc; my own roundup on the Kivalina Eskimo climate-change suit, also discussed by Taylor, and spearheaded by class-actioneers Steve Berman and Steve Susman; the piquantly named Kentucky Fund for Healthy Living, funded from the fen-phen settlement (and more); Congress votes to authorize antitrust suits against OPEC; metal baseball bat maker sued; D.C. Circuit panel rules paper money discriminates against blind; new round in Seidel subpoena controversy; why California's Prop 99 isn't effective eminent domain reform; and much more. And that's aside from a complete new design and navigation.


The Kentucky Enquirer reports that the judge who approved a $200 million class action settlement in a fen-phen diet drug lawsuit for which plaintiffs' lawyers are accused of looting from the "victim" class has testified he is embarrassed by the way he handled the case.

Retired Circuit Court Judge Joseph "Jay" Bamberger was on the stand in U.S. District Court in Covington, Ky., on Wednesday in the fraud trial of three Lexington attorneys accused of keeping $45 million dollars that should have gone to plaintiffs they represented, and of putting $20 million more into a "charity" that all three, as well as the judge himself, were paid $5000 each month to administer.

Bamberger told the court he had never presided over a class action lawsuit before and depended on the advice of Cincinnati class action attorney Stan Chesley.

Lawyers Shirley Cunningham Jr., William Gallion and Melbourne Mills Jr. are being tried on charges of conspiracy to commit wire fraud.

Jurors at their trial watched a videotape of a May 2001 hearing in which Bamberger approved the multimillion-dollar settlement. In the video, Bamberger seeks advice from Chesley on the proper way to proceed with the case. Chesley is heard on the tape making a self-deprecating joke about his qualifications as a class-action expert. Over the laughs that follow, Bamberger said Chesley was "taking the role" of the expert in the fen-phen litigation.

Bamberger stepped down from the bench in February 2006 to avoid being removed by Kentucky's judicial conduct commission for his actions.


From the American Association for Justice, a May 20 news release, New Poll: "Americans Say 'No Thanks' To Binding Arbitration"

Washington, DC--Americans generally disapprove of binding arbitration provisions in consumer contracts as an alternative to civil legal proceedings involving a judge or jury, according to a recent national poll by survey firm Peter D. Hart Research Associates Inc.

"Mandatory binding arbitration doesn't give consumers a choice," said American Association for Justice President Kathleen Flynn Peterson. "This poll proves that when asked to choose, consumers overwhelmingly say 'no thanks' to unfair arbitration agreements. Arbitration can only be a valid and effective method of resolving disputes when both parties agree voluntarily."

No news pick-up of the survey that I can find, and the AAJ website doesn't have the executive summary or polling document, which is almost always a sign of a survey based on loaded or leading questions.*

However, Depak Gupta of the anti-arbitration Nader outfit, Public Citizen, writing at the Consumer Law & Policy Blog, does post the executive summary. The summary includes much criticism of a survey conducted by the Chamber's Institute for Legal Reform, which has been very active defending the value of arbitration.

The ILR's survey was released with the full document, a news conference, and more materials, all available at the Chamber's website. So on transparency alone -- again, a key to interpreting survey results -- the ILR wins and the trial lawyers lose.

Of course, it's hard to take any public opinion survey seriously when it's on a complicated matter or detailed questions of law. The intricacies of arbitration versus litigation are not matters of daily consideration for most people.

* Not to impugn the good people at Peter D. Hart, who are reliable pros and Democratic pollsters. It's up to the client to determine how much of a survey is released. And the methodology is familiar: "From April 17 to 21, 2008, Peter D. Hart Research Associates, Inc., conducted a national telephone survey for the American Association for Justice among 833 adults nationwide (margin of error is + or - 3.5 percentage points)."


The House yesterday passed H.R. 6049, the Energy and Job Creation Act of 2008, also known as the "tax extenders" legislation, which includes lots of good stuff: An extension of the R&D tax credit (expired since Jan. 1), an extension of deferral of U.S. tax on active business global financing income, and extensions of tax incentives for energy efficiency and renewable energy. The vote was 263-160, and House Majority Leader Steny Hoyer highlighed the energy provisions in a news release.

House Republican Leader John Boehner saw another provision as noteworthy, focusing on it in a statement headlined, "Democrats Stiff Working Families, Give Tax Breaks to Trial Lawyer Allies ." Excerpt:

This bill tells us a lot about the Democrats' priorities. Rather than working to bring down gas prices or protect taxpayers, Democrats have hatched a scheme that fails to protect middle-class families from having to unnecessarily pay the AMT and gives their trial lawyer benefactors a $1.6 billion payoff. This giveaway comes just two days after former powerhouse trial lawyer and Democratic donor William Lerach reported to federal prison for his role in a multi-million dollar conspiracy scheme involving illegal kickbacks to plaintiffs - a scheme involving illegal activity that Mr. Lerach said is an 'industry practice' in the trial lawyer business. Democrats have refused to hold even a hearing to examine this scandal and its implications for our struggling economy, and now they're coddling their trial lawyer allies again by showering them in $1.6 billion in taxpayer-funded perks.

The language is from Sec. 311, Uniform Treatment of Attorney-Advanced Expenses and Court Costs in Contingency Fee Cases. The provisions allow trial attorneys to deduct advanced litigation fees regardless of whether their contingency fee was structured as a "net" or a "gross" fee arrangement. The law does not now allow lawyers to take a current tax deduction under a net fee arrangement. (We've put the relevant bill language in the extended entry.)

And the White House has threatened to veto the bill, although its Statement of Administration Policy released Wednesday does not mention the trial lawyer provision.


Marc Rodwin's response to my critique of his lead-authored study for Health Affairs consists entirely of statements that are either (1) factually false or (2) irrelevant to the central criticism I made of the paper, which is never addressed: Rodwin's bottom-line conclusions are cherry-picked non sequiturs from the underlying data in the paper.

Lawyers who go uninsured

Under new California bar rules, per Dan Levine at the Recorder, "lawyers who expect to bill a client for more than four hours must [inform clients] if they aren't covered for malpractice. .... In 2006, the California Bar Journal printed an estimate that 20 percent of the state's lawyers in private practice don't carry insurance." Some bar governors supported the rule in hopes of heading off proposals for more extensive disclosure obligations. More: Overlawyered Jun. 21, 2007 and Nov. 9, 2004 (Georgia).


Upcoming discussion on administered compensation alternatives:

Common Good is convening a public forum in conjunction with the American College of Obstetricians and Gynecologists (District II/NY) on Tuesday, June 3, 2008. This forum will present information and solicit input about the possibility of launching a birth-injury compensation program in New York.

Among other speakers, Dr. Richard Berkowitz of the Columbia University College of Physicians and Surgeons will speak about the current legal environment for birth-injury litigation - and opportunities for improving the system in New York. Kenney Shipley, the director of the Florida Neurological Injury Compensation Association, will speak about the functioning of Florida's birth-injury program. Also, Michelle Mello from the Harvard School of Public Health will discuss her research on system performance issues in the compensation programs in Florida and Virginia. A panel of respondents will follow, discussing the potential barriers to enacting to such a system in New York. Finally, representatives from the New York physician, hospital, and legal communities will share their perspectives.

Details here.

In re Volkswagen en banc

There was an auto accident in Dallas; plaintiffs sued Volkswagen in Marshall, Texas, in the notoriously plaintiff-friendly Eastern District of Texas, which has a hugely abnormal number of product liability cases--17% of all federal automobile product liability lawsuits in the United States. Let us quote from In re Volkswagen of America, Inc., 506 F.3d 376 (5th Cir.2007), earlier discussed on POL Nov. 27 and Feb. 23:

Volkswagen moved to transfer venue to the Dallas Division of the Northern District of Texas ("Dallas Division"). Volkswagen asserted that a transfer was warranted as (1) the Volkswagen Golf was purchased in Dallas County, Texas; (2) the accident occurred on a freeway in Dallas, Texas; (3) Dallas residents witnessed the accident; (4) Dallas police and paramedics responded and took action; (5) a Dallas doctor performed the autopsy; (6) the third-party defendant lives in Dallas County, Texas; (7) none of the plaintiffs live in the Marshall Division; (8) no known party or significant non-party witness lives in the Marshall Division; and (9) none of the facts giving rise to this suit occurred in the Marshall Division.

The district court refused to transfer to the Northern District, VW sought mandamus, and got it on the second try, with the Fifth Circuit ordering transfer. (See also John Council, "5th Circuit Restricts Trial Courts' Discretion in Venue Motions", Texas Lawyer, Nov. 5; John Council, "5th Circuit Case Could Reduce Product Liability Caseload in Texas' Eastern District", Texas Lawyer, Aug. 7).

In February, however, the Fifth Circuit vacated the decision, and granted en banc rehearing. Argument is Thursday in New Orleans, and the decision will determine whether the Fifth Circuit will tolerate forum shopping in the federal courts. (Michelle Massey, "Appeals court scheduled to hear arguments over forum shopping", SE Texas Record, May 20). The case is of special importance to the patent bar, given the fact that Marshall, Texas, has become the unlikely capital of United States patent litigation. Blog coverage: PatentlyO, Prior Art.

En banc briefs in 07-40058, In re Volkswagen AG:

Department of Strangely Shifting Academic Positions: In December 2007, law professor Georgene Vairo wrote a LexisNexis Expert Commentary on the Volkswagen case explaining its consistency with Supreme Court precedents, and writing

The Fifth Circuit is not alone in permitting the use of mandamus in limited circumstances. For example, in Lemon v. Druffel, 253 F.2d 680 (6th Cir. 1958), a case decided shortly after Congress codified § 1404(a), the Sixth Circuit ruled that mandamus was an appropriate remedy to test a district court's discretion on a motion to transfer.

In April 2008, she signed on to a brief taking precisely the opposite position, which does not cite Lemon. Curious.

Overlawyered has more on the Eastern District of Texas, and on Judge T. John Ward. (Cross-posted from Overlawyered.)


Marc A. Rodwin, Professor of Health Law and Policy at Suffolk University Law School, sends the following:

- - -

Ted Frank's post does not accurately report what my coauthors and I state in our article (Rodwin, et al. 2008. Malpractice Premiums In Massachusetts, a High-Risk State: 1975-2005 Health Affairs 27, No. 3: 835-844).

Wave of subprime litigation

Law.com's Corporate Counsel expects the securities litigation, not the borrower class actions, to be the major threat to defendants.


The Texas Republican, a member of the Senate Judiciary Committee, is introducing legislation that

would make several key reforms to current securities class action law to increase the accountability of and transparency for attorneys filing these lawsuits and the institutional plaintiffs they often represent. Specifically, it would require:

DISCLOSURE OF PAYMENTS BETWEEN PLAINTIFFS AND ATTORNEYS

Plaintiffs and attorneys would submit sworn certifications identifying any direct or indirect payments, promises of such payments, and other conflicts of interest between them, as well as all political contributions made to elected officials with authority or influence over the appointment of counsel in the case.

COMPETITIVE BIDDING FOR LEAD COUNSEL

Courts would include a competitive bidding process as one of the factors for the selection and retention of lead counsel for a class of plaintiffs.

STUDY TO DETERMINE APPROPRIATE ATTORNEYS FEES

GAO would commission a study of the last 5 years of fee awards in securities class action cases to determine the average hourly rate for lead counsel.

(release, Congressional Record statement).

Around the web, May 19

  • Another Scruggs ripple: Judge Senter disqualifies two Missouri lawyers (widely nicknamed the "Trailer Lawyers") from representing Rigsby sisters against State Farm in Katrina qui tam action [Sun-Herald via YallPolitics, more, Rossmiller with link to opinion]
  • "To recap the trial lawyer logic: Polls are great for calculating damages in large billion-dollar consumer fraud class action claims, but they're not appropriate for creating a ranking system for legal fairness." [Adomite/MC Record]
  • Scott Greenfield is bemused by the incivility at Ann Bartow's Feminist Law Professors site: "There is no doubt in my mind that I don't get it." [Simple Justice]
  • "We don't want a litigation industry," says head of largest German shareholder-protection body, of class action proposals [The Economist]
  • Vermont the next Roman Catholic diocese headed for bankruptcy? [Boston Globe] Plus: Albany lawprof Timothy Lytton has a new book hailing the church abuse litigation as a "remarkable success" of the tort system, not a view that passes entirely uncontested as readers here know ["Holding Bishops Accountable"]
  • By 2-1 margin, Second Circuit panel gives relatively broad reading to CAFA's scope in directing class actions to federal courts [NYLJ]
  • What if female underrepresentation in the hard sciences has something to do with women's own preferences? Who do we sue then? [Elaine McArdle, Boston Globe]


Interesting profile in the Courier-Post of the new head of the incoming head of the American Trial Lawyers Association-New Jersey, Tommie Ann Gibney. She's a member of the Haddonfield, N.J., firm of Andres & Berger. She specializes in suing nursing homes, and wants to expand potential compensation in wrongful death suits.

The most specific goal for the organization this year is to amend the state's wrongful death statute. Currently, survivors in a wrongful death action can seek damages only for lost income. There is no monetary value put on what Gibney calls "the reality of what a family is in the 21st century.

Many families today include older members, like grandparents, who provide care services for children. Others have stay-at-home parents, yet survivors in a wrongful death lawsuit cannot seek a judgment to compensate for the loss, through negligence or violence, of those care-givers.


The next American Association for Justice teleseminar is on litigating trucking cases. The issues:


  • Electronic On Board Recorders
    Morgan G. Adams | Chattanooga, TN

  • Daubert Issues and the Biomedical Engineer
    Robert L. Collins | Houston, TX

  • Successful Advocacy in a Trucking Case
    Kenneth L. Shigley | Atlanta, GA

Again, in an effort to be helpful, we note the error of this caveat: "Note: Eastern Indiana and parts of Arizona--no daylight savings...
Please be sure to note correct time for the teleseminar you register for." Indiana went statewide DST two years ago.

We remind our friends in the trial bar, all of Indiana is now on Daylight Saving Time. There must be some cause of action in that erroneous note, don't you think?


A Suffolk University Law study on medical malpractice rates, written by Marc A. Rodwin, Hak J. Chang, Melissa M. Ozaeta, and Richard J. Omar, and published by Health Affairs by has been getting a lot of attention. (Rodwin is a professor; Ozaeta and Omar are students; Chang is a recent Suffolk graduate.) The study finds skyrocketing malpractice rates, especially for high-risk doctors. Yet the authors conclude that there is no crisis, and issue a press release to that effect. Let's compare confirmation bias, shall we?

Rodwin's study (via Robinette, also on SSRN), makes the following findings:


Timely article by Shawn L. Organ in the Federalist Society's Class Action Watch on one of the more vexatious litigation topics of the day:

Since December 2006, much has been written about the truncation provisions in the Fair and Accurate Credit Transactions Act (FACTA), including an article in the September 2007 issue of Class Action Watch, and others I have penned. The writings all generally identify the truncation requirement--that is, that "no person that accepts credit cards or debit cards for the transaction of business shall print more than the last 5 digits of the card number or the expiration date upon any receipt provided to the cardholder at the point of the sale or transaction." But an interesting and foreseeable battleground has emerged as a subset of these FACTA cases: does FACTA apply to internet transactions? These cases present a host of new and interesting issues, and federal courts decisions are just starting to emerge....

We've covered credit-card-slip litigation here (with link to an article by Ted) and here, as well as here, here, and here.


Pretty good coverage all the way around, which is to say, both sides are included and the plaintiffs -- the three lead-paint manufacturers -- had their arguments represented fairly. From what little we were able to watch, a good exploration of the legal issues by the justices.

And again, we commend the coverage by Jane Genova at Law & More. This post seemed to hit the mark, including the observation:
I thought I was hearing wrong when one the of Justices cut Motley Rice attorney Fidelma Fitzpatrick short when she was starting her usual rant about lead paint is bad. I looked over to the man sitting next to me. He was bug-eyed. So, we both hadn't heard wrong. it was going to get a lot more intense.

The smart four men they are - one justice recused - they were going to find a narrow passageway through the public nuisance and contingency messes through questions of law. That's what they wanted. The attorneys representing the defendants Sherwin-Williams, Millennium Holdings and NL Industries and acquitted Atlantic Richfield stuck to the points of law. The plaintiff representatives did not. They came prepared with stylized rhetoric and kept to the script.

The court has archived the hearing, which you can watch it here.

Johan Norberg on Naomi Klein

A Cato fellow dissects a spectacularly bad book titled The Shock Doctrine that "has already become a bible for young anti-capitalist activists" and has gotten mysteriously indulgent reviews from such figures as Joseph Stiglitz.


The much-discussed new book is reviewed in City Journal. More coverage: Volokh Conspiracy, AEI-Brookings and Cato events, Shapiro/Cato-at-Liberty, Balkin.

Congratulations to Beck and Herrmann


Volokhite Todd Zywicki is among the speakers at a Federalist Society event on often counterproductive Congressional responses to turmoil in the housing and credit markets being held this Tuesday at the National Press Club. CLE credit available.

Federal Preemption, the Hearing

The House Committee on Oversight and Government Reform held a hearing yesterday on federal regulation of medical devices, a session meant to set the stage for reversing federal preemption of state regulations -- such a reversal being a priority for trial lawyers wanting to sue in state courts.

Testimony by Dennis Quaid -- you remember, the actor? -- got the most attention, even showing up on local news broadcasts in D.C. Quaid and his wife are suing Baxter Healthcare for a Heparin overdose given to their twin infants.

We commend the testimony of John E. Calfee, Ph.D., of the American Enterprise Institute. You can read Calfee's conclusions here. Bottom line: Eliminating pre-emption will encourage litigation, an ineffective and expensive approach of promoting safety or advances in prescription drugs.

And for a classic example of one-side reporting, read this AP scene-setter, an article that accepts the thesis from the activists (trial lawyers and self-styled consumer groups) that the Bush administration is using regulations to lock in federal preemptions, sticking it to the little guy in the process. Five separate people are cited complaining about pre-emption, "balanced" by two people making neutral observations about the legal and political landscape. Did no one make a positive case for federal preemption?

P.S. Ah, we see the AP reporter reported on the committee hearing from the same vantage point, that of doubting preemption.


The Rhode Island Supreme Court hears arguments today in an appeal from three paint manufacturers, sued by the state for creating a public nuisance by once selling lead paint, generally.

In a novel move, the court is broadcasting the arguments online, starting at 9 a.m.

The best blogger on the case is Jane Genova at Law and More. Reacting to the John Edwards endorsement of Obama yesterday, she considers the possibility of an Attorney General Edwards and observes:

To many he didn't seem like a good fit for the VP slot but a terrific one for the AG one. And that had tort reformers worried.

For just this reason tomorrow's Rhode Island Supreme Court lead paint public nuisance looms even more important in assessing the strength of the plaintiff bar in the U.S. If the RI SC Justices overturn the verdict for the state and acquit defendants Sherwin-Williams, NL Industries and Millennium Holdings, that could signal a significant setback for everything from class-action suits to novel legal theories such as public nuisance.

The National Association of Manufacturers' materials -- including an amicus brief -- are available here.

UPDATE The court has web-archived the four-hour hearing. You can watch it here.

Ohio AG Marc Dann Resigns

Guess he was all out of teeth to pull. From AP:

COLUMBUS, Ohio --Ohio's attorney general has resigned amid the scandal of a sexual harassment investigation in his office and his extramarital affair.

Marc Dann has been under pressure of possible impeachment and announced he was stepping down on Wednesday.

The 46-year-old Democrat at first refused to resign, despite demands by Democratic Gov. Ted Strickland and others within his party.

More from Reuters, and WSJ Law Blog.

As of 6:15 p.m., his official website is still up.

With Dann gone, whom will the New York Times now pick as the next Eliot Spitzer? Forbes had a round-up.

P.S. Oh, yes. Jonathan Adler has lots of Dann-related links from his redoubt at Case Western.

P.P.S. The memo to AG office employees.


Per exactly the grounds I predicted, a Texas appellate court has reversed in its entirety the $32 million verdict/$7.75 million judgment in Garza v. Merck (Apr. 23, 2006; Apr. 21, 2006; Aug. 8, 2006 NY Sun op-ed), holding that the expert specific causation evidence was lacking under Merrell Dow Pharmaceuticals, Inc. v. Havner, 953 S.W.2d 706 (Tex. 1997). (Merck & Co. v. Garza (Tex. App. May 14, 2008) and WSJ via Beck). The Ernst oral arguments recently occurred, and one can expect a similar reversal there in the long run.

Garza was one of the plaintiffs intentionally omitted from the Vioxx settlement, so he will take nothing unless the Texas Supreme Court reverses, an unlikely scenario. (Even under the settlement, he would not have been eligible for more than a token $5000 payment, because of the lack of evidence of Vioxx usage.)

That said, the attorneys who brought this meritless, and likely fraudulent, case will likely suffer no disciplinary consequence for inflicting millions of dollars of legal expense upon Merck. It was the nuisance of these legal expenses that forced Merck shareholders to spend $4.85 billion to extract themselves from the meritless litigation.

More: Bloomberg; Reuters; WSJ Health Blog (which has inaccurate trial statistics); WSJ Law Blog.

As I previously noted, plaintiffs had won only 5 out of 32 Vioxx cases scheduled for trial; the Garza reversal reduces that number to 4 out of 32, with the likely promise that the other Texas plaintiffs' verdict will be thrown out as well.

Enumerated Powers Act

Rep. Shadegg has introduced the Enumerated Powers Act, H.R. 1359, which will require that all bills introduced in the U.S. Congress contain "a concise and definite statement" setting forth the specific constitutional authority "relied upon for enactment." The idea is to encourage Congress to engage in more debates upon the scope of its constitutional authority before passing legislation, though with no Democratic co-sponsors, one imagines it is unlikely Rep. Conyers will let the House Judiciary Committee let it get to the floor. Sen. Coburn will introduce parallel legislation in the Senate.


Shannon Brownlee and Jeanne Lenzer write for Slate and bemoan that Peter Pitts, a former FDA official, and head of Center for Medicine for the Public Interest, was able to speak on a program broadcast on many NPR affiliates that failed to mention his ties to industry. Brownlee and Lenzer identify nothing that Pitts said that was scientifically inaccurate; they just object to the fact that CMPI receives funding from pharmaceutical companies. (In contrast, they lionize the Center for Science in the Public Interest, though CSPI apparently colluded with the plaintiffs' bar in support of bogus lawsuits.)

Brownlee and Lenzer write:

In hopes of making reporters' jobs a little easier, we've created for journalists an international list of prestigious and independent medical experts who declare they have no financial ties to drug and device manufacturers for at least the past five years. We have nearly 100 experts from a wide array of disciplines. E-mail us at Brownlee.Lenzer@gmail.com, and we'll be happy to name names.

Of course, financial ties from "drug and device manufacturers" are not the only source of potential conflicts of interest; many "medical experts" who take no money from drug and device manufacturers are instead receiving substantial money manufacturing quack expert testimony for the plaintiffs' bar falsely condemning pharmaceutical companies for profit. I took Brownlee and Lenzer up on their public offer to share the list and asked to see it, because I thought it would be interesting to see how many of their "nearly 100" could be cross-referenced against testifying experts for plaintiffs, but Brownlee and Lenzner refused to submit the list to independent scrutiny because I work for AEI. Students of game theory know what the refusal to disclose to skeptical sources indicates about the quality of the hidden information; the refusal tells you you can safely assume the worst about the list.

Read all the way to the bottom of the Slate piece for an amusing exchange between Bill Lichtenstein (who reveals that Lenzer only blasted his program on Slate after he refused to profile them on air) and Lenzer complaining that Lichtenstein dared to mention the scandal that forced BMJ to retract a Lenzer hit piece on Eli Lilly at the same time she makes ad hominem attacks on Peter Pitts and Trevor Butterworth without addressing the substance of their comments. To wit, Butterworth notes:

Lenzer, a former physician's assistant turned freelance writer, appears to be of the "industry money corrupts" school of medical reporting. This has its place, but only if an accusation of vested interests can be shown in faulty research methodology and poor statistical methods, or that the drug is pointless or has a greater risk profile than similar drugs without any greater benefit. Otherwise, it's a way of reporting whose bias is at least as bad as the bias it purports to expose precisely because it's unscientific in method; it insinuates corruption without demonstrating it in the data.

Lenzer's bias is evident in her attack on Butterworth. And, speaking of bias, we somehow doubt that Lenzer will ever have the problem that she will write an article that BMJ has to retract in its entirety and apologize for because it was mistakenly too favorable to industry.

Since Brownlee and Lenzer will point this out if they respond at all, my employer, AEI, receives a small portion of its annual budget from pharmaceutical companies. I have previously performed legal work or consulting work for pharmaceutical companies. None of this has previously prevented me from taking public-policy positions opposed by the pharmaceutical industry. Neither AEI nor any of its donors has dictated or sought to dictate the conclusions of any of my work.


You can't fire me, I quit! Well, I will after a couple of weeks of punishment.

Ohio Attorney General Marc Dann is expected to announce his resignation later today, The Plain Dealer has learned. He planned to break the news to his senior staff this afternoon.

The decision came as Dann faced intense pressure from fellow Democrats and Republican critics who said he was not fit to continue as the state's top lawyer.

It also followed action targeting Dann in the Ohio General Assembly today by lawmakers from both parties. House Democrats this morning filed articles of impeachment against Dann, accusing him of misconduct and malfeasance in office. And House Republicans began plans to fast-track a bill that would allow the state Inspector General's office to conduct an independent investigation into Dann's office.

  • Marc Dann's bio.

  • The summary of the internal investigation and disciplinary actions.
  • UPDATE (4:29 p.m.): AG's office says not the case: "At 3:55 p.m., as a group of reporters and camera people stood gathered outside Dann's office on the 17th floor of the Rhodes Office Tower, a receptionist handed out a short statement that read, 'In response to numerous media inquiries today, the office is issuing the following statement: "Ohio Attorney General Marc Dann has not resigned and no further announcements are planned.'"

    And here's an observation from Crain's Cleveland Business, made just about a year ago:

    Marc Dann is off to an aggressive start as Ohio's new attorney general, and The New York Times has taken notice.

    The paper even pays the activist AG what he would view as the ultimate compliment: It compares him with former New York attorney general Eliot Spitzer, the bane of Wall Street, mutual funds and the insurance industry.

    Whooooa-kay.

    It's the activist side of the AG that has us interested. Dann has certainly taken an activist bent when approaching the foreclosure issue.


    We've been covering this story for some time -- April 2007 and much earlier -- and the criminal trial of three of the Kentucky fen-phen attorneys who stole tens of millions from their clients begins today. (Andrew Wolfson, "Fen-phen trial gets under way", Louisville Courier-Journal, May 13). Andrew Wolfson has an overview at the Louisville Courier-Journal. The strategy of Gallion, Cunningham and Mills appears to be to blame their co-counsel Stan Chesley. The question arises why he hasn't also been indicted, as he took millions of dollars more than he was contractually entitled to on his own. Judge Joseph "Jay" F. Bamberger, who received at least tens of thousands of dollars directly from the settlement after approving it, will testify, but has not been indicted. Also not indicted: Bamberger's former law partner, Mark Modlin, who received millions of dollars from the fen-phen lawyers, helped negotiate the judicial approval of the settlement, and then bought a house in Florida with the judge.


    Blog coverage includes Bill Childs/TortsProf, Secular Apostate, Dan Pero/American Courthouse, and Tyson Wynn (lauding report principal author John Wylie II). And the Chamber-backed West Virginia and Southeast Texas Record explore local angles. Earlier here, here, here, and here, and the report is here.

    Around the web, May 13


    From a news release from the Aon Corp., the risk management and consulting firm, reporting the results of an annual survey of liability costs in the long-term care industry. Costs have stabilized.

    The study found that average general liability and professional liability loss costs nationwide are at approximately $1,460 per bed after peaking at $2,030 per bed in 1998. This trend is driven by a reduction in the average severity of claims from a high of $261,000 in 1998 to $138,000 in 2007. In addition, the number of claims (frequency) has stabilized in recent years -- hovering around 10.6 claims per 1,000 occupied beds after rising from 6.7 claims in 1997.

    Theresa W. Bourdon, managing director and actuary, credits tort reform for much of the progress, while adding: "Many other changes, including the withdrawal of some long term care facilities operators from expensive markets, more effective defense strategies, the use of arbitration for claims settlement and significant improvements in quality of care, have combined to help alleviate the liability crisis."

    In April, Sens. Mel Martinez (R-FL) and Herb Kohl (D-WI) introduced S. 2838, the Fairness in Nursing Home Arbitration Act. The bill would amend the Federal Arbitration Act to ban pre-dispute arbitration agreements for nursing homes and residential care facilities, e.g., assisted living facilities. The Martinez news release is here. The American Association of Justice issued a news release upon the bill's introduction. They like it.

    More at Shopfloor.org and the WSJ Law Blog.


    An unusual and unfortunate development at the U.S. Supreme Court today, as four justices recused themselves in an appeal of lawsuits brought by South African nationals against U.S. companies that did business with the South African government. Three of the justices own stock in the affected companies and another has a son who works for Credit Suisse. (AP story.)

    The case is American Isuzu Motors Inc. v. Lungisile Ntsebeza, 07-919. The court's order is available here.

    As Dow Jones explains:

    When lacking a quorum, the Supreme Court is required to affirm a lower court [2nd Circuit] ruling that went against the companies, many of them major international corporations. Both the U.S. and South African governments also urged the high court to hear the case.

    The South African apartheid appeal could affect more than 50 companies sued in 11 separate lawsuits for damages claims that exceed $400 billion. Among those who signed onto the appeal are American Isuzu Motors Inc., a unit of Isuzu Motors Ltd. (ISUZY), Ford Motor Co. (F), JPMorgan Chase & Co. (JPM), Honeywell International Inc. (HON), General Electric Co. (GE) and 3M Co. (MMM).

    The lawsuits represent a major interference with the Executive Branch's conduct of foreign policy and open up U.S. businesses to liability claims for doing business in an entirely consistent fashion with that foreign policy.

    The National Association of Manufacturers joined other business groups in an amicus brief (available here); the others are the National Foreign Trade Council, USA*Engage, U.S. Council for International Business, and the Organization for International Investment.

    The Solicitor General's brief is available at ScotusBlog here.

    In an earlier Point of Law post, The Manhattan Institute's Jim Copland argued, "As I expressed in an interview this spring, before the case was decided, the suits are largely driven by "cowboy law professors who want to hijack U.S. human-rights laws. They exploit U.S. courts to get their preferred policies implemented without having to worry about the State Department or Congress." While the latter class of cases -- those against the multinationals -- are the more typical fee-driven sort, many of these cases are also driven by "a feeling of 'I want to be the secretary of state' among these lawyers."

    Also, Michael Krauss commented, "Saudi Arabia's barbaric laws mistreat women and viciously oppress non-Muslims. China enslaves millions, harvests organs from thousands it executes, and is still in denial over Tiananmen Square. Warning to all US companies doing business in those places -- did you know you might be committing an American tort? Talk about a tariff barrier to exports!"



    An important all-day conference at AEI next week:

    In the last several years, nearly every major pharmaceutical company has paid hundreds of millions of dollars to settle allegations of illegal "off-label" marketing of drugs. There has been a growing trend of actions by federal prosecutors, state attorneys general, and cooperating trial lawyers to litigate against pharmaceutical manufacturers for allegedly doing too much to promote off-label use of prescription products. Citing recent legal changes mandating exclusion from federal programs after a conviction, many manufacturers say they are forced to settle rather than risk defending themselves--even as prosecutions against individual executives have foundered in front of juries.

    At this AEI Legal Center event, experts on both law and health care will present papers on the law, economics, medicine, and public policy of off-label marketing, discussing everything from the abuse of class action mechanisms to implications for the First Amendment and medical malpractice. Speakers include former Food and Drug Administration chief counsel Daniel Troy; former Cephalon general counsel John Osborn; former deputy attorney general George Terwilliger; principal deputy assistant attorney general and acting assistant attorney general for the Civil Division Jeffrey Bucholtz; attorneys Brian Anderson, James Beck, Mark Herrmann, Richard Samp, and Kyle Sampson; law professor Margaret Johns; and AEI scholars John E. Calfee, Theodore H. Frank, and Scott Gottlieb.

    Panel I: Off-Label Marketing, R&D, and Medical Practice

    Panel II: The Legal Environment from Federal Regulation and Enforcement

    Panel III: Distortions from State and Private Enforcement

    Panel IV: Legal Implications for Commercial Speech and Medical Practice

    Register here. Earlier discussion on POL: Feb. 1; Feb. 19; Mar. 24; Dec. 17; Aug. 31; Aug. 22 (Richard Epstein); Aug. 1, 2006 (state AGs); Mar. 19 (InterMune indictment).


    A high-profile criminal trial of three class-action attorneys charged with cheating their clients out of some of the $200 million Fen-Phen settlement money begins today in Covington, Ky. The Lexington Herald-Leader looks like it will have continuing coverage:

    William Gallion, Shirley Allen Cunningham Jr. and Melbourne Mills Jr. go on trial in Covington on Monday before U.S. District Judge William O. Bertelsman.

    Bertelsman perhaps set the tone himself in a comment during a hearing last year: "Not only these three gentlemen are on trial, but the whole legal profession is on trial."

    The Herald Leader notes that the case has attracted national attention and has prompted a reconsideration of how class-action lawsuits are conducted in Kentucky. In February, Chief Justice Joseph E. Lambert appointed 12 attorneys to serve on the nearly created Mass Tort and Class Action Litigation Committee. (News release.) The AP had a story that framed the issues in February.

    UPDATE (10:30 a.m. Tuesday): Good summary in the WSJ's Law Blog. We'd forgotten that two of the lawyers used the gains to purchase Preakness winner Curlin. Hope that doesn't make the current legal proceedings a win-place-or-show trial.


    This weekend the Boston Herald weighed in with a strongly worded editorial based on the report's findings:

    What is also needed, and rarely discussed, is a way to make judges control these cases rather than sit back and watch the plaintiff bar effectively extort cash from the defendants because it's cheaper to settle for a few thousand dollars each than to investigate thousands of cases filed at once.

    And to correct a misimpression left by my earlier post: while Jim Copland was the one at the Manhattan Institute who directed the report's preparation, its principal author was John M. Wylie II, who had earlier investigated asbestos-suit scandals for the Reader's Digest (Jan. 2007 issue). Now Wylie contributes the latest "Think Tank Town" column to the Washington Post:

    ...Tragically, real victims -- workers who actually face serious future health problems due to asbestos exposure -- are often duped into signing away future rights for a pittance in order to pad current attorney fees, and are then left with no recourse if they actually become sick. And workers falsely diagnosed as sick face a lifetime of worry and problems getting insurance.

    This project has been gut-wrenching for me. As a lifelong Democrat, I long have harbored grave doubts about many tort reform measures because I believed they hurt working men and women. In this field of the law, however, the need for reform has become blatantly obvious. ...

    [Both mass screenings and new filings declined after the widely publicized episode in which Judge Janis Graham Jack exposed bogus claims in her courtroom] But when no prosecutions, disbarments and serious sanctions for the lawyers materialized, new attorneys predictably decided to get into the game. In the past six months, a Texas law firm has conducted two new mass screenings in my native Oklahoma. More are sure to follow.

    When a few key doctors are stripped of their medical licenses and jailed, when a few key attorneys are disbarred, when a few overly compliant judges are voted or kicked out of office, it will send a strong message. Until then, lawyers have little incentive not to return to the business model that has earned them billions before.

    And Quin Hillyer is covering the study for the Examiner, with sidebars on fast facts, recommended reforms, and the views of Stanford lung specialist Dr. David Weill .

    Train in Vain

    The legislative failure of a proposed Central Florida commuter rail has engendered a real wave of reporting on the influence (or resurgence, as the case may be) of the state's trial lawyers, who helped kill the plan over liability issues.

    • The Sarasota Herald Tribune: "TALLAHASSEE -- The legislative battle that doomed commuter rail service in Orlando had little to do with the $641 million cost or the cries from other cities about the resulting increase in freight traffic...It came down to a question of who could sue whom and for how much. Nobody in Tallahassee is better prepared for that fight than the Florida Justice Association, the lobbying arm of nearly 4,000 trial lawyers."
    • The Lakeland Ledger: "TALLAHASSEE | All you needed to know about who was winning and losing the battle to bring commuter rail to Orlando you could learn from looking at the faces of lobbyists packed into the Capitol....As lawmakers worked through the hectic final day of their 60-day session on May 2, lobbyists from CSX Transportation and Orlando scurried through the hallways in a frenzied effort that failed to save the half-billion-dollar deal....But lobbyists for the state's trial lawyers, who had emerged as the primary opponents, leaned coolly against the limestone walls outside the Senate chambers. Their focus had shifted to the filming of a skit video for their upcoming annual meeting."
    • And in The Tampa Bay Tribune, a story entitled, "Lawyers Feeling the Florida Legislature's Love Again."

    The stories are all so ...frank. And informative for it. Gov. Jeb Bush was a noted critic of the trial bar; he wrote the foreward for the Pacific Research Institute's 2008 Tort Liability Index. Times change, as do governors.

    Tyrannosaurus Rex Morgan, M.D.

    Some of the sharpest commentary lately about the excesses personal injury lawyers has been appearing in the comic strip, Rex Morgan, M.D.

    Really.

    On the Hill

    Two House committee hearings to be aware of this week:

    • Committee on the Judiciary, May 14, Subcommittee on
      Commercial and Administrative Laws and the Subcommittee
      on Crime, Terrorism, and Homeland Security,
      joint hearing on Allegations of Selective Prosecution Part
      II: The Erosion of Public Confidence in Our Federal Justice
      System, 2 p.m., 2141 Rayburn.
    • Committee on Oversight and Government Reform, May 14,
      hearing on Should FDA Drug and Medical Device Regulation
      Bar State Liability Claims? 10 a.m., 2154 Rayburn

    Witnesses aren't listed yet for the Oversight hearing, which we assume will beat up on the Supreme Court's decision in Riegel v. Medtronic. (Earlier PointofLaw post here.) The American Enterprise Institute held a discussion on federal pre-emption issues in February, and transcript and background materials are available here.

    Defunct causes of action, cont'd

    The fascinating article on "Why Torts Die" that Ted points out, aside from its intrinsic interest, is also relevant to an issue of great current importance, namely the extent to which it is permissible to roll back the scope of existing common law liability without fear of committing any constitutional violation.

    As readers of this site probably know, the organized plaintiff's bar has been extraordinarily successful in getting state judges to strike down, as inconsistent with their states' constitutions, liability limits enacted by the elected lawmakers of their states. The grounds for such invalidation vary from state to state -- sometimes the reforms are declared at variance with "open courts" clauses of state constitutions, on the theory that to abrogate a long-recognized cause of action (or even curtail modestly the damages available under it) somehow amounts to abrogating the very right to redress grievances as such. Sometimes a curious theory of separation of powers is advanced in which the setting of liability rules is regarded as somehow internal to courts and not to be meddled with by mere legislators (of course those legislators are welcome to add new grounds for liability, so long as they don't narrow old ones).

    Of course, the barest acquaintance with American legal history suffices to make clear that many damage actions once recognized as valid under common law have been abolished both by courts themselves, and by legislatures with the later approval of courts. Perhaps best known are various employment actions. Employees formerly had a direct right to sue employers over job injuries, which was largely abolished as part of the enactment of workers' comp laws; and employers once had a direct right to sue over certain costs inflicted by labor unrest, such as the blockage of plant gates by picketing, which was largely abolished by New Deal-era labor laws.

    Those opposed to legislative encroachments on tort liability sometimes claim that the difference is that in the employment cases, liability was abrogated as part of an overall trade in which the party deprived of rights to sue was accorded valuable alternative rights: thus the injured employee could pursue benefit payments under workers' comp laws, while the blockaded employer might press a complaint before the National Labor Relations Board and in other ways might benefit from the legal regularization of labor relations. By contrast, legislative curtailment of (say) non-economic damages in medical malpractice cases is not ordinarily offset by the creation of any new no-fault scheme of compensation. Thus (it is argued) courts should feel free to strike down such damage limits, since they form no part of a comprehensive legislated scheme providing alternative benefits for patients.

    As I've been pointing out for years, there's a big problem with the theory that a tort somehow cannot be abolished or curtailed in the absence of a legislated alternative compensation scheme. Earlier in the Twentieth Century, state legislatures took a prominent hand in the abolition of the once thriving set of torts known as "heartbalm", actions that included breach of promise of marriage, alienation of affections, and criminal conversation (sexual relations with complainant's spouse). No alternate system of legislated compensation whatsoever was provided for jilted brides, cuckolded husbands and so forth; their losses were simply left to lie where they fell. Nor did courts seize on this circumstance to invalidate legislative curtailments of heartbalm and proclaim that once a common law tort, always a common law tort.

    Kyle Graham's article serves as a very handy compendium of other once-valid actions that have faded away, or been abolished perforce, with no suggestion that anyone enjoyed a constitutionally protected right to go on suing under them. They range from suits against taverns by spouses of alcoholics seeking compensation for their lost earnings (popular in the heyday of Temperance) to the old nuisance action of "ancient lights" (against the erection of nearby sunlight-blocking buildings), which retained vitality in Britain but mostly not here. Ironically, the list of defunct torts also includes the old common law right to sue the perpetrator of champerty and maintenance -- that is, to sue a third party who furnished one's opponent's the means to keep his lawsuit going. The AAJ/ATLA lawyers who assail as unthinkably outrageous the abolition of any and every common law right to sue are unlikely to go to bat for the revival of that one.

    "Why Torts Die"

    Prosecutor Kyle Graham, a recent Yale Law graduate, has an interesting piece in the most recent Florida State University Law Review:

    Alienation of affections. Claims for insult. Maintenance and champerty. Suits against saloonkeepers for spousal alcoholism. These are just a handful of the many torts that have disappeared, or are presently passing into history. Why Torts Die examines why these and other torts have vanished or are in danger of extinction. The central thesis of Why Torts Die is that the collapse of a tort typically owes to a confluence of compromising conditions or events. Changes in the ambient cultural atmosphere may threaten a tort theory, but the effects of these changes will be magnified or mitigated by several other factors: the nature, quality, and volume of critiques directed against the tort; the interests and limitations of the audiences that decide whether to retain or reject the cause of action; the relative power and influence of the tort's opponents and supporters; the availability and desirability of alternatives to the tort; and the intrinsic qualities of the threatened claim itself. To flesh out the hypothesis that most defunct torts haven't simply fallen victim to sudden cultural downdrafts, Why Torts Die offers three case studies, each detailing how a gravely endangered tort or torts came to find itself in that condition. This review of the diminutions of the tort of insult, of obesity lawsuits, and of the heartbalm torts (alienation of affections, breach of promise to marry, criminal conversation, and seduction) suggests that the disappearance of a tort is typically a complicated affair, implicating several of the factors discussed above.

    Around the Web, May 10

    • Good Wall Street Journal opinion section today, with an editorial, "Tennessee's Trial Run," on the judicial selection process in the Volunteer State. The state's current appointive plan, a modified Missouri-plan "merit selection" gives inordinate influence to insides and special interests, including the Tennessee Trial Lawyers' Association. Gov. Phil Bredesen is on the side of the reformers.
    • Lots of links and commentary on Tennessee and judicial selection at American Courthouse, the new blog from Dan Pero of the American Justice Partnership.
    • Tennessee Governor Phil Bredesen gets lots of mentions as a potential vice presidential candidate, a moderate Democratic governor with a record of fixing the state's budget problems, one who could possibly bring his state's electoral votes with him. Can he afford to offend a major constituency, the trial lawyers?
    • Back at the WSJ, Stephen Moore chronicles the tort-reform successes in Mississippi that helped bring the state out of the "Judicial Hellhole" status that corrupted justice and bedeviled business investment. The column, "Mississippi's Tort Reform Triumph," features Gov. Haley Barbour, the Manhattan Institute's Jim Copland, state Sen. Charlie Ross, and the Pacific Research Institute.
    • The Journal interviews Senate Republican Leader Mitch McConnell (R-KY), who comments on the blocking of legal authority for surveillance of international communications that pass through U.S. exchanges, i.e., FISA reform. Forty-some lawsuits have been filed against the telecommunications companies that acceded to federal requests for surveillance after 9/11, and McConnnell believes the failure of Congress to act is in direct response to a powerful constituency: "It shows you how far they're willing to go," he says, "to enrich these obscenely wealthy characters who practice this kind of law. They'll do anything for them, even jeopardize the security of the United States of America." Cooperation from private firms is essential to conduct intelligence operations, he adds. "This is a private-sector activity. We're not in the phone business. There will be no terrorist-intercept program without the cooperation of the private sector."
    • From The New York Sun: "Lawyers for Mayor Bloomberg are asking a judge to ban any reference to the Second Amendment during the upcoming trial of a gun shop owner who was sued by the city. While trials are often tightly choreographed, with lawyers routinely instructed to not tell certain facts to a jury, a gag order on a section of the Constitution would be an oddity." The Sun link is broken as we post [seems fixed now], so try these excerpts at SayAnythingBlog. The NRA comments: "Considering the trial judge is Jack Weinstein--who has almost singlehandedly attempted to keep illegal efforts to sue the lawful manufacturers and sellers of guns afloat--we will be waiting with bated breath to see how he rules on this motion."
    • An AP weekend story: "Following year of division, Supreme Court avoids 5-4 splits," with a dose of John Paul Stevens watching.
    • From The Houston Chronicle: Failing to inform victims of a potential plea bargain violates the Crime Victims' Rights Act of 2004, the 5th Circuit ruled this week in a case that grew out of the 2005 BP explosion in Texas City. The deal still stands, for now. The ruling is available here.

    The Issues Being Lobbied

    From the AP: "WASHINGTON -- The American Association for Justice, a trade group representing trial lawyers, spent more than $1.1 million in the first quarter to lobby on medical malpractice liability and other issues, according to a disclosure form. The organization, whose members represent plaintiffs in personal injury, product liability and other tort cases, also lobbied in favor of legislation that would prohibit mandatory binding arbitration clauses in consumer and other contracts." You can read the report here.


    Restraint imposed on asbestos litigation today in a welcome ruling by the Rhode Island Supreme Court in Kedy v. A.W. Chesterton Co..

    Thirty-nine Canadians filed suit in Rhode Island against U.S. companies licensed to do business there, alleging exposure to asbestos in Canada. The connection to Rhode Island was...well...we should be able to sue there. The issue in this appeal was whether the state would recognize the standard doctrine of forum non conveniens, that is, that the forum is simply not well suited to hear the case because neither the parties, witnesses nor other elements necessary to the trial are in Rhode Island.

    Today the court agreed that the case should be dismissed under that doctrine, which it ruled was part of the state's "jurisprudential landscape." The court adopted a two-pronged test that takes into consideration the adequacy of an alternative forum if the case is dismissed in Rhode Island, and a balancing of private and public interests affected by the litigation. The opinion allows a case to be dismissed even if the alternative forum provides fewer remedies or other advantages for the plaintiff, and the court gave less weight to a plaintiff's choice of forum when it is motivated by forum-shopping objectives. A court may also consider the extent to which its own judicial system will be burdened by the inappropriate forum shopping.

    The court's opinion is here.
    The National Association of Manufacturers has submitted an amicus in the case, which is available here.
    The American Tort Reform Association issued a news release praising the decision.


    A phone message left on the home answering machine last night, evidence of mass trolling for plaintiffs in what I assume to be Traydol lawsuits. I'll have enough wits about me to press "1" next time to be connected to a screener. Maybe I'll get a diagnosis over the phone!


    The San Francisco Chronicle reports that all major oil companies except Exxon have agreed to pay $422 million to settle a lawsuit over the gasoline additive MTBE.

    Methyl tertiary butyl ether was added to gasoline in the 1990s to make the fuel burn more thoroughly and cut air pollution, in response to government mandates (the only alternative to MTBE is grain-based ethanol, which is much more expensive and, as we know now, is ecologically catastrophic on the international level). MTBE is perfectly safe as long as storage tanks don't leak. But if tanks leak (an event for which gas station owners, not MTBE producers, are responsible) MTBE can seep into ground water and impart to it a noxious taste. Since tank owners are small fry, California governments went after MTBE producers to recover the costs of cleaning up their wells. I have written about this case at length in the Federalist Society's Engage journal.

    Under the agreement, the oil companies will pay $422 million up front. They also agree to cover 70 percent of the cleanup costs for any of the plaintiffs' wells that become contaminated with MTBE within the next 30 years.

    The companies argued that they shouldn't have to pay cleanup costs because the government had compelled MTBE's use, because no long-term health effects on humans had been proved, and as a result, and because any fault lay with tank owners, not with MTBE producers. The settlement agreement does not address those arguments, and an attorney representing Chevron in the case said the companies still hold those views. Too bad they're now moot.

    Drafting doctors for ER duty

    The spokesman for Florida's plaintiff's bar, president Frank Petosa of the Florida Justice Association, is keen on avoiding you-know-what as a remedy for shortages of emergency room doctors, and doesn't mind suggesting coercive steps instead (via RiskProf):

    Policymakers should instead focus on real solutions to this problem, even though they may be more politically difficult. These could include addressing reimbursement rates, increasing requirements for doctors to take call as a condition of practice, requiring hospitals to shoulder more responsibility and implementing true medical malpractice insurance reform that requires insurance companies to pass their savings on to Florida's doctors. [emphasis added]



    Charleston Gazette: "West Virginia University's College of Law received the biggest gift in its history on Friday, $8 million of unclaimed money from a settlement of a nationwide class-action lawsuit against H&R Block Inc." It was all very cozy and convenient since the judge presiding over the case had suggested the law school as a beneficiary, and the money seemed to be, you know, just sitting there.

    Ted has a very fine article in the new issue of the Federalist Society's Class Action Watch on the dangers of cy pres disposition of unclaimed class action funds, and how they can magnify the unaccountable power of the lawyers and other participants in such cases. Our earlier coverage -- including a case where Vanderbilt's law school got $2.9 million -- is here.

    More: Reader Skip Oliva writes, "Does anyone actually track or keep a master list of slush funds? I've followed a couple of antitrust-related ones, but I've never had the resources to compile a general list."

    Jim Copland at Overlawyered

    He's guestblogging over there about the Manhattan Institute's new asbestos report.

    Mortgage bill $35 million earmark

    It's for "legal counseling" for borrowers... hmmm. Republicans "raised objections" to the committee-added provision, "which they called a slush fund for trial lawyers to sue lenders." (via Chamber Post).


    As Carter reported yesterday, trial lawyers in Colorado have apparently reached a truce with some of their critics: a former state treasurer won't try to qualify a ballot measure limiting contingency fees, and CTLA won't try to qualify nine (9!) separate counter-measures which sought to inflict pain on realtors, doctors and other nonlawyer groups. That skirmish having calmed down, however, there remains a ballot war very much in progress between organized labor and some of _its_ critics. Amendment 47 would add Colorado to the ranks of states with a "right to work" law preventing unions from negotiating contracts that require the dismissal of nonmembers. A Better Colorado, the group promoting that initiative, has thus far been backed mostly by CoorsTek, which is related to the large brewing interest. As revenge, a group called Protect Colorado's Future, whose biggest support has come from the politically active Service Employees International Union (SEIU), is pushing two business-bashing ballot measures, one to allow lawsuits over firings without "good cause", and the other to menace company executives with lawsuits if they so much as know about legal infractions at their firms, even if they do not themselves participate.

    The New York Times showcased the executive-criminal-liability measure in a lengthy and overall quite flattering April 1 report, but omitted any discussion of the revenge initiative aspects or of the union backing, describing Protect Colorado's Future merely as "a coalition of advocacy groups that supports the initiative".


    Only to run into another veto threat by Gov. Brad Henry, who supports tort reform as long as it remains in the abstract. From The Journal Record: "OKLAHOMA CITY - Barely before the ink was dry on a significant tort reform bill the Legislature passed Wednesday, Gov. Brad Henry promised to veto the measure. The bill would reinstate certain provisions of a law struck down as unconstitutional in 2006. ...House Bill 2458 would require plaintiffs to obtain an affidavit from an expert when filing a professional malpractice lawsuit - but this time, the bill includes wording designed to avoid a legal pitfall that rendered the previous law unconstitutional." Search here for the bill history and text.


    The American Association for Justice has issued a news release respondi....well, not responding to the new Manhattan Institute report, "Trial Lawyers, Inc.: Asbestos." More like calling names and changing the subject.

    • The scene setter: "Manhattan Institute's latest attack on the civil justice system follows the mold of its previous reports: fictitious, imaginative and laughable." OK, that's a soundbite. Not substantive, but a soundbite.
    • An attack on the Institute's Jim Copland, director of the study, for comments taken out of context on Vioxx. Wait, Vioxx? And that's relevant, how?
    • A paragraph from an 11-year-old newspaper story about the Manhattan Institute's funding.

    Slurs and misdirection. That's part of the business model, isn't it?

    In other reaction to the report, Dan Popeo of the Washington Legal Foundation argues in The Examiner that the legal profession must do more to police itself and instill a sense of ethics. ATRA's Sherman "Tiger" Joyce sees more evidence accruing for the need to have Congressional hearings.


    Regulation by litigation marches on: Joseph Silvia of WLF writes about how the misnamed Center for Science in the Public Interest is using Massachusetts' one-sided consumer law, among other legal tools, to strong-arm food and beverage companies into changing their ingredient lists. Most recently, CSPI has been using lawsuit threats to dissuade Anheuser-Busch from introducing beer products incorporating caffeine and ginseng, all with no need to obtain any ruling from the Food and Drug Administration that such products are in fact unlawful. ("Threat of Litigation Masquerades As Regulatory Vehicle", PDF).

    Trial Lawyers Inc. -- Asbestos

    The Manhattan Institute's Trial Lawyers Inc. project came out yesterday with its latest, and one of its strongest, reports on the business of mass litigation: Trial Lawyers Inc. -- Asbestos, directed by my colleague Jim Copland, the principal author being John M. Wylie II. I've been writing about asbestos litigation for years on this site and elsewhere, and even devoted a chapter to it in my book The Rule of Lawyers, so I figured I'd seen it all. Wrong: this report has all sorts of fresh and arresting material, well organized and clearly written. As Carter notes in his laudatory post at Shop Floor, it makes a particularly good explanatory resource for new readers seeking a first approach to what is almost certainly the most complicated and costly body of injury litigation in history. It also makes a compelling case that our legal system has failed badly to curb the various devices -- from mass screening resulting in medically dubious diagnoses, to mass forum-shopping in search of favorable courts, through group trial and mass settlement of cases -- by which some law firms convoy spurious claims of asbestos injury to victory along with the genuine.

    In its first day the report has already made a considerable splash, with the ABA Journal taking note, Jim publishing an op-ed in today's Examiner, ATRA calling for Congressional hearings on the subject, and the Chamber-backed Legal NewsLine and sister publications covering as well. The report, once again, can be found here.

    More: Edited May 12 to clarify authorship of report; see followup posts here, here, and here.

    New York Lottery sued

    According to the would-be class action on behalf of Take Five ticket buyers, those supposed chances of "winning" are inflated by counting a free play as a win. "The lawsuit says merchants who sell the tickets should be held liable since they were in on the fraud." (Thomas Zambito, "A lotto nonsense, says $5M lawsuit", New York Daily News, May 6; Kati Cornell, "You've Gotta Sue To Win", New York Post, May 6; Lottery Post)(cross-posted from Overlawyered).

    Smokestacks and autism

    Orac at Respectful Insolence looks into a study that made for recent alarmist headlines, and finds that it doesn't check out very well.


    Political reality prevails in Colorado -- for the moment -- as the Colorado Trial Lawyers Association agrees to pull back nine proposed initiated measures, while a sponsor of a measure limiting contingency fees also drops his ballot plans. "John Sadwith, executive director of the Colorado Trial Lawyer's Association (CTLA) said the decision was made late Tuesday after continuing talks with the group promoting the restrictions on how much lawyers could collect in successful civil actions. From the Denver Business Journal: "We didn't think it was the best interests of working people in the state" to go forward with gathering signatures and putting the measures on the November ballot, Sadwith said. " Alternative explanation: We looked like hubristic jerks, confirming the worst prejudices against trial lawyers. Earlier Point of Law post here. Still leaves more than 100 proposed initiated measures.

    UPDATE (1:55 p.m.): More from the Rocky Mountain News, and the CTLA news release is here. The more we think about it, it seems possible that national leaders and Democratic officials could well have put pressure on the Colorado group to withdraw its initiatives. With the Democratic National Convention in Denver, nine intiated measures would have drawn unwanted attention to the cash connection between the plaintiff's bar and presidential candidates. Sure would be an interesting line of inquiry for Colorado reporters.


    Protecting unsophisticated clients dept.: The Massachusetts high court has asked an advisory panel to consider requiring lawyers to obtain a client's written consent "when a contingent fee agreement contains terms that 'materially departs' from the state's model agreement. The court also wants guidance on whether such agreements could allow a lawyer discharged by the client before the legal matter is resolved to collect more than the fair value of the attorney's services and expenses." (NLJ).


    Eric Posner finds the consensus in favor of this bad new law "puzzling". Earlier here.

    New SEC nominee

    Troy Paredes has the important Ribstein and Bainbridge endorsements.


    At the Federalist Society's Class Action Watch, Jack Park analyzes (and praises) a judge's ruling cutting attorney fees in a class action suit over precious-metal storage fees. Among other grounds for its action, the court discerned that the plaintiff's expert had manipulated assumptions so as to maximize the apparent value of the class's nonmonetary recovery.

    Train in Pain

    Interesting the sudden flurry of rail liability news coming from the states. First, Florida trial lawyers help kill liability protection for CSX, crashing a proposed Central Florida commuter train. (Think of all the extra miles that commuters will now drive, punishing the environment.) Rep. John Mica (R-FL) still insists the project is a go, while the Lakeland Ledger editorially applauds the resistance to what looked like a sweetheart deal.

    In New Hampshire, meanwhile, "CONCORD - A legal cap on railroad damages critical to restoring rail service from Boston through Nashua took an important step forward Monday...The Senate Transportation Committee's support of the rail cap, means the bill could become law later this year if the Senate backs it next week." The bill is HB 1404

    And in North Dakota: "BISMARCK, N.D. - About 3,100 Minot residents will share in a $7 million lawsuit settlement with Canadian Pacific Railway stemming from a derailment and chemical spill more than six years ago...[snip] The settlement in the class action case does not include people who filed individual lawsuits against the railroad, or the 228 people who opted out of the class action case to pursue their own lawsuits."

    Around the web, May 6

    • NY judges' deplorable "Black Robe Flu" slowdown aimed at Albany lawmakers' firms [Giacalone; also see Overlawyered and my comment at NYPIAB]; Judith Kaye issues denial [NYLJ]; Kaye in judge-pay suit wants Sheldon Silver to disclose what he gets from Weitz & Luxenberg [NY Post edit]; and will a Buffalo judge kick W&L off its representation of Erie County in drug-pricing suit, with its potentially huge contingency fee? [NY Post, Buffalo News] And isn't it kinda weird that the NYT still hasn't covered this?
    • Employee's having obtained and sold confidential business information no bar to winning FMLA verdict against Chase that could reach $7.6 million [Fulton County Daily Report]
    • Welding rod defendants holding off the courtroom onslaught? [Fisk, Bloomberg via ABA Journal; earlier]
    • Alabama's drug-pricing, oil-royalty suits stoke memories of the state's old reputation for insider justice [Tucker/AVALA, Huntsville Times]
    • "Very bad idea": bill co-sponsored by Obama to force firms to identify and disclose their major beneficial owners [Bainbridge]
    • "Lawsuit Reform Huge Boost to Texas Economy" per report by economist Ray Perryman for Texans for Lawsuit Reform Foundation [release; McAllen Monitor]
    • Mustn't condone tobacco companies funding research that might prevent lung cancer deaths, they've got a conflict of interest after all [Shaywitz/T. Stossel, TWS]


    Events are moving fast in the scandals engulging Ohio Attorney General Marc Dann. From The Toledo Blade, posted this afternoon. "COLUMBUS -- Gov. Ted Strickland and other high-ranking Ohio Democrats Monday joined Republicans in the chorus for Attorney General Marc Dann to immediately resign and threatened to lead the march toward impeachment if he does not."

    A letter demanding resignation was sent Sunday night by Governor Ted Strickland, U.S. Senator Sherrod Brown, Lt. Governor Lee Fisher, Secretary of State Jennifer Brunner, Treasurer Richard Cordray, House Minority Leader Joyce Beatty, Senate Minority Leader Ray Miller and Ohio Democratic Party Chairman Chris Redfern. Text here. It's tough: "Sadly, we no longer have even the most remote hope that you can continue to effectively serve as Attorney General and that is why we are asking for your resignation."

    UPDATE (5:20 p.m.), from AP: "Gov. Ted Strickland told reporters that Democrats will begin drafting an impeachment resolution against Attorney General Marc Dann right away."


    After a couple of weeks taken off to tackle a writing deadline, I'm back. I can only applaud the virtuosic performance here in the meantime from guestblogger Carter Wood, who has recently transformed the NAM's Shop Floor into the must-read blog destination for up-to-the-minute and brightly written coverage of legal reform news (as well as a range of other business and Washington topics: tax, labor, regulation, and more).

    Better yet, Carter has agreed to stay on and continue his efforts as an ongoing Point of Law contributor. We can't expect him to go on contributing (cross-posting or otherwise) at quite the Stakhanovite (Reynoldsian?) pace he's achieved over the last two weeks, but if his past record is any indication, all of it will be eminently worth reading.

    Around the Web, May 5

    • In "Who Owns John Conyers," The Examiner editorializes in support of congressional hearings into the Milberg Weiss as representative of the plaintiff's bar. The news peg is House Republican Leader John Boehner's letter to Conyers asking for the hearings.
    • Ohio Attorney General Marc Dann, a Democrat, is in serious political trouble for cheating on his wife and mismanagement that produced a sexual harassment complaint. Jonathan Adler has been following his travails at the Volokh Conspiracy, noting the numerous editorial calls for Dann's resignation. And, he mentions Husker Du.
    • Sen. Arlen Specter (R-PA) argues for a federal media shield law in a Washington Post op-ed today, responding to the contra position expressed by Attorney General Mukasey. The debate continues to concentrate almost exclusively on national security and classified information considerations. But what about business, against whom the media shield could be turned into a fierce weapon? We look at business' concerns in a post at Shopfloor.org.

    • From the Wall Street Journal's Law Blog: "Brooklyn-based Eastern District of New York have formed a task force of federal, state and local agencies, involving as many as 15 law-enforcement agents and investigators that will focus on Wall Street firms and mortgage lenders."

    • From the end of last week, a report on the $38 million settlement that's been reached with families of the Minnesota bridge collapse victims. The Legislature's package awards everyone on the bridge up to $400,000, with an additional $12.6 million pool for those suffering the most severe injuries and losses.
    • Entertainment at the House Judiciary Committee this week, a hearing by the Subcommittee on Commercial and Administrative Law, "The Rulemaking Process and the Unitary Executive Theory."
    • The national radio program of the conservative Christian group, Focus on the Family, had a good report this weekend on judicial questionnaires and the efforts in eight states to allow judge candidates to respond to inquiries about their views and associations. More here.

    • And a 10:20 a.m. addition, an op-ed in today's WSJ, "Dartmouth's 'Hostile' Environment": "[An] Ivy League professor [is] threatening to sue her students because, she claims, their 'anti-intellectualism' violated her civil rights. ...Priya Venkatesan taught English at Dartmouth College. She maintains that some of her students were so unreceptive of "French narrative theory" that it amounted to a hostile working environment. She is also readying lawsuits against her superiors, who she says papered over the harassment, as well as a confessional expose, which she promises will 'name names.'" We can start with Derrida.
    Around the Web, May 4

    • The May issue of "Trial," the monthly magazine of the American Association for Justice, includes an article on In re Seroquel Prods. Liab. Litig., 2008 WL 215707 (M.D. Fla. Jan. 24, 2008). While the magazine is reserved for members, a summary of the article has been posted online: "The U.S. district court overseeing multidistrict litigation against the manufacturer of the atypical antipsychotic drug Seroquel held that documents reviewed by witnesses in preparation for depositions are not protected by the work-product privilege." Here's an article on the litigation last year at Law.com.
    • Apropos the AAJ, the trial lawyers group is sponsoring is a teleseminar Wednesday, "Using the McKinsey Documents in Your Bad Faith Case." The reference is to management consultant McKinsey & Co.'s documents recommending how Allstate Corp should challenge automotive insurance claims. One of the AAJ presenters is David Berardinelli, Santa Fe trial lawyers and author of the book, "From Good Hands to Boxing Gloves." Business Week covered Berardinelli and his book in May 2006.
    • Last month, All State decided to post the McKinsey documents online in response to a judge's order and fines. The 150,000 pages are available here. The decision prompted news reports, including this New Orleans Times-Picayune story, which notes that the documents do not include information about catastrophic claims, of potential use in Hurricane Katrina litigation. David Rossmiller at the Insurance Coverage Blog has more.
    • This line in the registration materials for the AAJ teleseminar caught our eye. "Note: Eastern Indiana and parts of Arizona--no daylight savings -- Please be sure to note correct time for the teleseminar you register for." Nope. Indiana went all Daylight Saving Time effective April 2006, an initiative of Gov. Mitch Daniels. So if you miss the seminar because of bad info, can you sue?
    • Via The Volokh Conspiracy comes news of the action by Swiss Federal Ethics Committee on Non-Human Biotechnology. Finding: Plants have rights. "The Committee members unanimously consider an arbitrary harm caused to plants to be morally impermissible. This kind of treatment would include, e.g. decapitation of wild flowers at the roadside without rational reason."
    • From the Wall Street Journal's Law Blog: "Just days before the first Bextra trial was to begin, Pfizer has struck tentative settlements with some plaintiffs who alleged that painkillers Celebrex and Bextra caused heart attacks, according to lawyers at three plaintiff firms involved in the litigation." More from Bloomberg.
    • A column by Ken Connor, Chairman of the Center for a Just Society in Washington, D.C., challenging the U.S. Chamber of Commerce's "Lawsuit Climate 2008: Ranking the States." By its sample -- corporate attorneys -- the survey is inherently biased and does not reflect a good knowledge of the court system, Connor argues: "As a trial lawyer for thirty-five years, I am among the first to admit that the civil justice is imperfect. But access to the court system is a constitutionally protected right, and at a time of rampant corporate misconduct it is a right that needs to be zealously defended. Conservatives who believe in the Constitution and the need for checks and balances in our public life should agree." Connor's column is a rebuttal to a pro-survey column by Lindsay Boyd of Townhall.com
    • Three-hundred-and-twenty five new laws go into effect in Utah on Monday. The Deseret News has a round-up. Many new opportunities for litigation. Here's one: The estate of a person killed by illegal drugs can sue the person who provided or administered the lethal drugs.
    • A post mortem in the Orlando Sentinel of the Central Florida commuter train debacle in the Legislature: "TALLAHASSEE - Central Florida's commuter-rail project failed in the Florida Legislature because its backers didn't heed a cardinal rule of politics: Know your enemy...They thought their main opponents were residents of Lakeland, angry that the state's deal with CSX Corp. would run more freight trains through their city. They didn't realize until too late that the state's trial lawyers were grimly determined to defeat the deal."

    New paper on SSRN by Sheila B. Scheuerman of the Charleston School of Law (via):

    This article examines the intersection between two controversial areas of the law - punitive damages and class actions - and argues that the Supreme Court's recent jurisprudence clarifying the due process limits on punitive damages has broad implications on the procedural laws governing the types of cases that can properly be certified as a class action. Specifically, the article discusses the Supreme Court's evolving approach to punitive damages from one that considered the harm a defendant's conduct caused to society as a whole to one that now focuses almost exclusively on the harm to the specific individual bringing the lawsuit. This shift, which recently culminated in the Court's 2007 decision in Philip Morris USA v. Williams, constitutionally requires that the amount of a punitive damages award relate to the amount of harm suffered by the party bringing the suit. That requirement is at odds with class action practices that treat punitive damages as a common, class-wide issue and that have allowed juries to assess a punitive damages award before evaluating the harm to the individual class members. The article argues, therefore, that where injuries are not uniform among class members, punitive damages cannot be pursued as a class-wide remedy.

    This is similar to the point made by Beck and Herrmann and Marc Moller, but ostensibly different: Scheuerman claims she is arguing for a narrower view than Beck and Herrmann do, but never delivers on her footnoted promise to address the argument in Part III of her paper.

    Around the Web, May 3

    • House Republican Leader John Boehner and Ranking Judiciary Member Lamar Smith (R-TX) have written a letter to House Judiciary Chairman John Conyers asking for congressional hearings into crimes and corruption of Milberg Weiss and the trial bar. They asked for hearings by May 19th, the date Mel Weiss is to report to prison. Advocates like the the American Tort Reform Association and The Examiner newspaper have called for hearings, as well. Shopfloor.org has a post on the letter, including a copy of the letter here.
    • In other Milberg Weiss news, from Law.com: "John B. Torkelsen, a former expert witness in hundreds of shareholder derivative and class action cases for Milberg Weiss, pleaded guilty on Thursday to perjury charges." Also, from Reuters: "Indicted U.S. law firm Milberg LLP is in settlement talks with federal prosecutors to resolve a long-running criminal case involving accusations it paid illegal kickbacks to clients, sources close to the talks said on Tuesday."
    • Former D.C. Administrative Judge Roy Pearson sues to get his city job back. And he wants damages, just not $54 million. Pearson was not reappointed to the post after his suit against his drycleaners elicited international scorn.
    • A commuter rail project in Central Florida has gone off the tracks in the Legislature, with liability one of main obstacles. From the Daytona Beach News-Journal: "The Department of Transportation and Jacksonville-based CSX Transportation reached an agreement in 2007 for the state to buy the tracks from CSX, which would then lease them part time for freight. But the agreement requires legislative approval of legal liability provisions that provoked opposition from many senators and trial lawyers. One provision would have extended state sovereign immunity to private contractors hired by the state for key rail functions. Another would have shielded CSX for most liability from mishaps on the line.
    • For future use in direct mail and Internet solicitations. From The Advocate, Baton Rouge: "The controversial Roe v. Wade abortion-rights ruling will be overturned if John McCain is elected president, CNN legal analyst Jeffrey Toobin told a Baton Rouge audience Friday...'It's gone,' Toobin, also a legal affairs staff writer at The New Yorker, said after giving a speech about the U.S. Supreme Court at LSU's Paul M. Hebert Law Center. 'Maybe not during his first year or second year, but it will be overturned...'"
    • From the Dallas Morning News: "AUSTIN - The Texas Supreme Court ruled Friday in favor of Houston homebuilder Bob Perry, the state's most prolific campaign contributor, in a case homeowner advocates say reflects the influence of big money over elected judges." Indeed, there is an appearance of an appearance of an appearance of a news story.
    Protecting the Lonely Spamleteer

    Since Shopfloor.org is down momentarily because of an overload of spam -- whoever Olgunka is, may she suffer -- so this news migrates over here. The Supreme Court of Virginia has agreed to review the conviction of a Jeremy D. Jaynes, sentenced in 2004 to nine years in prison for violating Virginia's Anti-Spam Act; he was sending out as many as 10 million spam messages a day. (Court order here.) From the Richmond Times Dispatch: "Yesterday, however, the justices agreed to hear arguments on whether Jaynes could challenge the anti-spam law as unconstitutional in general, even if it was constitutionally applied to him."

    A First Amendment challenge, for crying out loud. One which Justice Steven Agee says he would grant, writing in a separate opinion: "I would find Code § 18.2-152.3:1 unconstitutionally overbroad on its face because it prohibits the anonymous transmission of all unsolicited bulk e-mails including those containing political, religious or other speech protected by the First Amendment to the United States Constitution. I would therefore reverse the judgment of the Court of Appeals and vacate Jaynes' convictions of violations of Code § 18.2-152.3:1.2."


    Today, House Republican Leader John Boeher and Rep. Lamar Smith (R-TX), the ranking Republican on the House Judiciary Committee, sent a letter to Committee Chairman John Conyers asking for a hearing prompted by the criminal conspiracy and convictions involving the Milberg Weiss law firm. (Copy of the letter here.)

    As the two note in their letter: "Mr. Lerach himself told the Wall Street Journal his illegal conduct and that of his law partners was an 'industry practice.' At his sentencing, one of his supporting letters quoted Mr. Lerach as saying, 'Everybody was paying plaintiffs so they could bring their cases.'"

    The two ask for hearings by May 19th, the date Weiss is to report to prison. The questions they want asked:

  • How many of these cases are brought as a result of illegal payments to plaintiffs?
  • What other types of conflicts exist between trial lawyers and the injured investors they purport to represent?
  • What reforms should Congress enact to eradicate these abuses from our judicial system?
  • More at Shopfloor.org, where we conclude:

    We would be naive to think partisanship didn't enter into this request. Trial lawyers represent a major political force within the Democratic party, much appreciated for their generosity in campaign contributions. If Chairman Conyers declines to hold a hearing, the Republicans will make an issue of it.

    But so what?

    UPDATE (11:59 a.m.) Nathan Koppel reports on the letter at the WSJ Law Blog, noting that Congress passed the PSLRA in 1995 to prevent this sort of thing. The point being?


    The media coverage goes poof, too. Our Shopfloor.org post on the dismissal of Raelyn Campbell's $54 million lawsuit against Best Buy for a lost laptop garnered minimum notice by the news media.

    The estimable Marc Fisher wrote an entry at his Washington Post blog, "Raw Fisher." Covering a hometown company, the Minneapolis Star-Tribune also took note in a news brief, as did the Minneapolis-St. Paul Business Journal.

    And that's it, so far and too bad. One of the factors that should discourage the filing of frivolous lawsuits is negative publicity, even ridicule. Campbell had a brief moment in the spotlight based on her snort-inducing $54 million demand -- look at all the news and blog references -- but when the suit was dismissed, she escaped media attention and the useful opprobrium it might have generated.

    In the future, some publicity-hungry, offended consumer might look at Campbell's experience and say to himself, "Well, I'll lose, but at least I'll be on TV. It's worth it to me."

    Crossposted from Shopfloor.org.

    Around the Web, May 2

    • The Wall Street Journal knocks Sen. Chuck Grassley's attempts to rewrite the False Claims Act in an editorial, "False Claims Gold Rush": "This reform would greatly expand the universe of false-claim targets. Today, individuals file qui tam suits against entities that directly take money from the U.S. government. Under Mr. Grassley's rewrite, lawsuits could be leveled against anyone on the ultimate receiving end of federal funds. Scientists who get federal grants via a university; artists who get endowment money; homeless shelters that receive block grants - all could be targets of disgruntled citizens looking to lodge a federal "fraud" case."
    • The Atlanta Journal-Constitution reports: "A Fulton County judge has struck down the cap on monetary awards in a medical malpractice case, a decision that if upheld on appeal could undercut a major component of Georgia's tort reform laws.Superior Court Judge Marvin Arrington wrote in an order released Wednesday that the legislative cap of $350,000 for noneconomic damages such as pain and suffering was unconstitutional because it gave special protections to the medical profession."
    • Judge Arrington has been in the news lately for having kicked white people out of his courtroom so he could lecture the black defendants. He has since apologized and joined forces with Bill Cosby to reach out to black youth.
    • Chris Manning of Manning & Sossamon -- who represented the Chungs in the $54 million lost pants lawsuit -- was in Jefferson City, Mo., Wednesday to help launch a statewide campaign for reforms to the state's consumer protection statutes. Supporters in the Missouri Justice Alliance called for passage of HB 2241. Missourinet has the story.

    • From the law offices of Robert H. Weiss comes a news release announcing a billion-dollar consumer class action against the leading baby bottle manufacturers (Avent America, Evenflo, Gerber, Handi-Craft (Dr. Brown's) and Playtex) for their use of Bisphenol A in polycarbonate plastic baby bottles and toddler training cups. The lawsuit was filed in the United States District Court for the Western District of Missouri pursuant to Missouri Consumer Protection Laws..."Now where have heard about those laws before?
    • Much excess going on in the handling of BPA, including Howard County, Md., no longer giving out BPA-containing baby bottles in the WIC program, and Senate Democrats introducing a federal bill. The bill is S. 2928. The Milwaukee Journal-Sentinel takes credit for the legislation.
    • Amazon sues New York State over its new tax on interstate sales over the Internet. Previous point on the topic here.
    • New York Governor David Paterson did sign the Libel Terrorism Protection Act (mentioned below), which protects U.S. citizens against libel suits by those using other countries more expansive laws. U.S. Rep. Peter King (R-NY) has introduced a federal version, H.R. 5814.


    From the AP:

    PORTLAND, Ore. (AP) -- The same Oregon court that slapped Big Tobacco with a huge punitive damages award has handed the industry a victory by rejecting a class-action lawsuit for medical monitoring costs.

    The Oregon Supreme Court ruled unanimously Thursday that smokers must show actual harm to make a negligence claim against cigarette manufacturers -- not the mere possibility of harm in the future.

    A woman had sued on behalf of 400,000 Oregonians, claiming the companies "knew or should have known that their cigarettes contained toxic and hazardous substances likely to cause lung cancer."

    The case is S054378 Lowe v. Philip Morris USA, Inc.; the state Supreme Court's ruling is available here. RJR Reynolds news release is here.


    H.R. 493, the Genetic Information Nondiscrimination Act, has passed the House in the form approved last week by the Senate. The vote was 414-1 (roll call vote available here). The bill outlaws insurance companies or employers from discriminating on the basis of genetic information.

    Other interesting provisions are included:

    (Sec. 302) Amends the Fair Labor Standards Act of 1938 to increase the maximum employer penalty for violations involving oppressive child labor provisions or certain child labor safety requirements. Establishes an additional civil penalty for any such violation that causes the death or serious injury of an employee under the age of 18, which may be doubled for a repeated or willful violation.

    Defines "serious injury" as: (1) permanent loss or substantial impairment of one of the senses or of the function of a bodily member, organ, or mental faculty; or (2) permanent paralysis or substantial impairment that causes loss of movement or mobility of a body part.

    Increases the maximum civil penalty for any repeated or willful violation of minimum wage or maximum hours requirements.

    The President will certainly sign the legislation, which CQ Politics calls "a landmark ban." Also CQ:

    Liability concerns of employers and the White House held up the bill until the Senate this month made changes to strengthen a "firewall" between the employer and insurer provisions of the legislation, so that businesses couldn't be hit with penalties under both sections.


    As the Quill Turns...Tobacco

    Today's Wall Street Journal carries an editorial on New York Governor David Paterson's intention of taxing internet sales. From "Return of the Web Tax":

    By signing the state's budget, Mr. Paterson is now attempting to do what Mr. Spitzer only threatened: Force out-of-state retailers such as Amazon.com to collect New York's sales taxes, which approach 9%, including local levies. A 1992 Supreme Court decision called Quill bars exactly this type of money grab. The Supremes ruled that forcing such obligations on companies with no employees or buildings in a state could cripple interstate commerce. Without Quill, small Web merchants would have to answer to 7,500 state and local tax collectors.

    Funny, that's not how North Dakota's Attorney General Nick Spaeth and Tax Commissioner Heidi Heitkamp described the Supreme Court ruling in "North Dakota v. Quill" in their Bismarck news conference back in 1992. (The case started in state court, State v. Quill.) If I recall correctly -- being there as a reporter -- their argument was that the Supreme Court decision was a victory for North Dakota because it said Congress could address the issue of taxation of interstate sales conducted via the Internet.

    We mention this in context of the tobacco lawsuit -- really. Heitkamp went to serve as a popular attorney general, one of the many AGs who pursued the tobacco companies through litigation. She recently returned to the news, proposing a state initiated measure to allocate additional moneys from the settlement to health and anti-tobacco programs. From the AP: "It would establish a new fund managed by a nine-member advisory board appointed by the governor. The board would be in charge of developing a comprehensive plan to discourage tobacco use."

    So the tobacco settlement continues to drive policy and politics a decade later. Consequences, we think more intended than un.


    This e-mail from just came over the transom here at NAM HQ, delivered by our vice president for litigation and deputy general counsel. How Quentin found the transom is beyond us, but anyway, it seemed relevant.

    CAFA Problems in the Seventh Circuit. Class action suits alleging violations of state consumer protection laws are being filed with increasing frequency, even though many members of the purported class of plaintiffs suffer no injuries and do not rely on the challenged marketing statements in making their purchasing decisions. These no-injury, no-reliance class actions expand liability beyond traditional limits and threaten to undo the benefits of the Class Action Fairness Act of 2005. The NAM joined with the Association of Home Appliance Manufacturers in an amicus brief 4/28 urging the Seventh Circuit to overturn a district court order that certified a class of plaintiffs from 29 states. We argue that courts should not undermine state consumer protection laws by lumping together claims under different state laws and ignoring the substantive differences between the applicable statutes. Liberal class certifications will make courts in the Seventh Circuit magnets that will unfairly expose manufacturers to extortion by litigation. Our brief in Thorogood v. Sears, Roebuck and Co. is online here .

    Speaking of transoms, the English term is "fan light" and the French term is "vasitas." From the German: "Was ist das?"

    Around the Web, May 1

    Apologies if this seems heavy on the tort reform movement today, but it's what I focus on at the National Association of Manufacturers and there's lots going on...

    • Dan Pero of the American Justice Partnership officially unveils his American Courthouse blog today. (He's had a soft opening for a few weeks, making sure the staff is up to his rigorous demands.) If you're interested in the politics of state judicial selection, this is the place to go.
    • Sherman Joyce of the American Tort Reform Association and Victor Schwartz of Shook, Hardy & Bacon ponder the prospects of Attorney General John Edwards in this Examiner column, "Don't outsource work of U.S. attorney general." Scary stuff: "The only legal barrier standing in the way of a plaintiff's lawyer as AG awarding his friends hefty contingency fee contracts is an executive order issued by President George W. Bush that bans federal departments from hiring outside lawyers on a contingency fee basis. But that order could be nullified by a new president."

    • How about U.S. Attorney General Richard Blumenthal? The Wall Street Journal's Holman Jenkins chatted with Connecticut House Speaker Jim Amann -- who's not seeking re-election -- summarized in the e-mail, "Political Diary." "As to the 2008 presidential race, Mr. Amann says the winner will be... Connecticut Attorney General Richard Blumenthal. That's because, if Hillary Clinton wins, Mr. Blumenthal is destined to become her attorney general. If Barack Obama wins, Connecticut Senator Chris Dodd will take a cabinet position and open up a senate seat for Mr. Blumenthal. If John McCain wins, Joe Lieberman will become defense secretary, again opening up a senate seat for Mr. Blumenthal."
    • Hugh Hewitt, the radio talk show host and law professor (Chapman University Law School), in his weekly syndicated column, "On Heparin: A Few, Kind Words For Plaintiffs' Lawyers." Over at Shopfloor.org, we note Hewitt's fine commentary on the move to list the polar bear as an endangered species, a stalking horse for global climate change regulation.

    • Marc Fisher, the Washington Post's very good Metro columnist, took note in his Raw Fisher blog of the judge's dismissal of Raelyn Campbell's $54 million lawsuit against Best Buy: "[Just] because the plaintiff was smart enough to glom onto the enormous worldwide publicity that the District's favorite administrative law judge, Roy Pearson, won in his case last year against his neighborhood dry cleaner does not mean--thank goodness--that her lawsuit was going to be taken seriously by the court."
    • The newly chosen president-elect of the Wisconsin State Bar is Douglas W. Kammer, long active in the Wisconsin Academy of Trial Lawyers. Good profile in the Portage Daily Register, which notes Kammer ran on a single issue: voluntary membership. In other trial lawyer news, the American Association for Justice announced the hiring of new press secretary, former Democratic activist and Obama-for-President staffer, Amaya Smith.


    I have an op-ed in today's New York Sun on the affirmance of the "Port Authority is 68% responsible for the 1993 World Trade Center car bomb" verdict. Earlier.

     

     


    Isaac Gorodetski
    Project Manager,
    Center for Legal Policy at the
    Manhattan Institute
    igorodetski@manhattan-institute.org

    Katherine Lazarski
    Press Officer,
    Manhattan Institute
    klazarski@manhattan-institute.org

     

    Published by the Manhattan Institute

    The Manhattan Insitute's Center for Legal Policy.