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October 2008 Archives

"Midnight regulations"

You know, including the ones that date back to December 2006.

In Defense of Contributory Negligence

I asked the Virginia Lawyers' Weekly, a plaintiffs' bar publication, to allow me to publish this op-ed three years ago, when a bill was pending to move Virginia to comparative negligence. I was surprised when VLW agreed, and I expected to be the object of multiple letters to the editor. Instead, total silence greeted my op-ed. Perhaps my opponents thought silence the best response? Well, I refuse to keep silent! Here is the op-ed I published at that time -- I believe it is as relevant today as it was back then.

We must keep Contributory Negligence in Virginia

Imagine a two-car collision at a four-way stop sign. Rochelle Rich, heading north down the road in her Rolls Royce (value: $200,000) was too busy punching stock option quotes into her Palm Pilot to notice the pesky stop sign. Peter Poor, lumbering west in his beat- up Chevy pick-up (value $2000) was ogling a girl on the corner, and also missed his stop. The two cars collide with each other and are destroyed (though thankfully no one is injured).

In Virginia neither party to this collision will be able to sue the other. Rochelle Rich will have to bear her $200,000 loss. Peter Poor will be saddled with his $2000 wreck. Either or both may have first-party (contract) collision insurance, of course, which they will have paid for. Now imagine that Virginia has adopted a pure comparative negligence regime. Say each party is found to be 50% negligent (more on this very problematic finding below). Rochelle will be condemned to pay $1000 to Peter. Peter will be condemned to pay $100,000 to Rochelle. After the $1000 set-off Peter's net liability will be $99,000. This amount will be determined through tort adjudication, not through contract. Many people claim that comparative negligence is more "fair" to the deserving poor than contributory negligence. Excuse me, but I just don't see it. Why is it "fair" to make Peter Poor subsidize the Rolls-Royce owned by Rochelle Rich? Wealthy people have, on average, much higher damages than do poor people - not only do they drive more expensive cars, they also have greater lost income and medical fees. What redistributive goal is satisfied by having the poor pay the wealthy when both are negligent causes of an accident? Contributory negligence sends negligent tortfeasors home empty-handed when they try to shift the blame for their self-inflicted injuries. Their recovery, if they have any, must come from their own insurance policy. This is the beauty of Virginia's rule - it encourages recovery through contract, which is much more efficient to everyone concerned (except lawyers, of course) than recovery through tort. First-party insurance typically has a loading cost close to 10% (that is, for every $1.10 in premium paid, $1 is eventually distributed to those who suffer a loss). Under comparative negligence, the default rule for a negligent person involved with another negligent party remains third party insurance (i.e., determination of shares of liability after a tort process), which has a loading cost close to 100% (it takes $2 in premiums to obtain $1 in compensation).

Do all Virginians wish to increase insurance premiums so the negligent poor might subsidize the negligent rich? Do they wish to engage in costly trials so that seven jurors could determine "shares of negligence," a process that has never been reduced to a science and that in fact is more akin to determining how many angels can dance on the head of a pin?

Maybe Virginia should emulate Florida. There, Barry Rothberg, driving his car, hit Plaintiff William Baugh whom he first saw in the center of a four-lane roadway.1 In an attempt to avoid Baugh, Rothberg moved his vehicle from the inside lane to the outside lane. At the same time, Baugh first moved back to the curb but then moved back into the roadway. The overwhelmingly obvious negligence of the victim of this accident would have kept this case out of a Virginia court. But in Florida the jury applies its comparative negligence alchemy in every case, with results presumably depending on the attractiveness of the plaintiff and the depth of pockets of the defendant. This particular jury found the victim 85% negligent and Rothberg 15% negligent, of the resulting $161,005.61 injury. Thus, the net verdict against Baugh was $24,150.84. Maybe Rothberg should have practiced his avoidance slalom a few times at the local race track.

Also in the Sunshine State, a young girl and her fiancé flirted by ramming each other's go-carts while on the Grand Prix ride at Disney World. Rammed too hard, the girl suffered injuries. Of course, she sued Disney World, claiming that the bumpers on her go-cart should have been thicker. [Can't bumpers always be thicker than they currently are.] The jury found Disney world "1% negligent", whatever the heck that means. Because of joint and several liability, Disney was obliged to pay 86% of the girl's damages.2 Thank Florida's comparative negligence rule -- the girl's case would likely never have gone to a Virginia jury, because of contributory negligence -- next time you pay your admission fee in Orlando.

Apportionment of fault is a flawed system. It suffers from inexactness, bias, and uncertainty; and thus it decreases parties' incentives to settle. Rejecting apportionment of fault is the optimal policy choice. Virginia should be proud that it has retained the common law contributory negligence rule. With its sister state Maryland,3 the Old Dominion should refrain from jumping on the disastrous comparative negligence bandwagon.


1 BAUGH V. ROTHBERG, NO. 96-8482-AH, 1999 FLA. JURY VERDICT REP. NO. 99:4-70 (PALM BEACH COUNTY (FLA.) CT. NOV. 28, 1998).

2 WALT DISNEY WORLD CO. V. WOOD, 515 SO. 2D 198 (FLA. 1987)

3 SEE, E.G., HARRISON V. MONTGOMERY COUNTY BD. OF EDUC., 456 A.2D 894, 898 (MD. 1983):
("[C]OURTS SHOULD NOT ASSIST A WRONGDOER WHO SUFFERED AN INJURY AS A RESULT OF HIS OWN WRONGDOING.").


The report has just been published. Here's a link to the free pdf file. http://www.ojp.usdoj.gov/bjs/pub/pdf/cbjtsc05.pdf

Highlights:

1) In 2005 plaintiffs won in more than half (56%) of all general civil trials concluded in state courts.

2) Interestingly, plaintiffs were significantly more likely to win bench trials compared to jury trials. [Perhaps plaintiffs choose juries when their cases are much weaker, however?]

3) Approximately 4% of victorious plaintiffs won over $1,000,000. The median tort award was $24,000.

4) The total number of civil trials declined by over 50% from 1992 to 2005 in the nation's 75 most populous counties. Tort cases decreased the least (40% -- (perhaps because of asbestos bankruptcies) while real property (77%) and contract (63%) cases registered the largest declines.

5) In the 75 most populous counties, two tort categories saw marked increases in median jury awards. This was particularly the case for product liability trials, where median awards were about 5 times higher in 2005 than in 1992, and for medical malpractice trials, where median jury awards more than doubled from $280,000 in 1992 to $682,000 in 2005 (an increase over 60% greater than inflation alone would predict).

"Slavery reparations: what happened?"

I've got an op-ed today in the L.A. Times by that title, based on a longer article forthcoming at City Journal, and I add a bit of perspective on the subject at Overlawyered.

Waxman report on drug preemption

Beck and Herrmann give it a much deserved skewering (more skewering from former FDA official Sheldon Bradshaw at American Lawyer; and background). John Calfee has a new Health Policy Outlook for AEI with a calmer and more reasoned view:

These analyses [by JAMA and New England Journal editorialists, among others] largely ignore three crucial points. First, the liability system is a clumsy tool that can easily do more harm than good, and its record in the pharmaceutical market is particularly bad. Second, the FDA faces powerful incentives to overregulate and overwarn, meaning that warnings and contraindications imposed by litigation will usually impede--rather than improve--medical care. Finally, contraindications imposed through litigation (as in Wyeth v. Levine) are especially likely to leave patients worse off.

White Coat Rants has been writing persuasively (here and here) about the harmful effect on medical practice of a plaintiff victory in Wyeth v. Levine.

Beck & Herrmann also have a new post up providing a comprehensive look at Wyeth v. Levine and the implied drug preemption issue, broadly taking the view that a defense victory at the high court would be 1) less sweeping in forestalling future mass tort claims than is often assumed, but 2) more difficult for Congress to override than the express pre-emption that came up in Riegel. One of the points they make adds perspective to the oft-touted endorsement of the plaintiff's case by NEJM and JAMA: both doctors and drugmakers are often defendants in these cases, and the effect of sticking the latter with more of the liability will often be to stick the former with less of it. (In other words, the doctors have reason to throw the drugmakers under the bus; put differently, the Litigation Lobby is great at playing "divide and conquer".) B&H also recently cautioned against too ready a concession to the claim that pharmaceutical tort litigation actually has a favorable effect on safety in the first place, the evidence for which appears surprisingly sparse.

Industrial policy -- one narrow escape

Manhattan Institute senior fellow (and Harvard economics prof) Ed Glaeser in City Journal:

Government has no business trying to pick winners or subsidize particular industries; the unpredictability of innovation makes that a fool's errand. Even Japan's famed Ministry of Industry and International Trade generally subsidized less successful industries. Forty years ago, one Harvard economist declared that Cambridge couldn't survive without government support for its candy industry. What a mistake that would have been. Today, the former New England Confectionary Company building houses Novartis, a major biotechnology firm.

Around the web, October 31

  • Ideologically charged new UC Irvine "public interest" law school will offer free tuition to first class of students [Above the Law]
  • Whodunit? Everyone [widow of power plant worker sues 192 companies in asbestos claim, MC Record; cf. cases with 92 defendants, 79, etc., etc.]
  • A different argument for pre-emption: if gov't has forced mfrs. to behave a certain way, it should share its sovereign immunity with them [Martin Kotler (Widener Law) via Beck & Herrmann]
  • Industry-sponsored research is less to be relied on than the other kind, right? Not necessarily [Tierney, NYT]
  • "Causation In Court: Working Principles For Toxic Tort Cases", by Antony Klapper of Reed Smith [WLF]
  • PoL contributor Michael Krauss, with George Mason co-author Jeremy Kidd, defends the collateral source rule [SSRN via TortsProf]


It's tricky to base class actions on consumer expectations, as the plaintiffs found when Judge Posner and a Seventh Circuit panel decertified their class in Thorogood v. Sears, a case against the giant retailer. Relevant passage from the coverage in AmLaw Litigation Daily:

In writing for the panel, Posner takes a whack at what he regards as misuse of the class action system. "The plaintiff claims to believe that when a dryer is labeled or advertised as having a stainless steel drum, this implies, without more, that the drum is 100 percent stainless steel because otherwise it might rust and cause rust stains in the clothes dried in the dryer," he writes. "Do the other 500,000 members of the class believe this? Does anyone believe this besides Mr. Thorogood?" And therein lies the problem, according to Posner. There was no "single understanding of the significance" of Kenmore's claims, and therefore no reason to treat all purchasers of Kenmore dryers as a class. (Parenthetically Posner adds this line, which we cite in case you're interested in the Seventh Circuit's dirty laundry: "At argument, the plaintiff's lawyer, skeptical that men ever operate clothes dryers--oddly, since his client does--asked us to ask our wives whether they are concerned about the rust stains in their dryers. None is.")

More on the case at Above the Law.

AP and Andrew Cuomo on Wall Street pay

Hodak Value wonders whether the news syndicate and the New York attorney general really have the slightest idea what they're talking about.

P.S. And you may have noticed the smooth move: first the government forces the banks to take capital infusions many of them didn't want and tried to turn down, then Andrew Cuomo shows up to demand that they curb executive pay, in a letter that states, "Taxpayers are, in many ways, now like shareholders of your company, and your firm has a responsibility to them." Hodak Value has more, and cf. Henry Waxman as well.

Ogletree to Washington?

Stories it's kind of amazing don't get more attention: "The ABA Journal predicts that [Harvard lawprof, borrowing buff and Al Sharpton associate Charles] Ogletree, who has long advocated race-based reparations, will be the Assistant Attorney General in charge of the Civil Rights Division during the Obama administration."

Yoo-hoo! ABA Journal!

When a new study is released with numbers on median (i.e., half-higher, half-lower) damage awards, the one thing you should realize it's not going to be capturing are "runaway" outcomes, which by definition are the outliers. If 98 lawsuits end in awards of $5,000 each, one ends in an award of $500,000, and one ends in an award of $50,000,000, then the median award among the 100 will be exactly $5,000, even though the mean, or average, will exceed $500,000. Those particular numbers are purely by way of example, but in all real-world instances I know of in which both measures are available, mean or average awards come out higher than median, and often very much higher (which has implications for the way cases settle before trial "in the shadow of" possible outcomes, as the vast majority do; these settlement flows of course do not show up in figures on trial awards). Median trial numbers are obviously badly flawed as a way of trying to assess such questions as whether the amount of money moving through the system is high or low, rising or falling.

To put it differently, could you please refrain next time from asserting that median numbers "debunk tales of runaway civil trial damages", when they quite plainly do no such thing?

Defense bar blog

DRI now has one, For the Defense (via LawSites).

Suing auditors after the crash

Deloitte & Touche, PriceWaterhouseCoopers and others had better brace themselves.

"Common-Sense Justice in Alaska"

Manhattan Institute fellow Marie Gryphon, in National Review, on the state's loser-pays rule:

Alaska's unique rule is a product of its history. When the United States purchased Alaska from Russia in 1867, the icy wilderness had so few inhabitants that the U.S. neglected to establish immediately any civil law there at all. Congress instituted a civil legal system for Alaska in 1884 through an Act that borrowed from Oregon's civil code and applied it to the new territory virtually wholesale. At that time, an Oregon statute allowed the prevailing party in a civil suit to recover attorney's fees from the loser. While Oregon unwisely dumped its loser-pays rule eventually, Alaska embraced loser pays and stuck with it. ...

The Alaska Judicial Council conducted a review of Alaska's loser-pays rule in 1989 and found that, while the law could not deter filings by irrational plaintiffs, it did reduce the number of low-merit lawsuits in Alaskan courts. The Council also found that a majority of Alaskan attorneys liked the system and believed that it functioned well.

Grundfest vs. Cox

Around the web, October 29

  • Judge Kessler's "P.R. as racketeering" decision against tobacco companies, now on appeal to D.C. Circuit, incorporated typos from DoJ proposed findings [B.L.T. first, second posts]
  • Schulman and Bershad, former name partners in Milberg Weiss, sentenced to six months each [Jurist, Karlsgodt]
  • "Get ready to relearn the ADA" [Lorber et al, Legal Times; Paul Secunda, Workplace Prof, with extensive discussion of inside negotiations from Chai Feldblum]
  • 95%+ of House members get majority of campaign money from outside their districts, but docs better not take a ballpoint pen from a drug rep, that would be corrupting [Happy Hospitalist]
  • Congress may make later assignees of mortgages liable for "predatory" conduct of original lender -- and retroactively too, one plaintiff's lawyer hopes [Seattle P-I]
  • Medical directory publisher that knowingly misstates doctor's qualifications can be held liable for later patient injury [OnPoint News, Knepper v. Brown, Oregon Supreme Court]


A bit of legal folklore turns out to be inaccurate.

'Free choice' versus binding arbitration

Peter Kirsanow, a Cleveland attorney and member of the U.S. Commission on Civil Rights, has turned his attention recently to the Employee Free Choice Act, the legislation that would allow labor organizers to dragoon employees into a union bargaining unit via public collection of signature cards, eliminating a secret-ballot election supervised by the National Labor Relations Board.

In several posts at National Review's The Corner (one previously noted by Walter), Kirsanow focuses on the binding arbitration provisions of the law, which until recently have received much less scrutiny then the "card check" provisions. In short, if a new bargaining unit and employer cannot reach a first contract after 120 days, a federal arbitrator will impose contract terms on them for two years. Sometimes you can't even agree on the size of the negotiating table in that period of time, Kirsanow notes from his own experience. And is it really a contract?

Under EFCA, the terms set by the arbitrator will be the furthest thing from a "contract." It won't be an agreement between management and labor. Rather, wages, hours and terms and conditions of employment will be dictated by a government appointed arbitrator. The mandate will be binding on the parties for two years. Neither the company nor the employees can reject it...

Currently, if employees don't like the tentative agreement negotiated between union leaders and management the employees can vote it down and instruct their leaders to go back to the bargaining table to get a better deal. Not so under EFCA. If the employees don't like the arbitrator's decree of a 2% wage increase, they're stuck. Similarly, if the company can't afford the arbitrator's command to pyramid overtime, the company's stuck. The consequences aren't difficult to imagine.


Right. Imagine being in an industry where five or six businesses are engaged in fierce price competition, and where labor decides to organize you first. An arbitrator's terms could kill your operation altogether.

Kirsanow's posts, which also include some illuminating comparisons to Canadian employment law:

Around the web, October 28

  • Ga-ga for gallows: more doings from those lawprofs and others promoting Nuremberg trials for Bushies [Ambrogi; earlier here, etc.]
  • That predicted explosion of ERISA fiduciary litigation over mismanagement of 401(k) plans hasn't happened [Secunda, Workplace Law Blog]
  • ABA president: we're neither a liberal group nor a conservative, we're a forum [ABA Journal]
  • Top Australian prosecutor says judges need to reclaim their courtrooms from long-winded lawyers [Melbourne Age]
  • "What did Alan Greenspan concede? From all the hullabaloo I thought he had granted the death of capitalism but no." [Cowen, MargRev]
  • "It is an open question as to whether CAFA is a bad law for lawyers who did not drink the 'anything that limits plaintiffs' rights in any way is a bad thing' Kool-Aid." [Miller, Maryland Personal Injury]

Jacobs pro bono flap, cont'd

American Lawyer's Litigation Daily updates its earlier coverage (scroll) and includes kind words for our efforts. The WSJ law blog's two recent entries on the controversy provoked a few thoughtful reader comments along with the usual flames and abuse (first, second).

Meanwhile, lame opinion journalism on the story is still being perpetrated, this time in an unsigned entry at the Student Lounge Blog of the L.A. County Bar Association. The entry manages (days after the transcript's release) to ludicrously misrepresent Judge Jacobs' expressed views (see sentence beginning "Essentially, he concludes...") and then triumphantly marches to the conclusion that if the judge declines Chemerinsky's offer of a public debate he will be "essentially conceding" the professor's case. Great logic, guys! I think I'll pick some other highly placed federal judge, launch a grossly unfair attack on him and then, when he demurs, grab more headlines by demanding that he appear in some public place to debate me. When he declines, you'll agree that he's "essentially conceding" my point. That's how it works, right?

Further coverage: Robert Ambrogi, Legal Blog Watch; David McGowan, Legal Ethics Forum; LA Legal Pad.


Law firms with major employment law practices have recently released analyses of the labor-backed Employee Free Choice Act, providing good info to their clients and the public prior to Election Day. We assume the preliminary publishing also sets a foundation for pitching an EFCA-specific practice if a Democratic Congress passes and a President Obama signs the card check bill.

May that day never come.

Anyway, here are some of the analyses that have crossed our screen.


A high-profile civil RICO suit against organized labor has been settled, just as a judge was to begin hearing the case in Federal District Court in Richmond, Va.

Smithfield Foods is dropping its racketeering and extortion suit against the United Food and Commercial Workers and will agree to allow a union election at its pork processing plant in Tar Heel, N.C. In exchange, UFCW will end its corporate campaign against the company. (Raleigh News and Observer story; Associated Press.) Beyond issuing a joint statement, the two sides have been told by the judge not to comment until after the union vote, whenever that might be.

Smithfield workers rejected organizing votes in 1994 and 1997, and labor has sought to make the company the blackest of its business bete noires. (Black Forest Ham?) The UFCW's corporate campaign was very aggressive, even by labor's usual standards -- alleging human rights violations, and more -- and Smithfield pushed back on all fronts. (The company estimates the corporate campaign cost it $900 million.) The suit was being closely watched for its potential precedent-setting value. Wackenhut's civil suit against the SEIU was another prominent example of business turning to RICO; more recently, CINTAS Corp. filed a RICO suit against Change to Win.

Guess we'll get our RICO precedents elsewhere.

For more background and documents, see below.

Employment law: the "claim du jour"

It's retaliation, subject of a steady climb in EEOC complaints -- up 18 percent in just the last year -- as its tactical uses are explored, especially at workplaces where managers are told to treat the complaining employee as "untouchable". Related: Mindy Chapman, HR Specialist via Ohio Employment Law weekly roundup.

Around the web, October 27

  • Landmark Twombly decision on pleading has been cited more than 2,000 times already, can be expected to influence state as well as federal courts [Day on Torts]
  • Remember hysteric predictions (against all evidence) that CAFA was going to do away with class actions? [Karlsgodt]
  • David Gulbransen hosts Blawg Review #182 in quiz format and Kimberly Kralowec (UCL Practitioner) hosts Blawg Review #183 showcasing California law blogs;
  • Is national political uncertainty helping spur big mass tort settlements like Bextra and Celebrex? [Beck & Herrmann]
  • "The lawyers who may run America" in the next administration [ABA Journal: McCain, Obama]
  • Just what Europe needs, less labor flexibility: EU tightens controls on use of temporary workers [Reuters/Business Insurance]

"Foreign-cubed" securities actions

The Second Circuit declines to establish a bright-line rule against claims in American courts by foreign securities purchasers who bought shares of foreign issuers on foreign securities exchanges.

Arthur Miller joins Milberg

Really just a formality in some ways, since the high-profile lawprof (NYU, formerly Harvard) and TV personality has long been associated with the scandal-ridden plaintiff's firm, in the process collaborating with men who are now among the profession's most notorious felons. Regrets? He's had a few, but then again, too few to mention (AmLaw Daily, NYLJ, Bloomberg). He'll be keeping his NYU professorship, too.

Around the web, October 24

  • If you think the card check provisions in EFCA are outrageous, wait till you hear about the mandatory arbitration [Kirsanow, NRO Corner]
  • "Prohibition of Excessive Overtime in Health Care Act will Exacerbate Nursing Shortage" [Pennsylvania Labor and Employment Blog]
  • Suppose plaintiffs win Wyeth v. Levine and Vermont juries can second-guess FDA on medication's labeling for IV use. What then? [ER Stories]
  • Other pre-emption issues are bustin' out all over [Beck & Herrmann (U.S. Supreme Court, food regulation), NLJ (NHTSA, seat belts), Mundy/WSJ, Carter/ABA Journal (various federal agencies), Cal Biz Lit (autos, California court of appeal)]
  • Must be those awful deregulators at work: workplace injuries decline for sixth consecutive year [Henke, Next Right via Friedersdorf]
  • Emergence of Delaware as favored asbestos plaintiff's forum could dull the state's edge in corporate law, gee thanks Senator Biden [Bainbridge, WSJ edit, SE Texas Record]
  • Annulling credit default swaps as void: could this be Ben Stein's worst idea yet? [Salmon]

Judge Jacobs and pro bono, cont'd

The Federalist Society has now posted a copy of Judge Dennis Jacobs' speech on pro bono, discussed at length in this space yesterday. I really can't improve on Prof. Obbie's take, so I'm just going to excerpt a portion of it:

There's nothing like a recording or speech text to serve as a check on faulty reporting. As I and others suspected, 2nd Circuit Chief Judge Dennis Jacobs' remarks to a Federalist Society gathering in Rochester were wildly misinterpreted by the reporter covering the event, and then by critics who seized upon Jacobs' supposed views as evidence of his hate for all pro bono (and by implication for all poor people in need of free legal help).

The Federalist Society posted the full text this afternoon. Reading Jacobs' words side by side with the story is enough to make one gag. Reporter Elizabeth Stull of The Daily Record in Rochester cherry-picked Jacobs' remarks to reflect a sweeping condemnation of pro bono and impact litigation that simply isn't what he said. He instead made a thoughtful argument about supposed abuses of pro bono causes. And he explicitly, repeatedly praised certain traditional forms of pro bono. ...

Now, if only The Daily Record will read the transcript and run an appropriate correction -- followed by apologies from the critics who took the original story to the bank.

Thanks to Glenn Reynolds at Instapundit and the others who linked yesterday's post, ensuring that it would be widely seen. For more on the problems posed by ideologized pro bono work, see, e.g., Ted Frank's AEI paper on Civil Gideon (text at footnotes 25-29) and Heather Mac Donald's 2000 article for City Journal.

Update (Friday 1:45 p.m. EDT): Incredibly, in correspondence with the WSJ law blog, Chemerinsky is digging in. He claims that on reading the speech itself he finds the Rochester paper's account accurate enough, goes on to extensively misdescribe the contents of Jacobs' speech (easy to check here), and refuses to apologize. As I say, incredible.

Krauss elected to ALI

We're delighted to announce that frequent Point of Law contributor Michael Krauss, professor of law at George Mason University School of Law in northern Virginia, has been elected to membership in the American Law Institute, the extraordinarily influential body of academics, judges and other thinkers responsible for Restatements and various other projects connected with systematizing and improving the law. An announcement from GMU is here. Congratulations!

Guestblogger volunteers

Guestbloggers are welcome through the year at Point of Law, but especially next week, when I'll be trying to wrap up a big deadline. Drop me a line at editor - at - thisdomainname.com.


Dean Erwin Chemerinsky of the newly founded UC Irvine school of (ideologically charged) law seems to fancy himself the conscience of legal academia. But it's looking very much as if he -- along with some bloggers and legal publications who should know better -- owe an abject apology to Chief Judge Dennis Jacobs of the Second Circuit U.S. Court of Appeals.

The affair began when the New York Daily Record, a Rochester, N.Y. legal publication, reported on a speech Judge Jacobs gave to a Federalist Society gathering in that upstate city. As soon summarized on several blogs and publications, Judge Jacobs supposedly dismissed pro bono work by lawyers -- all of it, in its enormous variety from high to low, humble to headline-driving, plain-vanilla to goofily cutting-edge -- as at least "primarily", if not entirely, driven by "anti-social" and self-seeking impulses. As criticism mushroomed, it was pointed out that Judge Jacobs had himself been quite involved with efforts to promote pro bono work among lawyers. Rather than cause the writers to question whether the Rochester report accurately summarized Jacobs' views, this circumstance was seized on as evidence that the judge was being hypocritical, or inconsistent, or something else bad.

Like, I suspect, a great many other readers, I knew from the very first reports that there was something very "off" about the story as it was being retailed. It wouldn't surprise me to hear someone in Judge Jacobs' position call some pro bono efforts by lawyers socially destructive, self-indulgent or ideologically charged -- indeed, most of us with eyes to see would agree with this humdrum observation. At the same time, I've never met a critic of pro bono excesses who spoke as if most pro bono work (which mainly consists of the handling of fairly routine legal matters for poorer persons) were anything to be deplored. In short, I clicked past the story figuring that a correction would soon be forthcoming, and more than a little surprised that those spreading it didn't seem to regard the reporting as suspect.

But it was the reaction of Erwin Chemerinsky that will long be remembered. Without, it seems, waiting for any further clarification from Judge Jacobs of exactly what he had or hadn't said, Chemerinsky mounted the highest horse available and rushed into the pages of the National Law Journal with a piece unsubtly titled "Shame on Dennis Jacobs". Jacobs "should be ashamed of himself," the speech was "a slap in the face", "I hope that he is widely denounced for his misguided views", and so forth. All of which happened to rest, readers may have noticed, on a wobbly little phrase in Chemerinsky's second sentence, namely "it was reported that".

Can you hear the "oops" coming?

When the WSJ law blog turned to the story yesterday, it too at first seemed to take it at face value. But later in the day, it added the following:

UPDATE: Through a spokesman, Judge Jacobs conveyed the following message to the Law Blog: "Dean Chemerinsky's article was evidently based on a newspaper article of my talk that grossly misstates what I said and think. Neither the National Law Journal nor Dean Chemerinsky have contacted me. I support, endorse and solicit pro bono work, and my talk said just that. The talk identifies abuses."

As was perfectly clear to many of us all along.

We're long overdue for a debate over the extraordinary things that some lawyers have managed to get away with in litigation labeled pro bono. When we have that debate, it won't constitute an "attack on pro bono", any more than criticism of misbehaving charities constitutes an attack on charity, or criticism of the giving of money to harebrained causes constitutes an attack on philanthropy, or criticism of the doings of overly politicized churches constitutes an attack on religion. That someone in Chemerinsky's position would pre-emptively react with personal attacks on a judge who has kicked off such a debate suggests he knows that the advocates of politicized pro bono will have much to be defensive about.

P.S.: Welcome Glenn Reynolds, Ron Coleman, and John Steele/Legal Ethics Forum readers. And as Prof. Obbie at Syracuse points out, the story is likely to unfold further; the Daily Record hasn't yet responded to the judge's criticism, and other attendees at the event might be heard from as well (aside from the possibility that a prepared or recorded copy of the judge's remarks will turn up).

Further P.S.: The national Federalist Society has now posted a text of Jacobs' speech here, which confirms the misreporting conjecture. Much more here.

Update Friday 1:45 p.m. EDT: Incredibly, in correspondence with the WSJ law blog, Chemerinsky is digging in. He claims that on reading the speech itself he finds the Rochester paper's account accurate enough, goes on to extensively misdescribe the contents of Jacobs' speech (easy to check here), and refuses to apologize. As I say, incredible.


The Massachusetts Democrat and banking committee chairman is now calling for a bonus moratorium at Wall Street firms whether or not they participate in the financial rescue plan. If it's any comfort, John Carney thinks the NYC-economy-ravaging idea is "most likely just political posturing".

Washington Post on credit crisis

"The market that failed was not exactly free," notes its editorial:

The deregulation of U.S. financial markets did not reflect only the narrow ideology of a particular party or administration. And the problem with the U.S. economy, more than lack of regulation, has been government's failure to control systemic risks that government itself helped to create. We are not witnessing a crisis of the free market but a crisis of distorted markets.

Like Thatcherism in reverse

Claire Berlinski on the misnamed Employee Free Choice Act.

Employment-law guide to the election

Daniel Schwartz discusses what's at stake at the federal level, as well as some legal topics relating to actual election mechanics. Michael Moore at Pennsylvania Labor & Employment Blog weighs in on the former subject as well (& welcome Legal Blog Watch readers).


Attorneys Maryann Peronti of New York City and Gary M. Jewell and Stephen Smith of Houston, and their firms, were sanctioned $64,656 in March by Federal District Judge Lewis A. Kaplan for filing a meritless lawsuit against a stock trader. The lawyers and their firms then agreed to settle with the trader, Knight Capital Markets, on one condition -- that the 2nd Circuit first vacate the sanctions judgment. Thank goodness the Second Circuit (Judges Sack, Katzmann and Rakoff) refused to go along. See ATSI Communications Inc. v. The Shaar Fund, Ltd., 08-1815. or the story in the New York Law Journal.

Around the web, October 22


Justice Clarence Thomas, delivering the Manhattan Institute's Wriston Lecture last week, rejects the notion that the language of the Founders is beyond our interpretive ken. More from Damon Root at Reason "Hit and Run".

The FDA and drug pre-emption

If the Supreme Court upholds a broad view of pre-emption, restraining state courts from second-guessing safety balances performed at the FDA level, it will be advancing the cause of rational drug regulation, argues Tomas J. Philipson, who's a former senior economic adviser to the FDA commissioner and chairman of Project FDA at the Manhattan Institute.

Jonathan Macey on corporate governance

New book, entitled Corporate Governance: Promises Kept, Promises Broken, from a leading scholar of the subject (via Prawfsblawg):

In the wake of the Enron meltdown and other corporate scandals, the United States has increasingly relied on Securities and Exchange Commission oversight and the Sarbanes-Oxley Act, which set tougher rules for boards, management, and public accounting firms to protect the interests of shareholders. Such reliance is badly misplaced. In Corporate Governance, Jonathan Macey argues that less government regulation -- not more -- is what's needed to ensure that managers of public companies keep their promises to investors....

Texans for Lawsuit Reform


Tucson Citizen:

Arizona voters will decide this November whether to require builders to provide a 10-year warranty on each new home. Proposition 201, dubbed the Homeowners' Bill of Rights by proponents, would allow homeowners to choose who repairs defects on their homes and guarantee fair compensation for repairs not completed.

The proposition also would prohibit sales contracts from requiring alternate means of resolving disputes, such as mediation and arbitration. Prospective homebuyers would be also allowed to sue over repairs. The measure would reduce the notice period for buyers to request repairs from 90 days to 60 days.

Construction unions are the initiative's big backers, according to the report. Homebuilders are opposing the measure with arguments that it will result in unwarranted litigation; an opposition website is here (h/t Carter). We've followed legislative and initiative fights over construction defect litigation in nearby Colorado.


Just a reminder that the U.S. Chamber of Commerce's annual Legal Reform Summit is coming up in Washington next week. Beck and Herrmann have more, including links to the agenda (PDF) and the Summit's website.

Olson vs. Kuo

I took exception to a law professor's bizarre and misleading post on the topic of campaign speech as incitement, and the law professor now responds by calling me names. Earlier here.

N.B. update: Prof. Kuo says her intent was never to call names or be insulting.


Syracuse/Newhouse Prof. Obbie at LawBeat thinks the New York Times may be premature in reporting that the financial crisis will, in Obbie's words, "revive the tattered image of trial lawyers. The rest of the story proves nothing of the sort." Of course, bearing in mind the Times's frequent line on these issues, we may have a case of the wish being father to the thought.

Around the web, October 19

  • List of AAJ litigation working groups offers clues on where trial lawyers directing their energy these days [Carter Wood, ShopFloor]
  • Reforms that made a difference: Texas med-mal insurance rates slashed yet again [Insurance Journal]
  • Steady rise in religious-bias complaints on EEOC docket [WSJ]
  • Hope to hear more about the expert testimony: "Traffic accident led to lupus, suit claims" [Madison County Record]
  • Pfizer settles most Bextra, Celebrex cases for $894 million [AP/Law.com, Beck & Herrmann] Plus: Big payday for Lieff Cabraser and Cotchett firm [AmLaw Daily]
  • Not going down U.S. path? British judges limit damages obtainable in consumer antitrust, competition actions [Times Online]

SEC net capital rules

A 2004 change deserves attention as a possible contributing factor to the meltdown, but the politics of assigning blame, if such is to be assigned, are a more complicated matter than might have appeared.


The post-2000 majority on the Michigan Supreme Court has been acclaimed by some (including us) and heatedly criticized in some other quarters for its determined efforts to craft a principled jurisprudence of limited judicial power. Now the Federalist Society has published a paper by Matthew Schneider, visiting professor at Thomas M. Cooley Law School in Michigan, which makes an excellent place to start in assessing why the post-2000 Michigan court has made such a difference. It can be found here.

Schneider examines the court's record not only on tort and liability issues, including governmental liability, but also such areas as standing (where it adopted the federal courts' view), criminal law, eminent domain, and stare decisis, among others. Of particular value, Schneider lays out in considerable detail the record of the liberal-dominated 1970-2000 Michigan court, which had cast aside longstanding precedent in one area after another; in civil law, the result was often to expand lawyers' power to sue and the scope of damages they could ask for. Many of the most widely assailed rulings of the post-2000 court have simply reversed these innovations and reinstated earlier rules; perhaps one reason emotions have run so high against the Taylor court is the widespread notion that legal change is a ratchet that can turn only one way, so that once a given court majority unilaterally liberalizes some aspect of the law, it becomes impermissibly "activist" for a later court to think of undoing matters (cross-posted at RightMichigan).


Sen. Obama criticized the Supreme Court opinion on statutes of limitation in employment discrimination suits; as Carter, Ted and other bloggers at this site have shown in numerous posts, such outrage is misplaced. Daniel Schwartz also comments and assembles several links, while Michael Fox at Jottings By an Employer's Lawyer points out that other fixes are available for the discontents in question.


The Electronic Frontier Foundation has now filed its challenge against the constitutionality of Public Law 110-261, the FISA Amendments Act of 2008, specifically the law's granting of retroactive civil immunity to telecommunications companies that assisted in the federal government's formal request to monitor foreign communications.

The EFF submitted a brief Thursday in the U.S. District Court in San Francisco in Re: National Security Telecommunications AGency Litigation, MDL No. 1791. The brief comes in response to the U.S. Justice Department's motion to dismiss civil lawsuits against the telecoms; the legislation (H.R. 6304) provided for the dismissals if Justice demonstrated that it had provided a written request for the surveillance authorized by the president. The ACLU and several affiliaties joined in the filing (ACLU news release).

From the EFF's news release, "EFF Challenges Constitutionality of Telecom Immunity in Federal Court":

"The immunity law puts the fox in charge of the hen house, letting the Attorney General decide whether or not telecoms like AT&T can be sued for participating in the government's illegal warrantless surveillance," said EFF Senior Staff Attorney Kevin Bankston. "In our constitutional system, it is the judiciary's role as a co-equal branch of government to determine the scope of the surveillance and rule on whether it is legal, not the executive's. The Attorney General should not be allowed to unconstitutionally play judge and jury in these cases, which affect the privacy of millions of Americans."

It's been a while since we've written on this, so for background see these posts at Point of Law.com and the NAM's blog, Shopfloor.org. To recap the arguments: Companies deserve legal protections for following in good faith what were adequately represented to them as legal orders to assist in monitoring of foreign communications. Corporations should not be punished for being good corporate citizens who help prevent America's enemies from crashing planes into buildings or blowing up people just going about their business.

Opponents of the law included not just privacy absolutists -- EFF and ACLU -- but also critics of the Administration's foreign policy and intelligence activities, Glenn Greenwald at Salon.com most prominently, as well as frenzied partisans and bloggers. Trial lawyers are also keenly interested in keeping litigation alive so as to dig into the deep pockets of the telecoms.

No matter how wrong the EFF is on the legal merits and the dangerous disregard, we think, the foundation shows for the intelligence measures necessary to defend America, it really does a great job of documenting the issue. So, for more on the FISA issue and the EFF's class-action lawsuit, Hepting v. AT&T, go here.

Durbin-Obama-Brown Patriot Employers Act

Over at ShopFloor, contributor Carter Wood takes a look at legislation co-sponsored by Sens. Dick Durbin and Barack Obama (D-Ill.) and Sherrod Brown (D-Ohio) that would designate employers as "Patriot" and entitled to favorable tax treatment if they follow a checklist of favored employment practices (including waiving their right under existing labor law to weigh in against unionization should their workforce be considering that issue). The unsettling implication: only those willing to sign away some of their rights under existing law are to be deemed patriotic, while those who decline to sign away such rights risk the label "unpatriotic".

It's considered a pretty serious breach of political civility these days to suggest that one's domestic adversaries fall short of patriotism just because they aren't on board with one's particular policy demands. So we expect to hear a lot of criticism of this bill's cheap terminological ploy. Anyone? Anyone?


I don't usually post about trial court decisions -- they have a high variance, that is typically narrowed on appeal. They are often the fodder for demagogic politicians of every stripe. I usually take them with multiple grains of salt.

But this New Jersey Law Journal report is, I think, worthy of larger notice. It describes a jury verdict from Hudson County, for $400,000, against a physician who treated his patient competently. His failing was to refuse to hire, at his own expense, an interpreter so that he could adequately communicate with his deaf patient. Why didn't the patient come with her own interpreter (hired at her own expense)? Because she doesn't have to, according to federal law as interpreted by the courts. Her lack of verbal skills is a disability that others must palliate at their expense.

More obscene still is that the defendant's malpractice liability insurance does not usually cover such liability, because the care actually given to the patient was quite appropriate.

The plaintiff claimed that she repeatedly asked her Jersey City rheumatologist to hire an American Sign Language interpreter. The doctor responded that as a solo practitioner, he couldn't afford the estimated $150 to $200 per visit an interpreter would cost, given that Medicare paid him $49 for each visit. He treated his patient (who declined to visit another rheumatologist, perhaps one who knew American sign language) for lupus for about 20 visits, stretched out over 20 months, occasionally exchanging written words with the patient's civil union partner [wait: if they were lovers, how come the partner didn't understand and use American sign language?] or verbal instructions via the "couple's" 9-year-old daughter (who apparently couldn't use sign language either -- it just gets stranger and stranger). But the patient claimed she never really understood the side-effects (swelling of her treatment), and that when she insisted the doctor was obliged to pay for an interpreter (she had an interpreter phone the doctor, self-serving legal advice if ever any has been dispensed), the doctor became angry and insulted her, forcing her to seek treatment elsewhere. Her next doctor was able to communicate with her, and ceased the treatment, since it turned out that the patient didn't want the swelling and preferred a different treatment. Essentially her lawsuit sounds in battery (touching of a patient despite the lack of informed consent) -- fine, except that the patient apparently was advised to seek out other providers and insisted on returning time and again to this one. I'm not excusing poor bedside manner or countenancing insults (though I have no evidence that any insults were uttered) --

During a three-week trial (!), the rheumatologist's argument that it would have been an undue hardship to pay an interpreter who cost more than the income he received for each visit was apparently undercut by the fact that the doctor's tax returns showed he earned over $400,000 a year. Sorry, but how did this evidence get in? Unless the doctor is obliged to treat handicapped people at a loss, why is his personal wealth relevant here?

The jury obviously doesn't share my disbelief. Fully half of the $400,000 verdict against the doctor was for punitive damages. To repeat, the sum is not insurable, apparently.

So, notice to all professionals out there: don't get wealthy, or you may be obliged to "share the wealth" with a disabled person. Can't professionals post a sign in their office that reads "Sorry, we decline to treat you if we must spend more money on your visit than you or your agents will pay us"? Apparently the answer is "Yes, such a sign is OK if the patient speaks only Slovak (since that is not a "disability", at least not yet), but not if the patient is blind or deaf.

Around the web, October 17

  • Recalling lead-paint protests: ACORN "would put together a few signs, a ragtag band of people, and stand outside one of [Sherwin-Williams'] retail stores" [Law and More]
  • Speculation begins on impact of Obama or McCain win on new Supreme Court appointments [Legal Times]
  • "The patient denies other complaints": costs of defensive medicine include patient write-ups that "have become more suited to legal defense than medical communication" [WSJ]
  • Lawyers on both sides of DuPont toxic tort case contributing to West Virginia high court candidates [WV Record]
  • Greve, Sharkey, others on AEI panel to discuss key business cases of new Supreme Court term [Mon. afternoon Oct. 27]
  • MI's Jim Copland quoted in piece on VP candidate Palin's record on legal reform [Legal NewsLine]


The suit, rejected by Ontario's highest court last month, was against a relatively unconventional defendant: the government regulatory agency Health Canada, which it was argued should have been more careful in approving and regulating the devices. Because the agency won on sovereign-immunity grounds, it looks as if the courts never got around to evaluating the plaintiff's contention that leaked silicone had caused them catastrophic health damage (CTV via Class Action Blawg).


In an interview with Securities Docket, Michigan lawprof Adam Pritchard sketches out more details about his idea, which has been causing buzz in recent weeks, for corporations to contract around the liberal Basic v. Levinson doctrine on shareholder lawsuits (via Beck & Herrmann; text of proposal, Prof. Pritchard's paper on the subject in Cato Supreme Court Review).

Around the web, October 16

  • Judge Weinstein says racial differences in life expectancy should have no place in calculations of damages, seems fair enough if applied across the board [NYLJ]
  • Reasons for worry at the direction the American Law Institute is taking on batch litigation of personal injury cases [Beck and Herrmann]
  • Another unintended consequence of bailout: lenders slow their workout negotiations with distressed borrowers [Zywicki @ Volokh]
  • GOP opinions on which state attorney general contests are close [Rizo, Legal NewsLine via Genova]
  • Don't call it "nationalization", please, it isn't that [Simon Jenkins via Carter at NAM ShopFloor, and again]
  • Coughlin Stoia: no fair cutting us out of the backdating class action by settling with another plaintiff [NLJ]

Criminalizing negative campaigning

I've got a new piece just up at City Journal in which I examine last week's boomlet of interest around the liberal blogosphere in the notion that by riling up campaign crowds about Obama's links to Bill Ayers, John McCain and (especially) Sarah Palin have engaged in "incitement to violence" of a "borderline criminal" nature that perhaps should even draw the attention of the Secret Service or FBI. (For examples of this boomlet, look among the several hundred occurrences of "Palin + incite" at Technorati between October 7 and 13; I also include a sampling as links in my piece). The article originated in a short post at Point of Law that City Journal asked me to expand into a longer treatment. I must say I find it fascinating that many bloggers, Huffington Post writers, etc. could so casually jettison the hard-won victories of free-speech liberalism, which fought long and hard against "incitement" theories by which criminal penalties might be applied to inflammatory speech. The idea of exposing your opponents to investigation or even arrest because you don't approve of the contents of their speeches doesn't seem like a particularly liberal one to me.

More: Stephen Bainbridge takes note.

Finance for Math-phobic Litigators

Jim Manzi over at the Corner has an indispensable explanation of the current financial crisis for the numerically challenged.


We've posted regularly at Point of Law on FACTA, the federal law on credit-card-receipt privacy that's given rise to a large volume of opportunistic litigation by and for the benefit of entrepreneurial attorneys. Now Randy Maniloff of White & Williams in Philadelphia, whose writings on insurance law we've often linked at this site, has written a new piece for us explaining why developments in insurance coverage litigation arising from FACTA claims could prove important in shaping the future course of litigation under the law itself.


A new Bloomberg report by Jonathan Salant minces no words on the Joe Biden candidacy:

Joe Biden has been an ally of trial lawyers throughout his tenure in the U.S. Senate, opposing every effort to curb lawsuits against businesses and doctors. The lawyers are returning the favor.

Five of Biden's 10 biggest lifetime campaign donors are members of law firms that specialize in bringing personal-injury cases, according to the firms' Web sites and the Washington-based Center for Responsive Politics. That ratio held up during his recent, unsuccessful run for the presidency.

The article has plenty of illuminating further detail, but waits till near the end to deliver the point that may actually have the most news value:

Even with Biden's record, business groups favoring limits on lawsuits have mostly stayed out of the presidential race, in contrast to their effort four years ago against John Edwards, the Democratic vice presidential nominee.

A "total money machine"

David Bernick, an attorney for defendant/debtor W.R. Grace, tells the bankruptcy court about the mechanics of asbestos litigation.

Nevada data encryption law

On October 1 a new law went into effect in Nevada requiring businesses to encrypt all "personal identifying information" (things like Social Security and drivers' license numbers and credit card numbers) of customers in email and "electronic transmissions" more generally. The law has raised concern among, e.g., law offices and medical providers which often work with client documents containing such numbers; it will now be unlawful (say) to email such documents from a professional's workplace to his or her home office absent encryption. Howard Marks at Information Week (Oct. 13):

Electronic transmission isn't defined, so one interpretation would include the telephone -- so if you forget the password to your online banking account, your bank will have to snail mail or fax you a new one. It does say "to a person outside of the secure system of the business," so you don't have to run out and encrypt all your disks like the vendor that brought this to my attention would like.

Don Sears at Baseline (Sept. 19) cites a Las Vegas lawyer on such problems with the law as "the lack of coordination with industry standards and the unclear nature of penalties both criminal and civil" and concludes "once again, the legal system and the IT industry are faced with potentially bigger compliance and liability issues than they probably intended." At Davis Wright Tremaine's Privacy and Security Law Blog (Feb. 27), Randy Gainer cites similar (but not identical) mandates moving forward in other states and also notes, "the overwhelming majority of reports of stolen and lost consumer data relate to stored data, not data in transit.... The limited, data-in-transit, encryption mandate in the Nevada statute will therefore do little to stem the tide of stolen and lost consumer data." Marian Waldmann at Morrison & Foerster (Oct. 2007) notes California's more sweeping but less specific mandate for businesses to implement and maintain "reasonable security procedures and practices", and also points out that the determination of whether an out-of-state entity dealing with Nevada residents is "doing business" in the state, and therefore subject to legal mandates of this sort, has been described by the Nevada Supreme Court itself as "often a laborious, fact-intensive inquiry resolved on a case-by-case basis" in litigation. Other commentary: Sidley Austin, Lori MacVittie/DevCentral (cross-posted from Overlawyered).


According to the annual Fulbright & Jaworski survey, they're expecting two of the most troublesome areas to be the Foreign Corrupt Practices Act and wage-and-hour class actions. And that doesn't count the effects of the credit meltdown, which -- along with all sorts of civil liability matters -- is widely seen as bringing "an inevitable surge in criminal prosecutions" with white-collar criminal defense lawyers preparing their clients for a "wave of expected indictments".


We may soon have less to write about on the forum-shopping front. As readers of this site know, the Eastern District of Texas has in recent years become plaintiff's lawyers' favored venue nationwide for patent cases and has been growing in popularity for other cases as well. Now the Fifth Circuit has ruled en banc by a 10-7 margin (PDF) that trial court judge T. John Ward was wrong to deny defendant Volkswagen's efforts to get a car case moved from the Eastern District (which had no particular connection with the parties) back to Dallas, where the crash had actually taken place. Ted discussed the controversy and its background at length this spring, as well as earlier, which are good places to start in understanding the significance of the new decision. More at Patently-O on this decision and on forum-shopping generally.

Around the web, October 14

  • Here comes a big wave of investor class actions over the mortgage implosion [NLJ]
  • Followup to our discussion of pending class action reforms in the U.K., with numerous useful links [Paul Karlsgodt, Class Action Blawg]
  • Detroit News endorses re-election of Michigan Chief Justice Clifford Taylor [its editorial via Pero]
  • Johnson & Johnson has spent at least $68 million to settle claims over its Ortho Evra birth control patch, which Planned Parenthood considers safe and effective [Bloomberg; earlier here, here, here, and here]
  • Survey finds most demanding employment issues for company legal departments are discrimination/harassment, FMLA, wage/hour, HIPAA and Sarbanes-Oxley [annual ACC/Jackson Lewis survey, Workplace Prof]
  • California court of appeal rules that parties can use state's Section 998 offer-of-judgment rule, an analogue of FRCP 68, right away at start of lawsuit rather than only after waiting period [Cal Biz Lit]


Really!

During the "Morning Edition" news block, the local NPR station here in Washington, WAMU, runs the feature, "The Writer's Almanac," a short segment of Garrison Keillor mentioning historical moments of the day. (For example, today is Margaret Thatcher's 84th birthday, and she once said, "Being powerful is like being a lady. If you have to tell people you are, you aren't.") Then Keillor reads a poem. It's a nice little feature with almost none of the superciliousness you sometimes get from Keillor.

And the poem this morning was a delight, "Warnings" by David Allen Sullivan, who observes, "I collect warnings the way I used to collect philosophy quotes." An excerpt:

What would I have done without: Remove infant
before folding for storage
, Do not use hair dryer
while sleeping
, Eating pet rocks may lead to broken
teeth
, Do not use deodorant intimately?

Goodbye to all those sentences that sought
to puncture the illusory world-like the warning
on the polyester Halloween outfit for my son:
Batman costume will not enable you to fly.

From Sullivan's Strong-Armed Angels.

Walter has also written about excessive warning labels, but he prefers prose. See this Overlawyered post.

Around the web, October 12

  • In multiple cases, U.S. Supreme Court being asked to intervene in West Virginia state courts [Liptak, NYT]
  • Employers buy big legal headaches when they ask for specifics from workers who call in sick. Better just to wave those intermittent FMLA requests through the gate? [NLJ]
  • Investment advice: "as soon as you see that a corporation is adopting good governance practices, sell" [Ribstein on Jeff Lipshaw]
  • Oh joy: California lawmakers regard federal HIPAA as too lenient so they've now enacted their own tougher medical privacy law [HIPAA blog and again]
  • New Toxic Tort Litigation Blog is by William A. Ruskin and Daniella Landers
    of Epstein Becker Green (via Kevin O'Keefe)
  • Med mal: Mississippi Supreme Court weakens state's legislatively enacted certificate-of-merit law [Day on Torts]

Campaign civility, enforced by law?

The press has been full of chatter this week about the supposedly unprecedented vehemence of campaign rhetoric on the Republican side of the presidential contest -- a charge that, as my colleague John Leo has noted, may be a trifle overwrought at best. Now lawprof Susan Kuo (South Carolina), writing at Concurring Opinions, asks whether the GOP candidates might have a "legal duty" to tone down their attacks, lest supporters of theirs commit (still-hypothetical) acts of impulsive rage that would never have taken place otherwise. Invoking the Model Penal Code, she explores the possibility of assigning criminal responsibility to the candidates for not cooling it with their language despite the knowledge that there are unhinged partisans out there.

Meanwhile, John Sweeney of the AFL-CIO -- the AFL-CIO! -- has piously proclaimed outrage over the inflammation of crowd sentiment in the Presidential race. As Prof. Bainbridge notes, four years ago union protesters stormed Republican offices in multiple cities, ransacking the party's Orlando office where a protester broke the wrist of a campaign worker, and intimidating workers in Miami, Tampa and elsewhere. Perhaps it is a kind of blessing that the race this year does not appear close enough for the organization's sympathizers to have found it advisable to repeat such tactics.

More: Howard Wasserman at Prawfsblawg wishes to preserve the relevant distinctions: "I cannot buy the notion being floated that anything unlawful is happening. ... ugliness is not unlawfulness. And whatever criticism the [Republican] campaign warrants for engaging in personal attacks and riling up the crowd, charges of engaging in 'borderline incitement' should not be among them." Similarly: Scott Greenfield.

Further: To amplify John Leo's point: the NYT's Frank Rich now accuses McCain and Palin of "inciting vigilantism" through public rallies on which "Weimar-like rage" is on display -- yes, that's right, he's invoking the Nazis' rise to power as his own special contribution toward de-escalating the rhetorical heat. According to David Bernstein's calculation, Rich's actual backup for the premise of a violent mob atmosphere rests on four (4) five incidents [Bernstein revised the number] in which nasty catcalls or outbursts were recorded from persons at rallies attended by hundreds of thousands of supporters.


Over the past couple of years I've repeatedly expressed fascination (here, here, here, here, and here) with the lawsuit in a Moscow commercial court in which the government of Russia is invoking the RICO law -- America's RICO law, that is, not some equivalent on its own books -- to demand that Bank of New York pay compensation over a ten-year-old episode in which rogue bank employees opened a channel that allowed Russian exporters and others to move money out of the country without official oversight. To begin with, there's the sheer size of the sum demanded: $22.5 billion, an artifact of RICO's damage-trebling provisions as well as an optimistic view of underlying damages. Then there's the issue of the application of our distinctive RICO law in other countries' courts over actions and damages occurring overseas, which seemed like a momentous sort of precedent, even though the plaintiffs hired prominent lawprofs Alan Dershowitz and Robert Blakey to testify that it was just fine. In addition, there was the question of whether the Russian courts would prove a forum adequately protective of the rights of an entity being sued by the Russian government (although Dershowitz piquantly dismissed such concerns: "Who are we to cast aspersions on a country's legal system?") Then there was the role being played by Miami injury lawyer Steven Marks, who openly pitched the lawsuit to the Russian government; while he's hardly the first stateside lawyer to sell the idea of litigation against U.S. companies to foreign sovereigns, that trend in itself is one that deserves closer attention. Finally, there was the curious circumstance that the rogue employees, who had pleaded guilty for their role in the scheme to evade the bank's internal controls, had found it worth their while to assist the plaintiffs in the advancement of the suit.

Now Fortune legal analyst Roger Parloff has published a thoroughly devastating analysis of the lawsuit in the form of a lengthy article for the Sept. 29 issue of the magazine and a series of follow-up blog posts here, here, and here. Among Parloff's findings:

Around the web, October 10

Demonization of deregulation

I'm quoted on the subject, as is co-blogger Ted Frank, in this new piece by Joseph Lawler for the American Spectator. I should add that I'm not trying to speak to the ultimate merits of either specific proposal discussed (a more unified financial regulatory authority, and Fed powers to supervise entities that might be future bailout beneficiaries). I do think that we should be discussing whether such steps might risk being ineffective, or might provide a blank check for new authority by regulators, or worse yet, both.


Pending proposals in the English courts would take a large step toward American-style practice by opening up so-called "opt-out" actions, in which class members are automatically counted as plaintiffs unless they go to the trouble of withdrawing their names. In this Times Online column, lawyers Antony Corsi and Ian Pegram dismiss fears of

a deluge of unmeritorious claims brought by aggressive and mercenary lawyers to force settlements from corporate defendants.

The CJC [Civil Justice Council, a law-reform body] is alert to that perceived risk and recommends that group lawsuits are carefully monitored. It proposes that claims should be closely supervised by specialist judges, including court certification that collective action is the most suitable method of resolving a particular dispute. It also recommends fairness hearings to approve any settlements and to protect the interests of all parties.

One hopes the safeguards being planned go farther that this brief description would indicate. After all, the U.S. already has, and has had all along, a certification stage in which judges are supposed to assess the suitability of a case for class action treatment, along with a fairness hearing stage to approve settlements and protect the interests of all parties. The combination of the two has not sufficed to prevent massive abuse.

The only definite departure from U.S. practice on the list is the use of specialist judges. Of course other features of the U.K. system, such as the far greater discouragement given to forum-shopping and the possibility of levying costs against losing parties, also diverge from the U.S. pattern. If abuse fails to materialize under the new rules, it may be these features that deserve some of the credit.

More: Paul Karlsgodt.


Refusing to let a hard case make bad law, a California appellate court this week upheld a fee award of $250,666.89 against Jeffrey Robins, who sued Regal Entertainment Group after his father took a fatal fall on a movie theater escalator. Robins lost at trial after refusing a settlement offer of $50,001.00 under California's offer-of-judgment rule, which shifts fees to a party who loses after refusing a reasonable settlement offer. California common law allows for a so-called Seever hearing to challenge such awards on the basis of ability to pay, but it appears that Robins' attorney dropped the ball on requesting one. The opinion is unpublished.

Robins is exactly the kind of personally tragic example that undermines the case for loser-pays rules in the public eye. Any expansion of loser pays in California should be accompanied by legislation authorizing insurance companies to insure plaintiffs against possible fee awards at the time they follow suit. Such insurance is common in Europe.


After years and even decades during which the Federal Trade Commission had reason to know there were big problems with its scoring for tar and nicotine, yet passively approved the continued use of the numbers, the commission and the Justice Department now claim to have been practiced upon by the wiles of the tobacco industry. Justice Alito termed the commission's position "incomprehensible", while Justice Scalia said, "When did the Commission know this stuff? I had a case when I sat on the Court of Appeals, so it had to be before 1984...It's been general knowledge for a long time, and the FTC has done nothing about it." More on the Altria Group v. Good argument at SCOTUSBlog and at Legal Times (Tony Mauro).

"Where was SOx in all this...?"

"...with all of its vaunted high-cost internal controls disclosures? And what's the fix going to be this time? Throwing more executives in jail? Slapping together some more complicated rules without any real consideration given to whether they'll work?" Larry Ribstein has some questions not asked in Capitol Hill's show-trial hearings.

Around the web, October 8

Ontario to adopt medical apology law

A trend in the lower 50 crosses the border: the health and justice ministers "announce[d] that the provincial government is adopting legislation that would allow an individual or organization to offer an apology as part of the dispute resolution process without concern over legal liability". British Columbia, Manitoba and Saskatchewan have adopted such laws, as have many American states.


Readers in and around Chicago take note: the law school's Searle Center is holding a two-day seminar this Thursday and Friday (Oct. 9-10) with prominent academic presenters on topics that include ADR, medical malpractice, punitive damages, securities litigation, and procedure. Details here.


The Georgia Supremes yesterday confirmed that state's intermediate appellate court's decision that a design defect suit against Glaxo, Smith Kline and others is NOT pre-empted by the federal National Childhood Vaccine Injury Compensation Act of 1986. In AMERICAN HOME PRODUCTS CORP. et al. v. FERRARI, the Georgia high court broke ranks with New York, Pennsylvania, and two federal courts to find that the Act does not pre-empt suits alleging that childhood vaccines are defectively designed because they contain the preservative Thimerosal, which some feel (despite very solid scientific evidence to the contrary) causes autism in a small number of children. I and others have written about the science (or should I write "junk science" aspect of this issue. The Ferrari decision does not deal with junk science, but solely with pre-emption. Essentially, the Georgia court found that since Thimerosal is not an "inevitable" ingredient of the vaccine, the design defect claim is not pre-empted by the no-fault, no-tort federal statute.

Anthony Sebok on loser-pays

The Cardozo lawprof has some further thoughts (at FindLaw) on the August discussion of the subject at the NewTalk site. He laments the absence of a robust empirical demonstration of what proportion of current suits are lacking in what kind of merit:

...we really do not know what percentage of meritless lawsuits -- especially negative-value suits -- are brought by hard-core liars who know that they have no claim, and what percentage are brought by sincere lawyers and clients who need discovery and pretrial practice to find out whether the other side is really a wrongdoer.

Presumably everyone agrees that the suits by "hard-core liars" ought to be discouraged, but it does not follow that the second category of ill-based suits, distinguished by the edifying presence of "sincerity" or at least lack of patent insincerity, does not contribute its own full share to the social havoc wrought by litigation. If so, that destructiveness might warrant attaching a price tag to it higher than zero.


"A 7th Circuit Bar Association study that tested alternative trial concepts (pdf), including allowing jurors to ask questions of witnesses during trials and limiting presentations by lawyers, generally showed that the new techniques enhanced the jury trial process. ... [Other concepts tested] were providing jurors with preliminary instructions before evidence was presented, using 12-person juries in civil trials (as opposed to fewer than that number), allowing counsel to make interim statements to the jury between witnesses during the evidence phase of the trial, having jurors fill out questionnaires for the jury selection process and providing jurors with guidance about how to conduct their deliberations." (Marek/NLJ).

Around the web, October 6

  • Remember press brouhaha over the Hannah Poling "maybe vaccines do cause autism after all" report? Turns out it may be a candidate for the scientists' undisclosed conflicts hall of fame [Seidel]
  • Slowdown, maybe, in craze for filing patent lawsuits in E. Dist. Texas [NLJ]
  • I provide an alternative viewpoint in this account of lawprof Tim Lytton's new book generally praising legal system's handling of church abuse scandals [Albany Times-Union]
  • West Virginia said to be "one Supreme Court decision" away from relapse into med mal crisis [Charleston Daily Mail]
  • Scott Greenfield on Long Island Rail Road "every retiree a disabled retiree" scandal [Simple Justice]
  • Mississippi judicial races heating up (again) [Salter, Clarion-Ledger]

Adler & Adler on Ohio Supreme Court

Case Western lawprof Jonathan Adler, well known to many of our readers through his blogging at Volokh Conspiracy, and his attorney spouse Christina Adler have co-authored a paper for the Federalist Society on the favorable developments at the Ohio Supreme Court, which has pulled back from a number of its predecessor's decisions that have been assailed as ill-considered or lawless (in particular, the court's former unwillingness to allow the Ohio legislature to enact liability limits). The paper's title is "A More Modest Court: The Ohio Supreme Court's Newfound Judicial Restraint". Commenters on Prof. Adler's post @ Volokh disagree on whether the relatively weak challenges to conservative justices this year testify to a successful de-politicization of the court, or simply reflect liberal interests' temporary inability to recruit formidable challengers. We've covered the court's doings extensively in the past.


As we noted back on May 8, Colorado unions responded to the appearance of a "right to work" initiative on the state's November ballot by qualifying several stridently anti-business "revenge initiatives", including one that would greatly expand the personal liability of company executives. (Denver Mayor John Hickenlooper, for one, called the union-backed initiatives "poison pills" that threatened the state's ability to attract business.) Now the revenge initiatives have had their intended effect: in exchange for the unions' agreement to drop the measures, business leaders have agreed to contribute millions of dollars to the cause of defeating the right-to-work initiative. (Rocky Mountain News, Oct. 2). More: WSJ is also on it this morning with an editorial.

In the periodic battles over state initiatives, revenge initiatives have become a favorite tactic of the opposition; as Carter noted this spring, the Colorado Trial Lawyers Association managed to dispose of a fee-limiting initiative by threatening in turn to qualify nine (!) separate counter-measures seeking to inflict pain on real estate agents, doctors and others, with the result that business interests pressured the initiative's backer to withdraw it as part of a resulting truce. More than once the revenge initiatives -- garish scarecrows though they were -- have in fact been voted into law, as was the case with both California's insurer-bashing Prop 103 and Florida's anti-doctor "three strikes" law.

Credit crisis roundup

  • How the "wooden children's arrow" and wool research earmarks made it into bailout bill [NYT DealBook; Mark Steyn, NRO "Corner"]
  • Ultra-bear Nouriel Roubini has sobering overnight analysis of crisis severity [RGE Monitor]
  • Claim that conservatives have overblamed CRA as contributor to housing bubble [American Prospect this spring] But CRA was one element in wider pattern of politically generated pressures for slack lending standards [Malanga, RCP]
  • Bill Clinton is talking sense on rush to blame deregulation and Glass-Steagall repeal [WSJ edit] But SEC's 2004 relaxation of rules for big investment banks isn't looking good in retrospect [NYT]
  • Washington Mutual failure has already passed from the headlines, but it was a big deal [LaCroix, D&O Diary]
  • Analysis of bailout bill's provisions on "excessive" executive compensation [Hodak Value]
  • Will credit default swap litigation be the next big thing? [American Lawyer]
  • More: What do economists want? WaMu-style surgical recapitalization of banks? [Tabarrok] Or current bailout bill as better than nothing? [E. Posner]


At least according to the CNN transcript, the word "lawyer" was spoken just once last night during the debate between Gov. Sarah Palin and Sen. Joe Biden:

IFILL: Final question tonight, before your closing statements, starting with you, Sen. Biden. Can you think of a single issue -- and this is to cast light for people who are just trying to get to know you in your final debate, your only debate of this year -- can you think of a single issue, policy issue, in which you were forced to change a long-held view in order to accommodate changed circumstances?

BIDEN: Yes, I can. When I got to the United States Senate and went on the Judiciary Committee as a young lawyer, I was of the view and had been trained in the view that the only thing that mattered was whether or not a nominee appointed, suggested by the president had a judicial temperament, had not committed a crime of moral turpitude, and was -- had been a good student.

And it didn't take me long -- it was hard to change, but it didn't take me long, but it took about five years for me to realize that the ideology of that judge makes a big difference.

That's why I led the fight against Judge Bork. Had he been on the court, I suspect there would be a lot of changes that I don't like and the American people wouldn't like, including everything from Roe v. Wade to issues relating to civil rights and civil liberties.

And so that -- that -- that was one of the intellectual changes that took place in my career as I got a close look at it. And that's why I was the first chairman of the Judiciary Committee to forthrightly state that it matters what your judicial philosophy is. The American people have a right to understand it and to know it.

But I did change on that, and -- and I'm glad I did.

Biden's also getting grief around the blogosphere for misstating the constitutional duties of the vice president. See Shannen Coffin, National Review Online, for example, and Glenn Reynolds.

UPDATE: More from the Washington Post's Ruth Marcus, who notes Palin also floundered on constitutional questions. But not as much as Joe.

Card check and an Obama Administration

Could, or would, Republican senators filibuster to block the scheme and thus preserve the secret union ballot? (scroll)(earlier).


Because even if you're not interested in drug-and-device-specific topics like the learned intermediary rule and the controversy over compulsory provision of experimental drugs to terminal patients, you may still benefit by learning about such wider topics as the difference between express and implied pre-emption, changes to Federal Rule of Evidence 502 and the attorney-client privilege, a conspectus of cases decided under the Class Action Fairness Act, and the identity of the go-to people for arranging defense-side amicus briefs.

Behind one Texas asbestos case

Russell Allen et al vs. American Petrofina Inc. et al was filed in 1987 by attorney Joseph Blanks, then of the prominent Beaumont, Texas firm of Reaud, Morgan & Quinn and named 101 plaintiffs and 10 defendants. Its two-decade history since then is told by Scott Sabatini in the pages of the (U.S. Chamber-backed) Southeast Texas Record, in a lengthy account that touches on many of the key problems of asbestos litigation. Among the points touched on: the vast growth of the caseload, constantly running ahead of defendants' hopeful assumptions; the increasingly "colorful, provocative and accusatory" tone of plaintiffs' filings; the assemblage of relatively meritorious and relatively unmeritorious cases into unified convoys, to the tactical benefit of the latter (the "aggregate settlement model"); the eagerness of many business defendants to settle even as it became evident that dubious cases were multiplying; the bankruptcy of leading defendants and successful refocusing on others who had been more peripheral; and, finally, the legislative reaction in Texas, turning one of the nation's most attractive states for asbestos lawsuits into one of its most inhospitable. Among those interviewed: noteworthy defense-side attorneys Bill Skepnek and Mark Behrens.


When the Supreme Court denied Louisiana's rehearing petition in Kennedy v. Louisiana, where the court had previously invalidated that state's death penalty for child rapists, the 7-2 decision was striking. For two Justices who had previously dissented joined the majority with a concurring opinion stating, in effect, that the emperor was not wearing any clothes.

Louisiana had petitioned the Court for a rehearing this summer, after a military law blogger pointed out that Congress had passed a law in 2006 allowing the death penalty for child rapists under military law. The omission of that fact in every single one of the briefs filed in the case, and the fact that none of the Justices' clerks had found the statute, made a mockery of Justice Kennedy's majority opinion that there was a well-known "national consensus" against executing anyone whose victim had survived.

The Court denied the petition to rehear by a 7-2 vote, with Justices Thomas and Alito. dissenting. Most delicious was Justices Scalia's,and Chief Justice Roberts' concurrence: the two joined the majority only because, as Scalia put it, "the views of the American people on the death penalty for child rape were, to tell the truth, irrelevant to the majority's opinion in the case."

The concurrence makes clear that the new piece of information undermines the logic of the majority's decision. "While the new evidence ... is ultimately irrelevant to the majority's decision, let there be no doubt that it utterly destroys the majority's claim to be discerning a national consensus and not just giving effect to the majority's own preference."

Around the web, October 2


On July 3, the Louisiana Supreme Court announced its adoption of comprehensive amendments to lawyer advertising rules in the Louisiana Rules of Professional Conduct. The new rules are scheduled to go into effect Dec. 1, 2008. But two Louisiana personal injury firms joined Naderite Public Citizen in a lawsuit filed this week in federal court to challenge the rules on First Amendment grounds.

The rules affect the content of attorneys' advertisements, barring the use of testimonials, actors, reenactments, and dramatizations. Public Citizen objects that this prohibition would be "unthinkable in any other field of commerce." Um, but the practice of law is not a field of commerce, it's a profession, many (including me) would respond.

The only "irremediable" damage the injunction would cause is the pulling of staged ads and the filming of new ones. If the Eastern District of Louisiana applies anything like the standard used by courts in San Francisco (see my earlier posting on that city's tobacco ban) this will be a no-brainer for the defense.


San Francisco has banned the sale of tobacco products in pharmacies -- at least, in SOME pharmacies (Safeways, for example, which contain pharmacies, may continue to sell tobacco). Though arguably states have the right to ban sales of noxious products, and may delegate this right to a municipality within their borders, they must respect the Constitution's Equal Protection clause when doing so. Since Walgreens cannot recover damages from San Francisco (because of sovereign immunity), it has sought a preliminary injunction against enforcement of the ban, on the grounds that its constitutional challenge is very likely to succeed.

Well, as law.com reports, the injunction was denied. Judge Peter Busch ruled that Walgreens had "some very difficult hurdles to get over" in its petition for injunctive relief, which must be declined so long as the San Francisco ban is "reasonably related to a rational purpose." This purpose, according to the city, is that "health-promoting businesses" must not send an implicit message that smoking is acceptable, which message is sent whenever they sell tobacco products. The city argued that Walgreens earns significantly more of its revenue from prescription drug sales than do big box stores: in 2007 roughly 65 percent of Walgreen's retail sales revenue came from prescription drugs, as opposed to 7.5 percent at Safeway and 1.5 percent at Costco, according to the text of the San Francisco ordinance.To the judge this was a "rational basis" for narrowing the tobacco prohibition to "pure" pharmacies.

If a customer buys cigarettes along with, say, make-up or birth control pills, and can no longer do so in Walgreens, that surely is a reason at the margin to switch to the Safeway pharmacy, right? Other cities are eyeing ordinances similar to San Francisco's, so the appeal of this injunction denial will be an interesting one to watch.

Basic Inc. v. Levinson, revisited

Michigan lawprof Adam Pritchard, in the NLJ, argues that the Supreme Court went astray in its 1988 adoption of the "fraud on the market" theory, and proposes a perhaps unexpected workaround:

...Shareholders effectively take a dollar from one pocket, pay about half of that dollar to lawyers on both sides, and then put the leftover change in their other pocket.

The U.S. Supreme Court set the groundwork for this circular and costly exercise 20 years ago in Basic Inc. v. Levinson. The court effectively eliminated the reliance requirement for plaintiffs suing large companies whose stock is actively traded -- and unwittingly released the floodgates for securities class actions....

Billions are being passed around in securities fraud class actions, to no apparent purpose other than the enrichment of lawyers. Shareholders have waited too long for Congress or the high court to fix this mess; they have the power to make the necessary reform themselves. The U.S. Securities and Exchange Commission's proxy proposal rule allows shareholders to recommend amendments to a company's articles of incorporation. An amendment limiting damages in secondary market cases and requiring actual reliance for claims of compensation would undo the harm caused by the Supreme Court in Basic. Corporations would face billion-dollar lawsuits only if they had been fraudulently selling billions of dollars in securities.

More: Beck and Herrmann are impressed with the proposal.

 

 


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.