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September 2009 Archives

Is Lobbying a Crime?

The Washington Examiner's Tim Carney argues that Jack Abramoff's colleague Kevin Ring is being unfairly prosecuted under the extremely broad federal wire fraud law for the legal act of lobbying in bad company.

A news release from the National Labor Relations Board, "Supreme Court is asked to settle the question of two-member rulings by the NLRB":

Washington, DC -- On behalf of the National Labor Relations Board, the Solicitor General of the United States today asked the Supreme Court to settle the question of whether the Board is authorized to issue decisions while three of its five seats remain vacant.

The request was made in two actions: a petition for certiorari in Laurel Baye Healthcare
of Lake Lanier, Inc. v. NLRB (see the petition), and a response to a certiorari petition filed by an employer in New Process Steel, LP v. NLRB (see the response).

The Board has operated with only two members since the start of 2008, when the terms for two other members expired. The current chairman, Wilma B. Liebman, and Peter C. Schaumber, a Republican, have continued to issue decisions.

In May, the D.C. Circuit found the NLRB's decision in the Laurel Bay Healthcare dispute to be invalid because two members did not constitute a quorum. (Wall Street Journal story; Blog of the Legal Times coverage.)

No surprise, the issue is deep in partisan politics.

Quest for Chinese drywall defendants

Manufacturers in China are hard to sue, and some installers and other middlemen in this country are sure to argue that they didn't realize the product was sometimes flawed. So, per AP, lawyers are casting a wider net. Plaintiff's lawyer Russ Herman said efforts

could involve attempts to obtain damage payments by seizing vessels that brought the drywall to the United States if they return to U.S. ports and even going after Wall Street investment banks with a share of ownership in the Chinese companies.

Amicus briefs in TVA nuisance case

The Alabama attorney general has filed a brief on behalf of the public utility in North Carolina's much-watched case, as have the U.S. Chamber of Commerce and several other business groups. Public Nuisance Wire also quotes Brian Walsh (Heritage) and Maureen Martin (Heartland), as well as other critiques. Our earlier coverage of the litigation can be found here, here, here, here, and here.

Around the web, September 30

  • Indiana: "Lawyers file challenge to end state's malpractice cap" [Indianapolis Star, Shelby News]
  • "Sears Roebuck Agrees to Record $6.2M ADA Settlement With EEOC" [ABA Journal] And a flurry of litigation activity: "EEOC announces 32 suits in past seven days" [Runkel via Fox]
  • Judge nixes class action against Toshiba over its defense of HD-DVD format [Russell Jackson]
  • Card check in lieu of union-representation elections has a track record in New York public employment [Bill Herbert, SSRN via Workplace Prof]
  • "Up Next: Securities Suits Against Municipalities?" [LaCroix]
  • Accusations fly in Neurontin litigation between Pfizer lawyers and David Egilman, Mark Lanier [American Lawyer]

Jonathan Adler and Hans Bader catch her palming off on Slate and Newsweek readers a risible caricature of a high court in which supposedly -- Lithwick's words -- "big business always prevails, environmentalists are always buried, female and elderly workers go unprotected, death row inmates get the needle, and criminal defendants are shown the door."

Med-mal reform's Capitol Hill graveyard

From Philip K. Howard's op-ed today in the WSJ:

On July 31, Rep. Bart Gordon (D., Tenn.), a Blue Dog Democrat, introduced an amendment to the House health-care reform bill (H.R. 3200) to fund pilot projects for liability reform, including pilots for "voluntary alternative dispute resolution."

What happened? According to the online newsletter Inside Health Policy, "While Gordon's amendment originally had seven policies that states could implement in order to receive federal funding, the other five suggestions were crossed out . . . due to the agreement with the trial lawyers."

Tobacco regulation moves forward

Today, September 29 December 28 is the deadline for submitting comments to the Food and Drug Administration on (FDA's docket) implementing the Family Smoking Prevention and Tobacco Control Act. [UPDATE: Last week the FDA extended the comment period. Notice.]

Here are several comments we found of note:

The comments come even as R.J. Reynolds and Lorillard are suing to block marketing restrictions in the new law that gives the FDA regulatory authority over tobacco. (AP story; Bloomberg.)

Policing a profession

Steven Erickson, Crime and Consequences, on what type of lawyerly conduct it takes to draw a disciplinary penalty of one year probation from the Missouri Supreme Court (crediting Legal Profession Blog).

Max Kennerly offers his critique of Maryland lawmaker Heather Mizeur's idea mentioned in this space.

Around the web, September 29

Twenty-seven* trade associations today sent a letter to Chairman Henry Waxman (D-CA) and Ranking Member Joe Barton (R-TX) expressing opposition to H.R. 2868, the Chemical Facility Anti-Terrorism Act of 2009. Waxman is a sponsor. Key excerpt for Point of Law purposes:

[We] also have strong concerns about the bill's "citizen suit" provision (Section 2116), which would allow any person - even those who have not suffered any harm - to bring suit against regulated facilities or the DHS to enforce compliance with the act. Although such private rights of action are common in environmental statutes, the performance-oriented requirements of the CFATS are not well suited to enforcement by citizen suits. This is so because CFATS's performance-based standards provide facilities the flexibility to decide which security measures or technologies to adopt. Allowing layperson litigants rather than DHS security specialists to challenge a facility's selection of security measures will not enhance security in any meaningful way.

Furthermore, we share the DHS's concerns that broad discovery rights in federal lawsuits could lead to public disclosure of classified or highly sensitive information that could assist terrorists.

As we noted in an earlier post, this private cause of action was not in previous years' versions of the bill. This year, the House Committee on Homeland Security has already reported out the bill with the citizen suit provision intact, despite much protest. Today's letter comes in anticipation of a hearing Thursday by a subcommittee of the House Energy and Commerce Committee.

The U.S. Chamber has a news release. The National Association of Manufacturers, which employs me, is one of the 27* groups signing the letter.

*Miscounted the first time. It's 27, not 26.

Second Circuit CO2 ruling, cont'd

Public Nuisance Wire has assembled reactions to the ruling in State of Connecticut v. American Electric Power Co. Inc. from, among others, Richard O. Faulk and John S. Gray of Gardere Wynne Sewell (an "extraordinarily broad [ruling that] entails major risks for all industries, not just the electric utilities"), Trent Taylor of McGuire Woods ("a heretofore unthinkable result"), and Stan Anderson, executive director of the Public Nuisance Fairness Coalition ("These are issues seeking a comprehensive legislative solution, not a piecemeal approach by activist courts.") Earlier here, here, and here.

Charlie Savage, New York Times: "The Justice Department is preparing to impose new limits on the government assertion of the state secrets privilege used to block lawsuits for national security reasons. ...The bills [currently pending in Congress] would encourage courts to find a way for lawsuits to continue, even if particular documents or information must be withheld." They would also require tougher judicial scrutiny of executive-branch assertions of the state secrets doctrine. Earlier here (Boeing rendition) and here (bill in Congress) (via Hartley).

EEOC publishes new ADA regulations

According to the EEOC, "As a result of the ADAAA [ADA Amendments Act], it will be much easier for individuals seeking the law's protection to demonstrate that they meet the definition of 'disability....'" Jon Hyman and Daniel Schwartz have details.

Around the web, September 27

  • "N.Y. Law Opens One-Year Window for Time-Barred 9/11 Claims" [NYLJ]
  • Much-watched formaldehyde case: "FEMA trailer didn't expose family to fumes, jury decides" [AP/NOLA.com] More: Wajert.
  • "Recent Securities Suit Filings Reinforce 'Backlog' Theory" [Kevin Lacroix, D&O Diary and relatedly]
  • Horne v. Flores high court decision is big win against overbroad consent decrees [Sandler/Schoenbrod, City Journal; both majority opinion and dissent cited S&S's Democracy by Decree] Ninth Circuit gets "severe spanking at the hands of Justice Alito" [Simon, Prawfsblawg]
  • New Jersey Supreme Court reverses $75 million malpractice award, case was largest in state history [WCBS].
  • Need some quick cash? Here's an idea, sue NYC [NY Post]

Divers items of interest from the committee hearing schedule, starting with the Senate Judiciary Committee:

September 30, Full Committee, to hold hearings to examine advancing freedom of information in the New Era of Responsibility, 10 a.m., SD-226. [Details]

September 30, Subcommittee on Administrative Oversight and the Courts, to hold hearings to examine responding to the growing need for federal judgeships, focusing on the Federal Judgeship Act of 2009, 2:30 p.m., SD-226. [Details]

The New Era of Responsibility? Huh. Whose slogan is that?

The Senate Judiciary Committee on Thursday also continues its months-long effort to mark up the Free Flow of Information Act, i.e., the federal media shield bill, although the panel appears to be making progress. On September 24, the committee adopted a substitute amendment to S. 448. (UPDATE: Broadcasting & Cable summarizes the substitute amendment.)

On the House side, this caught our eye:

September 30, Subcommittee on Crime, Terrorism, and Homeland Security, hearing on Cyberbullying and other Online Safety Issues for Children, including the following bills: H.R. 1966, Megan Meier Cyberbullying Prevention Act; and H.R. 3630, Adolescent Web Awareness Requires Education Act, 3 p.m., 2141 Rayburn.

Here's the description of H.R. 1966: "Megan Meier Cyberbullying Prevention Act - Amends the federal criminal code to impose criminal penalties on anyone who transmits in interstate or foreign commerce a communication intended to coerce, intimidate, harass, or cause substantial emotional distress to another person, using electronic means to support severe, repeated, and hostile behavior."

Which, if passed, will certainly lead to the use of the "smiley emoticon defense": "It wasn't harassment. It was a fun and ironic message! You saw me use all those colons and close parentheses."

Feature not bug dept.

Some in Louisiana are complaining that reforms enacted in 1996 could keep a 1 percent at-fault defendant in Chinese drywall cases for being ordered to pay for the other 99 percent. [Times-Picayune]

Asbestos trusts and tax law

Some litigation-created asbestos trusts "engage in transactions of a type the IRS deems dubious," according to Kirk Hartley. He also has been posting on the W.R. Grace bankruptcy: "Asbestos Plaintiff's Lawyers Ask W.R. Grace Bankruptcy Court to Order that Its Findings - on Solvency - Do Not Matter In any Other Forum", along with a followup.

The ABA Journal has a brief report on a nightmare about to afflict Joe Sharkey, a New Jersey journalist who was a survivor of a horrific mid-air collision between a Brazilian 737 and an American business jet carrying him and six others. All 154 aboard the 737 died when it reportedly nosedived after making an evasive maneuver. Those on the damaged business jet survived after the pilots eventually spotted a runway on a military base deep in the jungle and made a successful emergency landing.

Now Sharkey has been sued--in Brazil--by the widow of a man who died in the accident. She contends that Sharkey's reporting on the plane crash--in the United States--dishonored Brazil, which is apparently a tort in that country. [Shark defended the American pilots of the business jet, who had been accused in Brazil of criminal negligence, and criticized that country's air-traffic control system.] Last week, Sharkey was served in his home state of New Jersey with a copy of the lawsuit. A New York law firm has been retained to enforce stateside a Brazilian judgment against him.

This is exactly what happened to New Yorker Rachel Ehrenfeld, who exposed the terrorist ties of a Saudi who then made Ehrenfeld's life miserable by suing her in England, where libel laws are incredibly plaintiff-friendly. New York passed a law banning enforcement of such foreign impediments to American free speech, but New Jersey has no such law. [Ehrenfeld had better not set foot in England.] The Free Speech Protection Act of 2009, meanwhile, has not made progress federally.

At Legal Workshop, Richard Nagareda (Vanderbilt) has a shorter version of a full-length NYU Law Review piece (PDF) on the procedural history of class certification:

With so much riding on the class certification determination, one would have thought that procedural law would have arrived quickly at a clear and broadly shared understanding of the nature of that determination and the permissible parameters for inquiry by the court. That, however, has not been so. ...

The hard questions surrounding class certification today are--contrary to conventional wisdom--only superficially questions of fact, conflicting evidence, and dueling expert witnesses. Properly understood, aggregate proof frequently offers not so much a contested account of the facts that bear on class certification but, more fundamentally, an implicit demand for a new and often controversial conception of the substantive law that governs the litigation at hand.

"A public plan for malpractice"

Novel idea from a Maryland Democratic state lawmaker: fold doctors into the Federal Tort Claims Act. [Heather Mizeur, Baltimore Sun]

Around the web, September 25

  • State AGs (Connecticut's in particular) vs. businesses that try to close plants [Genova]
  • New York class-action firm Labaton Sucharow generous to Massachusetts politicians [Boston Globe]
  • Relying on analysis from some insurance consumer advocates can be hazardous indeed [RiskProf on Florida]
  • "Wyeth v. Levine Post-Script" [TortsProf]
  • How law schools promote or mispromote themselves is an important ethics issue [Steele, LEF]
  • Dickie Scruggs's private critique of federal judiciary bared in new suit? [Freeland and more citing YallPolitics]

Writers sought on class-action project

A reformist group (not us) is seeking a skilled writer capable of tackling the topic of class action abuse. If you're a serious candidate, drop a line at editor - at- this-domain-name - dot - com and I'll forward it to the group doing the search.

The New York Times (via Greenwire, or vice versa) today does a pretty fair job of examining the controversy over President Obama's nomination of David Michaels to head the Occupational Safety and Health Administration, albeit with the hook as described in the headline, "Conservatives Raise Questions About OSHA Nominee."

Not to deny that some conservative activists -- former Ohio Treasurer Ken Blackwell, for example -- have gone after Michaels as yet another radical nominee from the Obama Administration. The Van Jones debacle inspired more examination. (Cass Sunstein, repeatedly praised at Point of Law, received the brunt of the attacks.)

Still, the policy objections to Michaels ARE substantative. In the article, CEI's Hans Bader cites Michaels' own book, "Doubt is Their Product":

Bader points to one chapter in which Michaels discusses a 1993 Supreme Court ruling, Daubert v. Merrell Dow Pharmaceuticals Inc., which set the standard for admitting expert testimony in federal courts. Bader said Michaels' views on that case suggest he supports relying on "junk science," which could dramatically alter OSHA's approach to ensuring workplace safety.

In an editorial earlier this month, the Washington Times called Michaels "one the nation's foremost proponents of allowing junk science to be used in jackpot-justice lawsuits."

At Point of Law, we've also written about Michaels' attacks against the plastics additive, BPA, a favorite target of the litigation industry as well -- posts in April 2008 and August 2009 that preceded the Van Jones hullabaloo. Those posts also noted that the project on Scientific Knowledge and Public Policy began with funding strangely allocated from the settlement in the silicone breast implant litigation.

Pennsylvania high court vacancy

"Contributions from organized labor and trial lawyers helped give Democrat Jack Panella a big fund-raising advantage over Republican rival Joan Orie Melvin in the race for an open seat on Pennsylvania's highest court, according to a review of their latest campaign finance reports yesterday." [Philadelphia Inquirer]

In our newest column, original to Point of Law, Rona Koifman analyzes proposals being widely discussed in Britain to create a new international environmental court with jurisdiction over nations and, significantly, private parties accused of despoiling the environment. Part of the United Nations system, its domain would include not only intrinsically international environmental controversies, but even those that would traditionally have been considered domestic to a single country. The materials of existing international law, however, Koifman argues, are ill suited to fill in the content of ambitious new proposed concepts such as an internationally enforceable new human right to a healthy environment.

CALPERS' Phil Angelides

Manhattan Institute senior fellow Steve Malanga unflatteringly profiles the former California treasurer and unsuccessful gubernatorial candidate, well-known in both securities-class-action and labor circles through his clout at California public employee fund CALPERS, and more recently named to head the 10-member Financial Crisis Inquiry Commission.

Federal-level wage and hour suits

Contrary to the general impression, they don't really seem to have boomed in number in recent years, says Daniel Schwartz. No wonder the U.S. Department of Labor is hiring 250 more investigators to generate enforcement actions -- business has been slow! More: Jon Hyman.

Judge moves to ban sugar-beet crop

New York Times: "A federal judge has ruled that the government failed to adequately assess the environmental impacts of genetically engineered sugar beets before approving the crop for cultivation in the United States. The decision could lead to a ban on the planting of the beets, which have been widely adopted by farmers." A similar decision two years ago, also by the federal district court in San Francisco, shut down the planting of genetically altered alfalfa, also on the grounds that the USDA had not done an adequate environmental impact statement (EIS) on its approval.

Tobacco suits stumbling?

"As memories dim of industry wrongdoing, a new generation of jurors is proving less sympathetic to smokers." [Amanda Bronstad, NLJ]

Josh Gerstein at Politico on rumblings from two leading Democratic environmentalists, former VP Al Gore and former EPA chief Carol Browner.

Chamber on state-AG pay-to-play

The U.S. Chamber's Institute for Legal Reform denounces pay-to-play relationships between state attorney general offices and the private lawyers they hire, and has a list of relationships that it thinks fit that bill.

From Legal NewsLine.com, "State AGs hail ruling in greenhouse gas case, statements from the politically aspiring attorneys general reacting to the Second U.S. Circuit Court of Appeals' ruling allowing federal public nuisance suits against power generators.

  • California Attorney General Jerry Brown: "It's highly significant that the federal court has affirmed the right of states to challenge the greenhouse gas emissions generated by coal-fired power plants. The time has now come for Congress to enact long overdue climate protection legislation."
  • Connecticut Attorney General Richard Blumenthal: "Our goal is not money damages, but a change in company practices to stem the pollution and safeguard our environment and economy."

The National Association of Manufactures (my employers), the U.S. Chamber, and other major business trade associations filed an amicus brief in support of the utilities, which you can read here.

I also have a post at Shopfloor.org on the ruling, identifiying the same bad implications  as Michael Krauss did below. My thought: "The United States is only right now at the start of an economic recovery -- perhaps. That recovery will require expanded energy production and business investment. But if you're the head of a company that wants to invest for the future -- in the process creating jobs and wealth -- and you find that self-aggrandizing attorneys general and anti-growth environmentalists can simply litigate you into paralysis, well, the hell with it."

Missouri med-mal reform

Former Gov. Matt Blunt explains in the WSJ how it was done.

More: David Freddoso, Washington Examiner, on the demonstration project called "Mississippi". And insurance rates for many Florida doctors have dropped about 20 percent since a 2007 round of reform, reports the Palm Beach Post, though the state still has the highest premium in the country.

As the New York Law Journal reports, the 2nd Circuit has overturned a Southern District of New York Decision by Judge Loretta Preska, and revived a lawsuit by 8 states and three private land trusts against power companies, which lawsuit alleges that six power companies operate coal-fired power plants that add too much to the carbon footprint.

The case had been dismissed by Judge Preska as essentially arguing for a "federal common law of nuisance." The power plants operate in conformity with all laws, and as should be obvious, the lawsuit was really a means to enact public policy by the courts instead of the federal and state legislatures.

A rare two judge panel (composed of 2nd Circuit Judges Joseph M. McLaughlin and Peter W. Hall : Judge Sonia Sotomayor was also on the panel that heard oral arguments in the case in June 2006, but was elevated to the U.S. Supreme Court before the case was decided) decided that the 8 states and the three land trusts had standing to sue (the states as parens patriae, or in place of our parents...) and that a federal common law of nuisance was just fine to be adjudicated.

In a restrained understatement, Pat Hemlepp, a spokesman for one of the defendant companies, said,"Since this suit was filed, we have said that litigation is not the best way to address climate concerns," Hemlepp said. "It's a public policy issue and we have said there needs to be legislation. Congress is doing that now and we fully support the legislative approach."

Judge Hall turned aside the defendants' contention that private parties cannot bring federal nuisance common law actions. "Private parties and governmental entities that are not states may well have an equally strong claim to relief in circumstances invoking an overriding federal interest or where the controversy touches on federalism" he wrote.

If this Circuit ruling stands, why should investors have confidence in industrial projects that have received all necessary legal permits to be built? A "federal nuisance suit" filed by a "land trust" or a state other than the permitting state could destroy profitability. Presumably investors would need all 50 states' approval plus that of the "land trusts." Talk about a chill to job creation.

In Foreign Policy, he explodes some sentiments popular on campus and beyond, such as the supposed contrast between the Obama Administration's reverence for international law and its predecessor's contempt for it; the idea that international law has shown itself a reliable way to make the world safer and protect human rights; the notion that Europeans are more respectful of it than the U.S.; and more.

Specter's bill to overturn Stoneridge

Kevin LaCroix on "Why It Could Pass and Why It Matters". (More: Ribstein). He's also got some comments on the horrible Specter bill to overturn the Iqbal/Twombly line of decisions strengthening the pleadings stage of litigation, on which more from Tony Mauro at the NLJ.

Cornell accounting professor Robert Bloomfield (via Kenneth Anderson at Volokh) is soliciting reader input on how accounting standards should recognize litigation contingencies, a topic of much controversy earlier this year following initiatives from the FASB (Financial Accounting Standards Board), which is supporting Bloomfield's inquiries.

From the House Education and Labor Committee, an announcement of a hearing at 10 a.m. Wednesday, "H.R. 3017, Employment Non-Discrimination Act of 2009":

U.S. Rep. George Miller (D-CA), chairman of the House Education and Labor Committee, today announced that on Wednesday, September 23, he will hold the first full committee hearing in the House of Representatives on legislation to prohibit employers from discriminating against employees on the basis of sexual orientation or gender identity.

The Employment Non-Discrimination Act (H.R. 3017), introduced by Rep. Barney Frank (D-MA), would prohibit employment discrimination, preferential treatment, and retaliation on the basis of sexual orientation or gender identity by employers with 15 or more employees. Currently, it is legal to discriminate in the workplace based on sexual orientation in 29 states and in 38 states based on gender identity.

Bill information is available here. Rep. Barney Frank (D-MA) is the sponsor, and there are 159 cosponsors. The CRS Summary describes the legislation: "Prohibits employment discrimination on the basis of actual or perceived sexual orientation or gender identity by covered entities (employers, employment agencies, labor organizations, or joint labor-management committees). Prohibits preferential treatment or quotas. Allows only disparate treatment claims. Prohibits related retaliation."

Rep. Frank's office has posted the transcript of a June 24th news conference on the legislation. Similar legislation passed the House in 2007, 235-184, but stalled in the Senate.

Around the web, September 21

  • Med mal mini-roundup: "Medical liability insurer says caps law has stabilized malpractice rates" [MC Record, Illinois] Mixed verdict on Texas reforms [Mitchell Schnurman, Star-Telegram] Interview with Florida neurosurgeon & AANS president Troy Tippett [PNW] Tennessee med-mal filings drop sharply after state adopts pre-notice, certificate of good faith reforms [Day, first and second followups] Washington high court strikes down certificate of merit law [Day] "Georgia Supreme Court to Decide Constitutionality of Med Mal Damage Caps" [TortsProf, WSJ Law Blog]
  • Foundation for Fair Civil Justice (Bob Dorigo Jones) doing video and audio features on lawsuit abuse [Legal Reform TV]
  • "Point-Counterpoint: Repairing the Clean Water Act" [Federalist Society Engage]
  • "'Docket Science': Is it Time for an Inactive Docket in California to Manage Asbestos Workload?" [Cal Civil Justice]
  • "Looking at the Logic Behind Shareholder Class-Action Suits" [WSJ Law Blog]
  • "Ohio Pharmacist Going To Jail Over Botched Prescription" [Bull's-Eye Blog via Ohio Employer]

The med-mal pilot project known as "Texas"

Peggy Venable explains the Lone Star State's experience to Washington Post readers: "Doctors and hospitals are using their liability insurance savings to expand services and initiate innovative programs; those savings have allowed Texas hospitals to expand charity care by 24 percent."

Advance-fee-fraud or "Nigerian 419" email is constantly evolving to reflect the times: if letters announcing big lottery winnings or requesting help on behalf of deceased dictators' heirs fail to pull in new victims, one can always go back to letters on behalf of pious dying princesses or purported bank embezzlers. And now this, which arrived the other day in my email:

To celebrate this month of September' ending anniversary program.
Chevron/Texaco has given you a donation of $980,000.00USD
As a compensation for environmental hazards caused by our
Product, we hope this donation will be used well, not
Only for you but your community.

Please fill these below information's to file your
Donation: -

Full Names:
Cell phone Number:

Please contact Remittance secretary to get your donation:
Name: Mr. Clive Barker,
Email: [redacted]

Chairman and Chief Executive Officer
David J. O'Reilly

You know, that letter may qualify as more believable than some international lawsuit settlements that have actually happened.

Went to "Der Baader Meinhof Komplex" last night, a dramatic account of the birth, growth and destruction of the German terrorist band. After nearly two-and-a-half hours, one concludes that the Baader-Meinhof Gang, or Red Army Faction, was made up of murderous thugs.

Those revelations aside, it's always interesting to see depictions of the German judicial system, in this case the high-profile trial of the four leading terrorists held in the prison. Most Americans, we wager, have a passing familiarity with the British legal system, if only from "Monty Python" or "Rumpole of the Bailey." But the German?

You learn from the film that the German court system -- despite having no juries-- allowed the same kind of circus and media manipulation that U.S. radicals used in trials like that of the Chicago 8. The German authorities were also so solicitous of the terrorists' desire to coordinate their defenses that they made it possible for the prisoners to communicate with their outside comrades as well as orchestrate their own suicides -- politically motivated suicides not romanticized by the filmmakers, to their credit.

Gov. Haley Barbour of Mississippi spoke at the Heritage Foundation today on the state's successes with tort reform, an event hosted by former Attorney General Ed Meese. During the Q&A period, Meese asked the governor about the effects of the 2004 tort reforms on the state's trial bar. In response, Gov. Barbour alluded to the criminal prosecutions and convictions involving Mississippi's most prominent trial lawyer, Dickie Scruggs. It was an interesting exchange and a useful corrective to any schadenfreude legal reformers might occasionally indulge in.

BARBOUR: I don't think it was related to the tort reform, but as you know, some of the more prominent plaintiffs' lawyers in my state got into trouble. ...

I hate it. It's bad for the court system, it's bad for everybody. One of the things I really believe is, the public has to think the legal system is on the up and up. I mean, that's just really, really important.

Once in my career, I was the deputy chairman of the International Democrat Union, which despite its name - Democrat and Union - is the organization of conservative parties of the world that President Reagan started with Mrs. Thatcher and Chancellor Kohl. And I was struck by how much people in other parts of the world realized the importance of the rule of law in America. And it is not that way everywhere. There are advanced countries that are very prosperous that don't have nearly the confidence, faith and commitment to the rule of law that we do.

And for us, an advantage for us is the little guy generally believes that the court system is on the up and up.

All of sudden we get judges getting convicted of taking bribes and lawyers, good lawyers - they may have been plaintiffs' lawyers and they may be on the other side from me, and politically and everything else - but they're good lawyers. To me it's sad, 'cause it's bad for what we all ultimately want in America, and we do want the rule of law, and we want a system that let's us progress.

Legal reform as a New Jersey issue

Both incumbent Gov. Jon Corzine and challenger Chris Christie sent representatives to speak at the New Jersey Lawsuit Reform Alliance's lunch.

In this Forbes op-ed, yours truly attempts to put the kibosh on General Motors' mileage claims for the soon-to-be Chevy Volt, and wonders whether public ownership of GM might have something to do with the EPA standards that the automaker hopes will bolster its ridiculous mileage estimates.

Around the web, September 18

Corporations as fictional individuals

A question from Justice Sotomayor touches off a buzz around the blawgosphere, or at least the parts of it adjoining Profs. Ribstein and Bainbridge.

"Don't Buy Specter's EFCA 'Compromise'"

Manhattan Institute adjunct fellow Diana Furchtgott-Roth warns that the latest iteration of the labor bill, with organizer access and a slightly different regime of imposed arbitration, is no more acceptable than earlier versions. More: WSJ editorial, ShopFloor.

The White House today announced a $25 million grant program to fund demonstration projects on alternatives to the current system of medical liability. In a memorandum to the Secretary of Health and Human Services, he wrote:

In 1999, the Congress authorized the Agency for Healthcare Research and Quality, which is located within the Department of Health and Human Services, to support demonstration projects and to evaluate the effectiveness of projects regarding all aspects of health care, including medical liability. I hereby request that you announce, within 30 days of this memorandum, that the Department will make available demonstration grants to States, localities, and health systems for the development, implementation, and evaluation of alternatives to our current medical liability system, consistent with the goals and core commitments outlined above.

The Boston Globe has the background memo laying out the framework for the studies and reporting the AAJ's response.

It's a more formal and timely proposal than we had expected from the White House while serving the same political strategy -- kicking serious efforts toward medical tort reform a year or more down the road.

UPDATE (4:25 p.m.): Secretary Sebelius comments at the daily White House press briefing today. Robert Gibbs jumps in, too, disputing support of trial lawyers for Obama candidacy.

Opening arguments were presented to a Pennsylvania state court jury on Tuesday in a test case that charges that GlaxoSmithKline covered up studies suggesting that Paxil, its successful antidepressant, causes birth defects. Michelle David, a former cheerleader for the Philadelphia 76ers, sued on behalf of her 3-year-old son, claiming that her son's heart defects were caused by her consumption of Paxil. [Here's the Philadelphia Inquirer report on the case.] There are more than 600 other cases alleging that Paxil's side effects were concealed. Paxil generated about $942 million in sales last year.

During opening statements, the plaintiffs' attorney read jurors from one 1997 memo from a Glaxo executive. "If neg, results can bury," the executive had advised, referring to the possibility that the company might be compelled to conduct animal trials with Paxil. Plaintiffs claim that Glaxo urged in-house scientists to withhold data on side effects from the company's report on the "core safety philosophy for Paxil. For their part, Glaxo's lawyers told the jury that the 3-year-old's heart defect wasn't caused by Paxil at all, and that plaintiffs have cherry-picked a few out-of-context snippets from a huge number of Glaxo documents to put together their case. This is the typical profile of such "failure to warn" cases.

Meanwhile, on Monday, according to Bloomberg, U.S. District judge Nancy Gertner ruled that plaintiffs in a Mississippi case against Glaxo are entitled to correspondence between the company and researchers at Boston University's Slone Epidemiology Center relating to a Paxil study published in the New England Journal of Medicine in 2007. This one is one to follow.

It's the tenth annual such event, and will include discussions of third-party litigation funding and climate change litigation on its all-day agenda. (Details and registration).

Around the web, September 17

  • Hill committee jurisdiction: if tort expansion (Medicare secondary payor) can go through Ways & Means, why must tort reduction (med mal) go only through Judiciary? [ShopFloor]
  • In the mail, lively and readable if unsettling book: "Courtroom Cowboy: The Life of [Philly lawyer] Jim Beasley" [on Amazon]
  • "Drug companies say there are bogus Digitek suits" [WV Record, more, Wajert/Mass Tort Defense]
  • EEOC suit: AT&T violates age-bias law by not rehiring early-retirement-takers [Schwartz, ABA Journal]
  • Oklahoma lawprof Patricia Hatamyar, evidently no enthusiast of litigation reform, takes a look at filings in that state [Mass Tort Lit]
  • We seem to be going pretty strong at five-years-plus: "The Life Expectancy of a Legal Blog" [Beck & Herrmann & followup]

Democrats plan expansion of OSHA statute

Per The Pump Handle last month, S. 1580 (Reid, D-Nev.) and H.R. 2067 (Woolsey, D-Calif.) would, among other provisions, stiffen employer penalties and extend OSHA's reach to state and local employment.

"Acorn's a Creature of the CRA"

Steven Malanga (Manhattan Institute) reports at Real Clear Markets:

The Acorn scandal, in which amateur journalists posing as a prostitute and a pimp went seeking a mortgage for a house of prostitution and received advice on how to evade the law, is a fitting new chapter in the controversial history of the advocacy group.

Acorn found its way into the mortgage business through the Community Reinvestment Act, the 1977 legislation that community groups have used as a cudgel to force lenders to lower their mortgage underwriting standards in order to make more loans in low-income communities. Often the groups, after making protests under CRA, were then rewarded by banks with contracts to act as mortgage counselors in low-income areas in return for dropping their protests against the banks. In one particularly lucrative deal, 14 major banks eager to put CRA protests behind them in 1993 signed an agreement to have Acorn administer a $55 million, 11-city lending program. It was precisely such agreements that helped turn Acorn from a network of small local groups into a national player. ...

The collapse of the mortgage market has put a major crimp in these endeavors. The proposed Congressional answer? An expansion of the CRA to nonbanking areas, so as get money flowing again to ACORN and its colleagues -- and noncoincidentally, to the urban political machines in which they constitute such a major force.

P.S. Bret Jacobson (PDF) on ACORN's provision of outsourcing services to unions ("strike support" "monthly retainer", etc.); Sol Stern, Forbes.

Chairman Max Baucus (D-MT) of the Senate Finance Committee has just released the highly anticipated "chairman's mark" of health care legislation, the version of a reform bill that stands a prospect of passage.

Here's what it says about tort reform:

Current Law
No provision.
Chairman's Mark
The Chairman's Mark would express the Sense of the Senate that health care reform presents an opportunity to address issues related to medical malpractice and medical liability insurance. The Mark would further express the Sense of the Senate that states should be encouraged to develop and test alternatives to the current civil litigation system as a way of improving patient safety, reducing medical errors, encouraging the efficient resolution of disputes, increasing the availability of prompt and fair resolution of disputes, and improving access to liability insurance, while preserving an individual's right to seek redress in court. The Mark would express the Sense of the Senate that Congress should consider establishing a state demonstration program to evaluate alternatives to the current civil litigation system.

It is further the sense of the Senate that should hell freeze over...

Around the web, September 16

  • Interesting: whistleblower suit by lawyer against big personal injury firm raises questions over handling of fen-phen settlement [NJLJ]
  • "Summers v. Earth Island Institute Reiterates Actual Injury Requirement for Citizen Suit Standing" [Kevin Haroff/WLF, PDF]
  • L.A. port dispute with independent truckers: is it union favoritism dressed up in green? [Carter at ShopFloor]
  • High-profile lawprof Stephen Gillers joins Legal Ethics Forum blog [Andrew Perlman there]
  • "Mandatory National Reporting of Medical Errors?" [McDermott bill; TortsProf]
  • Pursuing product liability claim against Chinese manufacturer can be, let's say, an uphill battle [FT]

Expansion of class actions in the UK

An advocate of the idea complains that the British business community is "united in opposition". [Times Online]

Mark Mix of the National Right to Work Committee exposed them the other day in the WSJ [via Coyote]

The U.S. Senate on Thursday, Sept. 10, confirmed Harvard Law professor, prolific author and friend of President Obama, Cass Sunstein, to be administrator of the Office of Information and Regulatory Affairs. The vote was 57-40 (roll call here).

Fox TV host Glenn Beck had made Sunstein a target a la Van Jones, citing his writings on animal rights and the Second Amendment, and the Twitterverse was active inveighing against the nominee. Republican Senators cited similar concerns and found Sunstein "outside the mainstream." However, as noted by Sen. Susan Collins (R-ME) on the Senate floor (statements), Sunstein was supported by the U.S. Chamber of Comerce, the American Farm Bureau and the National Association of Manufacturers (my employers). Sunstein is a respected legal scholar and author, an expert in regulatory policy and an advocate of cost-benefit analysis. That's a far cry from the left-wing radicalism of Van Jones.

The media (and I) missed another factor that contributed to GOP Senators' opposition to Sunstein's nomination, that is, resentment of his role in politicizing and polarizing the judicial confirmation process. In 2001, Sunstein and Lawrence Tribe spoke to a Senate Democratic retreat where they argued the case for aggressively resisting President Bush's judicial nominees on the basis of political philosophy. Writing in The Wall Street Journal, Robert Bork decried the "Blue-Slip Blackmail":

The New York Times reported that one attendee said of the panel: "They said it was important for the Senate to change the ground rules and there was no obligation to confirm someone just because they are scholarly or erudite." Political correctness is apparently the new standard to which nominees are to be held.

The panelists themselves are well to the left on constitutional matters. Mr. Sunstein, for example, published in the New York Times the preposterous argument that President Clinton "chose centrists like Justices Ruth Bader Ginsburg and Stephen Breyer" for the Supreme Court. Centrists they may be on mundane legal topics but when it comes to major cultural issues, they are two of a four-justice adamantine liberal bloc.

Mr. Sunstein went on to say: "We are now in the midst of a remarkable period of right-wing judicial activism. The Supreme Court has moderates but no liberals."

Paul Gigot also mentioned Sunstein's role in Gigot's June 29, 2001, Potomac Watch column on Senator Schumer's machinations, "Ground Chuck. And here's Sunstein's New York Times column from April 26, 2001, "Tilting the Scales Rightward.

You can appreciate the argument that must have crossed the minds of some of Sunstein's Senate opponents, even though the OIRA post is not a judgeship: "You've helped poison the confirmation process. Well, we're going to hold you to the standard you yourself promoted: There's no obligation to confirm someone just because they're scholarly or erudite."

Around the web, September 15

The lunchtime program is Thursday Oct. 1 and includes Walter Dellinger III, Cleta Mitchell, Orin Kerr, Nicholas Quinn Rosenkranz, and Gene Schaerr, with Robert Barnes moderating. Registration is here.

The American Association for Justice has just sent out a mass e-mail soliciting funds from its membership above and beyond the usual dues. The subject line: "We Need You to Fight and Protect Patients!" The message is also online:

Dear AAJ Members:
AAJ is working hard to protect patients by fighting against tort reform, and we need all of our members enlisted in this battle in order to ensure a victory. The stakes are high and the opposition is well organized, but we will succeed because we are on the right side of this issue.

I want you to read the Dow Jones Newswire article at the bottom of this email. It illustrates fully what we are up against. This is not a fire drill.

Our Communications Department has been extremely successful in getting our message to the media. You will be encouraged to see the attached press clips that we have earned.

How you can help:
Make a Contribution
A contribution to the Protecting Patients Rights Campaign is an investment in your practice and in your clients' future. All the money raised for this campaign will go directly towards educating lawmakers about the dangers of medical malpractice reform, and towards debunking the myths spewed by the other side. We can win, but we need your help today to make a difference in this fight. We need your help today to make a difference in this fight. Please make a contribution via the attached form.
Write to Congress and Encourage Clients to do the Same
Visit: http://www.peopleoverprofits.org/nomedmal


Goodness knows this is standard operating procedure for a trade association, using a hot topic to supplement its income (although we've never seen it before coming from the AAJ). To anybody other than its membership, it would be a tough sell: Send lawyers your money so we can sue doctors! In any case, AAJ thought a euphemistic campaign title was called for.

If you click through to the contribution form, you'll see that the donations are not tax deductible; asking for non-tax deductible contributions for "educating lawmakers" equals "lobbying." The AAJ must think the issue has legs. Or, their allies in Congress have asked for help to fight back against the rising public demand for tort reform.

Or perhaps President Obama's mention of tort reform in his health care speech just presented a good opportunity. Money is fungible, you know.

Several hearings of note on Capital Hill this week.

  • Thursday, September 15, Senate Judiciary Committee, Subcommittee on Crime and Drugs, "Evaluating S. 1551: The Liability for Aiding and Abetting Securities Violations Act of 2009." S. 1551 is Sen. Arlen Specter's bill to amend the SEC Act of 1934 subject to liability in a private civil action any person that knowingly or recklessly provides substantial assistance to another person (aids and abets) in violation of that act. The Senator's goal is to restore the ability to sue third parties in securities fraud lawsuits as freely as you could before the U.S. Supreme Court's ruling in Stoneridge v. Scientific Atlanta (Supreme Court docket). Scheduled witnesses are John C. Coffee, Columbia University School of Law; Patrick J Szymanski, General Counsel, Change to Win (a group of labor unions); Tanya Solov, Director, Illinois Securities Department, of behalf of the North American Securities Administrators Association; Robert J. Giuffra, Jr., a partner in Sullivan & Cromwell LLP, NYC; and Adam C. Pritchard, University of Michigan Law School.

Setbacks for California foreign policy

Courts have dealt two more blows to the California legislature's longstanding effort to pursue its own foreign policy on reparations issues. An appeals court agreed, as the L.A. Times summarizes matters, that "California officials overstepped their authority when they passed the state's Holocaust art-restitution law, because they intruded on what is strictly a federal government prerogative to shape policies on war and foreign affairs." And a Ninth Circuit panel ruled unconstitutional, as an interference with U.S. foreign policy, a California law that had been used to leverage large settlements against life insurers over the deaths of Armenians in the Ottoman Empire between 1915 and 1923. The panel ruled 2-1 that the state lacked the power to define the slaughters as "genocide", a word the U.S. government has refrained from applying. [National Law Journal] Earlier the state enacted a law at the behest of Sen. Tom Hayden that unsuccessfully aimed at opening up lawsuits against Japan over mistreatment of American POWs in World War II, a stance not approved of by the U.S. State Department.

If these rebukes keep up, perhaps California will be so miffed that it will recall its ambassadors from Washington, D.C. Or perhaps the trial lawyers who often figure prominently in the Sacramento lobbying for such bills will at length turn their ingenuity to less blatantly unconstitutional schemes.

"There's a Pennoyer in My Foyer"

Civil Procedure as retold by Dr. Seuss [Elizabeth Chamblee Burch, forthcoming Green Bag, SSRN via Mass Tort Lit]

Around the web, September 13

All-blog edition:

  • Branded forever as the "screwdriver surgeon", here's his side of the story [Kevin MD]
  • Thoughts on assumption of risk and a waterpark tushy-bone fall [Turkewitz]
  • Tennessee statute entitled Drug Dealer's Liability Act "yet another arrow in the trial lawyer's quiver" [Day]
  • Shareholder class actions increasingly piggyback on Foreign Corrupt Practices Act (FCPA) enforcement [Kevin LaCroix, D&O Diary] And here's a new blog devoted to the law, FCPA Professor;
  • Age-bias suit against University of Iowa by applicant for lawprof position [Lipshaw, Legal Profession Blog, Secunda, Workplace Prof]
  • Maryland high court quotes David Bernstein on scientific evidence in dismissing vaccine/autism suit [Volokh]

National Journal blogger's poll on med-mal

Some interestingly cross-cutting results, summarized by National Journal as "Would Tort Reform Make Pill Easier To Swallow? Right-Leaning Bloggers Say They'd Support A Health Care Bill That Included It; Some Left-Leaners Would Hold Their Nose For It." The results, though, may have been influenced by wording that was susceptible to multiple interpretations. I added this comment, raising a sub-issue that I think might make a good topic for bipartisan discussions:

My pet proposal? Work on out-of-court dispute resolution methods for the sizable share of medical care the federal government already provides. Alas, Congress is headed in the other direction, as with its interest in opening up med-mal suits by active-duty personnel against military doctors.

More: David Kopel, Volokh. (cross-posted from Overlawyered).

Game theory and med-mal settlements

From Point of Law contributors Ted Frank (Center for Class Action Fairness) & Marie Gryphon (Manhattan Institute), "Negotiating in the Shadow of 'Bad Faith' Refusal to Settle: A Game Theory Model of Medical Malpractice Pre-Trial Settlements and Insurance Limits" on SSRN. Abstract:

Recent empirical studies of Texas data by Hyman et al, Zeiler et al, and Silver et al suggest that insurance limits affect settlements of medical malpractice cases. Writing separately, Silver argues that insurance limits act as a de facto cap on malpractice payouts, that plaintiffs are being underpaid as a result, and that therefore legislative caps on damages are unnecessary. But this hypothesis is inconsistent with the data, which indicates that forty-seven percent of cases in which plaintiffs obtain verdicts above policy limits are subsequently settled above policy limits. The analysis of data in the Hyman, Zeiler and Silver papers does not give a complete account of the effects that third-party causes of action for alleged bad-faith refusal to settle - known in Texas as a Stowers action - have on pretrial settlement negotiations. If an insurer in Texas is presented with a settlement offer within insurance limits, refuses to settle, and the plaintiff wins an award greater than insurance limits, the plaintiff is entitled to sue the insurer for the full damages amount, plus punitive damages, for refusal to settle. In this paper, we explore the game theory of medical malpractice settlement negotiations in the shadow of Stowers.

Using a Monte Carlo simulation of the "game," we find: (1) plaintiffs have an incentive to make, and defendants have an incentive to accept, settlement offers at insurance limits; (2) a settlement at insurance limits may therefore sometimes reflect something other than the quality of the underlying medical malpractice case; (3) the possibility of Stowers awards increases expected returns to plaintiffs and disproportionately increases the settlement value of low-merit cases; (4) plaintiffs with weak cases are systematically overcompensated, while plaintiffs with strong cases are systematically under compensated; and (5) non-economics damages caps have the greatest effect on low-merit cases by reducing overcompensation, without affecting the highest-merit cases.

The lawsuit concerns the gasoline additive originally added in response to government regulatory pressure and later found to contaminate water tables. The trial before Judge Shira Scheindlin could result in a large verdict against the oil company, whose rivals settled out earlier [Bloomberg, Public Nuisance Wire] Our earlier coverage of MTBE litigation is here, here, here, here, etc.

Around the web, September 11

"Obama's Medical-Malpractice Opportunity"

"In his speech tonight, the president shouldn't forget tort reform." (John Avlon of the Manhattan Institute, City Journal).

P.S. Maybe he was listening. In his speech tonight, Obama made a non-trivial gesture toward critics' views on the subject, acknowledging that defensive medicine drives up costs and "prompting an eruption of applause from Republicans at Wednesday's joint session of Congress." [UPI]. From the same article:

"I know that the (George W.) Bush administration considered authorizing demonstration projects in individual states to test these issues," Obama said. "It's a good idea, and I am directing my Secretary of Health and Human Services (Kathleen Sebelius) to move forward on this initiative."

On the politics of the gesture, see Jake Tapper/ABC, news-side WSJ.

Some reactions: Dr. Wes notices language recycled from the med-mal plan championed earlier by then-Sen. Obama and Sen. Hillary Clinton (D-N.Y.) My reaction? I think trying a bunch of demonstration projects to see how they work is actually one of the better reform ideas at the federal level, but obviously a great deal depends on how the demonstration projects are picked and designed. Projects might be selected from a list of ideas pre-vetted for acceptability to the litigation lobby, or at worst might even be designed to fail. I agree with Ron Miller: when it comes to actual policy, "Let's just say President Obama is keeping his options open." (bumped Thurs. a.m.)

And more: okay, maybe I gave the President too much credit above on having acknowledged the costs of defensive medicine: his exact wording was "defensive medicine may be contributing to unnecessary costs" (emphasis added). Ramesh Ponnuru: "A demonstration project for med-mal reform -- don't we already have one, called Texas?" Carter Wood notes that demonstration projects on med-mal reform have been shot down by Congressional Democrats in recent years. Dan Pero calls the gesture an "olive twig".

Reforming labor law: while we're at it

Since we're rethinking labor law, asks James Sherk, why not rethink more of it? Such as the case for letting unionized companies pay individual employees higher wages than union contracts allow.

Maybe so: "Justices work to keep improperly filed cases out of Jefferson County venue," runs the headline in the Southeast Texas Record.

The most law-related ones, it turns out.

Around the web, September 9

  • Steven Shavell and Mitchell Polinsky, "The Uneasy Case for Product Liability" [SSRN via TortsProf]
  • Distinguished alum now at odds with Gerry Spence's Trial Lawyer College [Norm Pattis, Greenfield]
  • Victory for sound policy: City of Milwaukee drops its public nuisance product liability case against Sherwin-Williams over lead paint residues [Genova]
  • Could the newly constituted NLRB order employers to recognize unions formed by card check even if the idea fails to pass Congress? [Mark Schoeff Jr., Workforce Management via ShopFloor; latest on measure]
  • Now before Supreme Court: Graham County v. United States ex rel. Wilson case might help rein in qui tam "whistleblower" actions that piggyback on official reports and investigations [amicus brief, PDF, and more from WLF, plaintiff's view from Labovick]
  • "Ten Things I Hate About Health Care Reform" [cardiologist/administrator Arthur M. Feldman, Washington Post via Althouse; #2 is the omission of you-know-what]

Reports Tresa Baldas at the NLJ. Groups sympathetic to expanded employment litigation recently sponsored a study, uncritically received in places like the New York Times, which purported to find a crisis of wage underpayment. More: ABA Journal (Department of Labor hiring 250 additional investigators to look for violations).

Welcoming blogger S. Todd Brown

We are delighted to announce that Buffalo Law School professor S. Todd Brown, who has been guestblogging for Point of Law in recent weeks, has agreed to stay on as a continuing contributor. As we noted in introducing him, he's practiced at such leading law firms as Jones Day and Wilmer Cutler Pickering Hale and Dorr, and his writings have often focused on the intersection of bankruptcy and mass torts, a subject of perennial interest to us here. He's also profiled in a recent issue of the UB Law Forum.

Failures of Bridgeport civic governance

They help explain why a once-popular resort island in Long Island Sound now lies vacant.

Via Mass Tort Lit, Art Hinshaw (Arizona State) and Jess Alberts have posted on SSRN a new working paper, "Doing the Right Thing: An Empirical Study of Attorney Negotiation Ethics". Abstract:

The code of ethical conduct for lawyers -- the American Bar Association's Model Rules of Professional Conduct (the "Model Rules") -- legitimizes a certain amount of dissembling and misdirection in the negotiation realm, only prohibiting legal negotiators from making fraudulent misrepresentations about material matters. To determine if attorneys are meeting this low standard, the authors surveyed practicing lawyers and asked them if they would agree to engage in a fraudulent pre-litigation settlement scheme if a client requested them to do so. Nearly one-third of the respondents indicated they would agree to the client's overtures, and only half indicated that they would refuse the client's overtures, thereby following the Model Rules. Follow-up questioning suggested several reasons for these results: there appears to be substantial misunderstanding as to what constitutes a fraudulent misrepresentation, there seems to be considerable confusion surrounding the rule's operative term "material fact," and it appears that some of the attorneys believe that other legal rules, including other portions of the Model Rules, either gave them permission or required them to engage in the fraudulent negotiation scheme. To rectify these apparent misunderstandings among practicing lawyers, the article offers three interdependent means for improving lawyer negotiation ethics - rule clarification, education, and increased rule enforcement.

Obscure but important stuff from Drug & Device Law, summarizing a new Fifth Circuit/Ford Explorer decision.

"10 Reasons Docs Order Expensive Tests"

Some very familiar, others less so [Chris Rangel via Kevin MD, who adds some thoughts]

Around the web, September 8

  • "Pfizer's $2.3B Fine Was a Huge Pay Day For Whistleblowers" [Business Insider] More: "Phillips & Cohen Behind Lead Pfizer Whistle-Blower" [Susan Beck, AmLaw Daily]
  • Notebook of fabled torts scholar Prosser is online courtesy Berkeley Law archivist William Benemann [Robinette]
  • Unions, trial lawyers top Pennsylvania PAC outlays [Penn. Biz Council]
  • Rosenfield's California lawsuit-lobby group seeks Jerry Brown probe of health insurers' advocacy efforts [ThinkProgress, which approves]
  • Wisconsin: defendants can't recoup cost of unnecessary medical treatments for plaintiff [WLJ]
  • ABA Journal is taking nominations for its annual best-of "Blawg 100" list [hint, nudge]

A Seattle Times editorial finds it disturbing that the court was so closely split, 5 to 4, on whether to greatly widen the "concerted activities" statutory exception to employment at will. Justices "Susan Owens, Tom Chambers, Debra Stephens and Mary Fairhurst, who sided with the complaining managers, would have made a mess of the labor law of Washington." [Briggs et al v. Nova Services opinion, PDF]

In a single editorial today, "Occupational hazard," The Washington Times provides the most powerful point-by-point argument we've seen against the confirmation of David Michaels to be assistant secretary of labor for the Occupational Safety and Health Administration, i.e., the OSHA administrator.

President Obama has made a mantra, even a fetish, of his determination to "restore science to its rightful place." It appears that he means junk science rather than the real thing. The president's nominee to head the Occupational Health and Safety Administration (OSHA), a virulently anti-business epidemiologist named David Michaels, is one the nation's foremost proponents of allowing junk science to be used in jackpot-justice lawsuits.

The editorial focuses on Michaels' attack against the 1993 Supreme Court ruling in Daubert v. Merrell Dow Pharmaceuticals Inc, which now permits trial judges to hold hearings to weigh the merit of expert testimony. As the Times writes, "This way, a trial can be protected from being polluted by hired guns who may look and sound impressive enough to sway a jury that has no particular scientific expertise but who actually are peddling bogus theories or trumped-up evidence."

Michaels devotes a chapter of his anti-business book, "Doubt is Their Product," to attacking Daubert, and has elsewhere published papers on the topic.

The editorial notes the many other reasons to oppose Michaels' nomination, including topics covered earlier at Point of Law ("Certitude is his Product") including the activism of the outfit he heads, the Project on Scientific Knowledge and Public Policy at George Washington University (SKAPP), founded with cash thrown off by the silicone breast implant settlement and still serving the purposes of litigation industry.

The editorial also quotes Walter for his observations at Overlawyered.com about Michaels' view that guns represent a public health issue. Second Amendment groups have certainly taken notice of Michaels' nomination, and you can expect their allies in the Senate to do so as well.

Around the web, September 7

New York and tri-state area edition:

  • New Jersey gets favorable ruling in suit demanding natural resource damages from ExxonMobil [NJLJ] "Ford Settles New Jersey Toxic Tort Case" [Mass Tort Lit, NorthJersey.com]
  • Million dollar broken elbow verdicts not so unusual in NYC [Hochfelder]
  • Discrimination complaints up nationwide, but down in Connecticut [Schwartz]
  • Calamitous crash on Taconic spurs a rush to legislate [Greenfield]
  • "A huge number of the physicians I know in New York are part of a two-income couple", and not by chance [Derbyshire, NRO]
  • Hey, don't break them: New York State Trial Lawyers Association (NYSTLA) faces $250 fine over violation of state's lobbyist ethics rules [Albany Times Union]

The Manhattan Institute discussion earlier this summer with former Attorney General Dick Thornburgh and Home Depot co-founder Ken Langone is now online at Chief Executive, whose own J.P. Donlon served as moderator. More: Jane Genova.

Howard Dean unleashed a flood of commentary critical of the litigation industry when, at Rep. Jim Moran's town hall, he explained that Congress had left any tort reform provisions out of health care legislation because members did not want to take on politically powerful trial lawyers. (Overlawyered round-up here.)

The American Association for Justice has finally, belatedly, fought back by issuing what the AAJ terms "an analysis of scholarly research" but which appears to be a repackaging of existing materials arguing against medical liability limits. There is also commentary from the group's new president, Anthony Tarricone: "Patients' rights aren't bargaining chips. Considering 98,000 people die every year from medical errors, health care reform should first do no harm. The legal rights of injured patients simply can't be bargained away."

Limits on non-economic damages do not bargain away anyone's rights. They conceivably limit the trial lawyers' payday, however.

The AAJ posted the materials on its website on Friday under the headline, "Patients' Rights Aren't Bargaining Chips." (Friday? The Friday before Labor Day? Couldn't their PR people wait until 4 p.m. Christmas Eve?) The release also served as a media advisory, announcing a press briefing via teleconference on Wednesday at 1 p.m.

The only way the AAJ's briefing will be newsy is if President Obama announces his new acceptance of med-mal reform in that evening's speech to Congress. Maybe AAJ knows that policy shift is in the offing, in which case the briefing makes some sense. But if the President skips over tort reform, then he proves Howard Dean's point, doesn't he?

Tiger Joyce of ATRA sounds the alarm in the Metropolitan Corporate Counsel, as part of a roundup on legislative proposals being advanced by plaintiff's lawyers around the fifty states:

Arguably the most onerous of several such bills are A. 8646 and S. 5768, companion bills still pending in respective Assembly and Senate committees at press time. The legislation would create a new private right of action under the state's securities law known as the Martin Act. Currently, only the state attorney general can bring lawsuits against mutual funds and other such financial entities for acts of negligence. This mind-boggling proposal would increase the statute of limitations to six years from the date of discovery but would not require plaintiffs to show "reliance" on the defendants' conduct.

The bill has been introduced by Assemblyman Richard Brodsky of Westchester County. Earlier on the notoriously broad Martin Act here and here.

Notice pleadings, the AAJ takes notice

The American Association for Justice schedules a teleseminar, "Iqbal/Twombly: The Death of Notice Pleading?"

On September 17 AAJ will hold an exclusive teleseminar on Iqbal/Twombly: The Death of Notice Pleading? This teleseminar will feature J. Douglas Richards who argued the case before the US Supreme Court on behalf of the plaintiffs-respondents and John Vail of the Center for Constitutional Litigation, P.C. which submitted an amicus brief on behalf of the American Association for Justice in support of the respondents.

Last year Richards published a piece in a St. Johns University symposium, "Three Limitations of Twombly: Antitrust Conspiracy Inferences in a Context of Historical Monopoly." And the AAJ's amicus brief in Iqbal is here.

UPDATE (Sunday): The agenda for the seminar is now posted online here.

Doing away with industrial banks

Is Congress sure it wants to go down this path? [Funnell]

Black, Hyman and Silver on early offers

SSRN via TortsProf: the team of Bernard Black (Texas), David Hyman (Illinois), & Charles Silver (Texas) use Texas data to "simulate" the effects of the sort of plan long championed by Virginia's Jeffrey O'Connell. They predict:

An early offer program will (i) sharply reduce payouts in cases with small economic damages; (ii) will not materially affect predicted payouts in other cases; (iii) will have very different effects on different types of plaintiffs, with large payout reductions for elderly and deceased plaintiffs and much smaller effects for newborns and employed adult plaintiffs; and (iv) will overlap substantially in its effects with statutory caps on non-economic damages, and hence have a smaller effect in states with these caps.

Funny how a group's bare-knuckled efforts to restrict the liberty of the rest of us will take a toll on its public image. [Gallup] P.S. As Carter notes, the union's role in the Detroit automaker debacle, and its status as chief beneficiary of the resulting bailout, didn't help either.

Around the web, September 4

  • New direction for New York high court under Kaye's successor? [NYLJ]
  • EEOC's new ADA suit against UPS could leave protracted-leave employees in limbo land indefinitely [Michael Fox, Employer's Lawyer]
  • Implications of Wisconsin high court lead paint decision for pharmaceutical liability [Beck & Herrmann]
  • Gov. Rick Perry "insists that Texas' success 'is a broader story than just tort reform.'" [WSJ interview]
  • "Buy American" rules strain U.S.-Canada trade relations [Carter at ShopFloor]
  • "Poll: Californians Want Lawsuit Reform" [Cal Civil Justice]

Herewith a very interesting Kansas City Star report on Enterprise Rent-a-Car's decision to save $11.5 Million by ordering Chevrolet Impalas without the side airbags that come standard with the car for retail sales.

Of course other cars come without side air bags. But as the head of a safety research company told the Star, ""I've never seen a standard safety feature removed from a vehicle. That's what's so unique about this. I've been doing this work for 17 years and, until now, had yet to see this happen."

Enterprise sold some such cars, and that was foolish, as the article indicates. They will buy those cars back. But what about the current rental fleet? Let's pray that no one is killed in a side-impact collision while driving a rented Chevy Impala. And here's some free legal advice to Enterprise: make sure you get a signed release from everyone who rents an Impala stating that they know their rental car lacks this particular piece of standard safety equipment.

A West Virginia judge has announced his intent to dismiss the case filed by CSX against a radiologist over faulty x-ray readings. [WV Record, more]

Around the web, September 3

International human rights law edition:

  • $21 million Maine verdict against Cuba stirs blogger interest [Legal Blog Watch]
  • Things you probably didn't know about extraterritoriality, from Wikipedia article on it [Tyler Cowen]. Spain backing away from its rules allowing prosecutions of foreign government officials [Posner, Volokh]
  • "Convergence" theories: "Is globalization of constitutional law inevitable?" [Eric Posner on Mark Tushnet] Eric Engle, "The Globalization of Tort Law" [Mass Tort Lit]
  • Appeals court sweepingly rebuffs lawsuit seeking to blame Coca-Cola for murders in Colombia [American Lawyer] DaimlerChrysler wins 9th Circuit appeal on charges of human rights violations in 1970s-80s Argentina [The Recorder]
  • Has incursion of international human rights law into domestic context "stalled in recent years"? [ABA panel]
  • Claim: critics' inability to block Harold Koh nomination is "sovereigntism's last stand" [Peter Spiro, Opinio Juris; Eric Posner, Volokh]

Campaign to undermine MICRA, part CLXXXVI

California plaintiff's lawyers are again seeking to enlist the state bar as an ally in chipping away at the law limiting malpractice payouts. [Gordon Ownby, Cal. Civil Justice]

Louisiana's state-run property insurer

Buck-passing on the bayou: A Katrina class action lawsuit against the state-run Louisiana Citizens Property Insurance Corp. could wind up inflicting a $95 million liability on ratepayers of privately owned property insurers, and the state's insurance commissioner favors legislation to shield the entity from the payout.

Around the web, September 2

At the Michigan Supreme Court

A tilt toward more plaintiff success is already in evidence following the liberal takeover of that court, notes Dan Pero at American Courthouse.

Against insider trading on Capitol Hill

Professor Bainbridge proposes the "Stop Trading on Congressional Knowledge Act".

Suits seeking to pin blame for birth defect "clusters" on environmental pollution have mostly fared poorly in this country, given the typically weak nature of the epidemiological and causation evidence and the hurdles posed by Daubert and other gatekeeping methods. Courts in the United Kingdom, however, have now decided to let one such potentially major case go forward. "The High Court ruled that Corby Borough Council's reclamation of a former steelworks was capable of leading to some or all of the birth defects displayed in 16 of the 18 children. The ruling could open the way to compensation claims." [Times Online, BBC, Telegraph]

Gale Scott, Crain's: "One proposal -- not yet in the form of a bill -- would limit the number of suits by tightening New York's lawyer-friendly 'comparative negligence' rules to match those of most other states." The idea would be to bar suits in cases where physicians' negligence was a less important cause of the injury than the negligence of others. According to figures supplied by lawyer/insurance executive Eric Poe, New York had the nation's second-highest rate of malpractice claims at 23 per 1,000 physicians in 2003, following only Florida at 28 per 1,000. (via Andy Barovick).

Around the web, September 1

  • Former Senator Bill Bradley proposes an Obamacare compromise: "Tax Reform's Lesson for Health Care Reform" [NY Times]. One critic gloats/scoffs that Republicans aren't serious about malpractice reform except as an opposition issue since they didn't try it when in office [Jonathan Zasloff, SameFacts] And I have a link roundup at Overlawyered on the subject.
  • Bahind the bankruptcy-claims capitulation, political brute force: "Chrysler yielded to pressure from consumer groups that aggressively lobbied for a law requiring warning stickers on used Chrysler vehicles, an effort which would have reduced the value of the vehicles." [Day]
  • Penn lawprof Tom Baker, whose policy views tend toward the opposite of those espoused here, has some good insights on shortcomings of insurance company data as a way of assessing litigation trends [SSRN via Mass Tort Prof]
  • Imagine that, injured parties seeking damages: "Civil Rights Defendants Going After Attorney Fees" [The Recorder]
  • Trial lawyers' political activism in California has been bad news for that state's economy [John Sullivan (CJAC), SF Chronicle]
  • "Securities Class Actions to Come to India?" [Karlsgodt]



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.