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March 2010 Archives

One Nation Under Arrest

Yesterday, the Heritage Foundation released an edited volume, One Nation Under Arrest: How Crazy Laws, Rogue Prosecutors, and Activist Judges Threaten Your Liberty.

Contibutors include the Cato Institute's Tim Lynch and former U.S. Attorneys General Ed Meese and Dick Thornburgh.

Also included is a chapter I wrote, on recent trends in New York criminal law. Topics I cover include the multiplication of regulatory criminal offenses, changes to the Rockefeller drug laws, the sweeping Martin Act, and the policing innovations that cut crime in New York City.

It's set for May 20 and 21 in Arlington, Va., outside Washington. Details here (via Hartley)

Now there'll be a federal requirement that employers provide lactation breaks [Ohio Employer's Law, Connecticut Employment Law] And new whistleblower and retaliation provisions in other areas [Zuckerman, Today's Employment] A bunch more, too [Fox]

Around the web, March 31

  • Sotomayor writes first dissent in 7-2 SCOTUS ruling slightly restricting False Claims suits, health care reform bill is going to restore the more liberal standard anyway [AP, BLT]
  • Cosmic rays? "NASA to investigate cause of Toyota problems" [WaPo, Detroit Free Press, L.A. Times]
  • Rejecting Easterbrook view, SCOTUS unanimously adopts Second Circuit/Posner view on standard for challenging mutual fund fees [Jones v. Harris; WSJ Law Blog, Ribstein, NLJ, earlier here, here, etc.]
  • AstraZeneca wins a big Seroquel case [Abnormal Use]
  • Hungarian Holocaust reparations suits continue in Chicago, this time the target is banks [ChicagoNow]
  • Even if you agree law school clinics need more oversight, heavy-handed Maryland effort is likely to backfire [Legal Ethics Blog, Maryland Reporter, Marler Clark Food Safety News, ABA Journal]

Since the American Association for Justice is patting itself on the back for beating back tort reform in the health care bill, even to the extent of neutering state demonstration projects, it seems only fair to highlight the final language in the bill.

We couldn't find it. But the reliable folks at the Kaiser Family Foundation have an excellent side-by-side comparison of the provisions in the Senate, House and final version of the health care legislation, a 40-page .pdf document available here.

The final tort reform provisions summarized:

Medical malpractice * Award five-year demonstration grants to states to develop, implement, and evaluate alternatives to current tort litigations. Preference will be given to states that have developed alternatives in consultation with relevant stakeholders and that have proposals that are likely to enhance patient safety by reducing medical errors and adverse events and are likely to improve access to liability insurance. (Funding appropriated for five years beginning in fiscal year 2011)

We've uploaded that single page here.

Criticism continued to pour out today in response to President Obama's recess appointments to the National Labor Relations Board, and the National Right to Work Legal Foundation announced it was filing motions demanding that former SEIU and AFL-CIO counsel Craig Becker recuse himself from 12 cases involving the foundation.

But other than Becker, and to a lesser extent the appointment of Buffalo labor lawyer Mark Pearce to the NLRB, the recess appointments provoked relatively little protest. Appointing a USTR negotiator in Geneva who had been blocked by Sen. Jim Bunning (R-KY) over Canadian tobacco policies would not be expected to cause a political firestorm.

President Obama also declined to make recess appointments of a few real hot-button nominees, the hottest of which is probably Dawn Johnsen to head the Office of Legal Counsel at the Department of Justice. There are also several prominent, much-opposed judicial nominees -- Louis Butler of Wisconsin, Edward Chen of California -- who were voted out of the Senate Judiciary Committee but whose nominations have not come to the floor. Recess appointments of judicial nominees are relatively infrequent because, unlike a lifetime appointment if confirmed, they can only serve until the end of the next session of Congress, which in this case would be the end of 2011.

The Congressional Research Service issued a report on recess appointments to the federal judiciary in September 2001 after President Clinton used his appointment power to place Roger L. Gregory on the Fourth Circuit. CRS concluded

The Environmental Protection Agency is handing out grants to researchers to search for disease clusters and other data correlations between pollution and adverse health outcomes, but, warns Ken Green, its methods seem likely to generate lots of false positives.

Orange County versus Toyota, cont'd

Lucy Dunn of the Orange County Business Council doesn't have high marks for county D.A. Tony Rackauckas's suit against the Japanese automaker [Fox and Hounds]:

Mr. Rackauckas says the lawsuit was motivated by questioning if Toyota "puts profits over people." Interesting choice of words for a DA who seeks monetary damages from a company through a contingency fee agreement with a private law firm. Is this to fill his own diminished department coffers in a very tough economy? Determining whether or not Toyota "used deceptive business practices" should not be the responsibility of a county, nor the DA, nor is it good public policy in the trend by government agencies to use private contingency fee lawyers to go after business. And please share with us, Mr. D.A: exactly what is your financial arrangement with the private law firm you hired to go after Toyota?

Incidentally, as we've noted before, Mark Robinson, whose firm Rackauckas hired, is the same lawyer who tossed a rather magnificent $1 million donation to help launch UC Irvine's new "public interest oriented" law school, and sat on its dean search committee.

"U.S. Supreme Court justices appeared hostile on Monday toward so-called "foreign-cubed" securities fraud class actions in which the plaintiffs and stock issuers are foreign and the alleged fraud took place on foreign soil." [Tony Mauro, NLJ; Roger Alford, Opinio Juris; Business Week] Austen Parrish at Prawfsblawg links a number of academic articles on the extraterritorial application of federal law (& see update and followup), while Kirk Hartley has some big picture observations. Earlier on "f-cubed" securities actions here, here, here, and here, and on extraterritoriality, of both the international and interstate kind, here. More: Hannah Buxbaum, The Conglomerate.

President Obama on Saturday announced his intention to make 15 recess appointments, including two Democratic lawyers to serve on the National Labor Relations Board: Mark Pearce, a Buffalo, N.Y., labor lawyer, and Craig Becker, a law professor and SEIU and AFL-CIO counsel. Becker had drawn vehement opposition from business groups, not just for his union affiliations -- he becomes the first NLRB member to have actually been a union employee -- but for his writings* that argued employers have no legal standing when unions attempt to organize a workplace. (We've been covering the nominations for months in posts at Shopfloor.org, the blog of the National Association of Manufacturers.)

Two former NLRB members today predicted serious consequences of the Becker and Pearce appointments, which makes the NLRB's current make-up four Democrats to one Republican. Peter Kirsanow, a Cleveland attorney who served on the NLRB from 2006-2007, commented at National Review Online's The Corner:

[The] Board could adopt rules recognizing minority unions, implement "quickie" elections, grant unions greater access to employees for organizational purposes, restrict employer options during union campaigns and elections, recast supervisors' roles during election campaigns, leverage neutrality/card-check agreements by overturning certain Bush Board decisions, and increase the use of mail-ballot elections.

John Raudabaugh, a board member from 1990-93, issued an analysis from his law firm, Nixon Peabody, arguing that, among other steps, a "reenergized, partisan" NLRB might shorten the time span for representation elections and reverse a series of major decisions, which he lists. Also:

Additional targets. "Quickie" elections in less than the traditional 42 days from the filing of an election petition; limitations on employer speech; liberal findings to justify re-run elections, bargaining orders, special damages, and full back-pay awards; liberal interpretations of information requests to "facilitate" bargaining; and upending the common-law of contract interpretation to require bargaining and/or prevent unilateral management implementation of anything not clearly and unmistakably waived by the union by express contract language in the applicable collective agreement.

Inside Higher Ed also reports that a newly active board could reverse a 2004 decision that held Brown University graduate students could not unionize. Unions like SEIU would love another opportunity to unionize grad student teaching assistants.

* University of Minnesota Law Review, 1993, "Democracy in the Workplace: Union Representation Elections and Federal Labor Law." (Via FrumForum)

President Obama's signing of the health care legislation into law has liberated the trial lawyers lobby to take credit for all the reforms it blocked. In a March 26 message to members of the American Association for Justice, AAJ President Anthony Tarricone takes a victory lap, hailing the AAJ's strategy of recasting (misrepresenting, in our view) medical liability reform as an attack on patient safety.

Tarricone states: "I am very pleased to report that the health care bill is clear of any provisions that would limit an injured patient's rights concerning medical negligence claims. While there is a provision for demonstration projects, it provides an absolute opt-out clause for plaintiffs at any time. While some states may embark on demonstration programs we find objectionable, the opt-out provision for plaintiffs minimizes this concern."

President Obama claimed the demonstration projects showed his willingness to compromise with Republicans on tort reform. But since the projects never really contemplated a serious attempt to fix liability laws, it was always an empty claim.

Tarricone lists the AAJ's victories, calling them "highlights of AAJ's efforts and the obstacles we overcame":

  • In the House, AAJ defeated tort reform amendments that were offered in all three committees that amended the original bill.

  • As the House voted on the health care bill in October, AAJ defeated the GOP's malpractice cap "motion to recommit," the only opportunity they had to kill the entire bill. Former AAJ Board Member, Rep. Bruce Braley, deserves special recognition for speaking in opposition to the motion amidst a vitriolic attack against trial lawyers.

  • In the Senate, 28 tort reform amendments were defeated in the two committees that marked up the bill.

  • On the Senate floor, AAJ decisively defeated a cap on attorney's fees by a bipartisan 32-66 vote. Many of you spent the weekend emailing and calling your members of Congress.

  • AAJ unveiled one of its largest media campaigns ever - 98000Reasons.org - to educate the public and lawmakers about the 98,000 deaths that occur every year from preventable medical errors.

  • In addition to print, radio and online advertising, AAJ bought all the billboard space in the Union Station subway for the month of December, specifically targeting Senate staffers who use that station for their daily commute.

  • AAJ staff, officers, and members did hundreds of interviews and letters to the editor submissions, reaching print and broadcast outlets nationwide. Thousands of messages were sent to members of Congress through AAJ's grassroots portal.

For all that activity, the lobbying and PR campaign by the trial lawyers received relatively little news coverage.

Nor does his knee disability keep him away from the golf links, reports the Post.

Pennsylvania provides more convenient and accessible data than most states. The patterns are familiar, though: the great majority of cases are settled, dismissed or otherwise resolved short of trial; defendants usually win at trial, but awards are often high when they lose. [Harrisburg Patriot-News via Robinette, TortsProf]

As part of a charity effort for the Connecticut bar foundation, Daniel Schwartz has invited Twitter users to summarize a single Supreme Court case of their choice in a single Tweet, that is, in 140 characters or less. Some of the more amusing results:

@gideonstrumpet Gideon v. Wainwright: helping poor people get convicted WITH the assistance of counsel since 1963.

@GoldnI Brown v. Board of Ed: "Hey Eisenhower, just kidding about the conservative thing. Love, Earl Warren."

@conlawgeek Gonzales v. Raich: "Dude, but I have a valid prescription for... uh... medical... uh... what were we talking about?"

@Popehat Lawrence v. Texas: "....not that there's anything wrong with that."

@ThirdTierAmie Buck v. Bell: You're dumb, your mama's dumb, even your mama's mama is dumb! Three generations of imbeciles are enough!

@AdamBonin Pleasant Grove City v Summum: Put up your wacky religious monument in your own damn park, freaks.

@david_m_wagner Wickard v. Filburn: Wheat. Wheat. The Constitution's dead, they're talkin' about wheat.

@coolasmcqueen U.S. v. Nixon: We have the privilege of informing you that you ARE a crook

My own contribution:

@walterolson Bates v. State Bar of Ariz.: OK guys, go ahead and advertise for clients. Might boost our traffic down the road.

Around the web, March 28

  • Faster regulation, more fines, authority to pursue "aiders and abetters": "Streamlined Rulemaking for the FTC's Consumer Protection Mission?" [Consumer Law and Policy]
  • Mounting opposition to Goodwin Liu nomination spurs talk that ideology shouldn't matter so much in confirmations, but would Liu himself agree? [Adler at Volokh]
  • A milestone in Florida: "McCollum's Legislation Preventing Pay-To-Play Politics Heads To Governor For Signature" [Capital Soup; earlier here, here, and here]
  • "Big money in El Paso runoff: Trial lawyers and tort reform interests pick sides" [El Paso Inc., Texas]
  • Litigation funding outfit has a focus on Silicon Valley [Hartley]
  • Labor-green alliance to squeeze out small truckers from serving ports? [Carter at ShopFloor]

Legislation under consideration in Baton Rouge would reintroduce punitive damages, expand litigation alleging unequal pay and raise limits on medical malpractice awards. On the other hand, a trio of bills introduced by other lawmakers would attempt to rein in abuses in asbestos and silica litigation, addressing forum-shopping problems and requiring plaintiffs to disclose more information that could shed light on duplicative or baseless claims. [The Hayride]

Martin Redish on cy pres awards

From a December Searle Center conference: the Northwestern law professor gives a presentation on his recent paper, "Cy Pres Relief and the Pathologies of the Modern Class Action: A Normative and Empirical Analysis." It turns out that cy pres treatment of class action proceeds (donating surplus funds to what the lawyers or others nominate as worthy causes) is a much newer practice than one might have assumed. It also, Redish argues, undemocratically transforms the nature of the underlying cause of action from one of compensation for injury to one in the nature of a socially imposed but privately prosecuted fine, with ill consequences.

For the impatient, the substance begins at 2:30, and the most concentrated statement of Redish's thesis around 9:00. We've covered the cy pres controversy extensively in the past.

The Washington Post's Style section today profiles the White House counsel, Bob Bauer, in one of those flattering stories reporters do early in an important official's tenure. Bauer's predecessor, Greg Craig, resigned in January after losing the President's confidence.

The piece by Anne E. Kornblut, "Is this the counsel Obama keeps?" does impart some useful information along with the "thoughtful" with a "mischievous sense of humor" source greasing. For one thing, Jan Baran of Wiley Rein LLP is a long-time friend of Bauer, and given Baran's support for the First Amendment, that's a mark in Bauer's favor. (Just a gut reaction.) Then there's Bauer's White House team:

To replace deputy counsel Cassandra Butts, an Obama loyalist who left around the same time as Craig (after a similarly rocky tenure), Bauer brought in three new lawyers: Kathy Ruemmler, an experienced litigator who prosecuted the Enron case and was most recently at the Justice Department; Kate Andrias, a former associate at Perkins Coie; and Don Verrilli, a former appellate attorney at the Justice Department. In particular, the "Kate-Kathy team," as colleagues refer to it, is structured to keep Bauer from getting overwhelmed by the day-to-day flood of requests.

Best part of the story? This line:

"He's more granular in terms of his involvement," one senior Obama adviser said, when asked for a comparison with Craig.

Look for the line in White House memoirs to come: "I remember when Bob's granularness really saved us."

Most large firms do some sort of contract business with the federal government, which means they might want to brace for possible new executive orders and regulations in lieu of labor law reform, as well as stepped-up affirmative action requirements administered through the Office of Federal Contract Compliance Programs [OFCCP]. Related, on new agency leadership, here.

Payouts are back on the upswing as the plaintiff's bar successfully adjusts to legal and institutional changes. [Reuters, Business Insurance, D & O Diary]

Around the web, March 26

  • Nail in tire didn't matter: jury says Cooper should pay $28 million in tread separation minivan rollover [Bloomberg, Iowa]
  • Law review symposium consisting exclusively of Iqbal/Twombly critics isn't exactly diverse [Beck et al, more]
  • Employers' hiring incentive in new jobs bill is "absurdly game-able" says one employer [Coyote]
  • "Time to Rethink What's a Crime" [Marc Levin, Texas Public Policy Foundation, PDF]
  • Appeals court overturns $3.5 M award against Queens apartment building owner over gang attack on tenant [Hochfelder]
  • Ninth Circuit nominee Goodwin Liu likes at least the rhetoric of slavery reparations, though it's less clear what he thinks of the actual litigation [Verum Serum and followup via Whelan, NRO]

The asbestos-causation hall pass

In the Brooklyn Law Review, Jane Stapleton (law, Australian National University and University of Texas) observes that U.S. courts have created special rules excusing asbestos claimants from expected requirements of proof of causation, using separate approaches for asbestosis and for cancer claims. These approaches facilitate suit against multiple defendants, and would have a potentially "explosive" effect were they to be applied in toxic-exposure contexts beyond asbestos. Abstract from SSRN (via TortsProf):

For decades the volume of asbestos claims has been a unique and mesmerizing phenomenon. This historic wave of civil claims would never have been possible had U.S. common law courts not adopted two radical dispensations from orthodox rules for the proof of causation, tantamount to causal fictions, that enabled asbestos plaintiffs to establish against each defendant factual causation to the plaintiffs' entire physical condition for which the defendant would, therefore, be jointly and severally liable. Yet these proof-of-causation doctrines have gone virtually unremarked by courts and the academy. What are these radical proof-of-causation doctrines? Why were they adopted? Why have they yet to face rigorous academic analysis? Why was the Products Liability Restatement silent about them? What might we learn from this apparently profound failure of the restatement process?

Prof. (formerly Judge) Mike McConnell, a longtime Point of Law favorite, suggests they're either pre-empted or unnecessary. [NPR]

"Buy globally, sue locally"

Blogger Russell Jackson and Skadden co-author Adam Tubbs examine the recent New Jersey Supreme Court decision aggressively asserting jurisdiction over product manufacturers outside the state. Earlier here, etc.

Roger Clegg explains why he's not keen on the idea [Minding the Campus]

Richard Blumenthal on plant closings

Free to depart? Not in Connecticut: the state's AG has waged an aggressive legal battle against one of the state's largest employers, Pratt & Whitney, over its plans to move jobs to Singapore, Japan and other parts of the United States. No doubt there are votes to be gained in the short term by making the state a business mousetrap, but you do wonder whether employers will think twice about selecting the state as a location for a major new facility in the future. [AvStop]

Around the web, March 24

  • By 4-3 margin Connecticut Supreme Court finds state's constitution guarantees all children "suitable" education, finance decrees to follow [CLT]
  • Welcome Mark Steyn readers (he linked to Rick Esenberg's post on health care and the constitution);
  • Comer v. Murphy Oil: "Suing our way to a carbon-free world" [David Freddoso, Examiner]
  • Dellinger: after Stevens retirement, seniority wrinkle might tip Justice Kennedy to side more often with liberal bloc [WSJ Law Blog]
  • Gender wage gap can be fully explained, yet advocates claim critical need for Paycheck Fairness Act [Mark Perry]
  • Critics say proposed compromise in Florida legislature wouldn't really restore reliable parental waivers of liability over kids' recreation [Orlando Sentinel] Trial lawyers playing defense on several other issues in Tallahassee including slip/fall suits, AG's use of outside counsel [Sentinel, Miami Herald, AP]

Washington State Attorney General Rob McKenna announced yesterday that he would join in a multi-state (eleven and counting) suit by States challenging the recently passed health care bill on constitutional grounds arguing that the law's requirement that everyone purchase health insurance is an unconstitutional expansion of the federal government's authority in violation of the 10th Amendment and the Commerce Clause. McKenna argues that the U.S. Attorney General is unlikely to raise any of these constitutional infirmities and that that job of raising these constitutional questions thus falls to the states. His announcement triggered Washington State Governor Christine Gregoire to announce that she would launch her own legal challenge arguing that the state attorney general does not represent the state in making such claims. McKenna responded that he is a separately elected constitutional officer under the state constitution.

Those of us with long memories may recall that way back when, when the state AG's, with then-Washington state AG Gregoire in the forefront, decided to bring a multi-state lawsuit against the tobacco industry, a similar state constitutional stand-off in Mississippi led to its Republican governor suing Mississippi's Democratic AG Michael Moore arguing that the Chief Executive of the State had to authorize any such suit both as a matter of state constitutional law and the requirements of the applicable federal law.

Both the passage of the legislation and the suits contemplated by the eleven states prompted this careful press release by Connecticut Attorney General and current U.S. Senate candidate Richard Blumenthal, who praised the historic legislation, but carefully noted that "most of the federal health care legislative provisions will not take effect for several years, providing time to review and improve the law, if necessary." Blumenthal, with his finger in the wind, deftly added, "I have received no official request from an authorized state official to challenge federal health care legislation -- but we will review such a request if we receive it."

Both Republican supporters of such state suits and Democratic opponents thereof are likely to stumble over their own past positions, with Democrats hard pressed to say that these eleven states have no business regulating national policy matters, and the Republicans facing claims that they are now a bunch of activist state AGs overstepping their powers. And did Gregoire or Blumenthal ever take the position that they required permission from the governor to bring the host of state AG regulation through litigation actions for which they have received such public notoriety and press acclaim?

The health care bill, and challenges thereto, is likely to engender both state and federal constitutional lawsuits that could tie up the courts and enrich countless attorneys for years. If there is one lesson to be learned from this, it is that any legislation that promises to drag such litigious mischief in its wake, is usually a bad idea to begin with.

The Georgia Supreme Court yesterday in Atlanta Oculoplastic Surgery v. Nestlehutt struck down as unconstitutional Georgia's statutory limitation on non-economic damages in medical malpractice actions.

Georgia had adopted a cap of $350,000 on non-economic damages in medical malpractice cases as part of its 2005 tort reform statute. (Prior post). The cap (codified at O.C.G.A. 51-13-1) caps non-economic damages at $350,000 in any action for medical malpractice, including an action for wrongful death.

The Georgia Supreme Court upheld the ruling of the trial court, that the statute was unconstitutional in light of Georgia's constitutional provision that "[t]he right to a trial by jury shall remain inviolate." (Ga. Const. of 1983, Art. I., Sec. 1, Par XI(a)).

The Court's opinion, which was unanimous, looked to prior Georgia cases intepreting Georgia's unique "right to trial" provision, finding that they prohibited statutory limitations on the right to trial in cases where the common law had permitted a plaintiff to have a trial. Citing Blackstone and other ancient authorities, the Court found that a cause of action for medical malpractice was well-established prior to the adoption of Georgia's Constitution and was, therefore, a right that could not be limited by statute.

In a later post I plan to contrast the reasoning behind this opinion with the Court's decision on loser-pays just last week.

It comes with an interactive map confirming in mouseover format the low regard in which surveyed corporate counsel hold the legal systems of West Virginia, Louisiana, Mississippi, Alabama, and California, to name the bottom five (press kit, press release). The Chamber has also launched an ad campaign. It's getting a fair bit of coverage in the states deemed worst, especially California (Jan Norman/Orange County Register, Sacramento Bee, Civil Justice Association of California) and Louisiana (Times-Picayune, Baton Rouge Advocate), as well as a bit of crowing in the states that did best (Newark, Del. Post). Notes the Times-Picayune: "This year's survey is the Chamber's eighth ranking of the states' lawsuit climates since 2002. Louisiana has never been ranked above 47." Besides Delaware, the rest of the top ten states included North Dakota, Nebraska, Indiana, Iowa, Virginia, Utah, Colorado, Massachusetts, and South Dakota. National Law Journal:

While Illinois barely missed the bottom five, coming in at number 45 out of 50, it did earn its own dubious honor: Cook County, home to the city of Chicago, was voted the city or county with the least reasonable litigation environment, earning nods from 14 percent of survey participants. It was trailed by Los Angeles, which was mentioned by 12 percent of respondents.

New York came in at #23 in the survey, Connecticut at #24, and New Jersey at a distinctly unimpressive #32. More: Daniel Fisher/Forbes, Tampa Tribune, Variety.

Prior to Sunday's vote on health care reform, Nancy Pelosi said that we were "at the door step of history." Mark Steyn counseled caution, reminding us that, on Christmas Eve, we were at the "garden gate of history" but then Scott Brown was elected and "we backed down the front drive of history reversing over the neighbor's dog of history."

I am fairly certain that ObamaCare won't work as advertised, but is it susceptible to constitutional challenge? To continue the Speaker's hackneyed metaphor, are we to have anything other than a quick look around the foyer of history?

In Sunday's Washington Post, Randy Barnett outlined some of the issues surrounding the constitutionality of ObamaCare. I am particularly interested in the status of the individual mandate. It is a standard bit of high school civics that Congress possesses only enumerated powers as opposed to the plenary authority of most state legislatures. The reality is a bit more complicated as courts, over the past seventy-five years have found these enumerated powers to be remarkably protean.

But, as Professor Barnett points out, the individual mandate may test the limits of Congressional power. Take the power to regulate interstate commerce. The commerce power has certainly become capacious. Even lawyers whose last exposure to Constitutional Law was in law school are vaguely familiar with the ways in which the commerce power had been used to reach activity bearing, at best, a weak family resemblance to the transaction of business across state lines. Most recently, in Gonzales v. Raich, the Court held that Congress can prohibit persons from growing and consuming marijuana at home because of its posited impact on interstate traffic in weed.

Still, the individual mandate may be different. Professor Barnett writes that "[w]hile Congress has used its taxing power to fund Social Security and Medicare, never before has it used its commerce power to mandate that an individual person engage in an economic transaction with a private company." It's one thing to be subject to regulation because you are providing for yourself what you would otherwise buy in an interstate market. It's quite another thing to argue that, because your refusal to consume a product may affect interstate commerce (if the young and healthy do not insure, the old and sick will have to pay more), you can be made to buy it.

Some scholars and lawyers prefer to emphasize Congress' authority to tax and spend to promote the general welfare. Jack Balkin, for example, thinks that this makes the case for the constitutionality of the individual mandate "easy." For Professor Balkin, there is no need to construct Rube Goldberg-like scenarios of commercial impact. "The government can make you pay taxes," he says. Because the failure to insure will result in a tax (as opposed, I guess, to a stint in Leavenworth), there is nothing to see here.

Perhaps not. There is certainly case law that, while not mandating that conclusion, provides some substantial support. But it ought not to be that easy. The power to tax is, the power to destroy. While taxes may have a regulatory purpose, there should be some limitation on the ability of Congress to accomplish by taxation is there truly no limitation on Congress' ability to coerce through taxation what it cannot do through regulation? Should Congress really be able to take, as is the case here, up to two percent of a person's income because she has failed to do what Congress cannot compel her to do? Does a fine become permissible as long as it is connected through the Internal Revenue Service?

Without getting into the doctrinal ins and outs, this should not - and might not be -as easy as my old law review colleague believes it to be. There may yet be room to argue that Congress' enumerated powers impose some limit on its power to tax, particularly when the tax is imposed in an effort to coerce certain behavior or to penalize a failure to act. Were I to wager on the question (which may turn out to be an exercise in reading the mind of Anthony Kennedy), I would expect the Court to uphold the individual mandate. But the day that it does will be a tragic one for the Republic.

The reason will not be the survival of ObamaCare. It is, I think, a poorly conceived proposal that will do more harm than good. As written, it seems likely to fail and, if not abandoned, may well lead to a single payer system. But we have survived worse.

It will be tragic because the notion of a Congress limited by the scope of its enumerated powers will have finally suffered the coup de grace. The Bill of Rights (once famously - and now ironically - thought to be unnecessary given the structural limits on the power of the national government) will become the only limitation on the power of Congress. If Congress can require you to buy health insurance because of the ways in which your uncovered existence effects interstate commerce or because it can tax you in an effort to force you to do anything old thing it wants you to, it is hard to see what - save some other constitutional restriction - it cannot require you to do - or prohibit you from doing.

I appreciate that many people - including most of my colleagues in the legal academy - see nothing wrong with this. There are, to be sure, still political constraints on Congress. Even if Congress can ration trips to McDonalds, it won't.

The extent to which you are comfortable with this may turn on the extent to which you are comfortable with the centralization of authority and, in a world in which Congressional enactments are increasingly delegations of authority to bureaucrats, your confidence in the capacity of experts to "get it right."

I am not very comfortable. I am not very confident.

And I don't think I am alone. As the popular response to ObamaCare demonstrates, there is a strong tradition - both in public sentiment and (I think still in constitutional theory)- of structural limitations on federal authority.
Our nation still seems to cling to our longstanding notions regarding the limitation of federal power. Given the Founders rather clear intent on the matter, would it really be surprising to see this theory of the Constitution surface in new ways? Is it is possible that the ongoing transmogrification of Article I may lead to a doctrinal response? If courts can no longer hold Congress to a set of enumerated powers, will they seek to restrain federal authority in other ways? Might we see more rigorous judicial scrutiny of what serves the "general welfare" or what is "necessary and proper."

Sounds like Lochner? There is, after all, nothing new under the sun. It is not what I would want, but could it be what we get?

Cross posted at PrawfsBlawg, Shark and Shephed and the Marquette University Law School Faculty Blog

Former Justice Sandra Day O'Connor isn't the only one speaking out:

Justice Ruth Bader Ginsburg said [Mar. 11] that she believes states should give up the practice of electing judges.

"If there's a reform I would make, it would be that," Ginsburg said during a question-and-answer session of the National Association of Women Judges, which is meeting in Washington.

My take is here.

Michael Krauss on punitive damages

In PENNumbra, the online supplement to the Penn Law Review, regular Point of Law contributor Michael Krauss has written a response to an article by Dan Merkel laying out a "retributive" theory of punitive damages. It's entitled "'Retributive Damages' and the Death of Private Ordering." (PDF) More: Scheuerman, TortsProf.

Around the web, March 22

Food and drug edition:

Defusing Citizens United hysteria

Todd Henderson takes on critics of the free-speech decision:

...does the fact that the conduct permitted by Citizens United was legal in 26 states prior to Citizens United, suggest that politicians are hopelessly corrupt in over half our states? What about the fact that prior to the case, companies, unions, and advocacy groups and other agglomerations of individual interests that chose the corporate form could do exactly what Citizens United allows them to do if the speech was funneled through "separate segregated funds," commonly known as Political Action Committees?...

Let me reframe the Court's holding: the government may not ban political documentaries in the 60 days before an election. This is the end of democracy? ... The Solicitor General admitted during oral argument that the logical extreme of the law would allow the government to ban book publishers, who happen to have chosen to organize their economic affairs as corporations, from publishing political books before elections. Yes, you read that right.

[U. Chicago Law School Faculty Blog via John Samples, Cato at Liberty]

NY comptroller candidate interviewed

Ira Stoll at Future of Capitalism talks with GOP hopeful Harry Wilson, who says, with reference to the pay-for-play scandals that have hit New York and other states, that he "would not be an active litigator" on the securities front.

Before the Blair House confab on health care and then in a March 3 letter to members of Congress, President Obama made much of his acceptance of Republican ideas on health care reform, such as medical liability reform. The President's "compromise" was to express a willingness to support a $50 million appropriation for state demonstration projects on patient safety and medical liability, language contained as an authorization in the Senate bill.

The Congressional Budget Office on Thursday issued its analysis of the $940 billion House reconciliation package, H.R. 4872, Reconciliation Act of 2010. The charts cover estimated direct effects on spending and revenues.

On page 18 there is an indeed a reference to "State Demonstration Programs: Alternatives to Litigation." Total revenue and spending effects over the 10 years of the bill: $0.

Neither is there any reference to medical liability in the House bill text nor the supplemental materials.

(See below for the additional materials supplied the House majority leader.)

The Civil Justice Association of California is out with updated details on its adversaries' political contributions, which topped $4 million in California's '07-'08 political cycle.

Curt Cutting at Cal Punitives analyzes a Texas worker-toxic-exposure case.

Around the web, March 19

Comparative law edition:

Pro-liability-limits American Justice Partnership has an interactive feature allowing readers to assign good/bad ratings to some state lawmakers who've taken a high profile on litigation reform. Results at the moment are looking a bit Mississippi- and Georgia-centric.

Yes, EVIL.

Rep. John Dingell (D-MI) appeared on the MSNBC politics program, The Dylan Rattigan Show, on Wednesday to discuss the health care legislation. Dingell remains in favor of a single-payer system.

Toward the end of the interview, Rattigan asked Dingell to comment on how the public now views Congress. The Congressman used the question to condemn the Supreme Court's decision in Citizens United v. FEC in the most vehement terms we've heard. He also claimed that the decision would allow Iranian government-owned corporations and Chinese arms merchants to contribute to U.S. campaigns. Excerpt:

DINGELL: Is there too much money in politics? Absolutely. Did the recent action of the Supreme Court allowing corporate contribution to campaign, campaigns, was that a good thing? Absolutely not. It was an abomination.

And it means that, for example, that the Iranian Guard-controlled corporations can now contribute to American campaigns. It means that Norinco, the Chinese arms manufacturer, can contribute to American campaigns. And there's altogether too much money in campaigns. They go along too long. And the only way that we have been able to address this so far has been to impose basic limitations on the amount that could be expended, and to see to it that we had publicly financed campaigns for the presidency.

In addition to this, we tried to see to it that we had revelations and openness with regard to who it is who contributes and how the money is spent.

But clearly, as you agree, I think, this is an inadequate situation and it's going to be made more difficult in view of the very evil decision that has been brought forth by the Supreme Court recently.

The discussion starts about six minutes into the segment, available on video here.

Ron Miller at Maryland Injury has some observations on jurors and insurance.

Around the web, March 18

  • Illinois toxics case: court turns thumbs down on medical monitoring class action [Russell Jackson]
  • Californians may hope for class action reform, but lawyers with clout in Sacramento have other ideas [Cal Labor, Karlsgodt]
  • Court dodges Twombly/Iqbal in pain pump case [Beck et al] Edward Hartnett compromise proposal on Iqbal/Twombly [Wasserman, Prawfs]
  • $5 million pain and suffering award set aside in suit against NYC housing authority [Hochfelder] $105 million NYC hospital award will result in $5 million recoverable damages [same]
  • "Corporate penalties and the SEC" [D&O Diary]
  • Lawyers swarm Toyota and scramble for position in resulting litigation [Bronstad, NLJ, AP; WSJ Law Blog] And here come the public-private lawyering partnerships: Orange County, California D.A. Tony Rackauckas hires Newport Beach's Robinson Calcagnie [Reuters, NLJ]

The enforceability of the offer of judgment rule in Georgia is now established as the Georgia Supreme Court in Smith v. Baptiste made it clear in its ruling on Monday that the 2005 offer of judgment rule was permitted under Georgia's Constitution. (Prior post).

To paraphrase Grateful Dead front man Jerry Garcia, however, "what a long, strange trip it was."

Discovery and tobacco historians

Historians (of all groups) shouldn't act as if they were born yesterday when it emerges that high-stakes litigation is contentious and tends to leave no stone unturned. Right? Bill Childs reviews a cover story at The Nation.

From Tyler Cowen, who knows a thing or two about Haiti.

More: Mike Koehler at FCPA Professor defends the law. Relatedly at FCPA Blog; and earlier on Andy Spalding arguments.

It's notoriously difficult to draw any sharp line distinguishing the strictly lawyerly activities of Washington, D.C.law firms from their lobbying and public-advocacy activities; thus the marshaling of arguments into persuasive documentary form might fall into any of the three categories depending on the identity of a document's intended recipient. Which raises a paradox, since, as Josh Gerstein notes as Politico, the emerging wisdom is that a lawyer's choice of legal clients must never, ever (well, hardly ever) be grounds for later reproach on entering government service, while the same lawyer's choice of lobbying clients confers a taint as ineradicable as Lady Macbeth's.

Put differently, Washington law firms have a great deal going: because their internal workings are necessarily somewhat opaque, their participants can inevitably engage in (and reap the high rewards of) some non-courtroom advocacy efforts on behalf of unpopular well-heeled clients without having to pay the public price of ostracism as lobbyists. The greater the disjunction between the treatment of lawyers and lobbyists, the greater the opportunities for this sort of arbitrage, and the more prosperous we can expect D.C. law firms to grow. I wonder whether this is mere coincidence. (& welcome Legal Blog Watch readers).

In a twin blow to trial lawyers yesterday the Georgia Supreme Court upheld two provisions of the state's 2005 tort reform statute. (Prior post.)

In Smith v. Baptiste the court upheld an offer of judgment rule (codified at O.C.G.A. 9-11-68) that allows a defendant in a tort case to 'shift' its attorneys fees to the plaintiff if the plaintiff refuses to accept an offer of settlement and ultimately fails to recover more than the amount offered. (Prior post on Georgia offer of judgment rule). The offer of judgment rule was adopted as part of Georgia's comprehensive tort reform legislation in 2005.

In Gliemmo v. Cousineau the court upheld the Georgia statute's limitation of liability for emergency room doctors which limits liability only to claims resulting from "gross negligence."

Groups affiliated with trial lawyers had attacked both elements of the tort reform statute on constitutional grounds. I hope to supplement this post with a longer analysis of the offer of judgment rule case shortly.

Our editor Walter Olson and I each had pieces that ran yesterday on National Review Online. Each of our columns helped shed light on the shenanigans of the plaintiffs' bar.

Walter's column unpacks the "Great Toyota Panic of 2010." Building upon the excellent investigations done by Ted Frank and Megan McArdle, Walter notes that, somehow, "those unseen and undetectable gremlins that hide in Toyota's electronic throttle controls" have it in for elderly drivers. And, Walter explains, we've been here before:

By far the most famous episode of sudden-acceleration panic is the 1986 Audi episode, which took years to fizzle out: Regulators in the United States, Japan, and Canada pronounced that they could find no explanation for the accidents other than "pedal misapplication" or, more bluntly, driver error. . . .
Why doesn't the mainstream press -- okay, in particular the networks and liberal newspapers -- do a better job of covering these issues? One reason is that -- this is unchanged since the 1970s -- both are willing to take their lead on coverage from the same trial-lawyer-linked consumer groups that help Henry Waxman to orchestrate his hearings. Indeed, some of the very same figures who pushed Audi's supposed guilt 25 years ago, such as Clarence Ditlow of the Ralph Nader-founded Center for Auto Safety, have been showcased both in the press and on Capitol Hill in recent weeks, usually with scant mention of their long records of inaccurate pro-litigation advocacy.

In a separate column, I continue to look at lawyers' influence over Washington politics, a theme I've been hitting on since we released our Trial Lawyers, Inc.: K Street report last month. This time, I place particular focus on Senate Majority Leader Harry Reid (D-Nev.):

Four of Reid's seven largest campaign donors are law firms, and these aren't corporate-law firms helping to structure the financials for Las Vegas casinos but rather out-of-state plaintiffs' firms, including asbestos firms in New York, Maryland, and Illinois, as well as a toxic-tort firm in California.

The South Carolina Supreme Court has overturned a whopping $18 million verdict ina wrongful death suit resulting from the rollover of a Ford Explorer. The SUV overturned shortly after the driver engaged cruise control.

An electrical engineer had testified as an exper that electromagnetic radiation had interfered with the cruise-control system and caused the SUV to accelerate. But the Court found that the witness didn't know enough about Ford Explorers or their cruise control systems to be qualified to testify as an expert.

"He had no experience in the automobile industry, never studied a cruise-control system, and never designed any component of a cruise-control system," South Carolina Chief Justice Jean Toal wrote. Apparently the witness conceded that he had never even operated a vehicle with a cruise-control system, or published any articles on the subject.

Here's the Yahoo Finance report.

9/11 Worker-Dust Settlement

I had a column in Saturday's New York Post, which looked at the contours of the settlement agreement reached between New York City and the 9/11-cleanup workers allegedly injured by dust. The proposed settlement suggests that the City hopes to avoid the fate that has befallen defendants who agreed to other mass-tort settlements (including those reached with lead 9/11 attorneys at Napoli Bern). But that doesn't mean the lawyers don't make out handsomely:

Of the $600 million or so to be distributed under the settlement agreement, more than a third will go to the plaintiffs' counsel, assuming they've negotiated standard contingent-fee contracts -- and Judge Hellerstein approves. The city has already paid over $200 million to its lawyers. Nine years after the terrorist attacks, the victims stand to get less than half of what they've "won."

(Note that Judge Hellerstein has signaled that he plans to scrutinize lawyers' fee agreements very closely.)

For my previous discussion of this case, see here and here.

Kathleen Seidel has details of another advance for vaccine sanity.

Authorities on everything

Some expert witnesses that get hired in liability cases remind Beck & Co. of the shtick of comic "Professor" Irwin Corey [Drug & Device Law]

Garden State reformer Marcus Rayner warns that the New Jersey Supreme Court has gone out on a pro-plaintiff limb -- too far out for Justices Roberto Rivera-Soto and Helen Hoens, who each filed a dissenting opinion. Earlier here.

Jane M. McFetridge, managing partner of Jackson Lewis LLP's Chicago office, testified at the Senate Committee on Health, Education, Labor, and Pensions hearing, "A Fair Share for All: Pay Equity in the New American Workplace." She was the only one of six witnesses to represent business' point of view. From her prepared statement:

The Paycheck Fairness Act would preclude employers from making market-based pay determinations, encourage frivolous litigation, and expose companies to financial ruin by way of uncapped punitive damages and massive class action litigation. Rather than eliminating discrimination, the legislation, if passed, would provide a windfall to attorneys who litigate employment discrimination cases, but result in no meaningful change in the extant wage differential. Furthermore, the Paycheck Fairness Act would levy enormous cost on companies and employers already reeling from the worst economic crisis we have seen in most of our lives.

We were also impressed by the presentation from Jan Baran, senior partner and head of the Election Law and Government Ethics group at Wiley Rein LLP. Baran testified at the hearing by the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises, "Corporate Governance after Citizens United."

In his prepared statement, Baran made it clear that attempts to limit speech by corporations (including nominally foreign corporations) of by trade associations would run afoul of the requirement that speech be treated equally, no matter the entity. Baran also submitted an article he had written summarizing the Citizens United ruling, "Citizens United v. FEC: Independent Political Advertising by Corporations in Support of or in Opposition to Candidates May Not Be Prohibited."

Back at the desk

I'm back after a few days spent in Washington, D.C. Thanks to Carter for posting the March 10 and March 12 roundups for me in my absence; the March 11 edition, with all the other excellent posting, was his alone.

President Obama on Wednesday nominated Rhode Island's most prominent trial lawyer and a generous campaign contributor, John J. "Jack" McConnell, to be a U.S. District Court judge. McConnell is the managing partner at Motley Rice (bio) and was one of primary figures behind the tobacco lawsuits of the 1990s.

McConnell also joined then Rhode Island Attorney General Sheldon Whitehouse in dreaming up the public nuisance suit against paint manufacturers. In 2008, the state Supreme Court overturned the 2006 verdict against Sherwin-Williams Co., NL Industries Inc. and Millennium Holdings, but not before cities and states produced a wave of copycat lawsuits seeking to twist traditional public nuisance law into a new, all-encompassing brand of product liability law.

Whitehouse, now a U.S. Senator, and his Democratic colleague Jack Reed recommended McConnell for the judgeship in April 2009. (News release.) As the Wall Street Journal editorialized at the time:

Mr. McConnell and his firm helped pioneer the practice of soliciting public officials to bring lawsuits in which the private lawyers are paid a percentage of any judgment or settlement. The law firms front the costs of litigation and are compensated if the suit is successful. But such contingency-fee arrangements inevitably raise questions of pay to play. And private lawyers with state power and a financial stake in the outcome of a case can't be counted on to act in the interest of justice alone.

So, yes, McConnell is a transformative political figure, which is not what one normally asks for in a trial judge.

Around the web, March 12

[compiled: W.O., posted: C.W.]

From Illinois Central Railroad, a news release:

A federal jury in Natchez, Mississippi, on March 8, 2010, found that Mississippi plaintiffs' attorneys William Guy and Thomas Brock committed fraud and breached the duty of good faith and fair dealing in asbestos claims they filed against Illinois Central Railroad. The plaintiffs' lawyers filed lawsuits on behalf of two individuals who had already received compensation for asbestos-related injuries in a previous lawsuit.

The jury awarded Illinois Central full repayment of the $210,000 the company had paid on the claim as well as $210,000 in punitive damages. The clients, also sued but held not liable in trial, testified that the two lawyers knew of their previous claims.

Mark Behrens of Shook, Hardy & Bacon tells us the case is significant because this is the first time a jury has found that as asbestos plaintiffs' lawyers committed fraud.

"Illinois Central is pleased that a Mississippi federal jury held these plaintiffs' lawyers liable for fraud in asbestos claims against us," said Karen Phillips, Vice President of Public and Government Affairs for Illinois Central. "Our company will continue to aggressively pursue all suspected fraud or litigation abuses."

El pueblo unido

AP reports on the latest Forbes listing of the world's wealthiest: "MEXICO CITY -- Mexican telecom tycoon Carlos Slim is the first man from a developing nation to become the world's richest person -- a shift that underlines the loosening of America and Europe's stranglehold on the top spots in the billionaires' club."

In the wake of Citizens United v. FEC, Sen. Charles Schumer (D-NY) and Rep. Chris Van Hollen outlined legislation to ban spending on federal campaigns by corporations if they had foreign ownership of 20 percent.

Thank goodness Carlos Slim owns only 6 percent of The New York Times. If he ever increases his stake to 20 percent, and the Democrats' legislation passed, the Times would be prohibited from writing editorials endorsing federal candidates.

The need to limit excessive speech by the corporate media will no doubt be addressed by the House Financial Services Committee at its hearing today, "Corporate Governance after Citizens United." As of 8 a.m. this morning, some of the prepared statements are already online.

Around the web, March 11

  • Hans von Spakovsky, Heritage Foundation's The Foundry blog, "The Latest Worthless Medical Malpractice 'Reforms'," reporting on a proposed amendment by Rep. Henry Cuellar (D-TX) supposedly intended to make state grants for medical liability projects a little more legitimate. "The bottom line is that so far in this extended debate over healthcare, there is absolutely nothing substantive in the president's proposals or the House or Senate bills that would implement any real medical malpractice reforms."
  • South Coast Today (Mass.), "Massachusetts SJC rules 2nd Amendment does not apply to states": "The right to bear arms as defined in the Second Amendment does not apply to the states, so Massachusetts can regulate who can have firearms and how those weapons are to be stored, the state's high court ruled Wednesday." Opinion in Commonwealth v. Runyon.
  • Washington Post, "Setting a Higher Bar at the White House": "President Obama's new social secretary, Julianna Smoot, sets a new bar in bringing powerful connections to the job. Smoot, 42, served as national finance director for Obama's $750 million presidential campaign...Early in her career, Smoot also worked at the American Association of Trial Lawyers (now the American Association for Justice), which ranks as one of the most powerful lobbying groups in Washington." The usual self-styled watchdog groups are upset, but the more interesting question is how was she was ever considered qualified to be chief of staff to U.S. Trade Representative Ron Kirk, her previous administration job.
  • Trial, the monthly magazine of the American Association for Justice, the one article from the March issue, "Pleadings and Discovery," made available online, "In the wake of Iqbal": "Last year, the Supreme Court stirred up the federal pleading waters, declaring that notice pleading is no longer enough. Here's how you can prepare your case to meet the challenging new standard."
  • Washington Examiner, David Freddoso, "America's Lindsay Lohan problem": "This week, Lindsay Lohan filed suit against E-Trade for $100 million because the company's 'talking baby' Super Bowl ad included an infant character named 'Lindsay' (or Lindsey) who is described as a 'Milk-a-holic.'" Really? I heard it as "Linseed" and thought the oil seed industry might have a claim. North Dakota flax growers are outraged.
  • NJBiz,, "Tort reform hopes dashed as Christie focuses on budget": "A Trenton-based tort reform organization hopes unfounded money-hunting lawsuits may be sidelined now that Chris Christie is in the Statehouse, but they admit a budget crisis has for now pushed the issue to the back burner." Unfortunately, that's all you get to read free, but the group cited is the New Jersey Lawsuit Reform Alliance.
  • New Jersey Lawsuit Reform Alliance, homepage news release, "Ninety-three percent of the lawsuits filed against our pharmaceutical companies were from out-of-state litigants, whose cases would never see the light of day in their home jurisdictions," added Marcus Rayner, Executive Director of the New Jersey Lawsuit Reform Alliance (NJLRA). "Instead of being the nation's 'medicine cabinet,' the trial bar is turning New Jersey into the nation's lottery ticket instead."

The Senate Judiciary Committee is now in the middle of a hearing, "We the People? Corporate Spending in American Elections after Citizens United." Chairman Patrick Leahy (D-VT) excoriated the decision, the Supreme Court justices who made it, and corporations that seek to exercise First Amendment rights. From Leahy's prepared statement:

This brand of conservative judicial activism is a threat to the rule of law. It undermined the efforts of Americans' elected representatives in Congress to keep powerful, corporate megaphones from drowning out the voices and interests of individual Americans. Rather than abiding by the limitations that Congress has developed to ensure a multitude of voices in the marketplace of election contests, the narrow majority on the Supreme Court decided that the biggest corporations should be unleashed, and can be the loudest and most dominant.

Sen. Jeff Sessions (R-AL), the ranking Republican, gave a solid opening statement that wondered at the hysterical reaction to the decision, asking for opponents to at least recognize that the decision was "a close call." Sessions also chided President Obama for criticizing the court at the State of the Union address, comments we took to be a reaction to Justice Roberts' remarks in Alabama Tuesday that the court may no longer attend the annual "political pep rally."

The witnesses: Doug Kendall, president of the Constitutional Accountability Center, who argued against corporate "personhood"; George Washington Law professor and legal writer Jeffrey Rosen, who repeated his argument that the ruling represented the kind of activist decision making that Justice Roberts had vowed to eschew; and Bradley Smith, the former FEC Chairman who defended the decision as good jurisprudence that respected the First Amendment.

Smith and Chairman Leahy got into lively back and forth about Smith's comments that people were "freaking out."

On Thursday, the House Financial Services Subcommittee n Capital Markets, Insurance, and Government Sponsored Enterprises will hold a hearing, "Corporate Governance after Citizens United." The witness list is now posted online, and one line of argument will clearly be that corporations must report their political spending to shareholders.

Around the web, March 10

[compiled: W.O., posted: C.W.]

The Senate Health, Education, Labor, and Pensions Committee on Thursday, March 11, holds a hearing, "A Fair Share for All: Pay Equity in the New American Workplace." The hearing marks the re-emergence of the Paycheck Fairness Act in Congress, in this case, S.182, to amend the Fair Labor Standards Act of 1938 (FLSA) known as the Equal Pay Act to increase liability and penalties for gender-based wage discrimination. For example, the bill:

  • Makes employers who violate sex discrimination prohibitions liable in a civil action for either compensatory or (except for the federal government) punitive damages.

  • States that any action brought to enforce the prohibition against sex discrimination may be maintained as a class action in which individuals may be joined as party plaintiffs without their written consent.

  • Authorizes the Secretary of Labor (Secretary) to seek additional compensatory or punitive damages in a sex discrimination action.

The House passed its own version, H.R. 12, along with the Lilly Ledbetter Fair Pay Act on Jan. 9, 2009. The House sponsor, Rep. Rosa DeLauro (D-CT), is the first witness at Thursday's hearing, which also includes testimony from an economist from the Center for American Progress, as well as Deborah Frett, CEO of the Business and Professional Women's Foundation, who contends women are underrepresented in "green jobs." We hope to hear the employers' perspective from Jane McFetridge, the managing partner of Jackson Lewis' Chicago office.

The 2008 presidential and congressional campaigns featured impassioned activism tied to the Ledbetter legislation, and the new push for the Paycheck Fairness Act comes just as that kind of political enthusiasm is needed for the 2010 elections.

Just so long as it doesn't apply to them:

...the NJ State Bar Association today supported legislation that would allow delinquent debtors to sue creditors and debt collectors for "unfair" and "unconscionable" debt collection practices - as long as the creditor is not a lawyer.

Fee shifts in employment lawsuits

Shifts in favor of prevailing plaintiffs are utterly routine, while shifts in favor of prevailing defendants are so difficult to obtain, as Jon Hyman advises his clients, that there's hardly any point trying.

The new Democratic-led 4-3 majority on the Michigan Supreme Court is making its weight felt. More: Ron Miller, who is glad Maryland's court is not as politicized.

The words of longtime Washington Democratic fixture Lanny Davis.

An encyclopedia of litigation

Checking in at the home page of the American Association for Justice -- www.justice.org -- we see a listing of many new updates in the Legal Research and Exchange category, packets of material for trial lawyer members interested in suing a particular target or improving their practice skills. It's quite a list of packets available only to AAJ members, starting with the topical "Toyota Sudden Acceleration" and including:

  • Yaz, Yasmin, and Ocella
  • Sex Discrimination & Sexual Harassment
  • Pharmacy and Pharmacist Liability
  • Wal-Mart Stores, Inc.: Merchandise Cart Collision
  • Defense Medical Examiner: Defusing the Testimony
  • Pressure Sores
  • Voir Dire and Jury Selection
  • HormoneTherapy
  • Failure to Diagnose Breast Cancer
  • Admissibility of Expert Testimony: Daubert, Frye, and Other Standards
  • Electronic Discovery
  • Low Speed Impact Cases
  • Preparing a Motor Vehicle Collision Case
  • Pain Pumps and Chondrolysis

But that's just the start. AAJ publishes a 26-page AAJ Exchange Litigation Packet Catalog -- Over 130 packets, and growing!

Georgia Tort Reform Cases

In 2005 the Georgia legislature passed a sweeping tort reform bill (S.B. 3) which enacted a number of measures intended to reduce the incidence of meritless litigation and to decrease the cost of litigation. The 2005 bill included caps on non-economic damages, increased standards of proof for certain medical malpractice claims, and a loser-pays offer of judgment rule.

Predictably, the trial bar cried foul and several test cases have wound their way through the system and are likely to be decided by the Georgia Supreme Court in the next few weeks or months.

In the interim, however, the Eleventh Circuit has taken the opportunity to wade into the scuffle with an opinion of its own.

In Deen v. Egleston (11th Cir. Feb. 26, 2010) the Eleventh Circuit reversed a ruling by the federal trial court that had struck down an earlier tort reform statute that had limited the time period for medical malpractice plaintiffs to file to only two years. (Opinion; Background from Fulton County Daily Report (subscription required)).

Sheldon Silver profiled

The Assembly Speaker, now routinely hailed as the most powerful man in New York government, is described as flexible on every topic but one, liability reform. Fred Siegel of the Manhattan Institute: "Shelly the trial lawyer and Shelly the speaker are the same person. Trial lawyers always make their money not by expanding the pie, but by extraction. He's not interested in reform." Silver does take exception when an interviewer refers to New York's chief justice, who has rapidly been steering the court in a pro-plaintiff direction, as: "Your appointee to the Court of Appeals, your friend Jonathan Lippman." [Orthodox paper Vos Iz Neias?]

The horror of swaps

More arrows aimed at the Times's Gretchen Morgenson, this time over her Sunday column warning of the shock horror menace of derivatives to government finance [Stone Street Advisors, Calculated Risk, Felix Salmon, Joe Weisenthal/Business Insider].

The 1966 death certificate of an insulation worker attributes his death to stomach cancer, but 37 years later experts associated with the Manville Trust posthumously diagnosed him as having been suffering from mesothelioma, the asbestos-linked cancer. The trust awarded him compensation and his survivors then sued other defendants. [Kirk Hartley at Global Tort, which has just been rehosted as a LexBlog site]

From the House Financial Services Committee, a hearing announcement:

Thursday, March 11, 2010, 10:00 a.m., 2128 Rayburn House Office Building. The Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises will hold a hearing entitled "Corporate Governance after Citizens United"

The subcommittee oversees financial regulatory policy and is chaired by Rep. Paul Kanjorski (D-PA), whose campaigns have relied heavily on contributions from the financial services industry.

Donations from a group curiously named Texans for Insurance Reform flood into a South Texas Democratic primary, but it doesn't work.

It seems they've changed since the days when he wrote a textbook [Christopher Fountain]

Carter at ShopFloor explains why not.

Around the web, March 5

Legal academia edition:

New video from Northwestern's Searle Center on its recent report, "State Consumer Protection Acts: An Empirical Investigation of Private Litigation."

Several weeks have passed since members of Congress mustered their outrage at the U.S. Supreme Court's decision in Citizens United v. FEC for opening the floodgates of campaign cash from powerful corporate interests.

Floodgates...such a cliche.

Anyway, politics requires another round of outrage mustering, so the Senate Judiciary Committee has scheduled a hearing for March 10, "We the People? Corporate Spending in American Elections after Citizens United." Scheduled witnesses are Jeffrey Rosen of George Washington University School of Law and a well-known legal writer, and Doug Kendall, president of the Constitutional Accountability Center.

Rosen has a piece in the latest New Republic analyzing the Citizens United ruling as a failure of Chief Justice Robert's consensus building on the court, "Roberts versus Roberts." The Constitutional Accountability Center is a "progressive" think tank and law firm; Kendall has condemned the Citizens United ruling as "startlingly activist and a sharp departure from constitutional text and history; our democracy will suffer for it."

UPDATE (Friday): Good. The committee has added former FEC Chairman Bradley Smith to the witness list. Smith is now chairman of the Center for Competitive Politics and professor of law at Capital University Law School, Columbus, Ohio.

The New York Times is increasingly staking the credibility of its op-ed page on sub-Philip-Landrigan environmental alarmism. Is that really a smart move?

The International Criminal Court is preparing to adopt a vague and open-ended new definition of the international crime of "aggression" under which most U.S. administrations over the past half-century -- as well as those of many other advanced countries -- could be adjudged war criminals. Even "planning" a never-executed act of aggression could give rise to charges. [Michael Glennon (Tufts), Opinio Juris via Anderson, Volokh]

"An order filed Wednesday will ensure asbestos plaintiffs don't get paid twice for the same alleged injuries. ... Under this case management order, plaintiffs now must disclose which bankruptcy trusts they have talked to and against any trusts he or she might have a claim." [Chamber-backed West Virginia Record]

P.S. A reader in the Northeast also draws our attention to, in his words,

another recent order, this one entered on February 22, 2010 by Judge Furber in the Montgomery County, PA asbestos litigation, in which plaintiffs are ordered to file, no later than 120 days before trial, whatever claims they believe they have against asbestos bankruptcy trusts and to provide to defendants with copies of all such filings, including affidavits, medical records and reports, and employment documentation. This is one of the most comprehensive orders I've seen in asbestos litigation regarding the trust payment issue and should be very helpful to defendants in these cases.

From The New Haven Register's report on a debate between the two Democratic candidates for U.S. Senator from Connecticut, Attorney General Richard Blumenthal and Merrick Alpert, a businessman and former U.S. Air Force officer.

[Alpert] said that Connecticut has lost jobs in Blumenthal's 20 years in office and asked, "How many jobs have your lawsuits created?"

Blumenthal shot back, "Our lawsuits, our legal actions actually create jobs because businesses actually welcome competition and a level playing field. What they really want is fair enforcement."

According to the CNBC's annual report on "Top States for Business," Connecticut ranked 47th among states in the cost of doing business.

The Register also reported on the Republican candidates' debate, "U.S. Senate candidates strike similar themes, little discord."

(Hat tip: Jim Geraghty, who cracks, "By this standard, John Edwards was a fantastic jobs creator.")

Last week, I blogged on the flurry of recusal motions directed at a justice on the Wisconsin Supreme Court based upon his "tough on crime" campaign in general and, in particular, one ad that was, even by standards of the genre, over the top. (My contemporaneous criticism of the ad was cited in briefs in support of the recusal motion.)

For some, these motions have been an exercise in judge shopping. The State Public Defenders' office urged the defense bar to file recusal motions against conservative justices, explicitly reasoning that they were unlikely to vote to uphold a defendant's claim anyway. No recusal motions were filed in response to the recent reelection campaign of the Chief Justice in which she ran ads in which a uniformed police officer driving in a squad car pronounced her "law enforcement's ally."

The Court has responded to these motions in two ways. First, by a 4-3 vote, it amended the state's Judicial Code to provide that a lawful campaign contributions or independent expenditures do not, in and of themselves, give rise to a duty of recusal. Of course, we know, from Caperton, that, in rare and unusual circumstances, there can be lawful campaign support that gives rise to a duty of recusal under the Due Process Clause, but, presumably, the justices will not interpret the rule to suggest otherwise.

Second, in a case called State v. Allen, it deadlocked on whether to deny the motion to recuse Justice Gableman that was filed in that case. Three justices would have denied the motion. Three wanted more briefing. As a result, the motion was not granted and Justice Gableman will remain on the case.

The three justices who would have denied the motion held that the Court lacked the power to force a peer justice from a case, although they also said that Allen's motion was facially invalid. In their view, an allegation of generalized bias against a group other than a protected class cannot give rise to a duty of recusal under the Due Process Clause.

The first conclusion may rest uneasily with Caperton in that it implies that the state's Supreme Court cannot provide a remedy to a violation of Due Process. The second conclusion - or something like it - is going to be necessary if Caperton does not become a vehicle for judge shopping. I have an op ed on the matter in today's Milwaukee Journal Sentinel and am completing a scholarly article.

It will be interesting to see how Caperton plays out in other states with an elected high court. These elections almost always involve "tough on crime" campaigns. When more liberal candidates challenge conservative incumbents, they may also involve an "anti-business" populism. An overly generous reading of Caperton will create a target rich environment for lawyers attempting to gaim a more favorable tribunal.

For those pushing aggressive recusal standards, the end game may be a move away from the election of judges or a return to campaigns that are largely concerned with a candidate's resume and endorsements and that are, in the words of one observer, "about as exciting as a game of checkers played by mail." Some commentators have, in fact, expressly pointed to recusal as an antidote to the United State Supreme Court's decision in Republican Party v. White, finding a robust right to free expression in judicial campaigns.

In the latest sign that the dangerous Akaka bill might be starting to receive overdue scrutiny, Hawaii Republican Gov. Linda Lingle has withdrawn her support. Gail Heriot, who deserves much gratitude for keeping the issue before the public in many venues including this one, has joined with Commission on Civil Rights colleague Peter Kirsanow to explain what is at stake in an excellent new Wall Street Journal op-ed.

P.S. More from Ilya Somin at Volokh Conspiracy here and here.

Obama open to health court idea

At least if money represents openness. The Associated Press:

Obama's letter said he was open to appropriating an extra $50 million for pilot programs that experiment with specialized health courts rather than jury trials. A judge steeped in medical matters would hear evidence and render verdicts for patients alleging injuries from wrongful acts.

A plaintiff lawyers' group, the Center for Justice & Democracy, said it strongly opposes such health courts, calling them "anti-patient."

New from Washington Legal Foundation:

A number of U.S. states, either through laws or enforcement actions, frustrate auto insurers' ability to share truthful information with policyholders about repair shop options. Orrin L. Harrison III and J. Carl Cecere Jr. of Akin Gump Strauss Hauer & Feld LLP explain the constitutional flaws inherent in such state policies in a new WLF Legal Backgrounder, "Anti-Steering" Insurance Laws: State Censorship Of Consumer Information Treads On First Amendment Rights.

Among their other ill effects, the laws can make it harder for policyholders to steer clear of overpriced or otherwise dubious repair shops. Among those pushing for tougher enforcement of the laws: Connecticut Attorney General Richard Blumenthal.

Five months after the Senate version of the legislation came in, Rep. Betty Sutton (D-OH) has introduced H.R. 4678, the Foreign Manufacturers Legal Accountability Act, to require foreign manufacturers of products imported into the United States to establish registered agents in the United States who are authorized to accept service of process against such manufacturers. The bill came in with 30 cosponsors, mostly but not solely Democratic.

The American Association for Justice hailed the new bill in a typically blunderbuss news release, Foreign Manufacturers Account for 83% of 2009 Recalls," but the bill does not automatically draws widespread business opposition. If U.S.-based and multinational businesses with a U.S .presence are going to be paying additional costs because of American litigiousness, then why should purely foreign manufacturers escape the burden?

The companion bill is S. 1606 introduced by Sen. Sheldon Whitehouse (D-RI) last September (news release). Last May, Sen. Whitehouse chaired a Senate Judiciary subcommittee hearing on the issue, "Leveling the Playing Field and Protecting Americans."

Allegedly contaminated drywall imported from China has provided the largest impetus for the legislation. The news seemed to have died down -- as the weather cooled? -- but it's in the headlines again. AP, Feb. 23, "Judge Weighs Damages in Chinese Drywall Case":

NEW ORLEANS (AP) -- A federal judge heard emotional testimony from a group of Virginia homeowners who blame corrosive Chinese drywall for ruining their homes and finances and are seeking more than $2.5 million in damages.

U.S. District Judge Eldon Fallon didn't immediately rule on the plaintiffs' bid for a judgment against Chinese drywall manufacturer Taishan Gypsum Co., which hasn't responded to lawsuits and didn't have a lawyer representing the company for a two-day hearing that ended Monday.

Much related litigating is going on, and conferences on litigating, too.

Around the web, March 2

  • Letter responses from Jim Copland and others to Robinson/Calcagnie "Why We Need Trial Lawyers" piece [WSJ]
  • With foundation backing, American lawyer trying to bring environmental litigation to Europe [NYT]
  • Lawyers' pet bills could prove costly for Washington taxpayers [Dana Childers, WALRC, TDN.com]
  • Cost of filing lawsuit in Virginia could increase [WTOP]
  • "Durbin gets big bucks from trial lawyers" [Rizo, Madison County Record, quotes Jim Copland]
  • S.D.N.Y. ruling: "Rating Agencies' Alleged Conflicts of Interest Held Immaterial" [Kevin LaCroix]

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Congressional hearings into Toyota's recalls continue this week, this time on the Senate side as the Senate Commerce Committee meets Tuesday on "Toyota's Recalls and the Government's Response." Last week ended with the chairman of the House Committee on Oversight and Government Reform, Rep. Edolphus Towns (D-NY), attacking the company in terms that could have been written by any one of the personal injury or class action lawyers suing Toyota:

Toyota issued a statement in response to Towns' letter:

Toyota takes its legal obligations seriously and strives to maintain the highest professional and ethical standards in its legal and regulatory practices. It is not uncommon, however, for companies to object to certain demands for documents made in litigation. Consistent with that philosophy, we take appropriate steps to maintain the confidentiality of competitive business information and trade secrets. We are confident that we have acted appropriately with respect to product liability litigation and our discovery practices and look forward to addressing Chairman Towns' concerns.

Henry Payne, the sharp-penned editorial cartoonist and columnist for The Detroit News, has been writing good commentary on the trial lawyer connection at National Review Online. In "The Auto-Tort Circus," Payne reported on the insights of Jason Vines, who was head of public relations for Ford "when it was swallowed by the tort bonfire over Ford SUV rollovers in 2000."

With blood now in the water, says Vines, Toyota is simply too rich a target. The tort sharks will use their their Congressional allies and their public- and press-relations affiliates to extract maximum pain.

"They were putting up bogus documents every day for the drive-by media," recalls Vines of Ford's public ordeal ten years ago. "We called it the daily SCUD missile attack."

More from Payne:



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.