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April 2010 Archives

Around the web, April 30

  • Obama: maybe liberal court activism wasn't figment of conservatives' imaginations [NYTimes]
  • "Judge Posner on conflicts of law, statutes of repose and limitations, and forum non conveniens" [Beck et al, Wajert; Taiwanese plaintiffs suing over blood products]
  • Maryland legislature raises minimum auto insurance rates, Baltimore Sun calls attention to trial bar's influence, blog polemics ensue [Andy Green, Jay Hancock, John Bratt (attorney deems Sun "local fishwrap"), Ronald Miller (questioning Hancock's "license ... to blog"), and more]
  • Higher rates of public sector unionization correlate with less efficient public management [Chris Edwards, Cato at Liberty]
  • Lawyers capture lion's share in settlement of harassment claims against Middlesex County, N.J. sheriff's department [NJLRA]
  • "Comparative Law - Various National Approaches to Personal Injury Compensation" [Hartley, Global Tort]


Stanford lawprof Deborah Rhode wants to get the law more involved.


Beware the "citizen-suit" provision tucked therein, which could open new frontiers of governmental liability. [Zachary Roth, TPM Muckraker, via Adler/Volokh]


More whetting of transnational-law appetites, via Mother Jones: "According to a forthcoming United Nations study, the world's 3,000 biggest public companies could be on the hook for $2.2 trillion--more than 30 percent of their profits--if they were made to pay for the fallout of their carbon emissions."


Glenn Lammi, Carter Wood and Ramesh Ponnuru all have a go at correcting People for the American Way and Dahlia Lithwick on some of their more egregious misstatements.


Disagree with a union organizer or class action lawyer on who should count as an independent contractor? Get ready for the criminalization of guessing wrong [ABA Journal]

Around the web, April 29

  • More on Ninth Circuit decision advancing Dukes v. Wal-Mart class action [Mark Moller, Cato]
  • "Financial Regulation Bill Includes Attack on Arbitration" [Carter at ShopFloor] And watch out for the provisions empowering state attorneys general [same]
  • Academic reception of Twombly/Iqbal plausible pleading has passed through stages of denial, anger, bargaining, depression, now on to acceptance [Sullivan, Workplace Prof]
  • Seventh Circuit Judge Diane Wood's handling of some liability cases gets high marks from one defense-oriented observer [Drug and Device Law]
  • "Modeling the Effects of Peremptory Challenges on Jury Selection and Jury Verdicts" [Roger Allan Ford, George Mason Law Review, PDF]
  • New Federalist Society site will cover Supreme Court nomination politics [SCOTUSreport.com]


New book by Don Gifford of the University of Maryland, which he discusses with Danielle Citron at Concurring Opinions. Excerpt:

What's wrong with this trend?

Such litigation is troubling for three reasons. First, an empirical one: it has not worked. A dozen years after the settlement that ended the tobacco litigation, most public health experts view it a colossal failure. While the agreement protected the profitability of the large tobacco companies, it did not cause any decrease in smoking rates among young people. The negotiations served the people negotiating the deal at the table well--the state attorneys general who negotiated it and were able to proclaim great public health victories went on to run for positions as governors or U.S. senators; their litigation partners, private plaintiffs' attorneys, earned as much as $150,000 per hour; the tobacco companies have survived and now thrive. But the public did not. The second problem was that the success of such suits required an unprincipled expansion of common law doctrines including the tort of public nuisance and the ability of the state to sue as parens patriae. That's probably why most state supreme courts ultimately rejected the litigation against pigment manufacturers, effectively ending the litigation solution. Third, and most important, these litigation cycles shifted the responsibility for regulating products, and even taxing and spending, away from state legislatures and the administrative agencies that they create to deal with certain problems, to the state attorneys general. Often what the attorneys general proposed contradicted past legislative enactments. The governor of Mississippi actually sued the Mississippi attorney general, unsuccessfully, to stop the tobacco litigation. The attorneys general and public health advocates had criticized back-room deals in legislative committees, but their own decision-making processes were far more opaque than that of legislatures. State attorneys general have neither the competence nor the legitimacy to comprehensively regulate products or to solve public health problems.

New at Overlawyered

Things you're missing if you're not following my other blog:

From the Brennan Center, "Just Books"

The Brennan Center at NYU has launched a new website devoted to law-related books, with many well-known writers among the early contributors. While the left-leaning Center often (though not always) espouses views that contrast with those in this space, there's no denying this is an impressive effort and especially welcome in a world in which many of the traditional sources of attention for serious legal books have been drying up. Some early contributions worth checking out: David Remnick offers a "Portrait of the President as as a Young Law Student"; Frank Colucci links Justice Kennedy's Citizens United opinion to wider themes in his jurisprudence; and Ciara Torres-Spelliscy reviews Richard Posner's book on the financial crisis. The site's editor is Susan Lehman.

Tex Tox Toe

From Carter at ShopFloor a little while back, defendants are seeking to force action in a remarkable and dubious Texas environmental case:

The brief [by business groups] challenges the judge's handling of the lawsuit filed in Hidalgo County, one of the South Texas jurisdictions that constitute a "Judicial Hellhole" as described by the American Tort Reform Association. It's a far-fetched suit as 1,800 plaintiffs claim to be harmed by general exposure to chemicals going back to 1950. The case has also been dragging on for a decade, as the judge keeps allowing the plaintiffs to avoid defendants' efforts at discovery. The defendants can't even gain the most basic of information they need to mount a defense, such as the products supposedly involved, claimed exposures and basic causation.

Some more background: Christine G. Rolph and Valerie E. Torres, "Evolution of Mass Toxic Tort Litigation: Texas Levels the Playing Field", Latham & Watkins (PDF).


U.S. Rep. Rick Boucher (D-VA) has sent a letter to House Judiciary Chairman John Conyers urging him not to schedule any committee consideration of H.R. 4115, the Open Access to Courts Act. The Congressman writes:

The measure overturns two recent U.S. Supreme Court decisions, Ashcroft v. Iqbal (2009) and Bell Atlantic Corp. v. Twombly (2007), which clarify standards for the sufficiency of pleading in civil cases. I am concerned that the legislation would produce a dramatic change in pleading standards to the detriment of the federal court system. Rather than reverting to pre-Iqbal and Twombly standards, as proponents of the bill claim, H.R. 4115 would raise substantially the government standards for motions to dismiss. In doing so the measure ignores the years of precedent affirmed by the two Supreme Court decisions which struck a fair balance between the rights of plaintiffs and the need to prevent frivolous lawsuits.

Boucher also emphasizes the effect of excessive filings on the limited resources of the federal courts.

Earlier posts on pleadings.


With the media absorbed with the political disputes over the "bailout" language in the financial regulation bill, S.3217, other objectionable provisions are slipping by with less attention. Take the corporate governance provisions in Title IX, Investor Protections and Improvements to the Regulation of Securities. Labor unions, environmental groups and other activists have long sought more access and authority to force corporate boards into making decisions that serve the activists' agenda over those of the shareholder. (See the AFL-CIO's commentary.) The bill's Subtitle G--"Strengthening Corporate Governance," would effect that fundamental shift.

In the Heritage Foundation's new webmemo, "Senator Dodd's Regulation Plan: 14 Fatal Flaws," the corporate governance language is Flaw 13:

Allows activist groups to use the corporate governance process for issues unrelated to the corporation or its shareholders. Section 972 of the bill authorizes the SEC to require firms to allow shareholders to nominate directors in proxy statement. Such proxy access turns corporate board elections from a process designed to ensure that each board has a good mix of skills and experience into a popularity contest where the long-term interests of the stockholders become secondary to political agendas or corporate raiders. The process can also be used by labor unions, politicians who manage public pension funds, and others to force corporations to respond to pet social or political causes.

Major business associations -- including my employers at the National Association of Manufacturers -- joined with free-market advocates to also register sharp objections to the proxy access language in an April 12 letter, warning it could unleash "an onslaught of activists trying to manipulate the proxy process to force corporate decisions that adversely impact shareholders as a whole in order to further their parochial social or political agenda." More broadly, why are we federalizing corporate law?


"Durabla Manufacturing, a Pennsylvania company that made sealing products, collapsed under the weight of 108,000 asbestos suits." [Steve Korris, MC Record]

Around the web, April 27

  • Spring issue of Federalist Society's State Court Docket Watch includes articles on Illinois liability reform, California furlough suits, Washington school finance reform, Caperton and recusal;
  • Judge Manuel Real hammers generic product liability complaint re: pain pumps [Beck et al]
  • Sen. Lautenberg's bill would tighten TSCA chemical regulation [Wajert, ShopFloor]
  • Good news for Maryland trial lawyers, state enacts a False Claims Act [Baltimore Sun]
  • "Litigation Funding in Australia" [Vischer, Legal Ethics Forum]
  • "Sentences Get Harsher in White-Collar Cases" [Henning, NYT DealBook via Greenfield]


According to Cymie R. Payne at the American Society of International Law's ASIL Insight, that's one of the holdings in a new International Court of Justice (ICJ) ruling in a dispute between Argentina and Uruguay over a giant pulp mill on the Uruguay River. Julian Ku has more at Opinio Juris here and here.


One hopes the Supreme Court will correct this travesty of a decision; we've extensively discussed the earlier litigation. Judge Kozinski's dissent is concise and to the point about the opinion's abuse of due process issues in its construction of Rule 23:

Maybe there'd be no difference between 500 employees and 500,000 employees if they all had similar jobs, worked at the same half-billion square foot store and were supervised by the same managers. But the half-million members of the majority's approved class held a multitude of jobs, at different levels of Wal-Mart's hierarchy, for variable lengths of time, in 3,400 stores, sprinkled across 50 states, with a kaleidoscope of supervisors (male and female), subject to a variety of regional policies that all differed depending on each class member's job, location and period of employment. Some thrived while others did poorly. They have little in common but their sex and this lawsuit.

I therefore join fully Judge Ikuta's dissent.

Look, we sued the Pope !


Lawyers for the Vatican have called the lawsuit against Pope Benedict and the Holy See a "publicity stunt." I wouldn't go so far as to say that - it has a chance of surviving a motion to dismiss and there may be, embedded in its fifty four pages, a theory that might get to the jury. But there is a sense in which that a publicity stunt is precisely what it is and there may be some larger lessons here about the American liability system.

The lawsuit arises from the predations of a pedophile priest in Milwaukee named Father Murphy. It's a nasty case. Murphy abused numerous young boys at a school for the deaf, largely in the fifties and sixties, but perhaps extending to the early seventies when he was (quite improperly) quietly shuffled away to an early retirement. It is clear that the Milwaukee Archdiocese - in particular Archbishop Meier - failed to act in ways - during the 1960s - that would have halted the abuse. There is no evidence that the Vatican, much less the Pope, had any knowledge of or involvement with Father Murphy during this period. By the time the Vatican (and then Cardinal Ratzinger as head of the Office for the Propagation of the Faith) became aware of Murphy's offenses, it was the late 90s. The Milwaukee Archdiocese had brought a belated action to defrock him.

There is a controversy over how that proceeding was conducted and whether it ended prematurely. But it could not have prevented any further abuse and it is almost certain that, however it was handled, Father Murphy would have (as he did) die before it could be completed.

Here is where the publicity stunt begins. What makes this case newsworthy - what puts you in the New York Times and on the networks news - is the defendant in the Apostolic Palace.

There are multiple legal problems with bringing an action against the Pope and Holy See under the Foreign Sovereign Immunities Act. Two circuit courts of appeals have allowed part, but not all, of such cases to go forward. The outcomes are not consistent with each other and, in one, a cert petition is pending before the Supreme Court. Without getting into the details, the reasoning in these cases is far from unassailable.

But the theories that have been permitted - largely negligent supervision and a rather curious notion of respondeat superior - have either been rejected or are unlikely to be recognized by Wisconsin law. The Wisconsin Constitution has been interpreted to confer rather broad protection for church autonomy. Even if these problems are not fatal, the actions complained seem to be almost certainly barred by the statute of limitations.

And, as this is important, the wrongs alleged to have been committed by Pope Benedict himself could not have averted any of the very real harms suffered by the plaintiffs. Father Murphy's predations had ended long ago. They - and the feckless response of the Milwaukee Archdiocese - were well known within the deaf community. (It was pressure from that community that lead to the charges against Murphy.) The Milwaukee District Attorney had, rightly or wrongly, already declined to prosecute him. Unless one buys into the dubious notion that the failure to a religious institution to impose discipline long after the fact is a legally cognizable injury, the naming of Pope Benedict XVI is, notwithstanding the sympathetic nature of the plaintiff and the very real horror to which he was subjected - a publicity stunt.

There are a few larger implications. Litigation, in this instance, is being used as a front in a larger war to affect Vatican policy in the future. Although advocates say that something "must change," the fact is that almost everything about the Church's response to clergy abuse has changed. The gravamen of the complaint is to have outsiders manage that change. Once again, we see an attempt to take traditional common law notions of duty and liability and extend them to form the basis for prospective regulation - something which, I would argue, strains judicial competence and usurps prerogatives of civil society - particularly where the institution to be regulated is a religious institution.

Second, a theme in the complaint is that the Vatican should have acted in a way that would have publicized what it calls, at a least one point, "the practice" of child sex abuse. The harm in its failure to do so, it seems, was not limited to the predations committed by known abusers who were placed in a position to abuse again, but in the failure (or so it seems) to let people know that, in general, "priests abuse kids."

This reminds me of other cases in which the theory of liability has been that the defendant (I think of the lead paint and tobacco cases, although those were stronger examples of the approach than this is) should have fallen on its sword. There are numerous difficulties with this theory in this context, but, once again, it strikes me as a questionable spin on traditional notions of common law duty.

Finally, we have the problem of our repeated inability to discuss these matters rationally. When I wrote an op-ed in the Milwaukee Journal Sentinel a few weeks ago arguing that it might not be a good idea to completely abolish Wisconsin's generous statute of limitations for cases like this, I was accused of siding against "victims" and not appreciating the gravity of Father Murphy's offenses. Neither charge is fair.

Just as lawyers know that being "against crime" does not mean that we ought to do away with constitutional protections for criminal defendants, we also know that empathy for those to whom bad things have happened doesn't mean that all limitations on liability - even for those "deep pockets" whose relationship with the wrong is indirect - ought to be swept aside.


Kirk Hartley thinks he knows one reason "why asbestos plaintiff's lawyers presently are spending so much time and energy trying to limit the time allowed for depositions of asbestos plaintiffs."

NYC: "Preservation Follies"

"Excessive landmarking threatens to make Manhattan a refuge for the rich." [Edward Glaeser, City Journal]


Marc Hodak examines Congressional pressure on owners to keep an Ohio clothing enterprise going.

Dodd Wall Street reform bill

Professor Bainbridge has been analyzing its provisions, and does not like what he sees.

RAND report on silica litigation

Missed this when it came out a few months ago, but it's definitely one to note:

...Litigation over injuries due to the inhalation of respirable silica dust in the workplace skyrocketed beginning in 2001, raising concerns that silica litigation would become a mass tort with similarities to the asbestos litigation that had occurred in the previous 30 years. However, the silica litigation collapsed soon after the discovery of numerous abuses in the procedures used to diagnose the injuries.

The uncovering of grossly inadequate diagnostic practices was a significant success for the tort system in handling a mass tort. However, there is no guarantee that similar practices would be uncovered should they be used in the future. This report reviews the court proceedings that led to the uncovering of abusive diagnostic practices in silica litigation. The insights are then used to identify several areas in which changes in litigation practices and procedures could increase the likelihood that similar diagnostic practices would be uncovered in the future or prevented from occurring in the first place.


The report is Stephen J. Carroll et al., The Abuse of Medical Diagnostic Practices in Mass Litigation: The Case of Silica (PDF) (via TortsProf.)

Legal bloggers and the courts


Here's the video, posted last month, of a presentation at Northwestern's Searle Center by Eugene Volokh. Looking on: blogger notable Mark Herrmann.


Just kismet, we're sure.

From the House Judiciary Committee:

Hearing on: Protecting the American Dream Part II - Combating Predatory Lending Under the Fair Housing Act

Thursday 4/29/2010 - 1:00 p.m.

2141 Rayburn House Office Building

Subcommittee on the Constitution, Civil Rights, and Civil Liberties

By Direction of the Chairman

Earlier, here and here.


The state wants out from under two-decade-old institutional reform litigation, and Children's Rights Inc., its adversary, is predictably seeking to block its escape. [Hartford Courant] For more on the big business of children's rights litigation, see this earlier post and this one, on a Georgia fee controversy resolved by the U.S. Supreme Court just this week.

Nonprofits and liability waivers

The Grand Rapids Press is calling for legislative action in Lansing to correct a regrettable Michigan court ruling.


The city is trying to keep alive its litigation blaming urban decay on mortgage lenders. The Baltimore Sun quotes the tart response of Andrew L. Sandler, an attorney representing the bank, who notes that plaintiff's attorney John Relman has filed a similar action in Memphis:

"One year, they file a suit saying that the lender didn't make enough loans in minority communities: redlining. The next year, they file a suit saying that they made too many loans in minority communities: reverse red-lining," Sandler said. "This is just a commercial enterprise for these lawyers. ... The same lawyers have been shopping the same complaint to various municipalities for two years."

CNBC "American Greed"

Atlantic Yards and ACORN


At the Cato Institute magazine Regulation, Georgetown scholar John Hasnas argues that the Supreme Court took a seriously wrong turn (PDF) back in the 1909 case of New York Central & Hudson River R.R. Co. v. U.S.

Vroom, go the Daubert principles

In a case over allegedly defective motorcycles, a Seventh Circuit panel including Posner may have helped put the brakes on overreliance on expert testimony in seeking class certification. [Beck et al]

Mandatory retirement ages for judges

It seems unlikely they can persist indefinitely in a world in which federal law bans as discriminatory mandatory retirement rules in most private employment. [WSJ Law Blog]

Goodwin Liu on judges' writings

"[W]hatever I may have written in the books and in the articles would have no bearing on my role as a judge." Really? None at all? Isn't it strange to think the contents of one's writings would have no bearing on one's true convictions, or alternatively that one's true convictions would have no bearing on one's role as a judge? [Whelan]

"The People v. CO2"

Slate has a report on the "coming tide of international climate lawsuits."


The mom it transported gave birth to a child with cerebral palsy [Orlando Sentinel via WhiteCoat] Two hospitals and two doctors had already settled out of the case for a total of $1.4 million, suggesting that perhaps a plurality of causation and liability theories were in play.

"Replacing Stevens"

The Manhattan Institute's Jim Copland had this op-ed last week in the DC Examiner on the prospects for a successor.

Around the web, April 21

  • New critique of proposals for aid-&-abet securities liability [Keane, WLF]
  • "Litigation - Has The Process Become The Purpose?" [Beck et al on Richard Nagareda paper]
  • W.V. justice has strong words on medical monitoring law in duPont case dissent [LNL, more]
  • Review: Robert Williams's The Law of American State Constitutions [Colburn, ConcurOp]
  • "Sue to Ban BPA and Then Sue Because It's Banned. Brilliant!"
    [Carter at ShopFloor, Maryland]
  • Mass toxic tort filed by former residents of now-shuttered L.A. County housing complex [AP]


Steven Malanga explains at City Journal.

Canada's class action bust

Canada began its experience with the class action format much more recently than we did, but the results are similar: few class members actually file claims for recovery, and secrecy enshrouds the resulting "take-up rates" and the disposition of unclaimed funds. "The lack of application for relief to the funds by directly affected plaintiffs indicates to me that there isn't a great social need for these actions," says William Vanveen, formerly of the University of Windsor law faculty and now in private practice. [Luis Millan, Lawyers Weekly]

Impacts of Ricci v. DeStefano

Did last year's high court decision quietly create a new defense for employers to disparate impact claims? [Joseph Seiner/Benjamin Gutman, BULR/SSRN via Secunda]

Pope's head-of-state immunity

According to Dapo Akande at the European Journal of International Law's EJIL Talk, arresting the Pope in Britain, as some "human rights" lawyers and others have proposed, would itself be a violation of international law. "The Vatican has a tiny territory and a tiny population but it does fulfill the criteria for Statehood." [via Ku] More: Infamy or Praise.


The Illinois Supreme Court's striking down of medical liability reform could become an issue, according to Andrea Holecek at Legal NewsLine.


A proposal to fold insurance, administered compensation and other institutional considerations into a staple of the law school curriculum. [Knutsen, Prawfs]

CSPI flops in vitamin case

The Center for Science in the Public Interest may hold to a theory of "busybody standing", but that's not how the courts see things [Goldfarb, Food Liability Law]

P.S. While on the topic of standing, David Wagner at Ninomania explains how the late Justice William O. Douglas in Sierra Club v. Morton wound up following in the steps of Strephon from Gilbert & Sullivan's Iolanthe, but less convincingly.


In a paper for WLF, Brian Stimson describes the Food and Drug Administration's plans to step up its usage of a federal law under which the government can effectively end the career of high-level drug company executives who were in a position to have stopped improper marketing and labeling of compounds, even if the execs did not have knowledge or intent of underlings' violations. The offense of "misbranding" has been characterized as a strict-liability misdemeanor and does not incorporate a mens rea requirement. More here.

P.S. Also, the Washington Legal Foundation has just launched a new blog (or blog-like entity, at least) called Legal Pulse. Welcome!

Around the web, April 19

  • Alien Tort Statute: Citing lack of causation, judge dismisses case tying Mideast terror to oil sales [Russell Jackson]
  • A history of federal intervention in executive pay [Bachelder, NYLJ/Harvard Corporate Governance Blog via Bainbridge]
  • McKool law firm of Dallas does well on patent-suit contingency work [WSJ Law Blog]
  • St. Clair County, Ill., nearby sibling of Madison, attracting many asbestos cases [Hartley, more]
  • Bill moving through Connecticut legislature would limit use of criminal background checks on workers [Daniel Schwartz]
  • The kind of pre-emption products liability plaintiffs adore [Beck et al]

Going after the Pope

The New York Times relies on a plaintiff's lawyer in making a case against Benedict XVI, then has to walk the story back after doubts emerge [de Souza/National Post, Canada]

Lobbying on admissability of evidence

One quarter's Congressional lobbying disclosure report is much like another, as issues and legislation often carry through an entire two-year Congress. In reviewing the reports, you keep an eye out for the few additions or omissions in each new filing.

Here's an addition in the American Association for Justice's disclosure for the first quarter of 2010: "H.R. 2136 (Honorable Stephanie Tubbs Jones College Fire Prevention Act); specific interest in provision relating to the admissibility of evidence."

The bill, H.R. 2136, is sponsored by Rep. Marcia Fudge (D-OH), Jones' former chief of staff who won election to the seat after the Congresswoman died in 2008. The legislation would establish a demonstration grant program in the U.S. Department of Education to promote installation of fire sprinkler systems, or other fire suppression or prevention technologies, in qualified student housing and dormitories.

The provision the AAJ is lobbying on:

SEC. 3. ADMISSIBILITY AS EVIDENCE.

(a) Prohibition- Notwithstanding any other provision of law and subject to subsection (b), any application for assistance under this Act, any negative determination on the part of the Secretary with respect to such application, or any statement of reasons for the determination, shall not be admissible as evidence in any proceeding of any court, agency, board, or other entity.

(b) Exception- This section does not apply to the admission of an application, determination, or statement described in subsection (a) as evidence in a proceeding to enforce an agreement entered into between the Secretary and an eligible entity under section 2.

We infer that trial lawyers want to maintain the ability to cite applications for financial assistance as evidence of an institution's liability in the case of fire-related personal injury lawsuits.

The bill, which has 57 bipartisan cosponsors, doesn't seem to be going anywhere.



The American Association for Justice has just filed its first quarter 2010 lobbying disclosure form, reporting $1.05 million in lobbying expenses for the three-month period. That's compared to the $1.33 million reported in the fourth quarter 2009.

Having successfully lobbied against any medical liability reform in the new health care law -- and boasting of that success -- the AAJ can now turn to other legislative priorities. From the lobbying disclosure, the association's website, www.justice.org, and other sources, we'd identify those priorities as the Medical Device Safety Act -- ending federal preemption for FDA-approved devices -- legislation to ban pre-dispute arbitration clauses, and bills to restore notice pleadings, i.e., to reverse Iqbal/Twombly. These will all be familiar topics to Point of Law readers.

The lobby also appears ready to resurrect H.R. 2519/S. 437, bills to allow the deduction of attorney-advanced expenses and court costs in contingency fee cases. This is the Holy Grail for the trial lawyers, described by Victor Schwarz and Chris Appel of Shook, Hardy, and Bacon in a May 2009 Washington Legal Foundation paper, "Federal Government Bailout for Trial Lawyers." Excerpt:

In the 110th Congress, the Joint Tax Committee scored the federal bailout for trial lawyers at $1.57 billion over 10 years. We do not believe the American taxpayer will want to bear this cost. At that time, The Wall Street Journal editorialized that the tax change "would allow plaintiffs lawyers to deduct the up-front expenses of pursuing contingency-fee lawsuits, even in cases where the lawyer is expecting to be reimbursed for these expenses. . . Allowing these big deductions now would mean that future reimbursements are taxed, but with some monster class-actions, the lawyers could avoid the tax bill for a decade or more. Naturally, this would be an incentive to file more class-action suits, because the lawyers could write off their up-front expenditures to pursue them." Editorial, The Bill Lerach Tax Cut, WALL ST. J., May 30, 2008, at A14. [Here].

We thought the disinfecting sunshine of public scrutiny had killed those provisions, but AAJ must believe otherwise. Not only are the bills listed on the lobbying report, the AAJ has also just hired an outside lobbying firm to work the issue.

On March 1, the Washington Tax Group filed its lobbying registration form with the American Association for Justice listed as its client. Listed as the lobbyist to represent the AAJ is Noushin Jahanian, former chief counsel to Sen. Debbie Stabenow (D-MI), a member of the tax-writing Senate Finance Committee.

Trade associations don't normally spend money on outside lobbyists if an issue is dead.

There's been talk of Sen. Arlen Specter (D-PA), sponsor of S. 437, trying to add various special-interest legislation to the financial regulation bill, but the trial lawyer bailout seems too hot for that maneuver. Our guess is that lobbyists will try to add it to an omnibus or disaster aid spending bill later in the session. A post-election, lameduck Congress in which the Democrats still control large margins in the House and Senate could try for one last bill to reward political allies. A tax deduction for contingency fee lawsuits would be quite a gift to the AAJ, one certainly worth lobbying for.

Jonathan Adler on the Liu nomination

Getting past the "we've got to confirm him extra fast because he's incredibly moderate" mythology.

P.S. Rick Garnett on some debatable New Republic assertions about "activism." And here's the happy news that Richard Epstein and Randy Barnett are confirmable after all -- we know because Dahlia Lithwick says so.


From the SEC, a news release, "SEC Charges Goldman Sachs With Fraud in Structuring and Marketing of CDO Tied to Subprime Mortgages":

The Securities and Exchange Commission today charged Goldman, Sachs & Co. and one of its vice presidents for defrauding investors by misstating and omitting key facts about a financial product tied to subprime mortgages as the U.S. housing market was beginning to falter.

The SEC alleges that Goldman Sachs structured and marketed a synthetic collateralized debt obligation (CDO) that hinged on the performance of subprime residential mortgage-backed securities (RMBS).

Goldman Sachs was one of the 21 banks and financial institutions sued in 2008 by the city of Cleveland, which argued that the banks' subprime mortgage marketing created the foreclosure crisis and resulting urban blight. Mayor Frank Jackson claimed at the time, "The unscrupulous lending practices that are part of the subprime market have devastated Cleveland neighborhoods, which clearly demonstrate a public nuisance."

A federal judge tossed the suit in 2009, rejecting the public nuisance arguments. One wonders if the SEC's prosecution of Goldman Sachs might engender a new round of municipal claims.

Baltimore's renewed litigation against Wells Fargo might also stimulate followers. The city originally took a different legal strategy, suing the bank for violating the federal Fair House Act throught predatory lending practices. After having its suit dismissed in January, Baltimore refiled earlier this month (as did Memphis). From Reuters:

(Reuters) - Baltimore and Memphis have filed new federal lawsuits accusing Wells Fargo & Co of steering black borrowers into expensive mortgages, only to later conduct many foreclosures that cost the cities property tax revenue and forced both to spend more on public safety.

The cities filed complaints on Wednesday, the same day Wells Fargo agreed to settle a National Association for the Advancement of Colored People lawsuit accusing it of steering blacks into subprime mortgages while giving comparable white borrowers better loan terms. As part of the accord, Wells Fargo will let the civil rights group review its lending practices.

NAACP issued a news release, "NAACP Dismisses Lawsuit against Wells Fargo," which reported that the organization is not seeking monetary damages in its other pending suits, but rather to change lending practices.


The Senate Committee on Rules and Administration Committee, one of the sleepier committees in the Senate, awakens for a hearing next Thursday, "April 22, to hold hearings to examine the filibuster, focusing on the history of the filibuster 1789-2008, 10 a.m., SR-301."

The committee is chaired by Sen. Charles Schumer (D-NY), a partisan. The committee website has not posted any information yet about witnesses.

In related news, the Senate Judiciary Committee has rescheduled its nomination hearing on the controversial Goodwin Liu to serve on the Ninth Circuit. The hearing starts at 10 a.m. today (Friday), with a webcast available.


The Columbia Journalism Review -- not a publication that will be suspected of conservative or pro-business biases -- is strongly criticizing a May 2009 "60 Minutes" segment that attacked Chevron over the Ecuador oil litigation. The CBS program's response? To stonewall and say its methods of developing its products are its own affair and nobody else's. Imagine what "60 Minutes" would say if one of its targets tried to use such a line....


AP notes critics' predictions that there will be plenty of scope for product users and the lawyers who represent them to file inaccurate or even malicious reports on SaferProducts.gov. "Unless done very carefully, the database will be of little use to the average consumer, but subject to potential mischief in the hands of plaintiff lawyers," warns Sean Wajert. As with the already existing NHTSA database, high rates of consumer complaints filed by lawyers organizing suits against a company (like Toyota) will then be cited in credulous media as proof that the company's products must indeed have a problem. Hugh Hewitt calls it "the database that ate American business" and writes, "Reputations will be ruined and brands deeply damaged once the Congressionally-mandated internet bulletin board becomes operational." More: Carter at ShopFloor.

A window into Scruggs's P.R. efforts

Privilege logs introduced in insurance qui tam litigation provide glimpses of the intensive public relations efforts that Dickie Scruggs and his associates put into their litigation, including lavish attention to how they were being portrayed on blogs and in the Wall Street Journal. [YallPolitics]

More: Tom Freeland analyzes the significance of the new documents and also flags an immediate favorite: "Have the public relations firm work up a Wikipedia entry for the Rigsbys."

From disgrace to the law lectern

Bill Lerach's contemplated hop from the federal slammer to a teaching position may be especially notable, but Kai Falkenberg at Forbes reminds us that others with records of disgrace or lawbreaking have turned up at the law lectern too, including Sixties terrorist Bernardine Dohrn, long ensconced at Northwestern; disbarred felon Lynne Stewart, who addressed the celebrated Hofstra ethics conference; and smurfing specialist Eliot Spitzer, who "taught a class called 'Law and Public Policy' at City College during the fall 2009 term." And had you heard that former Illinois Gov. Rod Blagojevich, whose trial on corruption charges is upcoming, gave a student-sponsored talk last month at Northwestern on the topic of ethics in government?

Sometimes it can be hard to tell the faculty panel discussion from the police lineup. In my forthcoming book Schools for Misrule: Legal Academia and an Overlawyered America -- due out next spring from Encounter Books -- I'll have a lot more to say about the lessons that sends.

"Liberal versions of Scalia"

Steve Chapman makes the case for appointing one (but not five!) of them.


The plaintiff had a "rather brief work history" with asbestos in summer and college break jobs at a GM warehouse, and also claimed "take-home" exposure from his father. Reason enough to attribute responsibility for his mesothelioma to dozens of companies, only two of which were left at trial as non-settling defendants, a New Jersey appellate panel decided. [NJLJ]

Around the web, April 15

  • Funny: the fabulous diversity of Obama's SCOTUS shortlist [Kerr, Volokh]
  • Cue laugh track: Connecticut AG Blumenthal, running for Senate, "says he would fight for businesses" [CT News Junkie] More: And now he's failing to impress on the campaign trail, with some Democrats describing him as "Martha Coakley in pants" [NY Times]
  • "Judge Reverses Course, Approves Contingency Fee in Staten Island Ferry Disaster Case" [NYLJ, earlier]
  • DC Examiner 5-day series on Greenlining Institute and its intimidation of business;
  • Beck et al on forum-shopping and Philadelphia [Drug and Device Law]
  • Township of Irvington, New Jersey reels after lawsuit setback [NJLRA]

Project labor agreements

Carter at ShopFloor explains how federal construction contracts will now be steered toward more expensive unionized suppliers. Thanks, taxpayers!

"Crist's costly populism"

The Florida governor's ill-conceived assaults on the property insurance market are an important reason his tour of office will go down as a failure. [Eli Lehrer, FrumForum; earlier here, here, etc.]


A former New Mexico official and associate at the class action firm has agreed to end his lawsuit, saying his allegations against the firm were wrong. [NYLJ]


Retiring Justice John Paul Stevens sometimes claims that he didn't drift left, it was the Court that moved to the right as he stood still. Stuart Taylor, Jr. at National Journal's Ninth Justice explains why this theory doesn't really stand up to scrutiny.

P.S.: A Washington Post editorial on Stevens claims "his voice was consistently raised on behalf of those vulnerable to government excesses." Jacob Sullum provides a correction on that one.


Released from prison, the felonious class-actioneer plans to join Dean Erwin Chemerinsky's left-leaning new University of California law school to lecture students on the topic of "Regulation of Free Market Capitalism -- Why Have We Failed?". He also apparently intends to claim the time spent in this propagandistic effort toward his community service obligation. In an interview with Diane Bell of the San Diego Union-Tribune, he says of his past legal practice: "I would not have done anything differently." "I also intend to be active in progressive political activities probably with the Campaign for America's Future," he says. [Sign On San Diego, WSJ Law Blog, Ribstein]

P.S. Prof. Bainbridge is "stunned that even as left-liberal a law school as UCI would hire this felon reprobate ... Shame on Erwin Chemerinsky and the rest of the UCI crowd."


Controversy in a West Virginia case against duPont, by way of Legal NewsLine: plaintiffs denied at trial that they were after any special rewards not offered to class members in general, then later put in for $50,000 incentive payments. And are incentive payments for plaintiffs a good idea in the first place?


The New York Times is editorially upset, and the WSJ glad, that loose-cannon Spanish judge Baltasar Garzon, known for his prosecutions of world figures under "universal jurisdiction", may finally be running into effective resistance. Though the Times does not spell it out, the implication of its position is that amnesties over past governmental misconduct, no matter how consciously arrived at by a fully democratic successor state after due deliberation, can simply be declared null and void and disregarded under the higher international law. I wonder whether the Times will continue to assert this position if some equivalent of Judge Garzon decides to disregard the widespread Eastern European amnesties over Soviet-era misconduct and orders the arrest of ex-Communist officials as they visit Florida or Utah.

Meanwhile, international law action against the Pope "looks like it will happen," according to Julian Ku at Opinio Juris:

It looks like the focus will be on breaking down the Pope's head-of-state immunity defense, rather than trying to fit the sex abuse into the category of crimes against humanity. I think even this argument is very shaky, and wouldn't fly in the U.S. because courts would give absolute deference to the executive branch's decision to recognize the Vatican as a state, and the Pope as the head of state. But these UK lawyers are serious, they have real money behind them, so legal action will likely happen. Will the Pope take the chance and visit anyway?

(& welcome Jonathan Adler/Volokh, Elie Mystal/Above the Law readers)

More: Eric Posner at the WSJ (sub-only) thinks the Garzon indictment may spell the beginning of the end for universal jurisdiction. Kevin Jon Heller at Opinio Juris responds.

Around the web, April 13

  • Coming up Apr. 21: Searle Center discussion on Federal Rules of Civil Procedure [announcement]
  • "Their pain gave them strength to fight for justice." L.A. Times isn't playing neutral in Kettleman City birth-defect-cluster suit [its endorsement]
  • Beck & Co. answer some critics of Twombly/Iqbal [Drug & Device Law]
  • Lawsuits proliferate involving embedded software [Michael Barr, Embedded.com]
  • "Long Live the Reversionary, 'Claims-Made' Settlement" [Karlsgodt, Class Action Blawg]
  • "Save Crown Cork" asbestos liability limit fails in Virginia legislature [Hartley, WaPo]


It seems to be open season against un-populist Supreme Court decisions these days in Democratic Washington, D.C., and now Vermont Sen. Patrick Leahy has nominated the latest Enemy of the People: retired Justice David Souter, who wrote the majority 5-3 opinion limiting punitive damages in the Exxon Shipping v. Baker case.

Chicken suit

With the 2010 Maryland General Assembly coming to a close today, lawmakers have decided they're OK with state taxpayers subsidizing Robert F. Kennedy's legal campaign against a major employer in the state, the poultry industry.

The University of Maryland's Environmental Law Clinic caused the controversy when law students provided pro bono assistance to two environmental groups, Assateague Coastkeeper and the Kennedy-founded Waterkeeper Alliance, in filing suit against the Alan and Kristin Hudson Farm, a Perdue-contract chicken factory farm in Berlin, Md., and the poultry giant, Perdue Farms, Inc. The Clean Water Act complaint, filed March 1 in U.S. District Court, claimed the operations were responsible for illegal discharges into the Chesapeake Bay watershed. (News release, complaint.)

Several Eastern Shore legislators were incensed at the University of Maryland's School of Law allowing its clinical program to promote the litigation. In floor debate in March, state Sen. Lowell Stoltzfus, a Somerset County Republican, warned that harassment of the industry could drive it to North Carolina: "We are concerned that our university system not be a tool to further expedite that movement south, because the poultry industry is huge. It's very important."

Senators sought to withhold $500,000 from the Law School until it completed a report on its legal clinics' clients and expenditures, but the lawmakers retreated in the face of organized outrage from legal circles, academics, environmentalists and other activists, as well as the media over the supposed attacks against academic freedom. The House of Delegates dropped the funding demand, and the Senate went along in last week's budget negotiations.

A Washington Post editorial, "Md. legislators' unsavory threat," captured the basic argument against the legislative maneuver: "The message for colleges and universities in the state is as clear as it is disturbing: Mess with a legislator's big corporate constituents or offend his sensibilities, and you can expect retaliation. It's good that the funding threat was dropped, but it never should have been made at all."

But how else can policymakers hold an arm of the state, the University of Maryland Law School, accountable? The Environmental Law Clinic is using state funds to aid environmental organizations that actively oppose state policy as established by the General Assembly. You would think editorial writers would embrace oversight and accountability.

Federalist calendar: Chicago, NYC

Today (Monday Apr. 12) at the Society's University of Chicago chapter, Point of Law contributor Ted Frank will be debating author/attorney Thomas Geoghegan on "Did the Right Make America a Lawsuit Nation? A Templeton Debate on Tort Reform." Details here. Tomorrow (Tuesday) at the Columbia student chapter, Ilya Shapiro of Cato discusses the GM bankruptcy with Harvey Miller of Weil Gotshal. And looking forward to next month, on May 6 the New York City lawyers' chapter will host Francis J. Menton Jr., Michael Gerrard, and Lois Bloom on "Does Climate Science Warrant Greenhouse Gas Regulation?"


The New Jersey Supreme Court has long had a reputation as one of the nation's most liberal and activist, and the Republican governors who've periodically held office in Trenton have done little with their appointment powers to change that. Will Chris Christie be different? [Philadelphia Inquirer]

"Stuff" and nonsense

Ann McElhinney, Big Hollywood (via Osorio) on a tendentious environmental film that's reportedly been shown to 7 million kids in classrooms across America:

Problem is when children see Leonard's film in the classroom they don't get to hear about all the good things stuff does. Stuff gave my Dad a hip replacement at 91; I think that's good. Hospitals use loads of stuff so people don't die really young like they do in places where there's very little stuff. Your bicycle is made of stuff and your computer is made of loads of stuff not to mention your car. Artists use lots of stuff to make other stuff that they hope someone might like, like jewelry or movies or sculpture or paintings. Lots of stuff allows us to travel much further than our bicycle will take us, it allowed 45,000 people to travel from all over the world to Copenhagen in December 2009 to campaign against other people traveling across the world.

Do they use the same writers?

Following U.S. Supreme Court Justice John Paul Stevens' announced retirement, President Obama described the kind of nominee he will seek to replace Stevens: "It will also be someone who, like Justice Stevens, knows that in a democracy, powerful interests must not be allowed to drown out the voices of ordinary citizens."

Nan Aron, president of the Alliance for Justice, also issued a statement: "The President now has an opportunity to name a worthy successor who will stand up for equal justice for all, not just the wealthy or powerful."

Such a nominee would surely look askance at the wealthy and powerful federal government forcing ordinary citizens to purchase health care coverage against their will.

Around the web, April 11

Labor law edition:


  • Gruber & Kleiner, "Do [Nurses'] Strikes Kill? Evidence from NY State" [NBER]
  • "Obama's Prosecutorial New Labor Department" [David Frum]
  • "The 'High' in High-Road Contracting Also Includes Taxes" [ShopFloor]
  • "Should graduate students be able to unionize?" [Hills, Prawfs]
  • DOL: "We can help [on wage-hour law]" Employers: "Don't do us any favors." [Hyman]
  • "Favorite Labor/Employment Blogs" [Workplace Prof]



In a symposium at NRO, various scholars, including yours truly, my colleague Stephanie Hessler, and various friends like Jonathan Adler, Ted Frank and Eugene Volokh opine about what lies ahead in the wake of Justice Stevens's unsurprising retirement announcement. Sadly, I think Ted's hopes that the president will nominate his old boss Frank Easterbrook will go unrealized.


A pressure group named Council for Education and Research on Toxics (CERT) is trying to intervene in the bankruptcy proceedings of a large chemical additives maker named Chemtura to argue that the company owes a future $9 billion over the lingering environmental effects of the flame retardant PBDE, which was withdrawn from the market in 2004. The company says CERT is neither a creditor nor a lawful plaintiff. Bloomberg: "The Middlebury, Connecticut-based company faces more than $2 billion in claims from the U.S. and state governments for environmental liabilities, along with 375 claims of injuries from diacetyl, a chemical used to flavor popcorn."

Human rights NGOs under scrutiny

From "Electronic Intifada" to Human Rights Watch can be just one hop [Jonathan Foreman, UK Times] "While I think HRW on balance does more good than harm, I can't say the same about AI [Amnesty International], and haven't thought that for quite a while." -- Kenneth Anderson's forthcoming views on his experience with the NGOs sound as if they'll be worth waiting for [Volokh] NGOs are pressuring Australia to adopt a national human rights statute so as to allow actions in its courts to enforce standards of international human rights law [Philip Lynch/The Age, Oz AI] And isn't it odd, reflects Prof. Bainbridge, that all the talk of universal jurisdiction for human rights crimes never results in the arrest of someone like Kim Jong Il?


Any book from the Yale professor is likely to be of interest, and this one sounds especially worthwhile, even if it will set you back a current $133.60 on Amazon. [Magliocca, Concur Op]


Vanderbilt lawprof Richard Nagareda, guestposting at TortsProf:

...In recent years, a new arrangement has emerged, to the point of spawning what is now an emerging scholarly literature about its operation and legitimacy. The 2007 settlement arrangement used to resolve mass tort litigation over the prescription pain reliever Vioxx exemplifies this new development. The Vioxx deal is striking in that it did not actually resolve a single extant Vioxx claim. The contracting parties were not the defendant manufacturer Merck & Co. and any individual Vioxx plaintiff. Rather, the contracting parties consisted of Merck and the small number of law firms within the mass tort plaintiffs' bar with significant inventories of Vioxx claims. ... For critics, the Vioxx deal exemplifies a deeply troubling trend toward the exalting of closure in mass torts to the detriment of legitimate consent.

The law firms agreed to "recommend" settlement to all their clients and, increasing the pressure, to withdraw representation from holdout clients to the extent permitted by legal ethics. Another step toward recognizing the lawyers as parties in interest to at least as great an extent, if not more so, than their clients?


Jonas Stankovich at FrumForum on why the New York AG's probe has yielded skimpy results:

...The only problem was that the LIRR retirement system is regulated largely by the federal Railroad Retirement Board, which also pays disability benefits to retirees. The Railroad Retirement Board has a history of being lax; 98% of American railroad workers who file to retire on disability are granted such status. When Cuomo launched his investigation, he had to have known that, as a state prosecutor, he would have little jurisdiction over federal regulations.

Stankovich says Cuomo has not even called for reform of the lax federal rules, calling into question how serious he ever was about curtailing the abuse in the first place. Earlier here and here.


A federal court in Maryland rebuffs an effort to sue in the United States over melamine contamination in China. [Beck et al] The reference is to a famous line from Britain's Lord Denning: "As a moth is drawn to the light, so is a litigant drawn to the United States. If he can only get his case into their courts, he stands to win a fortune." Smith Kline & French Laboratories, Ltd. v. Block [1983] 2 All E.R. 74 (C.A. 1982) (Denning, M.R.).


Quite a few twists in this West Coast saga since we last reported on it two years ago.

Around the web, April 8

  • Some thoughts on regulation, politics and mine disasters [Iain Murray, NRO; Stoll]
  • Noted plaintiff's lawyers Cabraser, Blue-Baron join American Constitution Society board [BLT]
  • Will the Left oppose Elana Kagan? [Whelan, NRO and more]
  • "The EPA, Tightening Control Over the Manufacturing Economy" [Brendle, ShopFloor]
  • Lerach saga just the iceberg-tip of class action deceit [Lawrence Schonbron, HuffPo]
  • Med-mal: Westchester County, N.Y. hospital appeals $48 million verdict in delayed diagnosis of spinal tumor [Hochfelder]


The Ninth Circuit nominee's omission of many speaking engagements from his Senate questionnaire responses has prompted an outcry in some conservative circles. Minnesota lawprof Richard Painter -- who worked with a number of President Bush's nominees to the bench in the confirmation process, and has also been a valued friend of this site -- finds the indignation misplaced: someone in Liu's position gives a great many public talks and omission does not imply attempted concealment. "Rather than posturing over yet one more 'missing documents' episode in Washington, the Senate should perhaps look at this nomination on the merits and vote." [Legal Ethics Forum, which Prof. Painter recently joined as a new contributor] More: Ed Whelan of NRO "Bench Memos" responds.


Jamison Colburn at Concurring Opinions reviews a new book on national and international litigation seeking to curtail fossil fuel use.

Student asbestos video contest

Turns out to have a law firm lurking in the background [Hartley]


Ohio, like many other states, engages in liberal departures from the federal standard on such issues as exhaustion of administrative remedies, time periods for filing claims, individual liability for supervisors and managers, and damages. The discrepancy "creates an uneven playing field, in which employees are encouraged to forum shop their claims." Time for a legislative fix [Jon Hyman]

Engel progeny cases in Florida

They're looking more and more like the long-sought vehicle for assembly-line individual smoker cases against the tobacco industry. [Abnormal Use] More: Richmond Times-Dispatch.


NYU Law Review note by Drew T. Johnson-Skinner (Legal Workshop), excerpt:

..."Paying-to-play" describes the practice of lawyers giving campaign contributions to public pension funds' political leadership in order to gain favorable consideration by the funds for appointment as class counsel. Many reforms have been proposed and enacted in response to paying-to-play fears. Aside from a few anecdotal reports, however, no examination of campaign contributions from plaintiffs' lawyers to elected officials exists in the legal literature. This Editorial returns to the first stage of analyzing paying-to-play that many commentators have skipped: whether law firms are contributing to investment funds' leadership at all. If law firms are not contributing, there can be no rational fear of paying-to-play. My study finds that law firms do indeed contribute to the investment funds that select them as lead counsel.

Around the web, April 6

  • "Maybe He Should Avoid Britain for a While": some lawyers eye assertions of "universal jurisdiction" to arrest Pope in abuse furor [Ku/Opinio Juris and more; Rick Esenberg on statutes of limitations and more]
  • "Appeal Confirms Rejection of Asbestos Bankruptcy Plan as Collusive and In Bad Faith" [Hartley]
  • State AGs as HIPAA police: Connecticut's Richard Blumenthal goes after a hospital over privacy lapse [HIPAA Blog]
  • "In Utah, Stopping Speculative Suits Based on Global Warming" [ShopFloor and update]
  • More high-dollar verdicts in suits alleging bullying [Fox/Jottings and more]
  • "Such a strange theory [in Illinois] -- that the legislature can't set limits on damages" -- Ted Olson [sub-only WSJ]


WSJ Law Blog: "the misspelling of an expert's name in a multibillion-dollar environmental lawsuit filed against Chevron is what tipped off Chevron's lawyers to the fact that the reports may have been fudged, a fact that has now been conceded by the expert himself."


I am not such a big fan of Keith Olbermann. He can be hilarious, but only when he is trying to be serious. But I think Henry Waxman may be a candidate for this week's "worst person in the world" this week. Olbermann won't think so, but that only puts him in the running for next week.)

Representative Waxman is upset because a couple - well actually a slew - of large publicly traded companies have looked at ObamaCare and decided that it is going to cost them money - lots money. So much money, in fact, that they have decided that they needed to take a charge to earnings and disclose it to the public - the SEC being rather sensitive about the accuracy of financial information relied upon by the investors.

This has made Waxman and that resolute defender of principle, Bart Stupak, apoplectic. Didn't AT&T and John Deere and Caterpillar and a growing list of others read the memo. Health care reform is going to expand coverage, reduce costs, cut the deficit and causeth the wolf to live with the lamb and the leopard to lie with the kid. Waxman cannot - cannot - understand how these companies could possibly disagree with selected analyses that claim that ObamaCare will cut costs. He wants them to explain.

Except they already have. The new legislation eliminates the deductibility of certain subsidies that these companies receive to provide prescription drug coverage to their retirees. This is a real cost. It will happen. The various "savings" are manna from heaven - something to be hoped (if not prayed) for. Generally accepted accounting principles require the disclosure of the former. They prohibit claiming the latter.

Now it could be that Representatives Waxman doesn't know that. It is, I suppose, possible that the Chairman of the House Energy and Commerce Committee could be that clueless. But I doubt it.

Waxman is, at best, engaged in a publicity stunt and, at worst, sending a message to others. Either way the rule of law is just a tad worse for it. These companies have a right to speak and a duty to disclose their financial condition. In the brave new world in which the government will be making us all better than we are, the company line had better not be resisted. If this means politicizing GAAP and misleading the public as to the financial condition of major publicly traded companies so be it. If it means that speaking out wins you a congressional grilling, no one ever said that revolution would be easy.


"Tucked away on page 466" is a provision that quietly replaces states' obligation to make sure doctors are paid to deliver services to the poor with a new obligation to make sure the services are in fact delivered. "'With the expanded definition, it leaves every state vulnerable to a new wave of lawsuits any time someone cannot access a service, even if that service is limited by virtue of the rates we pay,' said Alan Levine, Louisiana's secretary of health and hospitals, in a recent memo prepared for fellow state government officials." [Jon Ward, Daily Caller](cross-posted from Overlawyered)


And just like magic, all sorts of homeowners will be set up to charge their insurers for the cost of cleaning up after the defective material, at least if the decision stands. [NOLA.com]


At Prawfsblawg, PoL contributor Rick Esenberg has a few words for those who think the debate on the constitutionality of the individual mandate is settled even before it arrives at the Supreme Court. Ilya Shapiro has issued a challenge to debate the subject. And the issue has spun off a separate debate, between Rick Hills and Ilya Somin, about whether American libertarians are fonder of federalism than it would make sense for them to be, which also provokes comment from both Esenberg and Shapiro.


Washington Legal Foundation has an April 7 webinar with three attorneys involved in the successful recent Illinois Central case (invitation and speaker bios, both PDF).


The Buffalo (N.Y.) Law Journal profiles Mark Pearce, the Buffalo labor lawyer named via recess appointment by President Obama to the National Labor Relations Board, "Recess appointment takes Pearce back 'home' to NLRB." Pearce, 56, a partner at Creighton Pearce Johnsen & Giroux, actually began his legal career in the Buffalo offices of the NLRB. (Now that we look at Pearce's law firm bio, we find he's also an accomplished painter and portraitist.)

Pearce takes office on Wednesday as one of two Democratic appointees. Also expected to join the the board this week is the more controversial nominee, Craig Becker, the associate counsel for the SEIU and AFL-CIO. Their addition will make the board 3-1 Democratic to Republican; the five-member board is traditionally 3-2, with the majority held by the political party of the President.

Martin Payson, a partner at Jackson Lewis, raises the prospects of a completely one-side board if President Obama does not appoint or gain confirmation of a Republican board member -- he has nominated Senate staffer Brian Hayes -- and current Republican member Peter Schaumber leaves with the expiration of his term on August 37:

There will be no imperative for the President to fill the other two vacancies, which will mean there will be no institutional balance in the Board's decisions. Consequently, labor law reform will be accomplished through the reversal of numerous decisions, changes in election procedures, as well as aggressive rulemaking to enhance union chances for election success, and punitive new remedies for unfair labor practices designed to diminish management's lawful exercise of its statutory rights.

Schaumber gave an excellent speech March 3 at the ABA's Winter Meeting in Puerto Rico on labor policy, labor law and the functioning of the NLRB. In it, he responded to an earlier speech at Washington University in St. Louis given by Chairman Wilma Liebman. From Schaumber's remarks:

Chairman Liebman's speech is an important one, thoughtful, and I encourage you to read it. However, it is also a speech that was troubling for me on a number of levels. One can argue that the positions staked out therein reflect a nostalgia for a foregone era: a period in the 1930's and 40's when the Wagner Act reigned and American unions had only rights, not obligations; when employees lacked the protections afforded by Taft Hartley, and employers were severely restricted in their ability to convey opposition to the unionization of their enterprises. I would argue that the speech also rests for some of its assertions on incomplete statements of historic events, and discredited, or at the least hotly contested, research. One of the troubling aspects of the speech, for me, is its hint at the possibility of an upcoming wholesale reversal of Bush Board precedent.

A transcript of Liebman's speech is available here.


Mark Hemingway at the Washington Examiner has been doing a series all week on the Obama Administration's unabashed tilt toward pro-union policymaking, including the UAW auto bailout, the roundup of home health care workers, the new NLRB, pension plan bailouts, and much more. Installments here, here, here, here, and here.

What? No rewards for bad behavior?

"N.J. Justices Lean Toward Banning Use of Purloined Documents in Bias Suits" [NJLJ]

Around the web, April 2


Stuart Taylor, Jr. takes a look at the impending battle over the Ninth Circuit nomination of Goodwin Liu, who has indicated that the three decisions in question belong in history's dustbin. Milliken limited busing orders, Rodriguez found that the federal constitution does not provide grounds for school finance equalization suits, and Adarand limited racial preference by the federal government. Earlier here and here.

Amicus brief in tobacco-RICO case

The Washington Legal Foundation and National Association of Manufacturers have filed an amicus brief asking the Supreme Court to review and overturn the D.C. Circuit decision holding that tobacco companies can be charged with racketeering for defending their products in public controversy. Earlier here and, at Overlawyered, here.


Brace yourself: here come new extensions of the Americans with Disabilities Act and similar enactments, couched as requirements of international human rights law.


As well it might be. At issue is a District of Columbia law, similar to those enacted in 14 states, "that lets the victims themselves bring criminal prosecutions to enforce restraining orders" through criminal contempt charges.

OSHA revisits ergonomics, cont'd

And a coalition of business groups warn it not to reopen one of the great regulatory battles of recent decades. Earlier coverage here.

 

 


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

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

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.