On Tuesday May 8, 2012, the Subcommittee on Fisheries, Wildlife, Oceans, and Insular Affairs of the House Committee on Natural Resources will hold a hearing on proposed legislation to de-criminalize the Lacey Act, a 1900 statute prohibiting the interstate transportation of wildlife or plants obtained in violation of federal, state or foreign laws. The statute received attention recently when Gibson Guitars was raided by federal agents for allegedly importing ebony and rosewood in violation of the laws of India and Madagascar. Senator Rand Paul and Representative Paul C. Broun have introduced companion bills in the Senate and House, which would replace the Lacey Act's criminal penalties with a civil penalty system, and strike from the Act all references to "foreign law." The new legislation would also make the Lacey Act enforceable only through civil process.
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Secondary boycotts on ALEC supporters demonstrate a breakdown of civil society. Liberals have NCSL and NAAG and any number of Soros-funded organizations where legislators can exchange ideas and think about model legislation; heaven forfend free-market legislators have the same. The racial mau-mauing is especially disgusting and unfair, especially given the fact that so many of these former ALEC supporters were already supporting the Congressional Black Caucus, which refuses membership to African-Americans who don't toe their anti-market and racial-grievance line. [Adler @ Volokh; Smith @ WSJ and @CCP; WSJ; Bader; Forbes; Cherokee Tribune; Franklin Center; ALEC]
Black/Hyman/Silver have a new draft paper, "Does Tort Reform Affect Physician Supply? Evidence from Texas," (via Robinette) that substantially undermines the empirical case for the conventional wisdom that Texas's 2003 reforms against medical malpractice lawsuits attracted more doctors to Texas. The result is highly counterintuitive: after all, even the authors acknowledge that the reforms dramatically decreased malpractice expenses for doctors. Are we to conclude that doctors do not respond to economic incentives?
Alas, the authors do not suggest any explanation for the phenomenon they describe. Possibilities:
- The supply of doctors is inelastic relative to after-expense income. This is a testable hypothesis, and would have dramatic implications for "bending the cost curve" of health-care expenditures if true.
- Employers of doctors offset the decrease in medical-malpractice expenditures by decreasing wages paid to doctors. This seems somewhat implausible, as many doctors are independent, and the ones that aren't probably aren't paying for their own malpractice insurance. But it is also a testable hypothesis. Too, if the health-care market in Texas responded to such a wage decrease by reducing costs to patients (or, at least, reducing costs to patients relative to the nationwide trend of rising costs to patients), that is also worth studying, and would be a benefit that may refute the overstated conclusion of the authors that "tort reform is a small idea, when it comes to the larger and linked questions of health care access and affordability."
- The quantity of doctors did not increase, but the doctors responded to the incentives by changing the mix and quality of services provided in any given year: more OB/GYNs willing to deliver babies rather than restricting themselves to less risky work; more doctors willing to work in emergency rooms; doctors spending more time seeing patients and less time in medical-malpractice-related activities like defending themselves in lawsuits, cover-your-ass documentation, and (for better or worse) defensive medicine. If the average practicing doctor is spending more hours with patients post-tort-reform than pre-tort-reform, doctor supply is increasing, even if the raw numbers aren't. I am not aware of any evidence for this, but economic theory would predict this result. It's not clear whether the data exists to test this hypothesis, but as in the parable of the drunk looking for his lost keys under the streetlamp, one should avoid drawing conclusions that contradict economic theory just because it is too difficult to test an alternative hypothesis consistent with economic theory. Too, if defensive medicine practices changed, as one predicts they would, have health outcomes changed for better or worse? (Professor Silver has argued elsewhere his concern that Texas doctors would take less care post-reform.) Again, this is difficult to test, especially since the adverse consequences of many defensive-medicine decisions, such as excessive CAT scans, won't be known until the additional cancers show up decades later. But it is both a potential benefit and a potential cost of tort reform, as we don't know to what extent doctors are properly weighing benefits and costs (including opportunity costs of more intensive treatment of a particular patient) at the margin. Kessler's study, backed to a lesser extent by the CBO, certainly suggests defensive medicine is wasted money at the margin in the state of the world without damages caps, but defensive medicine is surely different today than in the 1980s.
- For many doctors with low-risk practices, malpractice liability is not a large factor in their practice decision. But the malpractice liability crisis most heavily hit high-risk practices, like neurosurgery or OB/GYN or emergency-room care. Did Texas tort reform materially affect the supply of doctors in high-risk specialties, while the effect on low-risk specialties was overwhelmed by noise? This should be a testable hypothesis, but the data is poor because of a change in the way statistics were collected. The authors try to get around this by comparing 1997-2000 growth to 2008-2010 growth, but there's not necessarily a reason that one would predict a post-tort reform world to have a different post-equilibrium effect than a pre-tort reform world. One cannot rule out the hypothesis that doctors overreacted to the new incentive when tort reform was first imposed and that depressed new demand in later years. Of course, one cannot rule out the null hypothesis that a dramatic decrease in malpractice-insurance rates caused by tort reform did not increase the supply of high-risk doctors, though, again, one wishes for an alternative explanation for why doctors are not responding to economic incentives. (Note, too, that the authors' decision of excluding 2001-07 from the data has dramatic effects on the data. It's unclear to me why a reporting change in 2001 that would artificially increase the 2001-02 numbers relative to the 1999-2000 numbers should have an effect on the 2003-07 numbers, especially given the 2000-2003 declines that are being excluded.)
Can anyone think of other alternative hypotheses in the comments?
I remain skeptical that a wealth transfer from lawyers to doctors and patients didn't have positive externalities, but I, for one, am going to stop claiming that Texas tort reform increased doctor supply without better data demonstrating that. More study is needed to explain Black/Hyman/Silver's counterintuitive result, and partisans on both sides need to be more conservative with their policy claims. Earlier.
If, in applying for law-school faculty jobs, Elizabeth Warren had fudged her transcript to improve her chances of getting hired, she'd almost certainly be suspended by the bar for ethics violations.
So where is the ethics investigation on Warren's fudging of affirmative-action credentials? Earlier.
Last week, the Supreme Court heard oral arguments in Arizona v. United States on the issue of "whether federal immigration laws preclude Arizona's efforts at cooperative law enforcement and impliedly preempt four provisions of S.B. 1070 on their face." Ilya Shapiro, senior fellow in constitutional studies at the Cato Institute and editor-in-chief of the Cato Supreme Court Review, recently discussed the case in our regular podcast series.
Today, we feature, fellow and senior legal analyst with the American Civil Rights Union and legal contributor to Breitbart News, Ken Klukowski's hypothesis on how the Court will rule:
I think two of the provisions of the statute, the alerting of federal authorities or inquiring with federal authorities regarding immigration status and also the warrantless arrest authority: those provisions fall I think pretty well within what we refer to as police power which is an inherent authority that all states possess to make laws for public health, public safety, social welfare, personal responsibility and morality. Those are the two, I believe, that the one judge in the Ninth Circuit voted to say was okay. I think there's a good chance, a real solid chance, you might be able to get five votes to uphold those. And I think that would be correct.
The other two provisions, making it a state crime not to have the federally required registration documents on you and also the provision making it a crime for an illegal alien to solicit work. Those I think face an uphill battle and I think that those are a much closer call regarding current federal law. Again, not saying that that federal law to the contrary, [if it is to the contrary] not saying it's a good idea, just saying that's a judgment that Congress has made. And so the way to change that would be Congress amending the law. Courts do not have the discretion to decide whether or not Congress's law is a good one. They, just so long as it's constitutional, need to uphold it against any contrary state law.
Klukowski also comprehensively discusses the central legal issues and analyzes the arguments as articulated before the Court in the full podcast.
Sulindac, like all NSAIDs, is capable of causing the rare (and horrific) reaction toxic epidermal necrolysis, and does so in about five or six patients a year. Nevertheless, the FDA, in evaluating the drug, recognized that the benefits outweighed the rare side effects, and approved the drug as "safe and effective." Karen Bartlett was in the very unfortunate one in a million, and suffered the rare side effect when she took generic sulindac. Her failure-to-warn theory was both a non-starter (her doctor never read the warnings) and, in any event, preempted by Pliva v. Mensing. But she was permitted to take a "design defect" theory to the jury. It's unclear how defendant Mutual Pharmaceutical was supposed to "design" sulindac differently; after all, it's a single molecule, and no one claimed that the inactive ingredients in the medication were at fault. But plaintiffs' theory was that the FDA was wrong, and that manufacturers should simply withdraw the drug from the market. A judge let this get to a jury, and let the jury consider the warning label in determining whether the drug was unreasonably dangerous, and, after the inevitable loss aversion bias kicked in, Mutual is now on the hook for $26 million. All this made possible by the Supreme Court's erroneous anti-business decision in Wyeth v. Levine. [Bartlett v. Mutual Pharmaceutical Co. (1st Cir. May 2, 2012) (via Bashman)].
Beck calls for Supreme Court review. I agree.
(Looking for good links on NSAIDs and SJS, I found that the search-engine-optimized websites for Stevens-Johnson Syndrome are all trial-lawyer sites, natch, with misleading names like "Skin Association.")
In The American Conservative, Ron Unz compares the Vioxx litigation to the Chinese melamine scandal, and finds the American justice system lacking. (Also: Sailer; Roberts; and a plaintiffs' lawyer who makes the lay mistake of confusing a mass tort with a "class action".) But Unz's entire argument is based on an incorrect premise. Unz assumes that David Graham is correct in implying that Vioxx had "probably been responsible for at least 55,000 American deaths during the five years it had been on the market." But Graham is not. While Graham's text in the Lancet made wild allegations, the headlines were not supported by his underlying data, which found a relative risk of low-dose Vioxx of 1.24, which was not statistically significant. A later Lancet study confirmed that Vioxx and other COX-2s were no worse than other NSAID pain relievers when it came to cardiovascular risk.
And, of course, Vioxx was not merely a product of corporate profit-seeking; it had benefits over other pain relievers. Since Vioxx has been withdrawn from the market, serious ulcerations have increased 21%.
Merck's total legal bill for Vioxx is in the range of $8 billion and counting, though it correctly won the vast majority of cases taken to final judgment; the only ones it lost, it lost due to junk science. Merck's experience with Vioxx is certainly a damning indictment of the American justice system, but for reasons opposite than the ones Unz thinks.
The Class Action Fairness Act requires additional scrutiny of coupon settlements, as well as limitations on attorneys' fees in settlements with coupon relief. With the able help of Dan Greenberg, I recently objected to a coupon settlement in a class action settlement Wal-Mart made in antitrust litigation accusing them of conspiring with Netflix to divide the online DVD market. (Netflix fought the case and won.) Plaintiffs argued that CAFA did not apply because the parties agreed to call the coupons awarded to the class "gift cards," and the district court literally rubber-stamped the settlement. I have appealed. Fierce Online Video and UPI cover the story. Earlier and see also.
The case is In re Online DVD Rental Antitrust Litigation, No. 4:09-md-2029-PJH (N.D. Cal.), appeal pending, No. 12-15705 (9th Cir.).
Details are sketchy, but New York state appears to be about to initiate a program requiring its 10,000 annual applicants to the bar to demonstrate 50 hours of supervised pro bono work as a prerequisite. [NY Times; Justice Lippman speech]
My view is that this proposal imposing a tax on attorneys is preferable to proposals taxing a broader tax base for the same thing under the guise of "civil Gideon." (More preferable still would be to make the requirement a substitute for, rather than in addition to, barriers to entry like the bar exam and CLE requirements.) On the other hand, fifty hours of an inexperienced attorney is perhaps comparable to twenty hours of an experienced attorney's work, so one questions how much of a gap this requirement will close. My greater concern is that the breadth of pro bono will be inconsistently applied to permit attorneys to engage in societally counterproductive activity characterized as "pro bono," but that a double standard will preclude work for the Institute for Justice or Center for Individual Rights.
(If, however, "work for a non-profit" can be out of state, I am happy to take requests to provide the Center for Class Action Fairness LLC.fifty hours of pro bono work. CCAF is not affiliated with the Manhattan Institute.)
Must all playground slides be straight and dull on pain of liability for "design defect," as Max Kennerly implies or can a manufacturer give parents the option to supervise children to play on a slide with some curves? Nick Farr defends. NB the rhetorical imprecision of Kennerly turning sixteen injuries into "odds are pretty good a kid is going to fall off and break their arm or knee when they land." Sixteen injuries may be too high to permit the product to be sold as is; I don't know what a reasonable baseline comparison is, or the size of the denominator. Certainly any playground equipment of height that isn't a barred cage permits a child to fall off and break an arm or a knee, and it certainly can't be the case that any risk of injury is too much risk, or that any product less safe than the most safe product is defective. If the ratio of injuries to slides used is much higher than average, I could certainly concede that a product is unreasonably unsafe. Kennerly's proposed solution, as well as that of the complaint in one lawsuit, however, is ridiculous: bigger warning labels. A warning label on a slide is just going to teach children to ignore warning labels; and any parents who don't understand the law of gravity aren't going to be educated by the label on a slide. The only conceivable label that could make a difference is "Don't Use." Either the Evos Slalom Glider is too unsafe to be sold at all (a possibility I don't rule out), or it isn't; let's not abuse the failure-to-warn doctrine.
Center for Legal Policy at the