Regulation Through Litigation
Since at least the New Deal, it has been taken for granted that it is the elected branches of government that shoulder the power (and the responsibility) of enacting new schemes to regulate private and business conduct. When things go wrong, policymakers—Congress, or the executive-branch appointees at the FDA, EPA, SEC, etc.—are ultimately answerable to and replaceable by a national electorate. . . .  Continue reading...

January 15, 2008

Cleveland, Baltimore municipal subprime suits

Met with a hail of dead cats from Baltimore Examiner, NAM "Shop Floor", "Dreck" @ TigerHawk, KipEsquire, Amateur Economist, and various commenters at the Plain Dealer. But the Denver Post's Al Lewis finds another lawprof who admires the Cleveland suit, which is more prominently being talked up by lawprof Kathleen Engel, a specialist in this area, as mentioned here and here. By coincidence or not, the law school at which Engel teaches is Cleveland State. And activist Ohio attorney general Marc Dann, a frequent mentionee on this site, praised the Cleveland suit and suggested that he may jump in at some point with an action on behalf of the state.

Earlier here and here. Related: Salmon @ Portfolio, Elizabeth Warren @ Credit Slips [with some good reader comments].

Posted by Walter Olson at 01:07 PM | TrackBack (0)

January 14, 2008

Cleveland suit: overlending as public nuisance

You can't say we didn't warn you about the dangers in lawyers' efforts to develop elastic, inventive "public nuisance" theories for suing unpopular businesses (gunmakers, makers of lead paint in 1920, global warming contributors, etc.) And now, shortly after Baltimore's lawsuit (PDF) seeking recovery from subprime lenders for various sins and insults, the mayor of Cleveland has followed with a yet more absurd and yet more dangerous lawsuit (PDF), this time invoking public nuisance law against not merely originators of mortgage loans, but even financial institutions that later bought the mortgages from their originators. The Cleveland Plain Dealer, in an astoundingly irresponsible editorial for a newspaper of its once-high reputation, actually cheers: "Wall Street should pay", though it concedes the shakiness of the actual filing: "The one-count complaint contains not one legal citation".

Meanwhile, the Baltimore Sun reported over the weekend that "Baltimore's lawsuit against Wells Fargo for its subprime mortgages has stirred up frustration among industry players, who say they're increasingly taking heat for offering loans in poorer and minority neighborhoods despite being urged for years to do just that." Some legal academics are applauding the emerging city lawsuits; see, for example, this post at Credit Slips. Earlier here.

Posted by Walter Olson at 12:10 AM | TrackBack (0)

January 11, 2008

Deadline approaches for individual FL tobacco suits has a nice summary of Florida plaintiffs' lawyers' current rush to file individual tobacco liability suits, after the Florida Supreme Court in July 2006 overturned a $145 billion class action punitive-damage verdict. The Florida supremes held that plaintiffs couldn't proceed as a group, but upheld jury findings that the companies were negligent and sold defective products, which will apply in each individual case. January 15 is the filing deadline.

The last-minute filers include Willie Gary, a Stuart, Florida, lawyer who travels in a custom 32-seat Boeing plane he calls ``Wings of Justice II''. [I wrote at length about Mr. Gary in "NAFTA Meets The American Torts Crisis: The Loewen Case", 9 George Mason Law Review 69 (2001)].

Tobacco defendants will NOT be able to litigate the defectiveness of their product, but they WILL be able to argue that plaintiffs were themselves to blame or that their illnesses or deaths did not result from smoking. Florida is a pure comparative negligence state, so each case looks to be a drawn-out affair.

Posted by Michael Krauss at 01:51 PM | TrackBack (0)

D.C. Strict Gun Liability Statute Bites the Dust

Yesterday a unanimous D.C. Circuit panel granted an appeal tossing a lawsuit based on an absurd District strict liability statute. The statute holds gun manufacturers liable for all deaths or injuries caused by handguns (none of which may be legally sold in the District). The panel dryly noted that federal legislation prevents this kind of law. End of story.

Posted by Michael Krauss at 05:39 AM | TrackBack (0)

January 08, 2008

You Harmed Us By Enabling our Citizens to Buy Homes

The New York Times reports on a hilarious display of legal incompetence by the new administration of Baltimore, the self-styled "City that Reads" (not).

In the suit, Mayor Sheila Dixon joined with the City Council to ask that the court bar Wells Fargo Bank from charging higher fees to black borrowers. It seems that the suit alleges that:

1. The bank allowed subprime loans in Baltimore;
2. These loans have defaulted in large numbers;
3. The defaults have led to foreclosures, and to a lowering of property values, hence to a lowering of the tax base to be tapped by Baltimore City.

Let's see, hmmm. You shouldn't have loaned money to unqualified borrowers, and now that you insist they pay back their promised amounts you are harming the city they were fortunate enough to own property (thanks to you) in. Legal incompetence and Economic incompetence all rolled together in one suit. Nicely done, your Honor.

Posted by Michael Krauss at 02:00 PM | TrackBack (0)

December 19, 2007

The other Scruggs Katrina scandal

The bribery charges stemming from the fee dispute have been getting 99 percent of the attention, but as David Rossmiller relates (and earlier here), there are some major developments as well in the thicket of misconduct charges arising from Scruggs Katrina Group's remarkably uninhibited tactics in its litigation against State Farm. One highlight: a smoking-gunnish note by an engineer cooperating with SKG "recount[ing] an apparent conversation between Special Assistant Attorney General Courtney Schloemer and an SKG attorney: 'they agreed that a criminal conviction [if one could be obtained against State Farm] could help civil cases.'" Some further discussions here, here, here, and here.

Also, the Wall Street Journal's free site has now posted a no-subscription-needed link to my Saturday op-ed on the Scruggs indictments. It can be found here.

Posted by Walter Olson at 09:55 AM | TrackBack (0)

December 14, 2007

"Here come the climate-change lawsuits"

A financial writer at Motley Fool advises caution on stocks of companies that might face legal claims: "Known to its detractors as Trial Lawyers, Inc., the plaintiffs' bar makes serious bucks by launching mass tort and class action suits. The bigger the damages, the bigger the contingency fees, so high-profile harm is how these litigation firms make hay -- and it doesn't get much more high-profile than climate change."

Posted by Walter Olson at 12:12 AM | TrackBack (0)

December 13, 2007

Toledo lead paint lawsuit

Soundly dismissed, reports Jane Genova. More: defendants' statement.

Posted by Walter Olson at 12:15 AM | TrackBack (0)

November 21, 2007

"3-year-old trial lawyer contract never approved"

Alabama: "A state contract hiring trial lawyers to sue drug companies over allegations of overpricing will be submitted to the Legislative Contract Review Committee this week, nearly three years after it was signed," the Birmingham News reported late last month. "Medicaid Commissioner Carol Steckel signed the Jan 6, 2005, contract hiring Birmingham firm Hand, Arendall" at a 14 percent contingency to file the pharmaceutical pricing suit, which could bring the state hundreds of millions. By Alabama law the legislative panel is supposed to oversee such contracts, though it has little formal power and cannot cancel them. The state says it submitted the contract for the panel's review but never heard back; "Contract Review records do not reflect the committee ever receiving the contract."

Posted by Walter Olson at 10:17 AM | TrackBack (0)

November 20, 2007

State Court Docket Watch November 2007

Some interesting articles in this month's State Court Docket Watch from the Federalist Society:

There are also a number of articles about judicial selection processes.

Posted by Ted Frank at 04:57 PM | TrackBack (0)