April 17, 2008

Abraham, "The Liability Century"

Haven't seen this new volume by Virginia lawprof Ken Abraham yet, but it looks to be of much interest:

From its beginning late in the nineteenth century, the availability of liability insurance led to the creation of new forms of liability, heavily influenced expansion of the liabilities that already existed, and continually promoted increases in the amount of money that was awarded in tort suits. A "liability-and-insurance spiral" emerged, in which the availability of liability insurance encouraged the imposition of more liability, and, in turn, the imposition of liability encouraged the further spread of insurance.

Liability insurance was not merely a source of funding for ever-greater amounts of tort liability. ...The very idea behind insurance--that spreading losses among large numbers of policyholders is desirable--came to influence the ideology of tort law. To serve the aim of loss spreading, liability had to expand.

(Harvard U. Press description via Robinette)

April 14, 2008

Federal regulation of the insurance industry

Although expanded supervision of insurers by Washington, D.C. sounds like a step in a vaguely Naderite direction, don't assume that plaintiff's lawyers necessarily support it. Texas's Perlmutter & Schuelke explain why some don't.

April 10, 2008

Roger Parloff on Dickie Scruggs

Must-read profile of the Fall of Scruggs in the latest Fortune.

Scruggs was someone who could render all of State Farm's actuarial calculations irrelevant, because he had the power and know-how to force it to rewrite its contracts retroactively. ...

While the bribery accusations have attracted most of the media attention, the story of Scruggs's siege upon the insurance industry is more jaw-dropping still. These were lawsuits in which the law itself played only a bit part. Victory was to be secured by aggregating pressure points, of which the most valuable were press attacks, threats of legislation harmful to the target or its industry, and the instigation of paralyzing state and federal investigations of the target.

Notwithstanding Scruggs's initial reliance on legal arguments that have been rejected by every federal appeals judge who has considered them, he still managed to squeeze out of State Farm $150 million for policyholders who, from a cold, contractual perspective, were probably entitled to only a fraction of that.

April 9, 2008

Recent opinion roundup

• Third Circuit affirms preemption in split decision in Colacicco v. Apotex Inc.. [Beck/Herrmann; Legal Intelligencer/law.com via TortsProf; Pharmalot; earlier: Dec. 2007]
• More on McLaughlin v. American Tobacco Co. (Apr. 3) decision. [Scheuerman; Sebok @ FindLaw; NYLJ/law.com; Class Action Defense blog; NY Times; NY Sun]
• Seventh Circuit affirms dismissal of scheme liability allegation. [Pugh v. Tribune Co. via Roberts]
• L.R. writes us: "In Egelhof v. Szulik, 2008 WL 352668 (N.C. Super. Feb. 4, 2008) a NC state court banned Robbins Umeda & Fink (one of the leading plaintiffs firms for derivative suits - Robbins is the brother of the Robbins at Coughlin Stoia) from appearing in NC courts for five years because of their mishandling of a derivative case against Red Hat. Notably, they put up a plaintiff with whom they had had virtually no contact and who was obviously unsuited to bring the case." [Triangle Business Journal]
• Split decision in Tenth Circuit: okay to sue expert for testimony that hurts your case. (The expert changed his mind at a deposition after opposing counsel showed him evidence that the propounding attorney chose to conceal from the expert in soliciting his opinion.) Dissent from recently appointed Judge Gorsuch correctly bemoans effect on truth-seeking function of judicial system. [Pace v. Swerdlow; Overlawyered roundup of links]
• Aside from the Scruggs disqualification, two Katrina decisions, both of them good for the rule of law and contract: Sher v. Lafayette Insurance Co. (La.) reverses court decision declaring flood exclusion ambiguous; Fifth Circuit reverses JMOL and vacates punitive damages in Broussard v. State Farm (see earlier discussion Jan. 2007). (Updated to add: the whole point of this bullet point was to highlight the continued excellent blogging of David Rossmiller, and I somehow failed to do so. Apologies.)
• Perhaps less good for the Rule of Law: SCOTUS rules that Federal Arbitration Act is not sufficiently flexible to permit parties to voluntarily contract for additional judicial review of arbitral decisions. Why the arbitration industry thought this would be a good result is beyond me: the point of arbitration is to permit parties to contractually select rules of decision outside of the default rules, not to create a second inflexible default. [Hall Street Assoc. LLC v. Mattel, Inc.; Sarah Cole on other problems] However, the National Arbitration Forum suggests that a recent Judge Posner opinion, Edstrom Industries, Inc. v. Companion Life Insurance Co., 516 F.3d 546, 550 (7th Cir. 2008), shows that the Hall Street ruling is narrow, because parties have other mechanisms to contract around the limited judicial review to ensure review of legal decisionmaking.

April 5, 2008

Judge Senter disqualifies Katrina lawyers, Rigsby sisters

A fairly spectacular rebuke to the lawyers formerly allied with Dickie Scruggs in the hurricane litigation, as well as to the now-disgraced Scruggs himself: the judge has disqualified both the lawyers and the Rigsby sisters from participating in Katrina claims in the Southern District of Mississippi because of the gross conflicts of interest created when the (former) Scruggs Katrina Group hired the sisters as consultants despite their status as fact witnesses. Tons of coverage from David Rossmiller, from NMC/Folo, and at YallPolitics here, here, and here. Plus: more from David Rossmiller.

March 31, 2008

When lawyers pay material witnesses

Things don't always work out happily, as David Rossmiller notes of Dickie Scruggs's Katrina informants, the Rigsby sisters.

March 28, 2008

Acme Insurance Regulation, Inc.

Florida's approach strikes David Rossmiller as Looney Tunes:

I've likened Florida lawmakers and regulators to Wile E. Coyote -- they persistently pursue failed strategies. Every time that Acme rocket backpack blows up or runs them headlong into a cliff, they strap on another. They also are somewhat like a guy who is denied a promotion and then comes home and beats the stuffing out of his dog. Everything about the state's insurance mess is someone else's fault -- they never pause to consider whether the central-command regulatory regime they love might be making things worse, or be one of the actual causes of the problem. Instead, they sound like some of the black helicopter conspiracy theorists, looking for evil everywhere. And when you are emotionally invested in finding wrongdoing, you keep at it, no matter how many times that rocket explodes and singes your fur.

March 27, 2008

"Are Insurance Companies Getting Hosed in the Wind vs. Water Controversy?"

Brendan Vaughan's student note in the Illinois Law Review explores some of the questionable rulings in the Katrina litigation, and cites this weblog twice.

March 6, 2008

Louisiana better governed than Florida

On insurance regulation, at least, suggests David Rossmiller.

P.S. That doesn't necessarily go to cover former state AGs, though.

March 3, 2008

Well, that sure worked out well

Spitzer's decapitation of AIG and Marsh.