June 29, 2009

Suing the scientific advisor

It didn't work as a tactic in the jaw implant mass tort, as Beck and Herrmann relate.

June 27, 2009

Around the web, June 27

• Mark McKinnon, "All arbitration is not created equal" [National Journal "Hotline on Call"]
• They owe it to themselves: "Conn. Supreme Court Orders Trash Utility to Pay Towns $36 Million", though the utility's a quasi-public entity run as a consortium of towns [Connecticut Law Tribune]
• Statute of limitations was just one problem for these Zyprexa plaintiffs, another was how obviously the drug had done well for them [Beck & Herrmann]
• Mark Geistfeld (NYU) on products liability & consumer choice [SSRN, Mass Tort Prof]
• "BPA is the 'Toxin du Jour,' Banning It Means Lawsuits Tout de Suite" [California Civil Justice, Elizabeth Whelan/Forbes]
• With ABA support, Congress hastens to strip away funding curbs on federal Legal Services class actions and law-reform efforts [ABA Journal]

June 26, 2009

$7 million Mississippi verdict against Sherwin-Williams

Over a child's lead paint consumption. [Tom Freeland, with many comments; Jane Genova]

June 24, 2009

Litigation groups: Continuous expansion is the key to profits

Reviewing the American Association for Justice's schedule for its summer convention in San Francisco, we see a brace of proposed litigation groups, those AAJ mutual aid societies for lawyers wanting to learn the tricks of product liability and class action trade. So might these new targets be?

• Fleet Phospho-Soda Litigation Group (Proposed) Meeting
• Chinese Drywall Litigation Group (Proposed) Meeting
• Denture Cream Litigation Group (Proposed) Meeting
• Durom Cup Litigation Group (Proposed) Meeting
• Bankruptcy Litigation Group (Proposed) Meeting
• Outbreak of Disease Litigation Group (Proposed) Meeting
• Hydroxycut Litigation Group (Proposed) Meeting
• Reglan Litigation Group (Proposed) Meeting
• Cable Set-Top Box Litigation Group (Proposed) Meeting
• Yaz/Yasmin Litigation Group (Proposed) Meeting

Chinese drywall and bankruptcy are obvious enough choices, and others are familiar from lawyers' web ads. But there's always something new. Cable set-top boxes. Denture cream. Huh. Guess there's some fan of The Lawrence Welk Show just waiting to cash in.

June 17, 2009

Alabama, sunlight or subsidy?

Walter noted on Tuesday that the powerful Albama trial lawyer Jere Beasley has announced his choice for governor, U.S. Rep. Artur Davis, a Democrat. Coincidently, we had just been reading up on one of the bills sponsored by Rep. Davis, H.R. 2519, a tax deduction for expenses and court costs advanced in a contingency fee case -- in effect, about a 40 percent tax benefit for trial lawyers to stimulate the filing of civil suits.

You could see how Rep. Davis might be Beasley's guy.

Davis' bill is the companion legislation to S. 437, introduced by Sen. Arlen Specter in his Republican days. Last year, Ways & Means Chairman Charlie Rangel tried to include the same language the energy and tax extenders bill last year (Section 311 in H.R. 6049). As we noted earlier, The Wall Street Journal called the provision, "The Bill Lerach Tax Cut."

The disinfecting sunlight of public attention killed the provision in 2008, and one hopes for a similar heliofatal blow this year. Victor Schwartz and Chris Appel of Shook, Hardy & Bacon help aim the light in a recent Washington Legal Foundation piece, "Federal Government Bailout For Trial Lawyers."

June 15, 2009

GM, Chrysler Bankruptcy Plans Unfair to Accident Victims?

As Chrysler emerges from bankruptcy and GM prepares to swallow the same very bitter pro-union pill its rival had to consume, a very interesting phenomenon is developing. Suddenly journalists and lawyers who had no problem with the destruction of bondholders' assets are complaining that potential tort victims are "unfairly" being targeted by the bankruptcy. See, for example, here and here.

Wait a minute. On the one hand, it is recognized that many people lost much (in some cases all) of their savings when their bonds, supposed to have priority over union claims, suddenly lost that priority as a result of government intervention. [This Washington Times piece gives several examples.] Why should claims that do not necessarily even validly exist (they have not yet been adjudicated in most instances; even when plaintiffs win automobile product liability suits their or others' misbehavior is often the chief cause of their injury) be treated more preferentially than explicit and preferential promises to pay?

When one is injured by a product produced by an insolvent, bankrupted, or liquidated firm, one may well have no recourse -- this is "unfair" only in the general sense that life is unfair. According to Clarence Ditlow, the executive director of the Center for Auto Safety, "the [bankruptcy] plans are unusual in that they would prevent anyone from bringing a future liability claim against GM or Chrysler if a car already purchased from either company is defective and results in an accident causing death or serious injury." Mr. Ditlow further stated that "it was...unusual for no money to be set aside for liability claims." Unusual perhaps, unheard of not at all; and what is NOT unusual about these nationalizations-cum-bankruptcies?

As soon as government became the main shareholder of the new corporations, we could guess it would not play by "usual" rules. Those Chrysler promisees who explicitly relied on pre-existing law have already seen their hopes dashed. Again all (alleged tort victims and real contract victims) are reminded of the value of first-party insurance.

June 12, 2009

Judge Weinstein on mass torts

The federal judge identified more than any other with mass-tort innovation recalls highlights of the field's development in the Cardozo Law Review's new online supplement. Weinstein credits brilliant lawyering with saving the tobacco industry (so far) from ruin, continues to begrudge the consensus of national opinion (as expressed through Congress) its right to cut off the handgun suits, and lays blame in multiple directions for the many failures of asbestos litigation. And he speaks up strongly at several points for judges' obligation to prevent the charging of excessive attorneys' fees. Also of note: "The breast implant litigation was largely based on a litigation fraud."

Weinstein's unrepentantly activist view of the judicial role fascinates, but also "scares the bejeesus out of", Beck & Herrmann. More: AmLaw.

June 8, 2009

The week in Congress: Preemption is awful, except...

The major legislation in Congress this week with sweeping implications for business and the litigation crowd is H.R. 1256, the Family Smoking Prevention and Tobacco Control Act, i.e., FDA regulation of tobacco. The Senate debates the bill today, with a cloture vote pending.

Mark Berlind, a partner at A.T. Kearney, essays a critique of the legislation in today's Wall Street Journal, "Tobacco and the Tort Bar," commenting, "Antitobacco activists are cheering, while some tobacco companies are raising the specter of First Amendment violations. Lost in the debate is the fact that this bill will continue to allow consumers to sue manufacturers that fully comply with the FDA's content and labeling rules."

There are other items of interest in Congressional committee rooms this week, including a hearing Tuesday by the House Judiciary Committee, Subcommittee on Commercial and Administrative Law, on H.R. 1521, the Cell Tax Fairness Act. As the CRS summary puts it, the bill: "Prohibits states or local governments from imposing any new discriminatory tax on mobile services, mobile service providers, or mobile service property for five years after the enactment of this Act. Defines 'new discriminatory tax' as a tax imposed on mobile services, providers, or property that is not generally imposed on other types of services or property, or that is generally imposed at a lower rate."

The bill was introduced by Rep. Zoe Lofgren (D-CA) and has 112 cosponsors from both parties, including opponents of federal preemption in other contexts.

Continue reading   The week in Congress: Preemption is awful, except...

Around the web, June 8

• Overexposure to zinc from denture cream eyed as new mass tort [Maryland Injury Lawyer, WSJ Law Blog, Qualters/NLJ]
• The donations of Madison County: "Metro East Litigation Giant Floods [Illinois] Senate Candidate Giannoulias with Cash" [Post-Dispatch courtesy American Towns, Madison County Record]
• Proposed expansion of federal gratuities statute could criminalize much innocuous behavior in dealings with public officials [Brian Walsh, Heritage]
• "Supreme Court of Canada Deals Setback to Nationwide Class Action Settlements" [Karlsgodt]
• Wachovia pays $39 million to settle stockbroker overtime class action [Bronstad, NLJ]
• Noteworthy amicus brief in Santa Clara case: California District Attorneys Association weighs in against government retention of contingent-fee counsel [Lisa Perrochet, Nuisance Blog]

June 4, 2009

GM and Chrysler Product Liability Plaintiffs

Lost in the discussion of bondholders, dealers and layoffs is the effect of bankruptcy filings on product liability suits against GM and Chrysler, typically launched by victims of automobile accidents who claim that they would have been less injured than they were if only their vehicle had been "correctly designed." Thousands of such suits are pending at any one time -- either our auto designers are remarkably inept or this kind of liability is remarkably open-ended and lawless (guess which option I choose?). The Washington Times reports that plaintiffs' lawyers are outraged that their clients must now compete for the few cents on each dollar that unsecured creditors get.