Recently in Regulation Through Litigation Category

Two weeks ago, PointofLaw featured Assistant Attorney General Lanny Breuer's announcement that next year the Justice Department would release "detailed new guidance" on the Foreign Corrupt Practices Act. In his address however, Lanny Breuer did not specify in any detail the particular guidance to be offered. Therefore, there has been an active effort, like that made by Senator Charles Grassley (R-Iowa), ranking member on the Senate Committee on the Judiciary, to ensure that the Justice Department provide appropriate guidance which would sufficiently aid the business community.

Senator Grassley submitted questions to the Justice Department pressing for clarification among which were the following:

• Will the guidance include the Department's interpretations of ambiguous statutory terms such as "foreign official" and "government instrumentality"?

• Will the guidance clarify when a company may be held liable for the actions of an independent subsidiary?

• Will the guidance clarify the extent to which one company may be held liable for the pre-acquisition or pre-merger conduct of another?

• Will the guidance include an enforcement safe harbor for gifts and hospitality of a de minimis value provided to foreign officials?

Additionally, the Wall Street Journal reported yesterday that Pfizer is near an over $60 million dollar settlement to resolve investigations of FCPA violations by the company in its efforts to win business overseas. In response to these investigations, many major pharmaceutical companies are spending a great deal of time along with millions of dollars developing comprehensive compliance programs. It may be that effective FCPA guidance aimed to cure vagueness and ambiguities would be much needed relief for American businesses.

At a hearing in New York City on Wednesday, U.S. District Court Judge Jed S. Rakoff, the same judge who on Tuesday gave Raj Rajaratnam a record $92.8 million penalty in a civil insider-trading case, questioned the proposed $285 million settlement between the SEC and Citigroup for Citi's $1 billion mortgage-bond deal called Class V Funding III. During the hearing, Judge Rakoff was critical of the proposed settlement amount and an agreement where Citigroup does not deny or admit wrongdoing.

The case is SEC v. Citigroup Global Markets Inc, No. 11-07387 (S.D.N.Y).

Notable judicial figures who admit in speeches that they don't read the fine print in the last year: Chief Justice Roberts (ABA Journal; LA Times), Judge Posner (Blackman), Judge Easterbrook (Blackman, @tedfrank). It should pretty much be a standard interview question for judges and legislators at this point, no?

The GMU Law & Economics Center has papers and videos from its recent roundtable.

The cover story in the latest New York Times Magazine is "The Other Oil Cleanup," in which Texas trial lawyer Tony Buzbee is the peg to tell the story of competition among the plaintiffs' bar for a piece of the litigation against BP.

The author, Douglas McCollam, a contributing editor for the Columbia Journalism Review and The American Lawyer, then explores the role of trial lawyerdom in today's economy and legal system.

The BP disaster comes at a pivotal juncture for the American trial bar. In many respects its power and influence hit its zenith in the late 1990s, when a coalition suing the tobacco industry on behalf of 46 states reached a landmark $206 billion settlement in a case that both fundamentally altered the public's perception of cigarette smoking and made billionaires out of several of the lawyers involved. That settlement led to predictions, both dire and hopeful, that the trial bar would use its newfound financial clout to go after a host of other industries, transforming the face of American capitalism.

Instead, the plaintiffs' bar has seen setbacks in Congress, state legislatures, the courts and most importantly, public opinion. And then, a new model of addressing liability in disasters arises: Kennth Feinberg and compensation funds.

The Feinberg fund represents an alternative model for the resolution of big disasters, one that moves trial lawyers from center stage to a spot in the chorus. Over the last few decades the trial bar has built what amounts to a private-enterprise regulatory machine, compiling an impressive string of victories over -- or at least a series of large settlements from -- the most powerful corporations in the world. Some call them parasites and label their style of litigation the "American disease." Others see them as the last truly effective check on corporate power left in the U.S. system. With the Feinberg model comes the prospect of their further diminishment, a blueprint for a future without big-time trial lawyers. And they are not willing to accept that future without a fight.

It's an excellent piece, with a lot of detail about the Multidistrict Litigation process, including a judicial panel's July meeting in Boise, Idaho, that featured the nation's major trial lawyers pleading their case as to jurisdictions and the makeup of the steering panel. Judging by the scope and detail of the reporting, McCollam must have a book in the works.

The American Association for Justice issued a statement in reaction to the article: Buzbee is not a member of AAJ "nor does he represent the interests of the trial bar," and asserting that only trial lawyers can hold BP accountable, and we mean it!

Surprisingly good news: the DOJ has weighed in on the AEP v. Connecticut certiorari petition, and asked the Supreme Court to reverse the Second Circuit decision permitting Connecticut to sue electric companies for carbon emissions on a nuisance theory. [NYT/Greenwire; WLF]

Related.

Update: Jonathan Adler isn't surprised.

My Investors Business Daily piece linked by Ted yesterday was inspired by the latest short update in the Center for Legal Policy's Trial Lawyers, Inc. series, focusing on the environment (see links to right). In addition to Connecticut v. American Electric Power, the report discusses other climate-change lawsuits, as well as environmental torts stemming from the BP Deepwater Horizon spill and toxic torts like those involving MTBE and atrazine.

Brian Bolduc discusses over at NRO.

More: Julian Morris, the executive director of the International Policy Network (and formerly Director of the Environment and Technology Programme of the Institute of Economic Affairs), reacts to the report.

MI's Jim Copland is in today's Investor's Business Daily discussing Attorney General Richard Blumenthal's attempt to hijack national environmental policy on carbon.

I saw her quoted on television complaining about the length of credit card contracts being "tricks and traps," and it's apparently a regular talking point:

In 1980, according to the Wall Street Journal, the typical credit card contract was about a page and a half long. It told you about the interest rate, about being late and that was pretty much it. Today, the typical credit card contract according to the Wall Street Journal is about 31 pages long. So, tricks and traps? It's that other 29 and a half pages.

To which I respond, "No, Professor Warren. The reason that credit-card contracts are 31 pages long is because your trial-lawyer buddies persistently sued credit-card companies for failure to disclose, and the lawyers kept making them add more and more to credit-card contracts to settle past or avoid future lawsuits. And all of this could have been avoided if you permit credit-card customers to opt out of the expensive and inefficient legal system that requires such overdisclosure, except your future Consumer Financial Protection Bureau is almost certain to bar consumer choice to agree to arbitrate these disputes."

Perhaps if Warren is appointed CFPB head, she'll require credit-card contracts to be a page and a half long again—and then start a new cycle of state-law class actions complaining about failure to disclose and arguing that CFPB regulations don't preempt those lawsuits. That'll surely make lawyers better off; consumers, not so much.

In the most recent issue of the Manhattan Institute's City Journal, Jim Manzi has a fascinating piece on the limits of social science. I posted my initial reaction to the piece on Marquette University Law School's faculty blog. His observation are particularly timely in light of the recent decision of a district court judge in Perry v. Schwarzenegger striking down California's constitutional amendment limiting marriage to one man and one woman.

My point relates not to same sex marriage itself, but Judge Walker's use of social science evidence and how that might relate to constitutional litigation generally. The key question is the extent to which courts ought to rely on social science evidence to overturn the laws enacted by voters and their elected representatives. This question extends well beyond the matter of same sex marriage.

According to Judge Walker, social science evidence has proven that same sex marriage will have no impact on the mores and vitality of marriage between heterosexuals and that it has proven "beyond any doubt that parents' genders are irrelevant to children's developmental outcomes."

It is certainly true that most academics who have devoted themselves to the study of gay and lesbian isses believe these assertions. But it is quite another matter to say that they have proven them. Our experience with same sex marriage is quite recent and limited. It is not clear that there is enough data to draw any conclusions about its long term impact.

As for the "genderless" nature of parenting, there are severe methodological difficulties in obtaining randomly selected comparable samples of gay and lesbian couples raising children. Comparision groups of heterosexual parents are often not limited to intact married couples raising their biological tradition and there are very few, if any, adequate longitundinal studies.

But beyond this, Manzi's article suggests that it may be difficult to ever say - at least by the standards of the physical science - what the impacts of same sex marriage are or will be. While his article focused on implications for policy making, there are lessons for judicial decisionmaking as well. A large part of Judge Walker's decision is given over to declaring the judgment of a majority of California's voters as irrational because social science purports to establish that what they believe to be true is not.

The question is not an easy one. Traditional equal protection analysis requires some scrutiny of the justificaton for legal distinctions. But it may well be that social science evidence needs to be viewed with greater skepticism than shown by Judge Walker in Perry. Constitutional litigation ought not to be seen as a battle of experts who attempt to claim the dispassion and robustness of the physical sciences to resolve contested issues of social policy.