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May 2004 Archives

Howard Bashman reports on How Appealing that the Ninth Circuit has declined to rehear en banc the decision of a panel issued last fall in Ileto v. Glock, which held that the gun manufacturer could be held liable for selling a firearm in Washington state that wound up being used in Buford Furrow's 1999 shooting spree in California. For my thoughts on the original decision, see my article last fall in National Review Online.

Another point of confusion that arose at the Manhattan Institute's May 25th forum came from a question posed by Bill Tucker, a journalist who wrote a Weekly Standard cover story last year entitled, "In Defense (sort of) of Trial Lawyers." Tucker asked whether we should distinguish between personal injury suits, class action suits, and the like, and business-to-business lawsuits.

The implicit premise is that a business, unlike an individual, will not bring a meritless lawsuit. But while some of the problems in our civil justice system aren't applicable to business-to-business suits -- say, the problem of attorneys' ethics under contingency fee arrangements, or the problems inherent in class action litigation -- it's hardly clear that business are unlikely to use the legal system as a harrassment tool, given our peculiar "American rule."

During yesterday's Manhattan Institute program Trial Lawyers, Inc.: Myths and Realities, a number of the audience questions directed toward John Stossel after his luncheon speech centered around "loser pays" provisions and how they might work in practice. Many of the questioners could have benefited from reading some of the writings of our editor Walter Olson on the topic, including the basic introduction he's posted on this site and overlawyered.com, or his more extensive treatment in chapter 15 of The Litigation Explosion.

The questioners focused on: (1) whether it was fair for plaintiffs themselves, as opposed to the lawyers representing them, to be responsible for paying fees if their suit did not prevail, and (2) whether such a system might prevent individuals from filing suit against large corporations who could run up very high legal expenses.

Cameron County's revenues apparently depend heavily on its warehousing of federal prisoners in its jail. But the U.S. Marshals pulled federal prisoners after a series of escapes. So Cameron County is suing the builder of the jail, and all of the contractors and subcontractors--including the plumber, who noone blames. Jo Rae Wagner, the president of the plumbing company, speaks out; such "shotgun" listing of plainly innocent defendants is common. The newspaper gets counterbalance from two law professors who assure readers that such defendants don't have to pay anything to be dismissed from the suit, but apparently haven't actually tried to get such a defendant out of a suit without incurring legal expenses or tried to recover legal fees for the frivolous suit. (Allan Essex, "Company calls county lawsuit unjustifiable", Valley Morning Star, Mar. 27).

To obtain sanctions for a frivolous lawsuit in Texas, a defendant has to prove, after an evidentiary hearing, that the lawsuit was not only groundless, but was brought in bad faith. To do this, one must overcome the presumption that papers are filed in good faith. Tex. R. Civ. Proc. 13; GTE Comm. Sys. Corp. v. Tanner, 856 S.W.2d 725, 731 (Tex. 1993). "A trial court may not base Rule 13 sanctions on the legal merit of a pleading or motion." Aldine ISD v. Baty, 999 S.W.2d 113, 116-17 (Tex. App. Houston 1999). The lawyer of "empty head and pure heart" avoids sanctions--and the defendant ends up incurring additional fees and costs over the evidentiary hearing, no matter how groundless the initial suit. So when you hear that recovery is possible for frivolous lawsuits, remember that the judicial system has a different definition for "frivolous" than the layperson does. (Tex. Rules of Civ. Proc. 13).

[cross-posted from Overlawyered, where it ran Mar. 28, 2004]

Update: Ness Motley and James Down

A feature from the Chicago Tribune on the Ness Motley sellout of its clients in the James Blair Down case (see Jul. 7 and follow-ups Aug. 24 and Jan. 17) is revealing about forum-shopping:

[Blair] Hahn told his clients he knew exactly where to find the class-action judgment they needed: in Madison County, across the Mississippi River from St. Louis.

In testimony later, [former Secret Service agent James] McGunn said Hahn assured them he could "manipulate" the court, and that "his wishes would be granted."

"The reason that they selected Madison County was because the judge there looked very kindly on Ness Motley and would be very favorably impressed with whatever they said," McGunn recalled Hahn telling him. "They would have no problem in Madison County."

On February 18, Madison County Judge Phillip Kardis (Oct. 7) held a twenty-minute hearing and preliminarily approved a class action settlement that provided millions for the lawyers and little for the class. (Greg Burns, "The lawsuit capital", Chicago Tribune, Mar. 8).

[cross-posted from Overlawyered, where it ran Mar. 25, 2004]

More data piles in refuting the bald claims of ATLA and "consumer" advocates that medical malpractice reform is somehow an insurance company conspiracy that doesn't reduce rates. (See Mar. 22 and Jul. 29, 2003). In an actuarial study using the National Practitioner Data Bank, we find, among other interesting things, that (1) dollars paid in malpractice claims went up 80% between 1992 and 2001, even though the number of claims only went up less than 20% in the same period; and (2) malpractice premiums are higher in states without noneconomic damages caps compared to those in states with noneconomic damages caps. (Richard S. Blondi and Arthur Gurevitch, "Noneconomic Damage Caps Help Reduce Malpractice Insurance Premiums", Contingencies, Nov.-Dec. 2003). Contingencies is the journal of the American Academy of Actuaries.

[cross-posted from Overlawyered, where it ran Mar. 24, 2004]

Sen. Lindsey Graham (R-S.C.) has introduced legislation that would provide for a modified "loser pays" rule in federal courts. It's of the "offer-of-settlement-driven" variety, and would expose litigants to a possible fee shift if they turned down a settlement offer and then did less well at trial. "Loser pays' does more to stop frivolous lawsuits in the federal court system than any other reform," Graham said. "Litigation designed to shake someone down for a settlement would be far less frequent if each party had something to lose." And: "The culture of suing anybody about anything with no consequences to yourself has to change." (Amy Geier Edgar, "Graham urges reform to curb frivolous suits", AP/Myrtle Beach (S.C.) Sun-News, Mar. 2).

[cross-posted from Overlawyered, where it ran Mar. 23, 2004]

Tort reform opponents play race card

Apparently lacking in meritorious arguments, opponents of tort reform have resorted to a strategy of accusing tort reform advocates of racism. According to the "Center for Justice and Democracy," "racial prejudice lurks behind the 'tort reform' movement." Among the out-and-out lies in the press release: "'Tort reform' laws weaken the only available forum, in some cases, for holding perpetrators of hate groups and hate groups accountable." But not even the scare paper supports this.

The report suggests that volunteer immunity laws are really a Trojan horse to provide protection for "volunteers for the Ku Klux Klan." (You may recall that the American Trial Lawyers Association recently falsely suggested that those very same volunteer immunity laws refuted the premise of a recent Newsweek cover story. (see Jan. 9; Dec. 12).)

Evidence? Well, none whatsoever. The CJD cites successful lawsuits against the Klan and Aryan Nations for assaults, a murder, and a church burning, but no tort reformer has suggested that civil liability be limited for those who commit violent crimes or intentional torts. Certainly, the Volunteer Protection Act of 1997 does not; aside from the exclusion in the law for hate groups, the supposed "loophole" that permits states to provide additional protections for volunteers would have no effect on a federal suit for deprivation of civil rights.

In my radio interview last week, I was asked about the Wisconsin Association of Trial Lawyers' claim that tort reform measures have no effect on medical insurance rates. ATLA's "fact sheet" on medical malpractice reform makes the same claim. A 2003 HHS compilation of studies on the matter, linked on our old medical page, refutes that proposition. (HHS, "Confronting the New Health Care Crisis", Mar. 3, 2003 at Tables 6 and 7).

Cheeseburger seconds

"Given that a 2003 Gallup Poll found that 89 percent of Americans don't believe in blaming the fast-food industry for obesity, you'd think the bill is unnecessary. I take this vote as Washington's way of recognizing that in America, a bad idea, given enough time, will gain support, take root and become law." (Debra Saunders, "If you are what you eat, then sue", San Francisco Chronicle, Mar. 12). "Victor Schwartz, a leading expert on tort law who has been advising the National Restaurant Association, says these lawsuits still face formidable obstacles. He thinks a greater danger to the industry is that at some point state attorneys general will start filing lawsuits demanding compensation for Medicaid expenses, as they did with tobacco." (Jacob Sullum, "Fast Food Damnation", syndicated/Reason, Mar. 5). Blogger Kevin Drum (Calpundit) is torn and, he says, open to argument: "On the one hand, I don't think much of using civil damage suits aimed at a specific industry as a way of changing social policy. Down that road lies madness. But at the same time, I also don't think much of Congress exempting specific industries from the civil justice system. That can lead to some madness of its own." (Mar. 11). Vice Squad (Mar. 11) has links on various topics including McDonald's elimination of its Supersize offerings and developments in the U.K. on food regulation. The roll call on Wednesday's vote is here. (See Mar. 11 and links from there.)

[cross-posted from Overlawyered, where it ran Mar. 13, 2004]

Senate refuses to block gun suits

The House-passed bill (see Feb. 25) that would have protected firearms makers from being held liable for criminals' misuse of guns died last week in the Senate, although endorsed by a substantial majority of members of that body. Why? Well, it seems quite a few Senators had to pretend to like the bill, given its popularity with the voters back home, but in fact were happy to see poison pill amendments attached to it that they knew would lead to its demise. (Edward Epstein, "Gun-liability bill dies in Senate", San Francisco Chronicle, Mar. 3). Editorial writers of leading newspapers opposed the lawsuit restrictions with sniffish near-unanimity; it's not as if George Soros were funding a litigation campaign that placed them at risk of bankruptcy, after all. Gun-bias-watcher Alphecca (Mar. 8) finds a few balanced press accounts of the week's doings, but not many. More: another helping from Alphecca. And the National Rifle Association's Institute for Legislative Action ran a story last year (Chris W. Cox, "One Big Victory, Now Another Big Battle", May 15, 2003) summarizing the progress of the bill as well as quoting highlights from my, and others', House testimony.

[cross-posted from Overlawyered, where it ran Mar. 12, 2004]

Cheeseburger bill passes House

By a vote of 276 to 139 with most Democrats opposed, the House gave its approval to a bill that would bar lawsuits against the food industry over obesity. (Christopher Lee, "House bill bans suits blaming eateries for obesity", Washington Post/San Francisco Chronicle, Mar. 11). The bill faces an uncertain future in the Senate; similar legislation is pending in many state legislatures and has passed in Louisiana. Jacob Sullum at Reason "Hit & Run" has two good commentaries on the bill. It's "disconcerting to see Congress instructing state courts to dismiss patently absurd lawsuits. I worry that it's not really necessary. I worry more that it is," Sullum writes. (Mar. 9). Sullum also catches GW law prof John Banzhaf talking out of both sides of his mouth about whether obesity lawsuits have been successful (Mar. 10).

One activist quoted in the new coverage is Ben Kelley, who in cooperation with Prof. Richard Daynard has taken a prominent role in organizing conferences advising lawyers on how to sue the food industry (see Elizabeth Lee, Andrew Mollison, "Food fans weigh in", Atlanta Journal-Constitution, Mar. 10). It turns out that this is none other than the same Ben Kelley we covered ten years ago when we examined how litigation consultants working with trial lawyers have successfully promoted bogus media coverage of alleged auto hazards, including NBC's famous use of hidden incendiary devices to portray GM trucks as prone to explode (Walter Olson, "It Didn't Start With Dateline NBC", National Review, Jun. 21, 1993.) The pro-foodmaker Center for Consumer Freedom has more on Kelley's recent activities: see Dan Mindus, "McLawsuit Lies", National Review, Oct. 29; "Trial Lawyers Up Demands On Food Companies", Oct. 30; "Update: Obesity War Loses Discredited General", Nov. 4.

MedPundit Sydney Smith thinks (Mar. 10) that the much-headlined new study purporting to find that obesity claims more lives than smoking "is, all things considered, a very weak study. Certainly too weak to be the foundation of sweeping public policy." For more of our coverage of obesity litigation, see Aug. 11, Jun. 20, Sept. 4, Aug. 6, Jul. 21, Jul. 3, Jul. 3 again, Jul. 1, Jun. 24, and a great deal more here. More: Radley Balko dissents from the bill on federalist grounds (Mar. 11)(& letter to the editor, Mar. 18).

[cross-posted from Overlawyered, where it ran Mar. 11, 2004]

Update: "Asbestos exposed"

Dana Joel Gattuso covers Lester Brickman's Pepperdine Law Review study of asbestos litigation (see Jan. 21) and provides an accessible introduction to the 137-page piece. (Tech Central Station, Mar. 9).

[cross-posted from Overlawyered, where it ran Mar. 9, 2004]

Nissan headlights

The blue-tinged xenon headlights of the Nissan Maxima have become a popular target for thieves who rip them from a car and sell them on the black market, including 277 incidents in Newark alone. The State of New Jersey, noting the epidemic of thefts in its state, has decided to take action -- by suing Nissan. Nissan should have anticipated that its customers would be victimized, says the State, and warned them before they bought the car. (Ronald Smothers, "Nissan Sued Over Theft-Prone Headlights", NY Times, Mar. 9; Crissa Shoemaker, "Lawsuit: Nissan withheld headlight theft risk", Courier-News, Mar. 9; Mitch Lipka, "Headlight theft wave spurs state to sue Nissan", Philadelphia Inquirer, Mar. 9). According to a recent article in the Boston Globe, Nissan was a leader in taking steps to prevent headlight thefts, so if this suit has legs, look for copycat lawsuits against other auto manufacturers--and this ludicrous theory of liability could end up being extended to other car parts or even carjackings. (Peter DeMarco, "Left in the dark", Boston Globe, Feb. 26; Rod Gibson, "Most-stolen cars? It's debatable", bankrate.com, Sep. 23, 2003).

[cross-posted from Overlawyered, where it ran Mar. 9, 2004]

Citizens for a Fair Share, a group backed by the Florida Medical Association, is seeking to put a state constitutional amendment on the ballot in the Sunshine State to limit attorneys' fees in medical malpractice cases; it'll need to collect 450,000 verified signatures (Donna Wright, "Doctors petition for tighter cap on fees", Bradenton Herald, Nov. 4; Gary Fineout, "A Crisis Or Battle Of Special Interests", Lakeland Ledger, Nov. 24; Patrick Danner, "Lawyers' fees come under fire", Miami Herald, Jan. 4; "Sunshine, Ballots and Lawyers", Center for Individual Freedom, Feb. 12). But Associated Industries of Florida, the state's leading business group, is opposing the measure (Diane Hirth, "Lobby groups disagree on drive", Tallahassee Democrat, Jan. 31)(FMA statement).

As for the state's trial lawyers, they have already prepared revenge initiatives against the doctors. A group calling itself Floridians for Patient Protection, a political action committee of the Academy of Florida Trial Attorneys, is collecting signatures for three constitutional amendment proposals of its own. One of its proposals "would require physicians to charge the same fee for the same service to all patients." (Liz Freeman, "Supporters of cap on attorney fees collect enough signatures for review", Naples Daily News, Feb. 11). The executive director of the Academy of Florida Trial Lawyers describes the initiatives as "countermeasures to ensure that the FMA must play defense first and offense second" (Scott Carruthers, "Pressing Forward", Jan. 1, likely to rotate off URL). The revenge-initiative technique has served the litigation lobby well in California ballot battles. After insurance companies were so rash as to support efforts to obtain liability reform through the initiative process, trial lawyers struck back in 1988 with the rate-slashing Proposition 103, which inflicted huge losses on the industry. And when high-tech execs stepped to the plate with a batch of initiatives aimed at curbing litigation, the trial lawyers' riposte was a counter-initiative that would have put the executives' personal homes and assets at risk in a much broader range of securities cases. Both groups got the message, and abandoned the California initiative game.

[cross-posted from Overlawyered, where it ran Mar. 1, 2004]

Senate nixes OB relief

State medical societies have expressed considerable ambivalence about proposals to proceed specialty by specialty on malpractice reform, starting with the hardest-hit areas such as obstetrics and emergency medicine, fearing that such measures might serve to divide the profession and allow politicians to say that they had "done something" after addressing only the most obvious crisis areas ("AMA vows united voice in battle for tort reform", American Medical News, Jan. 5). At any rate, it seems the choice of such a compromise won't be available at the federal level, since opponents have no seeming interest in it. This week the Senate's Republican leadership brought back malpractice reform in a pared-down version intended just to address obstetric litigation, but no go: the 48-45 vote was pretty much the same as that by which omnibus reform had failed, falling far short of the 60 needed to overcome an expected filibuster by Democrats.

The Associated Press report on the vote (Jesse Holland, AP/DailyNews.com, Feb. 25) reported that "some conservatives" opposed the bill, but the conservative it quoted turned out to be Ken Connor, former head of the religious-right Family Research Council. What AP didn't add is that Connor is not exactly your typical conservative, having made his fortune in Florida as a plaintiff's lawyer suing nursing homes and having served as a tenacious legislative advocate for the interests of the trial bar before his stint at FRC (see Mar. 2-4, 2001).

[cross-posted from Overlawyered, where it ran Feb. 26, 2004]

The Mississippi Supreme Court has reformed its joinder and venue rules to make both forum shopping and unfair mass tort litigation more difficult. The changes stem from a recent case where 56 plaintiffs sued 42 doctors and a drug manufacturer in Jones County, where only one of the plaintiffs resided. Mississippi state law has no provision for class actions, and judges had attempted to get around this by broad application of joinder rules. (AP, Feb. 21; Davis Brister, "Ruling Could Have Major Impact on Tort Reform", WLBT, Feb. 20; Janssen Pharmaceutica v. Armond; rule and comment changes).

Aside from the forum shopping, such overly permissive joinder is often fundamentally unfair to defendants, who may be forced to try cases where their issues are entirely different from the central issues in the case. Pending before the Mississippi Supreme Court now is the case of 3M Company v. Johnson, where six plaintiffs with a minor lung impairment that did not restrict their activities won a $150 million judgment in rural Holmes County against 3M for allegedly defective face masks in the middle of a much larger proceeding involving many other defendants and asbestos manufacturing--even though 3M's masks were never designed for asbestos protection, and some of the plaintiffs had no evidence that they had ever used a 3M mask. The plaintiffs did not work together; the defendants were being sued under different theories and different sets of facts, permitting the plaintiffs to introduce large amounts of evidence about manufacturers' supposed careless marketing of asbestos-containing products that had nothing to do with 3M. (Washington Legal Foundation press release and amicus brief).

[cross-posted from Overlawyered, where it ran Feb. 23, 2004]

Update: Eisenberg/Miller study

The Class Action Coalition releases a refutation of the much-hyped Eisenberg/Miller study (Jan. 16) to be published in the forthcoming Journal of Empirical Legal Studies purporting to analyze trends in attorneys' fees in federal and state class actions. In an analysis of published opinions, Eisenberg and Miller claim that attorneys' fees in class actions have been stable over time, and that state courts have not been more generous than federal courts in such cases.

But, say the Class Action Coalition, the methodology of the study biases the result; by relying solely on published opinions, the study omits the numerous unpublished settlements. Moreover, as the authors acknowledge, the mix of federal settlements (where securities cases tend to be litigated) is different than state settlements under current law. By averaging all state courts, the paper ignores the fundamental problem of magnet jurisdictions. Finally, the study makes no effort to distinguish between announced and actual relief to the class: a $20 coupon is treated as equivalent to a $20 check. "In short, in state court cases, the relief actually recovered by class members is often far less than what was 'advertised' in the settlement proposal. The authors essentially assume away this problem -- the key problem with state court class action settlements."

The paper was debated at an AEI event today.

[cross-posted from Overlawyered, where it ran Feb. 20, 2004]

United Kingdom: "An eight-year, multimillion pound legal battle by more than 2,000 veterans for compensation for Gulf war syndrome has collapsed because there is not enough scientific evidence to prove their case in court." Although the government-aided Legal Services Commission is estimated to have spent around �4m on the case, "a trawl by scientists through 10 years of research worldwide, overseen by the veterans' lawyers and funded by the LSC, has found no evidence which establishes any specific cause for the range of health problems they suffer. ... The collapse of the case comes only months after litigation by parents who blame the MMR vaccine for their children's autism suffered a similar fate, also for lack of scientific evidence to back up their claims." (see Dec. 29) (Clare Dyer, The Guardian, Feb. 5). Last year a lawsuit was filed in this country against chemical companies on behalf of Gulf War Syndrome sufferers: see Aug. 25. For more on the weakness of the scientific evidence ascribing GWS to chemicals in the environment during the first Iraq war, see Michael Fumento's work.

[cross-posted from Overlawyered, where it ran Feb. 17, 2004]

Economic Report of the President

This year's Economic Report of the President, just published, includes a chapter (large PDF, look for chapter 11) on the economic impact of the U.S. tort system, its growth, the mixed evidence on its success in hazard-reduction, and its impact on particular fields such as medicine and light aviation (via Alex Tabarrok).

[cross-posted from Overlawyered, where it ran Feb. 12, 2004]

Risks of defensive radiology

Use of radiation-based diagnostic methods continues on a rapid rise, even though experts on carcinogenesis warn that a small but non-trivial share of cancer is attributable to radiation from the use of medical X-rays, much of it from CT scans. MedPundit Sydney Smith (Jan. 29) says she sees a high volume of CT scans of the chest and abdomen. "I have a couple of patients who are on their third or fourth follow-up CT for uncertain findings that, truth be told, are done more for our own protection than theirs. Yet another way our litigation culture is influencing healthcare -- and health."

[cross-posted from Overlawyered, where it ran Feb. 1, 2004]

NAAG enforces tobacco cartel

Who's serving as muscle to enforce a cartel that costs American consumers billions of dollars a year? Why, the National Association of Attorneys General, that's who. As reported in our Jan. 13 item, the Big Four tobacco companies are starting to lose significant market share to small, regional and foreign cigarette companies that either do not contribute to the MSA (multistate settlement agreement) or do not contribute as much as the majors proportionally. Now AP confirms that NAAG sees this as a big problem and is urging states to pass laws closing the supposed "loophole" (which loophole appears to consist simply of the smaller companies' not having to pay for past sins absent any showing that they've committed such sins). AP also obtained a confidential September memo from NAAG that's a bit of a smoking gun, we'd say, as far as illuminating the true motives behind the plan. The memo "warned states to expect a $2.5 billion decrease in settlement payments due April 15, down from a projected $9.3 billion. It says about $600 million of that decrease, or 25 percent, is the result 'not of a decline in smoking but rather of NPM (nonparticipating manufacturer) sales displacing sales by Participating Manufacturers.' 'NPM sales confer no benefits on the States,' reads the memo.... 'All States have an interest in reducing NPM sales in every State.'" ("Small cigarette makers cut into Big Tobacco's markets, states' pockets", AP/Raleigh News & Observer, Jan. 16). (via Vice Squad).

[cross-posted from Overlawyered, where it ran Jan. 23, 2004]

Asbestos: send in the prosecutors?

Prof. Lester Brickman of Yeshiva University's Cardozo School of Law, a noted legal ethicist and the leading academic critic of the asbestos litigation, has a devastating new 137-page article out in the Pepperdine Law Review. His contention: mass attorney solicitation of claimants has combined with willfully unreliable medical screening and witness-coaching by law firms to generate hundreds of thousands of fundamentally fraudulent claims which are obtaining unjustified payouts in the billions and even tens of billions of dollars. The only likely catalyst for reform at this point, he argues, would be a full investigation by a grand jury armed with subpoena powers. (Stuart Taylor, Jr., Dec. 31; Paul Hampel, "Many asbestos suits are fraudulent, professor says", St. Louis Post-Dispatch, Jan. 13). The article, not online but available to those with LEXIS access or in law libraries, is Lester Brickman, "On the Theory Class's Theories of Asbestos Litigation: The Disconnect Between Scholarship and Reality", 31 Pepp. L. Rev. 33. For our coverage of asbestos, see, e.g., Nov. 12, Oct. 24, Sept. 25, and earlier posts.

[cross-posted from Overlawyered, where it ran Jan. 21, 2004]

As Joanne Jacobs puts it, remarkable and refreshing: "The New York City teachers' union proposed yesterday cutting to six months the time it takes to remove incompetent teachers, speeding up a process that can now drag on for years.

"As part of a broad overhaul of the disciplinary process and evaluation system for teachers, the union president, Randi Weingarten, also called for ending so-called rubber rooms, where more than 200 teachers facing charges of malfeasance are sent to languish, some for years, while still receiving full pay. She proposed the appointment of a special master and a task force of pro bono lawyers to clear the backlog of cases." (David Herszenhorn, "Failing City Teachers Face a Faster Ax", New York Times, Jan. 15) (more).

[cross-posted from Overlawyered, where it ran Jan. 20, 2004]

Jacob Sullum on class actions

The syndicated columnist takes a look at the Schwartz v. Citibank class action, and also points out a couple of weaknesses in a much-hyped new study by Cornell law professor Theodore Eisenberg and NYU law professor Geoffrey P. Miller which found no upward trend in the average amount of settlements or fees in 370 class actions recorded in court decisions from 1993 to 2002. (syndicated/Reason Online, Jan. 9; see Jonathan D. Glater, "Study Disputes View of Costly Surge in Class-Action Suits", New York Times, Jan. 14; "Attorneys Fees in Class Action Settlements: An Empirical Study", Sept. 24).

[cross-posted from Overlawyered, where it ran Jan. 16, 2004]

As mentioned in our last post, Stuart Taylor, Jr. has consented to let us reprint his point-by-point rebuttal to ATLA's attack on his Dec. 15 Newsweek cover story "Lawsuit Hell" (see Dec. 8, Dec. 12, Dec. 15). We've split it into two posts of which this is the second.

Newsweek, as is typical for a newsweekly, published only a terse editorial response (see previous post) to the litigation lobby's concerted attack on its reporting. However, Stuart Taylor, Jr., the distinguished veteran journalist who (with Evan Thomas) was principal author of the feature, has kindly consented to let us reprint his more detailed point-by-point rebuttal to ATLA's official gripe catalogue, published under the title "Spin or Facts? A Look Behind Newsweek's Series 'Lawsuit Hell'". Because of the length of Taylor's response, we've split it into two posts, the first responding to the first six points of ATLA's critique and the second responding to the rest. Check out in particular, under heading #6, ATLA's false (and remarkably brazen) assertion that the Tillinghast study's $233 billion estimate of the cost of the liability insurance sector includes "the cost of the entire property/casualty insurance industry" and in particular the cost of hurricanes and similar damage. (It doesn't.)
The Lawsuits of Madison County

In 2002, Madison County (Dec. 3, Oct. 7, etc.)--where juries and judges are notorious for finding liability where no other courts will--led the nation in class actions per capita when there were 77 filed in the state courts there. In 2003, the number of class actions filed in Madison County rose to 106. The number was three as recently as 1998. (Brian Brueggeman, "Class-action lawsuits set a record", Belleville News-Democrat, Jan. 2; Sanford J. Schmidt, "Debate renews in wake of record class action filings", Alton Telegraph, Jan. 4; Michael Bobelian, "Congress Eyeing Major Reforms Of Class Actions", New York Lawyer, Jan. 5).

One example of the forum shopping is a 2003 asbestos case of Whittington v. U.S. Steel. The plaintiff claimed to have been injured as a result of exposure to asbestos on the job in Gary, Indiana, and sued his former employer, U.S. Steel. A plaintiff-friendly judge let a legally frivolous argument against application of workers compensation laws go to the jury--which appears to be the first time a tort suit against an employer for asbestos exposure was permitted to get to a jury. The jury, on flimsy evidence that the asbestos exposure occurred at U.S. Steel or that U.S. Steel was negligent (helped by a ruling precluding U.S. Steel from showing the safety measures they had employees take), awarded $50 million in damages and $200 million in punitives. "I could hardly write it down," the jury foreman said. "I've never seen numbers that big." The size of the award, compounding at 9% interest, caused U.S. Steel to decide to settle for a fraction of that amount rather than take their chance with an appeal. (Paul D. Boynton, "$250 Million Asbestos Verdict Awarded Against U.S. Steel", Lawyers Weekly USA, 2004; Peter Page, "Asbestos Exposure Cases Draw Big Awards", National Law Journal, Apr. 10, 2003; Brian Brueggemann, "Man awarded $250 million in cancer case", Belleville News-Democrat, Mar. 29, 2003).

[cross-posted from Overlawyered, where it ran Jan. 5, 2004]

"The Last Rung"

The nation's oldest ladder manufacturer, family-owned John S. Tilley Ladders Co. of Watervliet, N.Y., near Albany, has filed for bankruptcy protection and sold off most of its assets. Founded in 1855, the Tilley firm was profitable until a few years ago but could not handle the cost of liability insurance, which had risen from 6 percent of sales a decade ago to 29.4 percent by the end, even though the company wasn't sued often and had never lost an actual court judgment. Jury awards in product liability cases have jumped from "an average of $1.7 million in 1994 to $6 million in 2002". "We could see the handwriting on the wall and just want to end this whole thing," says Robert Howland, a descendant of company founder John Tilley. (Carrie Coolidge, Forbes, Jan. 12).

[cross-posted from Overlawyered, where it ran Jan. 5, 2004]

2003's largest verdicts

The Associated Press uncritically reports Lawyers Weekly USA's claim that the top ten jury verdicts of 2003 were supposedly "unusually" small, with the biggest "only" $254 million (Dec. 15). ("Juries Hand Out Fewer Big-Ticket Verdicts", Jan. 2). Which is funny, because the same publication names Stephen Tillery (Jun. 12) a "lawyer of the year" for winning a substantially larger award in judicial hellhole Madison County (Mar. 24). (Jaclyn Jaeger, "Landmark $10.1B Light Cigarette Award A 'Career Event' For Veteran Litigator", Lawyers Weekly USA, 2003). Of course, that was a judge who made that decision (Apr. 30), but the publication seems to have also missed November's $11.9 billion Alabama jury award (Dec. 1).

Update, April 6, 2004: A Lawyers Weekly USA writer writes to tell me that there is no inconsistency, because the "Top Ten" list was limited to "individual" awards. Which is fair enough, but that only accentuates the main point that the publication--and the Associated Press--has no basis to claim that 2003 featured fewer "big-ticket" awards in a year where multi-billion dollar awards were shockingly commonplace. For what it's worth, the #1 "individual" award on the list involved more than one plaintiff.

Speaking of year-end awards, if I may toot my own horn, my firm, O'Melveny & Myers, received the "Litigation Department of the Year" award from American Lawyer magazine. (Jim Schroeder, "O'Melveny & Myers Lawyers Named as Top Litigators", Dec. 31).

[cross-posted from Overlawyered, where it ran Jan. 2, 2004]

Vaccines, cont'd

Britain's legal-aid commission invested �15 million in assisting claimants who wanted to sue makers over the measles, mumps, rubella (MMR) vaccine, but finally decided to call a halt: "After taking expert advice, the LSC acknowledged that, given the failure of research to establish a link between MMR and autism, the litigation was 'very likely to fail'". Michael Fitzpatrick, writing for the UK's Spiked Online, explores what he calls the "enormous waste of public funds" on the litigation. ("Medicine on trial", Dec. 15). Efforts to pin the blame on the preservative thimerosal have come up short, according to an editorial in today's WSJ: "Researchers recently examined the health records of all children born in Denmark from 1971 to 2000 for autism diagnoses. Though Denmark eliminated thimerosal from its vaccines in 1992, the researchers found that the incidence of autism continued to increase. A second research team reviewed the records of nearly 500,000 Danes vaccinated for pertussis. They also found that the risk of autism and related disorders didn't differ between those vaccinated with thimerosal and those without." ("The Politics of Autism" (editorial), Wall Street Journal, Dec. 29). More on vaccines and liability: Jim Copland (Manhattan Institute), "Liable to Infection", Dallas Morning News, Dec. 14; Robert Goldberg (also Manhattan Institute), "Vaccinating against disaster", Washington Times, Dec. 17; and see Dec. 24 and earlier posts. Update Feb. 25: Lancet regrets publication of anti-MMR study.

[cross-posted from Overlawyered, where it ran Dec. 29, 2003]

The amount would be almost one sixth of the $650 million settlement (only $148 million of which is in cash, which Lucent's insurers put on the table early in the negotiations), working out to about 11 to 15 cents a share for shareholders allegedly injured by alleged securities fraud by Lucent. Another $5 million is set aside to administer the cost of the settlement, and Lucent shareholders surely paid hundreds of thousands of dollars defending the lawsuit, which threatened to put the company into bankruptcy. And you thought that Lucent's share price dropped from $74 to $3 because of the Internet bubble. (Tim O'Brien, New Jersey Law Journal, Dec. 24).

[cross-posted from Overlawyered, where it ran Dec. 24, 2003]

"Dan Morales, the former attorney general jailed for scheming to steal millions of dollars from Texas' tobacco settlement, says sealed court documents could show wrongdoing on the part of private lawyers who represented the state." (see Nov. 2 and links from there). Morales said a year ago that he believed the Big Five tobacco lawyers he hired may have breached their loyalty to the state in the course of taking home $3.3 billion in fees, and now says documents sealed as part of his criminal case would show such misconduct if made public. The documents were sealed by U.S. District Judge Sam Sparks at the request of attorney Mike Tigar, representing the Five. "Also Friday, Marc Murr, a former Houston lawyer charged as a co-defendant to Morales, was sentenced to six months in federal prison. In October, Murr pleaded guilty to mail fraud." (Janet Elliott, "Morales urges probe of tobacco attorneys", Houston Chronicle, Dec. 20).

[cross-posted from Overlawyered, where it ran Dec. 20, 2003]

CNSNews.com reports that an American Trial Lawyers Association publication, "ATLA's Litigating Tort Cases," an $800 manual advertised as "the inside track to establishing and maintaining a successful tort practice," recommends quizzing jurors on their religious beliefs during the "voir dire" procedure meant to exclude biased jurors.

The chapter classifies certain individuals as "personal responsibility" jurors. "The personal responsibility jurors tend to espouse traditional family values." Often, "these jurors have strong religious beliefs." Because "personal responsibility jurors" hold values such as "People should be self-reliant, responsible, and self-disciplined. When people act irresponsibly and are not self-disciplined, there are consequences. People must be accountable for their conduct," they may not be sufficiently sympathetic to the plaintiffs.

Thus, "the only solution is to identify these jurors during voir dire and exclude them from the jury."

A spokesman for Americans United for Separation of Church and State objects: "'Certainly a good lawyer will try to ferret out any evidence of prejudice, whether it's religious prejudice or racial prejudice, prejudice against women, whatever, that's legitimate,' [Rob] Boston said. 'But, for a lawyer to simply assume that certain religious beliefs will dictate certain behaviors is naive and I think it does a disservice to our legal system.'" (Jeff Johnson, "Trial Lawyers Question Jurors' 'Strong Religious Beliefs'", CNSNews.com, Dec. 18).

Alas, the article uncomfortably and unnecessarily singles out the Judaism of the author of the book chapter in question. But the identification of trial lawyers' strategy in such bald terms provides interesting insight.

Plaintiffs' lawyers are fond of accusing tort reformers of attempting to remove certain decisions from "the people". But under the current tort system, jurors in many cases are not so much "the people" as a hand-picked group selected to favor a certain result. When one combines this biased sampling with random variation, and then combine that with the possibility of jackpot damages awards, it takes only a small minority of "the people" to create a jury pool that creates dramatic shifts in wealth to lawyers from the rest of society.

[cross-posted from Overlawyered, where it ran Dec. 19, 2003]

"'What I'm coming to understand is that, short of an actual conviction or revocation of a license, none of that information gets shared,' said Dr. William Cors, chief medical officer at Somerset Medical Center in Somerville, N.J., where Mr. [Charles] Cullen last worked and where, prosecutors say, he may have killed 12 to 15 patients. 'If anything good comes from this, it would be to reform the system where we're prevented from telling one another what we know out of fear, quite frankly, of being sued.' ... Ms. Schantz, at St. Luke's, said, 'There is no record that anyone called here, ever, for any recommendation on him.' And if someone had called? She said she was not sure what the hospital would have said. Hospitals are loath to say anything negative, she acknowledged, adding, 'We're a litigious society.'" (Richard P�rez-Pe�a, "Hospitals Didn't Share Records of a Nurse Accused in Killings", New York Times, Dec. 17). For more on reference liability, see Aug. 7; discussion of pilot and teacher cases from The Excuse Factory (link now dead). See also Mar. 23, 2000. More: Jan. 29, Mar. 3, Mar. 30.

[cross-posted from Overlawyered, where it ran Dec. 18, 2003]

"In a reversal that has stunned the plaintiff bar, the Florida chapter of AARP, the powerful senior lobbying group, has declared its support of caps on pain and suffering damages in abuse and neglect lawsuits against Florida nursing homes." In years past the retirees' group has been an influential foe of limits on nursing home liability, but the state chapter reversed course and decided to strike a compromise with nursing home operators that would trade limits on pain-and-suffering liability in exchange for the industry's agreement to accept new state rules, among them a requirement that facilities maintain assets so that successful litigants can recover liability verdicts. A lobbyist for the Florida chapter "said AARP changed its view after learning that many nursing homes were hiding their assets to avoid liability claims. In addition, many nursing homes have been carrying little or no liability coverage, despite the 2001 law's requirement that all facilities carry coverage." The group's change in course is likely to draw fire from other elements within AARP that remain closely allied with the litigation lobby; it also was criticized by an official of the "Coalition to Protect Florida Elders, a nonprofit organization that is funded by trial lawyer Jim Wilkes." More on Fla. nursing home suits: Mar. 13-14, 2001; Mar. 19, 2003; etc. (Julie Kay, "Unexpected Ally", Miami Daily Business Review, Dec. 17).

[cross-posted from Overlawyered, where it ran Dec. 17, 2004]

From a kit (no lawyer included)

Experimental aircraft assembled from kits are rising in popularity, aimed at accommodating owner-pilots "who want a new high-performance aircraft without shelling out hundreds of thousands of dollars". "The fact is, there just aren't that many new production airplanes," says Bob Warner, executive vice president of the Experimental Aircraft Association. "Part of the price in the production-built airplane is you're paying for a bunch of lawyers and a bunch of insurance." (Jon Bonn�, "'Experimental' aircraft push the envelope", MSNBC, Dec. 15).

[cross-posted from Overlawyered, where it ran Dec. 17, 2003]

AEI: Lawsuits without Injuries?

Wednesday, December 17, the American Enterprise Institute Liability Project is holding a panel moderated by Chicago Law Professor Richard Epstein on a new trend in the expansion of tort liability.

While plaintiffs have traditionally been required to demonstrate some form of harm or damage to file a lawsuit, recently proposed definitions of harm appear to be broadening substantially the scope of tort litigation. At the forefront of this legal innovation is the "benefit-of-the-bargain" theory of damages: if a product is shown to have harmed some consumers, unharmed consumers have a claim against the manufacturer on the basis that they would have not paid as much for the product had these risks been known beforehand. Panelists at this event will address the merits and disadvantages of "benefit-of-the-bargain" lawsuits.

[cross-posted from Overlawyered, where it ran Dec. 14, 2003]

"The U.S. tort system cost $233 billion in 2002, a $27.4 billion increase over 2001, representing the largest dollar increase in U.S. history. Current costs translate into $809 per U.S. citizen, $87 more than in 2001 and $797 more than in 1950." So say the people at Tillinghast Towers Perrin, who've issued the newest update to their widely followed series of estimates of the size of the liability insurance sector of the U.S. economy. Liabilities tied to asbestos payouts jumped to $11 billion, double the level of just two years earlier, and medical malpractice, class actions and shareholder suits all exerted upward pressure on the totals. Less than 50 cents on the dollar of these costs were returned to claimants, and only 22 cents went to compensate actual economic losses, the report says. "Tort costs increased by a total of 30% in the last two years -- the largest two-year increase since 1986/1987." ("U.S. Tort Costs Climbed to Record $233 Billion in 2002, According to Tillinghast Study", Dec. 10, executive summary (PDF).

[cross-posted from Overlawyered, where it ran Dec. 11, 2003]

McDonald's coffee revisited

Professor Bernstein (also here) and the "Curmudgeonly Clerk" trade thoughts on the infamous McDonald's coffee case ($2.9 million verdict for Ms. Stella Liebeck, who spilled a 49-cent coffee on herself), with the Curmudgeonly Clerk's comments demonstrating how thoroughly the plaintiffs' bar has infiltrated societal thinking.

The Clerk justifies the verdict on a couple of grounds: McDonald's had 700 previous complaints; and Ms. Liebeck suffered horrific injuries.

To say that there were 700 previous complaints of burns (ranging from scalds to real injuries) from McDonald's coffee begs the question. After all, 700 is just the numerator. What's the denominator? The answer is in the tens of billions. A product that hurts one in twenty-four million people is not "unreasonably dangerous", especially when the vast majority of the 700 incidents were not the sort of grievous injuries Ms. Liebeck had. (McDonald's had settled previous cases, but the cases were incidents where the McDonald's employees had spilled the coffee.) However, the jury took the 1-in-24 million statistic not as evidence that McDonald's coffee was not dangerous, but as evidence that McDonald's cared more about statistics than people -- when in fact the statistic should have been used to throw the case out.

That Ms. Liebeck was surely serious hurt doesn't change the underlying problem with the lawsuit: Ms. Liebeck was hurt because she spilled coffee on herself. If (as all fast-food restaurants do now) McDonald's had the obvious statement "Coffee is hot and can burn you" on the cup (a juror later complained that McDonald's warning was too small), would that have prevented her injuries? True: McDonald's could have served luke-warm coffee or even iced coffee. But at the end of the day, the proximate cause of Ms. Liebeck's injuries, as awful as they were, was Ms. Liebeck.

The argument for liability is that McDonald's chose to serve its coffee hot and should have foreseen that people would burn themselves when they spilled coffee. But, here's a question: the reason Ms. Liebeck's injuries were so terrible was because she was wearing a sweatsuit that absorbed the hot liquid and held it close to her skin. Surely, clothing manufacturers can foresee that people will spill hot liquids on themselves. If Ms. Liebeck's sweatpants had been made out of Gore-Tex or some other liquid-resistant material, she never would have been hurt. What's the principle of tort law that holds McDonald's liable, but not the clothing manufacturer?

"Lawyers losing their jobs because of the NSW government's clampdown on public liability claims have received little sympathy from Premier Bob Carr. The government's tort law reforms have reportedly forced the closure of a whole floor of lawyers at one Sydney firm. And NSW Bar Association president Ian Harrison has warned that up to a third of barristers could lose their jobs.

"But the premier gave the lawyers short shrift, saying he would rather see money going to workers than lining legal eagles' pockets. 'Australia would have been put out of work if we hadn't reformed the tort laws and reined in this culture of litigation in NSW,' he said." ("Lawyers get no sympathy", AAP/Melbourne Age, Dec. 5).

"The Civil Liability (Personal Responsibility) Act and its amendments introduced caps and thresholds on compensation and shifted the balance towards greater personal responsibility to avoid long and expensive court cases. The result has been a sharp drop in casework for solicitors and barristers specialising in personal injury cases." (Alex Mitchell, "Get over it, Carr tells jobless lawyers", Sun Herald/Sydney Morning Herald, Dec. 7).

[cross-posted from Overlawyered, where it ran Dec. 9, 2003]

Med-mal roundup

Massachusetts: "The Romney administration and the Harvard School of Public Health, seeking to address soaring health care costs driven by medical malpractice lawsuits, are working on a sweeping proposal to move malpractice claims out of state courts and into a new administrative framework much like the state's workers' compensation system." (Ralph Ranalli, "Malpractice plan would limit trials", Boston Globe, Nov. 13). "Defense and plaintiffs' lawyers agree that, in recent memory, no medical malpractice verdict in excess of policy limits has resulted in the seizure of a Connecticut doctor's house, savings or other personal assets", reports Thomas B. Scheffey of the Connecticut Law Tribune. But now following a series of high awards "more aggressive collection strategies may come into play" as trial lawyers at Bridgeport's kingpin tort firm of Koskoff, Koskoff and Bieder are "exploring other options" with regard to collecting a $10 million judgment against a Stamford physician insured for only $1 million ("Med-Mal Awards Put Doctors on Alert", Nov. 18). And a judge in McDowell County, W.V., has dismissed Dr. Julie McCammon's lawsuit against the West Virginia Trial Lawyers Association and its former president for causing her malpractice insurance rates to rise, ruling that the defendants owed her no duty of care. (Nora Edinger, "Doctor's suit dismissed", Clarksburg Exponent Telegram, undated, appx. Nov. 26).

[cross-posted from Overlawyered, where it ran Dec. 2, 2003]

In a retrial of a case which earlier led to an exorbitant punitive damages award, an Alabama jury two weeks ago ordered ExxonMobil to pay $63.6 million in compensatory damages and $11.8 billion in punitive damages to the cash-strapped state government in a dispute over natural gas royalties ("Alabama jury orders Exxon Mobil to pay $11.9 billion in dispute over natural gas royalties", AP/San Francisco Chronicle, Nov. 14; Phillip Rawls, AP/Miami Herald, Nov. 13). A former state administration had hired two of the state's most successful private trial lawyers, Jere Beasley and Robert Cunningham, to take the case on a 14 percent contingency, which in this case would amount to $1.6 billion in fees; the two lawyers are also important campaign contributors. Earlier verdict: Dec. 20, 2000. Editorial reactions: "The truly ridiculous", Huntsville Times, Nov. 17; "Exxessive verdict", Birmingham News, Nov. 19; "Don't over-celebrate ExxonMobil verdict", Mobile Register, Nov. 17. Update Apr. 18: judge cuts verdict to $3.6 billion. Further update Nov. 8, 2007: Alabama Supreme Court throws out punitives.

[cross-posted from Overlawyered, where it ran Dec. 1, 2003]

The lawsuit, which seeks class-action status, was filed by the Armonk, N.Y. firm of Boies Schiller & Flexner LLP and by "David Boies III, of the Fairfax, Va., law firm Straus & Boies," who is the son of Boies Schiller's David Boies (Nov. 6, earlier cites). Although it claims not to be (yet) a broad-scale assault on the liquor industry a la tobacco, the suit seeks to recover "unlawful profits" made by Coors, Heineken, Brown-Forman, Diageo, and others for such supposed atrocities as employing the Captain Morgan character to sell rum and advertising in rock music magazines. Also being sued is the trade association The Beer Institute. (AP/Salon, Nov. 26). As we noted in July, liquor companies "have been curiously absent from the list of targets of mass litigation campaigns in the U.S.A. in recent years; but see Mar. 22, 2000."

Juan Non-Volokh notes (Nov. 28) that Miller Brewing Co., which has been a client of Boies, Schiller & Flexner in the past, "is not among the named defendants in the suit. ... Boies claims this is because Miller is not one of the 'more egregious' actors in the industry". Julian Sanchez (Reason "Hit and Run", Nov. 28) discerns the ripple effects of anti-alcohol agitation by the Robert Wood Johnson Foundation and other Safety Dry forces. Jim Leitzel (Nov. 19) takes note of a study suggesting that alcohol advertising probably does raise the rate of underage drinking. Professor Bainbridge (Nov. 28) has some thoughts on the regulation-through-litigation angle. Further: for more on the Neo-Drys, see Radley Balko, "Back Door To Prohibition", Cato Policy Analysis #501, Dec. 5. (Update Feb. 16: second suit targets brewers).

[cross-posted from Overlawyered, where it ran Dec. 1, 2003]

Specialized business courts

Through most of the 20th Century the preferred model in American court organization was that of the generalist court in which a given corps of judges applied a standard set of procedures to handle a wide, not to say bewildering, variety of cases. In the past couple of decades, however, there has been renewed interest in the idea of establishing specialized courts to handle some types of recurring or distinctive cases: intellectual property, complex mass torts, low-level drug offenses, and so forth. "More than a dozen states, including Massachusetts, Rhode Island and Connecticut, have introduced specialization into their courts to deal with business disputes. Some programs are recent and some, like those in New York and Delaware, have been operating for decades." Removing complex commercial litigation to its own docket can assist in the development of greater judicial expertise, useful procedural innovation and more consistent law; it can also help unclog the schedules of courts that handle more conventional cases, according to its advocates. The success of specialized business courts is now encouraging other states to consider adopting the model, as is now the subject of discussion in Maine. (Andrew Grainger (New England Legal Foundation), "Business specialization in court system a good idea", Portland Press-Herald, Oct. 31)(& letter to the editor, Dec. 6).

[cross-posted from Overlawyered, where it ran Nov. 25, 2003]

Silica lawsuits: castles from sand

Mississippi is far outpacing the rest of the country in silica litigation (see Sept. 13): "More than 17,000 plaintiffs in this state have sued U.S. Silica, a leading producer of silica sand, for allegedly causing them to develop an incurable lung disease." One lawsuit filed at the courthouse in Macon, Miss. "was filed by 4,200 plaintiffs, close to double the 2,461 residents in this Noxubee County town." Less than one percent of the plaintiffs are actually from Mississippi, the others having been brought there by their lawyers to sue. Critics say law firms are using mass solicitation and screening techniques to recruit thousands of claimants with no actual disability, as was done earlier with asbestos. One silica plaintiff, "62-year-old Noah Myers Bufkin of Lucedale, said he was diagnosed in a mass screening as having silicosis, although he can't say for sure he has any symptoms. ...The same screening company diagnosed him as having asbestosis seven or eight years ago, he said. He estimates he has received about $10,000 from that suit. .... He doesn't know of any symptoms he's suffering from silicosis or asbestosis. 'I'm saving up in case I do have a problem,' he said. 'For a poor fella like me, every little bit helps.'" (Jerry Mitchell, "Silica suits latest to hit Miss. courts", Jackson Clarion-Ledger, Oct. 19).

[cross-posted from Overlawyered where it ran Nov. 12, 2004]

At-will employment

Dan Seligman writes an intriguing piece about at-will employment, the value it presents to an economy, attempts to have exceptions swallow the rule, and the irony of the New York Times invoking it in a recent employment dispute. ("The Right to Fire", Forbes, Nov. 10 (registration required)). One of Governor Gray Davis's departing gifts to California taxpayers was his signing of SB 578, an end to at-will employment for government contractors (on pain of criminal prosecution), which will manifest itself in increased litigation expenses and transaction costs. (Kathy Robertson, "New laws reshape workplace", Sacramento Business Journal, Oct. 20).

[cross-posted from Overlawyered, where it ran Nov. 9, 2003]

Back at the old test-rigging game

Ten years after litigation consultants helped NBC News stage fake "tests" which supposedly proved a GM truck vulnerable to fuel-tank puncture (see "It Didn't Start With Dateline NBC", our 1993 effort), you have to wonder whether much has changed. "Ford Motor Co. says Dallas rigged a crash test that purported to show that the Crown Victoria is vulnerable to deadly fuel tank explosions even when equipped with safety gear. Ford said its inspection of the car used in the test showed that items in the trunk had been welded together, including a crowbar that was aimed at the back wall of the fuel tank." The test was paid for by personal injury lawyers representing the city of Dallas in a lawsuit over the death last year of police officer Patrick Metzler, who died when his Crown Victoria was rear-ended by a drunk driver at high speed. ("Dallas rigged Crown Victoria crash test, automaker alleges", AP/Fort Worth Star-Telegram, Sept. 18.) In the 75-mph test, the vehicle's trunk was filled with "items that the city said were commonly found in a police officer's trunk", which turned out to include a crowbar welded to a vehicle jack -- just the sort of contraption an officer might lug around to traffic stops, no? Ford, which discovered such details only later on when it was allowed to inspect the test vehicle during litigation, "criticized the city for not disclosing the artificial conditions when reporting its testing results." Reinforcing the sense of deja vu, Center for Auto Safety head and trial lawyer chum Clarence Ditlow publicly defended the use of the peculiar trunk contents as legitimate, the same way he defended NBC's use of hidden rockets back then. ("Ford Questions Dallas Crash Tests", AP/Primedia, Sept. 18; "City calls Crown Victoria tests 'valid'", Dallas Business Journal, Sept. 18). "Mark Arndt, the president of the company that oversaw the testing, is himself an expert witness for the City of Dallas in its lawsuit against Ford. Arndt makes his living as a hired gun testifying against carmakers." (Mike Scott, "City's crash test spawns controversy", reprinted at Houston Citizens Against Lawsuit Abuse site). For trial lawyers' side on the Crown Victoria controversy, see Ditlow's Center for Auto Safety; Dallas City Hall; and Crown Victoria Safety Alert. For Ford's side, see CVPI.com.

[cross-posted from Overlawyered, where it ran Nov. 5, 2003]

New York abolishes ad damnum

Late last month New York Gov. George Pataki signed into law a bill that will abolish the requirement that a personal injury or wrongful death lawsuit specify at the outset (in its "ad damnum" clause) the amount in dollar damages it is seeking. New York thus becomes the latest state to adopt a measure that is relatively rare among litigation reforms in eliciting widespread support from among both defense interests (example: American Medical Association model legislation, PDF) and the plaintiffs' bar, which is perennially embarrassed by news items such as the one cited in yesterday's New York Times about how a woman who survived the Staten Island Ferry catastrophe has demanded $200 million for a sore back and lost sleep. Lawyers "often will pick an astronomical figure for fear that a lower number will preclude their clients from recovering damages if they win a case" -- or, of course, they may be seeking the publicity that often accompanies huge demands. The state bar association urged Pataki to sign the bill, saying it "will reduce pretrial publicity about how much money is sought from particular defendants, and deals with the common misunderstanding by the general public that the amount sued for is the amount actually obtained by plaintiffs." (Joel Stashenko, "Pataki Signs Bill Eliminating Damage Amounts In Liability Suits", AP/Newsday, Oct. 31).

[cross-posted from Overlawyered, where it ran Nov. 5, 2003]

Class conflicts: a dose of theory

One of the perennial problems with class actions as a procedural device is whether and how to recognize the conflicts and divergences of interest among members of the class (for instance, in a consumer class action, class members who plan to buy the product again in the future may have very different interests from those who do not on the question of what counts as a useful remedy). Lawrence Solum on his Legal Theory Weblog has a very long and theoretical post on the topic (Oct. 30) one of whose lessons (if we are reading it correctly) is that many of the conflicts are too real and fundamental to be conjured away even by clever theoretical efforts to reinterpret class members' interests at a higher level of abstraction.

[cross-posted from Overlawyered, where it ran Oct. 31, 2003]

Countersue? Just try it, doc

When doctors are named in groundless malpractice lawsuits, they often want to fight back by filing countersuits or moving for sanctions. But, as American Medical News is the latest to learn, our legal system is elaborately structured to deny them any such recourse for the injury done them by the lawsuit. (Tanya Albert, "Fighting frivolous lawsuits: Doctors engage in an uphill battle", American Medical News, Oct. 27). For a few of the rare instances in which countersuits or sanctions motions have been successful, see Sept. 6-8, 2002; Jun. 14-15, 2000; Sept. 14, 1999.

[cross-posted from Overlawyered, where it ran Oct. 30, 2003] More: see Jan. 10, 2005 (Pennsylvania Medical Society has begun assisting doctors in countersuits).

The Class Action Fairness Act, a version of which has already passed the House with White House support, may be brought to the floor of the Senate tomorrow, but Democratic leaders are saying they have enough votes lined up for a filibuster to prevent its passage (Jesse J. Holland, "Supporters looking for more votes to help class action legislation past filibuster", AP/San Francisco Chronicle, Oct. 20; Helen Dewar, "GOP Pushes Vote to Curb Class-Action Suits", Washington Post, Oct. 21; Heather Fleming Phillips, "Group tries to rein in lawsuits", San Jose Mercury News, Oct. 21). If so it's a shame, the more so as some of the most persuasive argumentation for the CAFA has come from New Democrat circles, especially from Walter Dellinger, solicitor general during the Clinton Administration, now a professor at Duke Law and partner at O'Melveny & Myers (home of our co-blogger Ted Frank). ("The Class Action Fairness Act", Progressive Policy Institute, Mar. 11). "The states whose courts have honorably decided not to play class action games are, contrary to fundamental federalism principles, being forced to transfer authority over their citizens' claims and the interpretation of their own laws to other states whose courts seem to have an insatiable appetite for such lawsuits," according to Dellinger. See New Democrats Online, "Breakthrough in the Courts?", Feb. 19; "Compromise on Class Action Reform", May 1.

[cross-posted from Overlawyered, where it ran Oct. 21, 2003]

Chicago lead paint case dismissed

"A judge has dismissed the City of Chicago's lawsuit seeking hundreds of millions of dollars from lead-based paint manufacturers, saying the city had not proven that the companies created a public nuisance." ("Chicago's lawsuit over lead paint dismissed", AP/Milwaukee Journal Sentinel, Oct. 8). The New York Times recently noticed one complication affecting the diagnosis of an "epidemic" of lead poisoning among inner-city children, namely that a large share of urban kids found to have high lead-blood levels are immigrants from countries where lead exposures are very high (Kirk Johnson, "For a Changing City, New Pieces in a Lead-Poisoning Puzzle", New York Times, Sept. 30 (fee archives); Steven Malanga, "The Lead Paint Scam", New York Post, Jun. 24, 2002, reprinted at Manhattan Institute site (same point); our entry for Oct. 28-29, 2002).

[cross-posted from Overlawyered, where it ran Oct. 13, 2003]

Larry Schonbrun profile

Our primary editor, Walter Olson, is quoted in an East Bay Express profile of "The Spoiler", Larry Schonbrun, a former Neighborhood Legal Assistance Foundation lawyer who now specializes in taking on class action settlements where the plaintiffs' lawyers seek extravagant attorneys' fees. (E.g., May 28). "To date, Schonbrun has convinced judges to reduce such fees by more than $100 million." (Susan Goldsmith, "Class Action Warrior", Oct. 8).

[cross-posted from Overlawyered where it ran Oct. 12, 2003]

Declining to follow our bad example: "A French health authority has lost its attempt to sue four tobacco companies for the cost of treating thousands of cancer patients. In the first case of its kind in France, the national health insurance fund (CPAM) in Saint-Nazaire had demanded 18.6m euros from BAT-Rothmans, Philip Morris, JTI-Reynolds and Altadis. The CPAM said it was the amount it had spent treating more than 1,000 people with smoking-related diseases." A court threw out the action as ungrounded in law. "'It is interesting to note that no jurisdiction in Europe has so far allowed this kind of surrogate action against cigarette manufacturers,' said BAT in a statement." ("Health fund loses tobacco fight", BBC, Sept. 29)(see Oct. 7, 1999 (Israel) and Feb. 1-3, 2002 (foreign governments suing in U.S. courts).

[cross-posted from Overlawyered where it ran Oct. 11, 2003]

...runs the rhetorical question posed by anti-gun litigators. "Because the gun industry is under special attack," responds Eugene Volokh (Oct. 9). A version of the federal pre-emption litigation recommended in this space (Apr. 4-6; my hearing statement) may be on the way to passing Congress soon, but proponents have made what sounds like a rather major concession to win the support of Senate Minority Leader Tom Daschle (D-S.D.), by allowing suits to proceed against guns deemed defective; trial lawyers have long pushed the idea that the absence of some feature such as a timed trigger lock is really a "design defect" for which manufacturers ought to be held liable. If such theories are left unscathed by the new legislation, the push for gun-control-through-litigation is likely to continue (Jesse J. Holland, "Gun Makers May Win Exemption From Suits", Washington Post, Oct. 9). See also Pejman Yousefzadeh, Oct. 9.

More: Eugene Volokh has follow-up posts on the federalism aspects of the pre-emption bill, here and here (Oct. 10)

[cross-posted from Overlawyered where it ran Oct. 9, 2003]

Under the theory of market-share liability, dear to the heart of the plaintiff's bar, consumers who allege that they were injured by a product but cannot identify who made it would get to sue all manufacturers and collect from each in proportion to their share of the market. After early experiments, mostly in the realm of generically equivalent pharmaceuticals, courts have been reluctant to extend the idea any further (see, for example, Apr. 27-29, 2001, on the failure of attempts to assign market-share liability to gun makers). But hope springs eternal, and some New Jersey lawyers are now hoping to get market-share liability accepted in that state in the case of a postal worker banged on the head by the metal door of a bulk letter carrier -- she can't remember which maker's. "Essentially, we would be shifting the burden from the plaintiff to the defendants," said attorney Andrew Watson of the law firm representing her. "Any company that could prove its products had nothing to do with the accident obviously wouldn't have to pay anything. Any company that could not prove its innocence would have to participate in any verdict that was awarded," he said. Hey, it seems fair to him. (Andrew D. Smith, "Who's responsible?", Trenton Times, Sept. 28).

[cross-posted from Overlawyered, where it ran Oct. 6, 2003]

Overreading mammograms

American women who get routine mammograms are more likely to be called back for additional tests than women in other countries, even though such caution does not result in more cases of breast cancer being found, a new study has found. 'Higher callback rates would be fine if we had evidence we're getting more bang for the buck,' said Dr. Joann Elmore, lead author of research published Wednesday in the Journal of the National Cancer Institute. 'But we're not.'" The study found that "American mammographers do not detect any more cases of breast cancer, nor do they detect cancer at earlier stages, than their counterparts in such countries as Australia, the Netherlands, Italy or Britain." They do, however, have a much higher false-positive rate: "According to one of Elmore's earlier studies, one in every two U.S. women will have at least one false positive after 10 years of annual screening. ... the authors say they have adjusted for most of the other factors that could lead to higher false-positive rates and hint strongly that America's litigious culture is implicated." ("Callbacks don't increase detection", Chicago Tribune/San Diego Network of Care, Sept. 17). See also Nov. 2, 2000; May 12, 2003; "Study suggests false-positive mammogram results linked to radiologists� experience", UW School of Medicine Online News, Sept. 27, 2002 (earlier Elmore research).

[cross-posted from Overlawyered where it ran Oct. 3, 2003]

There's been much attention (and deservedly so) to the recent ruling of the Appellate Committee of the House of Lords in Tomlinson v. Congleton Borough Council (see Aug. 11), which vigorously and eloquently defended the principle of assumption of risk as a bulwark of "the liberty of the citizen" which helps prevent the imposition of "a grey and dull safety regime on everyone." See, for example, Scott Norvell, "'The Protection of the Foolhardy or Reckless Few'?", TechCentralStation.com, Oct. 2. Now, in a case that arose on the Isle of Wight, "A judge has stripped a schoolboy of a �4,250 damages award after his school argued that it would be 'madness' to compensate him for breaking his arm after falling off a swing as he played Superman during a sports day at Chillerton country primary school near Newport. ... [O]verturning the ruling that the school was negligent, Mr Justice Gross said at London's high court that if 'word got out' the boy had won his case 'the probability is sports days and other pleasurable sporting events will simply not take place ... Such events could easily become uninsurable, or at prohibitive cost.'" (Clare Dyer, The Guardian, Sept. 25; Chris Boffey, "Judge's ruling 'saves school sports days'", Daily Telegraph, Sept. 25). See also articles by barrister Jon Holbrook in Spiked Online: "'Duties of care' to the careless and criminal" (Tony Martin case, etc.), Jul. 29; "The trouble with Making Amends" (medical malpractice law), Aug. 22; "Blind spot" (road accident caused by pedestrian), Sept. 23.

[cross-posted from Overlawyered where it ran Oct. 3, 2003]

FTC commissioner on class actions

Federal Trade Commissioner Thomas Leary's June 26 speech on the FTC's interest in class action litigation is on-line. Leary criticizes excessive attorney fees, cites the Manhattan Institute's work on forum-shopping (see Mar. 24) and also notes the problem that the process can drive the result:

Once a class is certified to address a single common factor, it acquires a life of its own. If the case does not settle promptly, conservation of judicial resources may motivate courts to find ways to shortcut a burdensome inquiry into other substantive elements of the plaintiff's case, like actual "impact" on, or "reliance" by, a large number of individuals who are differently situated. Substance is tailored to serve the needs of process rather than the other way around.

(Cross-posted from Overlawyered, where it ran Sept. 30, 2003)

Interesting medical malpractice reform bill passed in the North Carolina Senate just before Hurricane Isabel (which is about to take out my power now) hit --supported by Democrats and opposed by Republicans. "Pretrial reviews in malpractice cases would come from a three-member panel appointed by a judge but with input from lawyers in the case. Panel recommendations would be entered into evidence, and a plaintiff or defendant who took a case to court despite a negative recommendation and still lost would have to pay attorney fees to the opposing side." Insurers and Republicans seem to be unhappy with the creation of a state insurance fund, increased reporting requirements for insurers, and the lack of a damages cap. (Scott Mooneyham, AP, Sep. 16; "AIA: NC. Senate Med-Mal Bill Lacking", Insurance Journal, Sep. 18). "A special House committee will consider the medical liability issues, but the full House will not act on any measure before May." (Matthew Eisley, "Malpractice changes offered", The News & Observer, Sep. 17). Game theory scholars will be interested to note that the bill requires juries who find negligence to choose between a plaintiff's proposed damages figure and a defendant's proposed damages figure -- what is sometimes called "baseball arbitration." This effectively constrains rational trial attorneys to perform a balancing act and make reasonable requests -- the higher the demand (or the lower the counter), the more reluctant a jury to go along. This alone should encourage settlements by narrowing the difference between parties. In conjunction with what will likely be a persuasive pre-trial panel expert report, it is hard to imagine circumstances when attorneys would ever let a case get to a jury verdict.

(Cross-posted from Overlawyered, where it ran Sept. 18, 2003)

Plaintiffs' lawyers are trying to turn silica into the next asbestos; though government statistics indicate reduced health problems from the critical industrial sand used to make glass, fiberglass, paints, and ceramics, claims are skyrocketing. Insurers are accusing lawyers of bringing claims of silicosis on behalf of people who have already recovered for alleged asbestosis for the same symptoms. (Jonathan Glater, New York Times, Sep. 5). Using a prominent search engine to find silicosis on the web has a strong chance of leading one to one Texas personal injury law firm or another.

(Cross-posted from Overlawyered, where it ran Sept. 13, 2003)

"Venue wish upon a star"

Okay, we picked it in part just as an excuse to quote that headline, but the story actually does show how litigation reform can work as intended: the Philadelphia Inquirer editorially hails a precipitous drop in filings of malpractice cases in that city since the state legislature enacted a bill (meant to curb forum-shopping by plaintiff's lawyers) which requires that suits against doctors be filed where the care was delivered. It is not yet clear to what extent the drop in Philadelphia filings will be counterbalanced by an expected rise in filings in suburban and rural counties; some cases, which had been premised on the generosity or unpredictability of juries in the center city, may wind up not being filed at all. (editorial, Sept. 4; Josh Goldstein, "Medical lawsuits plummet in Phila.", Aug. 31). The Pennsylvania Medical Society comments (other liability resources at its site).

In other Pennsylvania-related malpractice news, a website of doctors in neighboring New Jersey is posting the text of the "Liability Update" newsletter put out by PaMedSoc Legislative Issues Chair Donna Baver Rovito (sample), packed with news clips of interest to anyone interested in the medical liability crisis whether resident in Pennsylvania/New Jersey or not (mirror AOL site with comments) (also available at Politically Active Physicians' Association (www.fightingdocs.com), click through "News and Information" on left column). [Corrected Sept. 13 to repair/improve nonworking links]

(Cross-posted from Overlawyered, where it ran Sept. 12, 2003)

Texas tort reform update

The Texas tort reform initiative is unique because it seeks to accomplish reform through constitutional amendment; on some other occasions, plaintiff-friendly judges have struck down state tort-reform measures by claiming that they conflict with state constitutions. Early voting for tomorrow's election shows larger-than-normal turnout. (Kris Axtman, "Texas vote tests a new tactic to curb jury awards," Christian Science Monitor, Sep. 12). Lara Squires writes at length in support of Proposition 12 in the Fort Worth Business Press, noting a 400% increase in some insurance costs:

[Dr. John] Durand is an interventional cardiologist with Consultants in Cardiology of Fort Worth. He says that in a three-year period, his 12-physician group�s insurance premiums have gone from $125,000 a year to close to $700,000 a year, despite an impeccable claims history.

�We had been setting aside funds for our practice growth. We were going to build an outpatient congestive heart failure clinic, to meet the needs of a growing population facing this major health problem,� Durand said. �Instead, we had to cut back on services, freeze hiring of more medical staff and scrap plans for the outpatient center. It�s the first time in 35 years of our practice that we�ve identified a need in the community and haven�t been able to implement the solution.� (Sep. 10).

One unintended consequence of the ballot initiative: a backlog of over a thousand medical malpractice cases filed in Harris County in a three-month stretch in an effort to beat the deadline that would be imposed by the amendment. (AP, "Backlog of malpractice cases results from deadline," Sep. 11; previous Overlawyered discussion Sep. 6).

SEP. 14 UPDATE: The constitutional amendment passes, 51-49. (Kelly Shannon, "Texans Vote to Limit Lawsuit Awards", AP, Sep. 14; Janet Elliott, "Texans pass Prop. 12 in statewide election", Houston Chronicle, Sep. 14; amendment text). (via Bashman)

(Cross-posted from Overlawyered, where it ran Sept. 12, 2003)

Rx: Hired-gun control

"Two physicians fed up with medical expert witness testimony gathered lawyers and doctors and founded the Coalition and Center for Ethical Medical Testimony this summer. ... Their goal is to expose physicians who falsify credentials or mislead juries about standards of care, and they're planning to arm physicians with the tools necessary to do the job." (Tanya Albert, "Group aims to weed out deficient medical expert witnesses", American Medical News (AMA), Aug. 18). Meanwhile, in a trend that outrages the organized plaintiff's bar, medical societies are establishing tribunals to review and discipline doctors over expert witness testimony that they present in court. "Doctors whose testimony does not pass muster can be suspended or expelled from the societies." Critics from the plaintiff's bar say the medical societies will not conduct objective evaluations because of their members' interest in retaliating against those of their number who testify against fellow doctors. "The giving of expert testimony should be considered the practice of medicine, and it should be the subject of peer review," counters AMA president Donald J. Palmisano. "If someone comes into court and gives junk science, we don't want fraudulent testimony in court." Although attorney Robert Peck, who works closely with ATLA, is menacing the associations with charges of antitrust violation and witness intimidation, an opinion by the Seventh Circuit's influential Judge Posner in 2001 upheld medical testimony peer review as socially valuable self-regulation that "furthers rather than impedes the cause of justice." (Adam Liptak, "Doctors' testimony under scrutiny", New York Times, Jul. 6).

Expert batting averages

Peter Nordberg notes that on appeal, experts in criminal cases are much more likely to survive Daubert challenges than experts in civil cases. (Aug. 30). Why the discrepancy?

Texas's Proposition 12

An intense campaign is under way in Texas over Proposition 12, which would amend the state constitution so as to give the Legislature authority to set limits on non-economic damages awarded to plaintiffs in civil lawsuits (vast assemblage of news links via Google News). It is being enthusiastically backed by the state's medical community: YesOn12.org; Texas Medical Association; Texas Association of Family Physicians. Opposition: Save Texas Courts, TexansAgainstProp12.com, Texas Trial Lawyers Association. Opponents of the measure claim to fear the influence of "Big Money", but -- such a surprise! -- have heavily out-fund-raised and out-spent the proposition's supporters, with at least five law firms kicking in $250,000 each to the Save Texas Courts group (Houston Chronicle, Jul. 17, reprinted at National Constitution Center).

Curmudgeonly Clerk has a thorough roundup (Aug. 26), including the sentiments of major newspapers (the elite ones tend to be opposed, as usual) and weblog pointers. Kill As Few Patients As Possible (Sept. 2) and RangelMD (Aug. 20) also comment.

Remarkably, some opponents of the proposition have now carried out a sort of broad-daylight identity theft against the state's best-known tort reform organization, Texans for Lawsuit Reform. Observing the domain name TexansforLawsuitReform.com up for grabs, they registered it as their own and put up a site exactly mimicking the actual TLR's graphics and logo but then filling the rest of the page with boilerplate propaganda against the measure. The Austin Chronicle has more on the story (Lee Nichols, "Naked City", Aug. 29). Kill as Few also comments (Sept. 4).

Addendum: BeldarBlog (Aug. 28) has an excellent analysis of the division-of-powers angle of Proposition 12 (should tort law remain exclusively the province of judge-made law, or is it legitimate for lawmakers to help shape its course?).

(Cross-posted from Overlawyered, where it ran Sept. 4, 2003)

Employment law roundup

Newsweek purports to discern a renewed boom in workplace suits, though the strength of its evidence for that proposition is open to question (Jennifer Barrett, "'I Have Never Seen Such a Fever Pitch'" Jul. 21). In one remarkable bit of stimulation to the employment litigation sector, a California court of appeals has ruled that a litigant can turn an age discrimination claim into a lawsuit under the state's famously broad unfair-competition statute, s. 17200, on the grounds that an employer who commits age discrimination gains an unfair competitive advantage over employers that don't (Alexei Oreskovic, "Nestle Ruling Paves Way for New Work Discrimination Cases", The Recorder, Jun. 16). The EEOC has filed a lawsuit on behalf of a Mormon employee who says he was fired for refusing to drink alcohol, prompting blogger Michael Fox to observe that "one of the fascinating things about employment law is how almost any issue that could arise in the workplace, seems to ultimately lead to a possible claim of some sort". ("Fired for not drinking, suit alleges", Jewish World Review, Aug. 3; Employer's Lawyer, Aug. 26). And the EEOC has gotten its hand slapped by a court after overreaching in one of those much-publicized "noose" racial harassment cases (EEOC v. Asplundh Tree Expert Co., 11th Circuit, Aug. 7 (PDF), via Employer's Lawyer, Aug. 7).

(Cross-posted from Overlawyered, where it ran Sept. 2, 2003)



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.