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November 2004 Archives

"The scholarly content of blogging"

At Marginal Revolution, Tyler Cowen offers his thoughts on the intersection between blogs and scholarship. He notes that there must be something there, given the new Posner/Becker blog venture: "I've heard that if Posner were a law school, his citation index would put him in or close to the top ten. And Becker . . . . is also the most widely cited living economist, not to mention that Nobel Prize."

WSJ on obesity study flaws

Last week, I noted that the CDC had taken "the unusual step yesterday of admitting flaws in its March study that had claimed that obesity was responsible for 400,000 deaths annually." Today, the Wall Street Journal editorial board chimes in ($) on the same topic, and adds the following legislative note:

Earlier this year the House of Representatives passed the Personal Responsibility in Food Consumption Act, which would shield food vendors from civil claims premised on weight gain. Like a lot of other tort reform legislation, however, Senate Democrats blocked it. Perhaps the bill will meet a different fate next year. We hope so, because allowing trial lawyers to exploit the obesity epidemic -- and encouraging Americans to blame their dietary excesses on someone else -- isn't going to make anyone healthier.
N.C. med mal

North Carolina's John Locke Foundation has just published a 30-page paper (PDF) on medical malpractice reform by our own Prof. Michael Krauss. There's some Tarheel-specific content, but much of the paper will be of equal interest to reform-minded readers in other states. (via Robert S. Sargent, Jr. at Enter Stage Right). More on N.C. med mal from Jacob Montgomery at the ProCare blog (to whose readers, by the way, welcome).

Europe discovers securities litigation

Shareholder actions are mushrooming in Germany and many other countries as a result of recent financial scandals, and various nations including the Netherlands and Finland have enacted or are enacting laws allowing class action or other aggregation methods to handle the resulting litigation more efficiently, according to a Bloomberg News report spotted by Lyle Roberts of the 10b-5 Daily. The article includes the following quote: "'Europe wasn't litigious until about five years ago, but then we started to get Americanized,' says Paul Bowden, a 49-year-old partner at the law firm of Freshfields Bruckhaus Deringer in London. 'Consumer associations have become more powerful and willing to push lawsuits, and there is a growing number of small law firms with young, ambitious lawyers who have learned a lot from the U.S.'"

Becker/Posner blog link

On Wednesday, I noted that Nobel laureate Gary Becker and Seventh Circuit Judge Richard Posner planned a new weblog. That site can be accessed here. (Via Bashman, of course.)

Overlawyering the schools

Over at Phil Howard's Common Good, they have collected all the laws and regulations governing a typical public high school in New York City. On their new website, "Over Ruled," you can access explanations and commentary by type of regulation as well as follow interactive flow charts explaining the labyrinthine process for, e.g., suspending a student. Another look, both comical and depressing, about the effects of overlawyering on society.

Times on Harvard Law borrowings

The New York Times weighs in on the recently exposed borrowings of Profs. Ogletree and Tribe (see Sept. 17, Sept. 14). Worth noting are the comments of much-quoted legal ethics prof Stephen Gillers, who blasts the motives of those who bring these matters to wider public attention, and suggests that Ogletree has been punished severely enough by the public exposure of his transgression. Now you can begin to see why Gillers maintains his place in seemingly every reporter's Rolodex: any old legal ethicist will give you a quote criticizing plagiarism, but if you're looking for something more, well, distinctive...

Florida's three-strikes, cont'd

An AP analysis last week examined the initiative approved by Florida voters earlier this month (and sponsored by trial lawyers) which provides for the revocation of the licenses of doctors with three findings of malpractice on their records (see Nov. 4, Jul. 20, etc.) Citing the views of our own Lester Brickman, it suggests that the measure may be a bigger victory for the trial bar than has heretofore been recognized:

Legal experts say the measure could let loose a flood of malpractice suits. Doctors say it will scare some physicians away from Florida while forcing others to reach quick malpractice settlements to avoid a "strike" against them.

"It has branded the state as probably the most unfriendly state for physicians," said Robert Yelverton, a Tampa doctor. ...

Lester Brickman, a professor of legal ethics at the Cardozo School of Law of Yeshiva University in New York, said the lawyers "trumped the doctors" with the three-strikes amendment, because lawyers will rush to sue in hopes doctors will settle to avoid a "strike" on their record.

"You'll see hundreds of these claims," Brickman said. "In the next 10 years virtually every doctor in the state of Florida will have been sued."

Obesity study flawed

The Centers for Disease Control and Prevention took the unusual step yesterday of admitting flaws in its March study that had claimed that obesity was responsible for 400,000 deaths annually -- a figure that represented a 33% increase from 1990. The actual figure is some 80,000 lower, only a 10% increase since 1990. The CDC is blaming methodological and statistical error.

"Public health advocates" have been quick to point out, of course, that obesity remains "the second leading cause of preventable death." And I'd expect the drumbeat of trial lawyers bent on making obesity lawsuits their newest line of business to continue, along similar lines to those that targeted the "first leading cause of preventable death." For more on efforts to limit such suits, see May 19, May 19, and Oct. 15.

Tax protestors in action

Judge Easterbrook famously wrote in Coleman v. Commissioner, 791 F.2d 68 (7th Cir. 1986):

Some people believe with great fervor preposterous things that just happen to coincide with their self-interest. "Tax protestors" have convinced themselves that wages are not income, that only gold is money, that the Sixteenth Amendment is unconstitutional, and so on. These beliefs all lead -- so tax protesters think -- to the elimination of their obligation to pay taxes. The government may not prohibit the holding of these beliefs, but it may penalize people who act on them.

A group of tax protestors got sufficiently overconfident over the lack of IRS enforcement against their tax evasion that they took out a full-page ad in USA Today bragging about their success and inviting others to join them. That woke the feds up, and Al Thompson was arrested last week after a high-speed car chase. (David Cay Johnston, "Leading Foe of Income Tax Is Arrested After Car Chase", NY Times, Nov. 19). As tax-blogger Roth CPA put it, "He should have told his tires that there is 'no law' requiring them to go flat when they run over highway spikes." Other signatories of the USA Today ad are meeting similar consequences.

David Cay Johnston also interviews the now-bankrupt and prison-bound Jerome Schneider, whose schemes met with more mainstream acceptance by a variety of millionaires who now face prosecution or suit for the taxes they evaded. ("Pioneer of Sham Tax Havens Sits Down for Pre-Jail Chat", NY Times, Nov. 18).

As analyzed in more detail by Ted Frank at overlawyered, a Tennessee jury has awarded over $105 million to the family of an 8-month old killed in a tragic car injury in 2001 when a pickup truck going 70 miles per hour rear-ended the Chrysler minivan containing the infant. $101.75 million of the verdict is allocated to Chrysler on the theory that the infant's death was caused when the front seat of the van collapsed backwards onto his head. But the seat backs exceeded U.S. regulatory standards by more than three times, and as Ted points out, a stiffer seat back would result in far more net deaths over the vast majority of collisions.

Such is the problem of regulation through litigation, which lacks the sophistication of industry engineers and regulatory agencies and is prone to juries' "hindsight bias," i.e., "the human tendency to overstate the predictability of past events." (For a more detailed discussion of hindsight bias, see Steve Hantler's The Seven Myths of Highly Effective Plaintiffs' Lawyers.)

Chrysler has, of course, announced that it will appeal the decision.

New Becker/Posner blog

According to an article on Underneath Their Robes, Nobel prize-winning economist Gary Becker and Seventh Circuit judge Richard Posner intend to start a new blog, which is certain to include many law and economics topics of interest to readers. Stay tuned for more information. (Hat tip: Howard Bashman)

Toward loser-pays in California?

This reader (Charles R. Landau) thinks a couple of simple amendments to the state's offer of judgment provisions would be enough to do the trick. I haven't enough evidence to offer an opinion, myself.

Expert witness fined $20K

In other news of testimony gone wrong, an expert witness for the defense in a medical malpractice case has been chastised by the trial judge and fined $20,000 for misstating a key aspect of a study relevant to the case. The judge found that the expert, Dr. Fred Hochberg of Massachusetts General Hospital, had wrongly professed familiarity with the details of the study. (Boston Globe/LexisOne; Peter Nordberg).

Lawyer jailed for coaching perjury

So it does happen after all -- in this case to a Nashville lawyer who over-aggressively handled a criminal defense case. Authorities will determine whether David Gold will also lose his law license.

Spitzer's "reign of force"

New York Attorney General Eliot Spitzer has been critiqued on these pages in regards to his campaigns against drug companies, mutual funds, and, most recently, insurers and insurance brokers. In today's Wall Street Journal ($), Henry Manne, dean emeritus of George Mason School of Law and a pioneer of the law and economics field, dissects Spitzer's actions in more detail.

Manne notes that Spitzer's campaigns put enormous pressure upon companies to change behaviors, regardless of whether their prior behaviors were actually wrong or anticompetitive:

Eliot Spitzer's current campaign against major insurance brokers and insurance companies has reaped massive media indignation, just as his "discovery" of a mutual-fund scandal did. No need to wait for messy trials in courts of law or lengthy studies by scholars; the returns are in, at least in the headlines, and Mr. Spitzer has won again.

But what if Mr. Spitzer is wrong, and what if none of the practices complained of was either unethical or anticompetitive?

Attorney Robert C. Heim of Dechert LLP has a paper (PDF) giving advice to businesses on how to respond to class action lawsuits. He observes that since the certification of a class often turns a case into the "bet your company" kind and thus creates overwhelming pressure to settle, many if not most defendants find it crucial to defeat the original motion for class certification. They may, for example, convince the judge that it is unfair to lump all potential claimants into one class or impractical to run a resulting trial. One opinion that may be cited advantageously as precedent was written by the current U.S. Attorney General-designate:

Bernal is a leading state court decision on trial plans and class certification. In an opinion by then-Justice (now White House counsel) Alberto R. Gonzales, the Texas Supreme Court held that �it is improper to certify a class without knowing how the claims can and will likely be tried.� Bernal involved hundreds of personal injury claims arising from a refinery explosion. The claims turned on �thorny causation and damage issues with highly individualistic variables.� The plaintiffs� trial plan called for proof of causation and damages on a class-wide basis, with �the help of models, formulas, extrapolation, and damage brochures.� The court rejected this idea, holding, first, that defendants have a fundamental right to case-by-case discovery and individual trial of personal injury claims, and, second, that if �individual issues� cannot be resolved �in a manageable, time-efficient, yet fair manner, then certification is not appropriate.�

Pro se cases...

...clog the Ninth Circuit, according to the NLJ. It seems all remedies under consideration involve devoting yet more resources to assisting persons who file such cases.

It's Greek to me

It's a common legal axiom that you can't libel the dead, but some 2300 years isn't enough to deter a group of Greek lawyers who are upset with Oliver Stone for portraying Alexander the Great as bisexual, a commonly understood but apparently not universally accepted bit of history. What's next, Israeli lawyers suing Mel Gibson?

C-section rates

CodeBlueBlog cites multiple reasons.

Federal tobacco suit

Jacob Sullum has an update on the appellate review angle.

Weblog about state attorneys general

It's been launched by James Tierney, former attorney general of Maine and a longtime presence in activist AG circles; he now directs a State Attorneys General Program at Columbia Law School. From first impressions the blog looks likely to be the source of much interesting information, from a perspective very different from our own (via Orin Kerr, Volokh Conspiracy).

"Dispelling malpractice myths"

William R. Brody, president of Johns Hopkins University, has his say: "A few new caps on liability costs aren't going to solve the problem. It's time we begin a comprehensive reform of the medical justice system."

In a newly posted commentary on Medical Progress Today, a sister site to this one, also sponsored by the Manhattan Institute and focusing on medical policy issues, Dr. Gilbert L. Ross discusses the Vioxx litigation. Ross is the Executive and Medical Director for The American Council on Science and Health, and he is highly critical of the litigation:

[L]ast week, a new report revealed that a Merck vaccine against the virus that causes almost all cervical cancer was completely effective in a 4-year trial among over two-thousand patients.

But will this cancer vaccine - or other lifesaving drugs in the Merck pipeline - ever see the light of day? Not if "Trial Lawyers, Inc." has its way. Tort lawyers seasoned in the asbestos and silicone breast implant wars are filling the airwaves with solicitations for poor folks injured by Vioxx to come in (or just phone!) for a Free Consultation to Protect Your Rights. Those hoping to win the big-bucks lottery for a piece of Merck would get to share their multi-billion dollar damages with their attorney - sometimes 50-50, after expenses - while Merck goes bottom-up. Plaintiffs' lawyers just held a big conference in Las Vegas to organize most efficiently for the kill, and possibly to divvy up the spoils, just like they did with litigation against the tobacco industry.

Ross continues:

Merck is not Enron or R.J. Reynolds, plaintiffs' bar rhetoric to the contrary. In addition to its new foray into cancer prevention, Merck is the only pharmaceutical company still making vaccines for the national children's vaccine stockpile - all the other makers of kids' vaccines have abandoned this vital market due to burdensome regulations and economic disincentives.

Ross's view is best summed up by his title: "Don�t Kill The Pharmaceutical Golden Goose." I encourage all to read the full article.

Vioxx withdrawal a mistake?

This morning's WSJ ($) is editorializing that it may have been a big mistake, both medically and strategically, for Merck to yank the arthritis drug off the market entirely rather than strengthen warnings while leaving the drug available for patients for whom its benefits exceed its risks. Larry Ribstein was making similar arguments a few days ago, while KipEsquire also questions the "bad for everyone, should never have been marketed" view of the COX-2 inhibitor category.

Specter as Judiciary chair

He'll be a team player on litigation reform, he says, and won't bottle up White-House-backed legislation, whether or not he himself supports it.

Losing a doctor

On Oct. 22, 2002 the Philadelphia Daily News ran a lengthy article on what it's like to lose a doctor who moves out of state for reasons of you-know-what. It's still online (reg) and well worth reading. Among those interviewed by the newspaper: Kathleen Olsen of South Philadelphia, who lost the surgeons who did her mastectomy and reconstructive surgery; Erin Zezzo of Doylestown, who lost the obstetrician who delivered her first child; and Mildred Tomassetti of South Philadelphia, planning for cataract laser surgery, whose trusted ophthalmologist "now only does surgery in New Jersey to avoid paying the high malpractice insurance rates in Pennsylvania." Erin Zezzo's story got picked up by First Lady Laura Bush in a campaign speech.

WSJ asbestos editorial

Opines this morning's Journal ($): "A group of commercial creditors -- who stand to lose if the trial bar and healthy plaintiffs gobble up every last corporate asset -- are waging a principled battle against asbestos shenanigans, and have made some headway." In particular, the "creditor banks have asked that he [Judge John P. Fullam, recently appointed to oversee several asbestos bankruptcies] order a look at a random sample of the medical records of those plaintiffs with non-malignant (non-cancerous) claims against Owens Corning. These are the vast majority of asbestos claims -- and the most suspect." Plaintiff's firms are fighting the request; critics contend that a closer look at medical files will reveal a majority to be medically ineligible.

Sarbanes-Oxley implementation

Another phase goes into effect, another wave of highly onerous costs gets piled onto businesses. And Prof. Bainbridge has a paper which we haven't linked previously on "The Creeping Federalization of Corporate Law".

New Hampshire medicine

Even New Hampshire, a state that long maintained a reputation as unlitigious, is feeling the medical chill these days, especially after a jury returned a $2.6 million verdict on behalf of a Wolfesboro man against a respected orthopedic surgeon. Foster's Democrat and the Concord Monitor have more.

Living in the Welfare State

Thanks to this post on the Adam Smith Institute Blog, we learn of the publication of a "hard-hitting" indictment of Britain's welfare state. James Bartholomew's The Welfare State We're In has just been published by Politico's Publishing. According to the ASI Blog, Bartholomew argues that social security has produced alienation and crime, unemployment, and more poverty; that means-testing has discouraged work and saving; that the high taxes required have made work less attractive. That the [National Health Service] is "like a train crash every day." That old people would be better off if the state pension had never been created. That the UK could have been a rich country, but the postwar welfare state killed any chance of it.

Bartholomew had a column in the Telegraph last week, arguing "There was never any need for the NHS to begin with."

Specter and tort reform, part deux

Those who have read Mike DeBow's and Walter Olson's comments on this site know that the brewing controversy over Arlen Specter's likely appointment to head the Judiciary Committee concerns not only his treatment of judicial nominees but also his posture on tort reform. Alan Murray has an extended analysis in today's Wall Street Journal ($). Stephen Bainbridge has excerpts and commentary.

Dust settles on medical ballot measures

The AMA's American Medical News weighs in on the referendum and initiative battles decided earlier this month. Physicians in Florida and Nevada "have fielded calls from colleagues nationwide who are curious about how the campaigns were developed," while trial lawyers for their part are expected to file legal challenges seeking to overturn doctors' victories in both states. As for the counter-initiatives successfully pushed by the lawyers in Florida, "Physicians already have reported fallout [from the anti-confidentiality initiative], including some doctors resigning from peer review boards and at least one hospital suspending peer review for now." In contrast to the doctors' measure, however, "the lawyers' initiatives require approval by the Legislature and governor before they can take effect," according to a Florida Medical Association official, which opens the possibility that eventual regulations to implement the measures will soften some of the most onerous consequences (via KevinMD). (Update: more on the "three-strikes" measure from MedPundit.)

Plus: Insurance Journal (via Martin Grace) has more: Alexander Clem, the president of the Florida Academy of Trial Lawyers, "said that lawyers might in the future hit back at doctors' incomes with an amendment that requires doctors to charge all their patients the same as they charge Medicaid patients." As for the limits on lawyers' fees, how 'bout just getting clients to sign away their rights? "Clem said some attorneys think some clients may waive their right to the amount of winnings the amendment guarantees, which is 70 percent of the first $250,000 in damages and 90 percent over that. If they can't get a lawyer to take their case because of the requirement, they could simply agree to forego their right to the higher amount, he said." No doubt the FATL would be really sympathetic to such arguments if advanced by, say, credit-card companies that wanted to charge higher interest rates than regulations allow.

Justice Talking tomorrow night

Tomorrow night, I'll be doing a taping on National Public Radio's Justice Talking program. The program description follows:

Limiting Lawsuits Tuesday, November 16, 2004 7:30 PM at The National Constitution Center

Multi-million dollar jury awards are being blamed for increasing insurance rates, dampening corporate profits and stifling an economic recovery. Corporate leaders say the system is being abused by too many and must be fixed for the few who are genuinely injured. They welcomed the pledge from the White House to curb awards. But consumer advocates warn against relaxing liability rules that punish corporate negligence and fear for public safety. Corporate credibility has taken a beating as one scandal follows another and Americans, they say, should be wary about cutting awards and punitive damages that let bad actors off the hook.

Obviously, NPR's spin is "corporations vs. consumers." I'll be explaining why that characterization is highly misleading and why our nation's explosion in tort litigation harms the average American as well as our democratic and constitutional fabric.

I'll be debating Arthur Bryant, the Executive Director of the Trial Lawyers for Public Justice, a trial lawyer-friendly "public interest" law firm. Our readers in the Philadelphia area can attend the free 80-minute taping by reserving seats here. Anyone can send in questions that may be used in the program by emailing the producers at jt_info -at- justicetalking.org.

"Aggressive settlement policy"

Defendants as a group will probably never reach consensus on the relative merits of a hard-line approach toward settlement, which counsels against making offers on claims unless they appear likely to prove legally valid, versus a policy of reaching out aggressively to settle a wider category of claims before they mushroom into expensive disputes. As Law.com's Corporate Counsel magazine reported recently, lawn mower manufacturer Toro has had good results with a strategy of settling fast and generously, so much so that some of its methods are being emulated by companies like duPont, GE and Johnson & Johnson.

Federalist panel on reg-by-lit

I took part this weekend in a panel discussion at the Federalist Society National Lawyers Convention in Washington, D.C. on the subject of regulation by litigation. My remarks inquired into the subject of why Congress isn't more jealous of its prerogatives when the "Fourth Branch" of trial lawyers exercises lawmaking ambitions in areas like tobacco, guns and health care. The question period got into federalism, among other topics. Law professor Jonathan Adler of Case Western was there and blogged the whole thing at Commons Blog (Nov. 12).

Emergency medicine: a gathering crisis

The American College of Emergency Physicians recently published a survey (PDF) confirming that the number of specialists willing to serve on call at the emergency departments of the nation's hospitals appears to be declining and to fall well short of what is needed. The reasons are complex -- EMTALA, the federal law mandating emergency care, apparently has lots of unintended consequences -- but the high liability exposure of emergency medicine is also cited as a factor. ACEP maintains a page on liability issues more generally.

An election lesson

"Whatever you feel about the rights that have been gained through the courts, it is easy to see that dependence on judges has damaged the progressive movement and its causes." (David von Drehle, "Take the Issues to the People, Not to the Courts", Washington Post, Nov. 14).

Growth areas

In case you doubted it: "...a search of federal civil litigation trends over the past five years reveals that the practice areas with the largest growth are products liability, securities, intellectual property, antitrust, and employment.

"Products liability cases have surged since 2001 to an anticipated 25,700 cases in 2004 and now make up nearly 10 percent of all federal civil filings. In particular, the estimated 24,100 cases dealing with personal injuries continue to grow and now account for 94 percent of all products liability cases." (Kevin Stehr (vice president for strategic market planning at LexisNexis), "Spot the Litigation Trends", Legal Times, Oct. 7).

Top lawyers/executives speak out

The Washington Legal Foundation, a free-market legal advocacy organization, has published a recent "Conversations With . . ." piece in which former U.S. Attorney General Dick Thornburgh, a leading advocate for legal reform, leads a discussion with three business leaders on the topic. Participating in the forum are Maurice "Hank" Greenberg, Chairman and CEO of American International Group; Bernie Marcus, founder and former Chairman of Home Depot; and Steve Hantler, Assistant General Counsel of DaimlerChrysler. Check out this entertaining and informative read for a better understanding of how the litigation explosion is affecting American business.

Specter and tort reform

On the op-ed page of today's Washington Times, Timothy Carney argues that Arlen Specter's voting record on tort reform issues makes him "the favorite senator of the trial lawyers." The column concludes with this:

As Mr. Bush tries to revive the economy in his second term, it's not clear he can do that with Mr. Specter atop the committee that deals with tort reform. As Mr. Bush said during this campaign, "I don't think you can be pro-small business and pro-trial lawyer at the same time." There's little doubt whose side Mr. Specter is on. There's little hope for business if he's chairman.

State AGs under fire

Two new papers are highly critical of a group of officials who are unused to getting bad press:

* For Capital Research Center, Martin Morse Wooster has written a paper entitled "State Attorneys General: Policing or Politicizing Private Philanthropy" (Oct.). While much of the paper consists of a skeptical evaluation of recent initiatives by AGs in their capacity as primary regulators of nonprofits, charities and foundations, Wooster also extensively criticizes activist state AGs who seek to use expansive powers and stretched legal interpretations to impose an "extreme makeover" on sectors of the economy, with particular attention to an undercovered aspect of the tobacco settlement, its establishment of the "American Legacy Foundation" to use legally driven funds to propagandize against the tobacco industry.

* At the U.S. Chamber's Legal Reform Now site, Wall Street Journal editorialist John Fund has a paper whose name says it all (PDF): "Cash In, Contracts Out: The Relationship Between State Attorneys General and the Plaintiffs� Bar". In addition to a detailed roundup of pay-to-play revelations concerning the tobacco caper, Fund compiles a wealth of information about donations to AGs by law firms angling for work on environmental and other lawsuits in New Mexico, Louisiana and elsewhere.

FTC and the professions

The Federal Trade Commission is one of the very few cops on the beat keeping tabs on the legal profession's propensity for anti-competitive and deceptive fee practices, class action collusion and so forth. From the American Antitrust Institute, Northeastern U. economist John Kwoka has a history of the commission's 25 years of involvement in oversight of competition in the professions. The paper (PDF) was presented at the commission's September symposium (via David Giacalone).

NYU Journal of Law and Liberty

The new journal describes itself as "dedicated to providing a forum for the critical discussion of classical liberal legal scholarship. It will include articles on the nature of rules and order, legal philosophy, theories of rights and liberty, constitutional law, jurisprudence, legal history, and historical and contemporary legislation." On Nov. 19 it will hold a symposium at NYU on "Private Property in the 21st Century" with such notables as Richard Epstein, Jan Narveson, Ilya Somin and Joseph Salerno.

National Association of Manufacturers

Senior Vice President Pat Cleary of NAM has started a blog. A regular participant in product liability debates, NAM is also a steady source of policy analysis on workplace and employment law.

Chances for federal legislation

Legal Times offers its prognostications. Class action reform is the closest to a sure thing, if anything is, and the departure of Tom Daschle, "poster child for obstructionism", may also bode well. Likely Judiciary chair Arlen Specter, it should be noted, while unhelpful on many legal-reform issues, has taken an interest in hammering out a compromise on asbestos litigation, which has been a job-killer in his home state of Pennsylvania.

While visiting the Cato website, I noticed several articles in the current issue of Regulation that will be of interest to Point of Law readers (all available in PDF, by clicking here):

Pierre Lemieux, "The Public Choice Revolution" (the application of economic theory to politics "has demystified and undeified the state")

Fred McChesney, "Talking 'Bout My Antitrust Generation" ("Overeager attorneys on the state level and in Europe threaten to destroy an improved antitrust climate.")

Paul Teske, "The New Role and Politics of State Regulation" ("Is the recent trend of expanding state regulation beneficial or harmful?")

John Mueller, "A False Sense of Insecurity?" ("How does the risk of terrorism measure up against everyday dangers?")

New book on regulation by litigation

Robert Levy's soon-to-be-published book, Shakedown: How Corporations, Government, and Trial Lawyers Abuse the Judicial Process, is the subject of a "book forum" at the Cato Institute tomorrow (Wednesday) at noon eastern time. The event will include commentary from Walter Olson, and will be streamed live online.

You can read a brief description of the book here (and order it, as well).

Wyoming referendum results split

Updating our election-night coverage: it now appears that one of the two medical liability proposals on the ballot in Wyoming, the one allowing the legislature to provide for medical review panels, narrowly passed rather than failing as it looked likely to do from earlier returns. The other one, which would have allowed the legislature to enact damage caps, failed by a narrow margin.

RAND's study on MICRA

Getting a lot of attention, says the AMA's American Medical News.

Jim Copland on election aftermath

Trial lawyers & the AFL-CIO, together

A coalition of organizations calling itself the Prescription Access Litigation Project files lawsuits against the pharmaceutical industry over its pricing of drugs (see Overlawyered, Nov. 24, 2003); it's represented by big-gun Seattle litigator Steve Berman (Hagens Berman) of state tobacco-suit fame. In an action last month, PALP sued AstraZeneca under California unfair competition and false advertising law saying the company's advertising wrongfully persuaded consumers to switch to its anti-acid-reflux drug Nexium. "The coalition filing the lawsuit on behalf of consumers is made up of the A.F.L.-C.I.O., the California Alliance for Retired Americans and the Congress of California Seniors." Harbinger of more AFL-CIO/trial lawyer working relationships to come? (Stuart Elliott, "AstraZeneca Sued Over Advertising", New York Times, Oct. 19).

Aftermath of Prop 64

The San Francisco Chronicle and Sacramento Bee have postmortems on California's landmark vote. Trial lawyer advocate Jamie Court, sounding more than a little apoplectic, is vowing to push repeal of Tuesday's amendment through a future ballot initiative. The text of the measure is here (PDF).

Still unexplained, and more than a little mysterious, is why trial lawyers put up only token financial opposition to the proposition, in contrast to their willingness in the past to spend heavily against virtually every other liability-limiting proposal ever placed on a state ballot. (Opponents spent only $1.3 million fighting the measure, according to the Chron, versus backers' $15 million+). Maybe they wrongly calculated that editorial pages would as usual take their side and that the governor could be kept out of it. If so, they bet wrong.

The Chron, citing Yes on 64's John Sullivan, cites an example of why the s. 17200 law, although applicable to companies around the world that do business in California, places a much more onerous burden on those headquartered in the Golden State (thus discouraging such headquartering):

Last year, for example, Visa International of Foster City and MasterCard of New York were found guilty in Alameda County Superior Court of failing to clearly disclose their fees for currency conversion abroad.

Because Visa is based in California, it must pay refunds to all of its customers who were charged the fees, while MasterCard need only repay fees to its California customers. Both companies are appealing the verdict.

Convictions in Enron barge case

Updating our Sept. 20 item, the AP reports: "A jury convicted four former Merrill Lynch & Co. executives and a former midlevel Enron Corp. finance executive of conspiracy and fraud Wednesday in the first criminal trial of Enron and Wall Street executives for their role in the energy company's 2001 collapse." More at Texas Lawyer.

Public Choice and Tort Reform

Emory University economist Paul Rubin has recently completed an article by this title that will likely interest many Point of Law readers. Here's the abstract:

It was originally thought that the structure of the common law would not allow rent seeking. More recently, scholars have realized that there is room for rent seeking, and that attorneys are engaged in exactly this process. This rent seeking has led to a great increase in the scope of U.S. tort law, and a corresponding effort to limit the scope of the law. This creates an ideal system for students of public choice. There are organized interest groups on both sides (attorneys, businesses and doctors) which are both coalitions themselves and members of broader coalitions. Each side has numerous tools available for advancing its agenda, such as litigating and lobbying for favorable rules, and attempting to elect preferred representatives and judges. There is ample comparative data available at the state level and also roll call votes at the federal level useful for studying these issues. This is an important and interesting area for future research.

The article can be downloaded via the Social Science Research Network's website.

Belated judicial election round-up

Links to stories about the judicial election results in a few states well-known to Point of Law readers:

Alabama -- "GOP sweeps Alabama Supreme Court races" (Kim Chandler & Stan Bailey, Birmingham News, Nov. 3)

Michigan -- "Supreme Court: Easy victories predicted for 2 incumbents" (L.L. Brasier, Detroit Free Press, Nov. 3)

Mississippi -- "Graves in runoff for Supreme Court, three incumbents easily win" (Sheila Haradwell Byrd, AP, Nov. 3)

Texas -- "GOP maintains grip on statewide elective offices" (Clay Robison, Houston Chronicle, Nov. 3)

Stephen Bainbridge has some thoughtful ideas about how Bush should handle the SEC in term 2. Key points: fire Chairman William Donaldson and block the "shareholder access" proposal.

AP on Tuesday's results

The wire service characterizes the outcome on ballot measures as "indisputably a split decision" as regards litigation reform and "a virtual stalemate reflecting deeply divided public opinion". That's a pretty strange reading, considering that:

1) Of nine measures on the ballot dealing directly with litigation reform, the trial lawyer side lost by thumping margins in six (Fla., Calif., the three Nev. measures, and Colo.) and managed to eke out very thin victories in at best three (Ore. and the two Wyo. measures -- although conflicting reports continue to come in as to whether both Wyoming measures lost.) (Update Nov. 9: one of them appears to have passed.) It's true that the trial lawyers can claim broad victories for their two Florida revenge initiatives, but those measures on their face purport to regulate the practice of medicine, not litigation.

2) The trial bar's victories came in small states, and did no more for them than maintain the status quo in those states. Two major defeats for them came in very large and important states (Calif. and Fla.) and in both cases the measures under consideration were big ones which are going to have a major long-term impact on the litigation environment unless struck down by courts.

3) It won't be easy for them to complain about being outspent. Final spending numbers will inevitably differ from those available before the election, but in the biggest contest, that in Florida, the trial bar had as of mid-October out-fund-raised the doctors three to one ($20 million to $7 million). California reform proponents, it's true, outspent the lawyers by a wide margin. But money wasn't enough to push them over the top: Proposition 64 lagged in the polls despite its big ad campaign, and then took fire through a late combination of surprisingly favorable newspaper endorsements and the endorsement of Gov. Arnold Schwarzenegger.

4) Other election results -- including judicial races in Illinois, Ohio and West Virginia, and elections to the U.S. Senate -- were a blowout victory for litigation reformers.

The ABA Journal (Stephanie Francis Ward and Siobhan Morrissey, article not online) more accurately headlines its account "Tort Reform Gains Traction". First paragraph: "Tort reform figured prominently in the Nov. 2 election, and Americans seem to be embracing it, particularly in medical-malpractice cases. And defense and plaintiffs lawyers predict Tuesday's results will influence a revival of federal tort reform efforts." Sounds about right to me.

Med-mal initiatives

Arizona could have one in 2006.

Cost of Maag/Karmeier race

Also per the same Post-Dispatch article: "The race set a national record in campaign contributions for a judicial contest," with the candidates raising comparable amounts, $4,301,156 for Karmeier and $4,231,664 for Maag.

Doctors and the Madison County results

Reader Daniel Shinkle of Lawrenceville, Ill. writes:

The St. Louis Post-Dispatch is reporting: "The election of a Republican to the Illinois Supreme Court on Tuesday was a disaster for the Madison County plaintiff's bar, says longtime prosecutor Don Weber."

Doctors in this part of Illinois who had never been politically active have been telling their patients that the medical community is in crisis and asking them to vote Karmeier. Most of these doctors will probably never be organized politically, but right now, they are angry and worried -- worried about their own livlihoods and about their communities. Most of them could move to another State, sign up with a clinic there, work less, and make more money. They don't want to do that. This election tells them that people are starting to support them.

For more, see this morning's post on Overlawyered.

Florida amendments fallout

Per a commenter at MedRants, the three successful Florida initiatives are all likely headed for court soon, with the lawyers seeking to overturn Amendment 3 and the Florida Medical Association challenging doctor-burdening Amendments 7 and 8. The Florida Supreme Court has been considered rather a favorable forum for plaintiffs'-side interests, so it will be interesting to see whether its members will heed the wishes of a strong majority of voting residents of the state who have shown their desire to curb lawyers' fees.

The "three-strikes" idea in Amendment 8 applies retroactively: currently practicing doctors will inherit one, two or even a license-revoking three strikes if they've been found to have committed three acts of malpractice anywhere (not just in Florida). Very few doctors actually lose three malpractice trials, but the amendment provides that "The phrase 'found to have committed' means that the malpractice has been found in a final judgment of a court or law, final administrative agency decision, or decision of binding arbitration." Presumably a lot of doctors, especially in specialties where multiple payouts are not uncommon such as neurosurgery and orthopedic surgery, are now rechecking their closed-cases-with-payment to reassure themselves about whether liability was admitted as part of the settlement. P.S. Law.com's Miami Daily Business Review is out with a closer look at the post-initiative maneuvering, which is better-informed on several points than my sketchy ramblings above.

Illinois judgeships

A reader writes:

The Maag loss might have more of an effect on the Fifth District in Illinois than many, including myself, first thought. A story in the St. Louis Post Dispatch reports another 5th District Judge, Judge Clyde L. Kuehn, is a temporary judge who will be off the court by next month, and by tradition, the first order of business for Karmeier will be to appoint successors to both Maag's and Kuehn's seats. That would likely be a pretty significant shift in the Fifth.

Welcome visitors, cont'd

...from Steve Bainbridge, Kevin M.D., and the Reason Public Policy Institute's "Out of Control", all of which linked to our election coverage, along with the sites mentioned last night. More: Stop the Bleating, Judicious Asininity, Southern Appeal.

The results in other state AG races

In addition to the West Virginia race described in Walter's post immediately below (the tightest AG race in the nation), here's a roundup of the ten other state attorneys general races I've been able to get information on (percentages are approximate):

Indiana -- Incumbent Steve Carter (R) defeated Joseph Hogsett (D), 58%-42%. (John Tuohy, "Voters re-elect GOP's Carter," Indianapolis Star, Nov. 3.)

Missouri -- Incumbent Jay Nixon (D) won a fourth term in his race against Chris Byrd (R), 60%-38%.

Montana -- Incumbent Mike McGrath (D) was unopposed for a second term.

North Carolina -- Incumbent Roy Cooper (D) beat Joe Knott (R), 55%-45%. (Bruce Siceloff, "Cooper re-elected handily," Raleigh News-Observer, Nov. 3.)

North Dakota -- Incumbent Wayne Stenehjem (R) defeated Bruce Schoenwald (D) by the largest margin of the night, 73%-27%.

Oregon -- Incumbent Hardy Myers (D) won a third term by beating Paul Connolly (R), 55%-40%.

Pennsylvania -- In the race to fill the seat vacated by Mike Fisher (now a judge on the U.S. Court of Appeals for the Third Circuit), Tom Corbett (R) beat Jim Eisenhower (D), 51%-49%. ("Corbett has slight lead," Pittsburgh Tribune-Review, Nov. 3.)

Utah -- Incumbent Mark Shurtleff (R) defeated Gregory Skordas (D), 67%-33%. (Zack Van Eyck, "GOP retains 3 state posts," Deseret Morning News, Nov. 3.)

Vermont -- Incumbent William Sorrell (D) won a fourth (2-year) term by defeating Dennis Carver (R), 65%-35%.

Washington -- In the race to succeed Democrat Christine Gregoire (who may or may not be the next governor of the state), Rob McKenna (R) defeated Deborah Senn (D), 55%-45%. (Stuart Eskenazi, "McKenna declaring victory in campaign for attorney general," Seattle Times, Nov. 3.)

Bottom line: In the 2 races for open seats, the GOP picked up Washington, and held on to Pennsylvania -- both Kerry states (by 53% and 51%, respectively).

One question: It looks as though the second term of Maine's Steven Rowe (D) ends this year. I have it on good authority that the Maine AG is appointed by the legislature, but I can't find any evidence of Rowe being re-appointed. Can anyone shed any light on this?

Finally, Ken Salazar's successful race for the U.S. Senate seat in Colorado leaves that state's AG position open.

West Virginia AG race

Here's one that hadn't been on my radar screen but evidently should have been: Republican challenger Hiram Lewis nearly managed to knock off (50.4/49.6) incumbent W.V. Attorney General Darrell McGraw, which would have been a major upset (AGs almost never lose re-election bids). Quoth AP: "Like his brother, Supreme Court Judge Warren McGraw, Darrell McGraw was targeted by Republicans for defeat for the way he has handled his office. Lewis accused McGraw of turning his public office into a large plaintiffs' law firm, alleging that he was using public money to boost the earnings of personal injury lawyers by assigning them cases that were pursued with state-employed staff."

Polls and voter sentiment

The fate of the various state ballot measures shows either how mercurial voter sentiment can be, or how unreliable polls can be -- take your pick. A couple of weeks ago both Florida's Amendment 3 and California's Proposition 64 were trailing badly, yet both won convincing victories yesterday (the latter, of course, with more than a little help from popular Gov. Schwarzenegger). The Florida turnaround is especially noteworthy because the measure had initially led among voters and then had fallen behind after huge ad buys by trial lawyers; pundits who watch the initiative process sometimes say that once a measure slumps in the polls that way, it almost never comes back.

Meanwhile the Oregon med-mal measure, which did poll strongly enough to look like it might be a comfortable winner, didn't prove so. An article in this morning's Salem Statesman-Journal says trial lawyers are confident the close vote on Measure 35 will break in their favor because many of the yet-unreported precincts are from Multnomah County (Portland), where the "no" side has racked up big margins.

At least the Nevada polls proved an accurate predictor of the outcome.

Those other races in Ohio

President Bush seems to have won reelection on a tight but apparently insurmountable lead in Ohio. But down-ballot, three contested Supreme Court races were big wins for supporters of tort reform in the Buckeye State. Ohioans elected Thomas Moyer Chief Justice, and Judith Lanzinger and Terrence O'Donnell Justices, of the Ohio Supreme Court. Each faced well-financed trial-lawyer-backed opponents in a multimillion dollar campaign that was another major front for tort reform.

Karmeier wins in Illinois

As Walter posted last night (congrats on an outstanding liveblog!), the Illinois Supreme Court race in southern Illinois between Gordon Maag (D) and Lloyd Karmeier (R) was one of the most followed in the country. The St. Louis Post-Dispatch shows Karmeier with an apparently insurmountable lead, and other media outlets and the Illinois Civil Justice League, a strong Karmeier supporter, have declared him the winner.

As noted by the Post-Dispatch, the Maag-Karmeier race was the most expensive in judicial election history, nationally:

Karmeier, a Washington County circuit judge reported raising $4,291,863 and 5th District Judge Maag reported $3,482,141.

An additional $2 million poured into the two men�s campaigns from outside groups raising money on their own.

A money quote:

Maag�s financial backing came largely from Madison County trial lawyers, who defended the current court system, saying it provided speedy justice to thousands of plaintiffs from across the country.

Of course, while Madison County does provide "speedy" resolution to plaintiffs, "from around the country," to call the results there "justice" is a stretch. Those in tort reform circles are well aware that Madison County is the epitome of the "magnet court" phenomenon nationally, as we've documented in three separate Manhattan Institute studies (here, here, and here). The American Tort Reform Association calls the county the top "judicial hellhole" in the nation.

The Maag-Karmeier race represents a big push back from the business community; Karmeier's win is a big victory for tort reform forces.

P.S. According to the Madison Record, Maag is also losing the retention election by which he would have retained his current appellate judgeship if not elevated to the higher court. He "received 55 percent 'yes' votes. He needed 60 percent to keep his position."

Goldberg on Edwards

At NRO's The Corner:

When I get back... if someone can explain to me what John Edwards did for that ticket, I'd love to know. He was supposed to make the south competitive. Brrrrrr: Wrong! He was supposed to gin up the rural voters. Brrrrr wrong! He was supposed to make economic populism work for Democrats.....Brrrrrr oh you get the point.

Edwards brought no substance, he brought no states, he brought (as far as I can tell right now) no vital demographics but he did bring pretty hair.

Edwards did, however, bring trial lawyer cash.

Morning update

AP has now called the Wyoming results for the "no" side. (More from the Casper paper; it was close.) (Update Nov. 9: one of the two measures, on medical review panels, appears to have passed after all.) The Oregon Measure 35 results are still too close to call, with the Secretary of State's office showing an 1,800-vote lead for the "no" side among 1.5 million votes tabulated, and AP/OregonLive showing an edge for the "no" side of 542 votes among a slightly smaller overall vote total, with 898 of 1,004 precincts reported as having been counted. Otherwise, no change to report from the outcomes described below.

And so to bed

Oregon's med-mal initiative is still hanging (for newer results, revisit/reload linked pages). Wyoming's didn't look good with half the vote counted, but I haven't found updated figures. In the other four states, the lawsuit-reform side seems to have virtually swept the table, dealing a huge defeat to Florida trial lawyers on fees (despite the passage of their two revenge initiatives), a thorough defeat to those in Nevada (who lost badly on their counterinitiatives), scoring a convincing win for California businesses in their quest to reform the unfair-practices law, and lopsidedly defeating the Colorado measure to expand construction litigation. In both hot judicial campaigns, the trial-lawyer-backed candidates lost. See you tomorrow.

Oregon's 35: now a 17-vote lead

This AP results page, which seems slightly fresher than the Secretary of State page linked to earlier, now lists the "yes" side as having moved into a 17-vote lead over the "no" side, 611,490 votes to 611,473. However, it says that the number of precincts reporting is still only 691 of 1,004, which leaves hope that the final tally will not be as close, or as susceptible to litigation, as that.

Oregon's Measure 35 on knife edge

The Oregon Secretary of State is reporting that with 1,155,000 votes tabulated, Measure 35, which would apply limits akin to California's MICRA to medical malpractice suits, has an almost exactly equal number of "yes" and "no" votes. Specifically, the yes side has 577,263 or 49.97%, while the no side has 577,855 votes or 50.03%, an edge of less than 600 votes. It appears that many votes remain to be counted, however. There were big geographic disparities in the vote, with the measure passing in most of the state's counties but suffering a 38-62 deficit (as of this moment) in Multnomah County (Portland), as this table reveals.

Prop 64 winning

The California Secretary of State reports that with more than two million votes counted, Proposition 64, which requires private lawyers to show actual injury if they want to sue under the state's unfair-practices law (see below), retains its 60-40 lead. The Secretary of State's office also provides a neat map on which you can examine the proposition's success county by county.

Wyoming amendments faltering

Contrary to the trend that seemed to be under way an hour ago, the AP is reporting that both Wyoming medical malpractice initiatives are in trouble, with Amendment D, which would authorize the legislature to cap pain-and-suffering damages, falling behind 44-56 percent with nearly half the state's precincts reporting. Amendment C, which would authorize review panels in malpractice cases, was getting about 50 percent of the vote, but that may not be enough because of the state's distinctive practice of counting as "no" votes those cast by voters who did not pick either yes or no.

Big win in Nevada

Word from Nevada, via the Las Vegas Review-Journal's website, is that the doctor-sponsored Question Three is sailing to enactment by a 60-40 margin, while the lawyer-sponsored counter-initiatives, Questions Four (insurance rates) and Five (sneakily mislabeled a measure against frivolous suits) are going down to defeat, 36-64 and 38-62 respectively. About 270,000 votes have been counted.

Tonight is shaping up as one prolonged migraine for the litigation lobby, isn't it? (At least as regards ballot measures).

Calif.'s Prop 64 way ahead

Leading by a 60-40 margin with 600,000 votes recorded, according to the San Diego paper. Yippee! For more on this much-needed proposition and the law it would amend, see below, here, here, here and here.

Welcome visitors...

...sent by Virginia Postrel at Dynamist, David Bernstein at the Volokh Conspiracy, Michael DeBow at Southern Appeal, and of course yours truly at Overlawyered, all of which have linked to this liveblogging effort.

More on McGraw-Benjamin race (W.Va.)

According to the Wheeling Intelligencer, Republican Supreme Court candidate Brent Benjamin, favored by defendants concerned about runaway verdicts, (see below), now holds a 52-48 lead over incumbent Democrat Warren McGraw, 149,745 votes to 138,036. There's no indication of what share of precincts may still not be reporting. More: as of 2 am, the vote totals are higher and Benjamin's lead has grown to 53-47, with about 550,000 votes tabulated. This page at the W.V. Secretary of State's site may eventually contain the needed numbers, but doesn't yet.

Wyoming Amendments C and D

The amendments would authorize the legislature to set limits on damages in medical liability. According to this AP tabulation, via the Casper Star Tribune, C is leading by a 60-40 margin and D by a 56-44 margin. Celebrity legal gunslinger Gerry Spence toured the state to denounce the measures, which may not have been enough.

CNN's ballot measures page...

...allows the visitor to follow results for twenty questions on this year's state ballots. Unfortunately, the twenty presently listed do not include any of the various lawsuit reform measures -- not even Florida's, the passage of which is going to count as reasonably big news in the worlds of both law and medicine. No wonder we turn to liveblogging....

Florida: Amendment Three wins big

In a crushing defeat for the plaintiff's bar in the Sunshine State, voters are overwhelmingly approving (63 to 37 percent) tight limits on the fees lawyers can charge in malpractice cases. The limits are in fact significantly tighter than those in California's MICRA law. All is not clover for organized medicine, however: with 75 percent of precincts reporting, voters have given approval by an even wider margin to the two "revenge initiatives" hatched by the lawyers, including Amendment Seven, which would require the disclosure of more documents helpful to the lawyers in building cases, and Amendment Eight, which would menace doctors with license revocation if they lose three cases. For more details, see below and adjacent posts.

Coloradans rejecting Amendment 34

Early returns indicate that Colorado voters are rejecting by a wide margin lawyer-sponsored Amendment 34, which would amend the state constitution to enshrine a much wider right to sue builders over construction defects. With only a scattering of precincts reporting, the Rocky Mountain News reports it losing by a three-to-one margin, and although figures are bound to change as more precincts report, they are unlikely to hold out any hope for the measure's passage. For more on the initiative, see below.

McGraw-Benjamin race in W.V.

The other most hotly contested judicial race in the country, as far as organized litigation reformers are concerned, is that between incumbent Democrat Warren McGraw and Republican challenger Brent Benjamin for a seat on the West Virginia supreme court. The only numbers I've been able to find yet are on the W.V. secretary of state's page, and are as yet too sketchy to be useful. For more on the race, see Overlawyered, Sept. 4, 2003 and May 13, 2004 (McGraw staves off Democratic primary challenge).

Maag-Karmeier race in Ill.

One of the two most hotly contested judicial races in the country, from the standpoint of litigation reformers, is that between Democrat Gordon Maag and Republican Lloyd Karmeier for an Illinois Supreme Court seat representing a district in southern Illinois that includes famed heaven-for-plaintiffs Madison County. The St. Louis Post-Dispatch has numbers; the race is still too early to call with 5 percent of precincts reporting, Karmeier has an edge. If you click on the "candidate biography" for Maag, you find that he adopts the protective coloration of a litigation reformer to the point where you'd hardly dream he was the one being backed by the high-rolling trial lawyers. The Illinois Civil Justice League is also following the race and is displaying different numbers which give Maag the edge. For more on the race, see Overlawyered, Mar. 20, Aug. 29, and Oct. 22. More: ICJL says Karmeier wins.

Fla. amendments headed for passage

With 22 percent of precincts reporting, Florida's Amendment 3 to limit lawyers' fees in malpractice cases is leading with 1,291,647 or 64.4% of votes "yes" and 715,125 or 35.6% "no". Barring a truly unprecedented turnaround, the measure seems headed for passage by a comfortable margin, a crushing defeat for both the Academy of Florida Trial Lawyers and for the Florida Bar Association and American Bar Association, both of which intervened on the "no" side. Amendments 7 and 8 are also passing by even wider margins.

Amendment 3's poll surge

Whatever mistakes the Florida doctors may have made in their campaign, they seem to have benefited from a recent upsurge in public support. A poll reported Oct. 30 in the Tampa Tribune and WESH-TV found that 48 percent of Florida voters were planning to vote "yes", 39 percent "no", with 13 percent undecided. That's a marked improvement from polls only a week or two earlier which had found the measure trailing.

Fla. docs' outreach

There's no question Florida doctors have been working hard on behalf of their side of the initiative battle, as witness this report of a rally in Sebring. However, their outreach to natural allies seems to leave much to be desired. The publication Insurance Journal talked to several Florida independent insurance agents and found that "amazingly, even on election day, none had investigated the details or implications of this amendment to the insurance industry and very few had made up their mind about how to vote." Meanwhile, perhaps stung by criticism, trial lawyer interests are now taking pains to deny that their revenge-initiative Amendment Seven would necessarily crack open hospital peer review records.

This appeared on Overlawyered Nov. 1:

More about the Magna Carta for California bounty-hunters known as the Unfair Competition Law or s. 17200, which Golden State voters have a chance to rein in tomorrow by approving the much-needed Proposition 64:

* Attorney Harpreet Brar, whose law firm of Brar & Gamulin was among those to arouse public outrage in the shakedown-lawsuit scandal of 2002-03, has been ordered to pay nearly $1.8 million for filing shoddy lawsuits against small businesses and seeking to settle them quickly for cash (see Aug. 20, 2002) (various news sources, via Legal Reader, Oct. 20);

* Justice David Sills's spirited dissent in the "Six Screws" case in June (mentioned in my Friday WSJ piece) can be found, along with the majority opinion, here. An excerpt from Sills's opinion to illustrate the flavor:

What is the difference between the $3 million attorney fees award here and the petty shakedowns which made the Trevor Law Group infamous in Southern California? Nothing but the size of the law firm and its target. As this court noted in People ex rel. Lockyer v. Brar (2004) 115 Cal.App.4th 1315, 1316-1317: "The abuse is a kind of legal shakedown scheme: Attorneys form a front 'watchdog' or 'consumer' organization. They scour public records on the internet for what are often ridiculously minor violations of some regulation or law by a small business, and sue that business in the name of the front organization."

Thus, if the Trevor Law Group sues an auto body shop over not having its license up to date, that is an abuse of the unfair competition law. But if a more established law firm sues a big corporation over an equally trivial putative violation -- it is rewarded with $3 million in fees. The net result is to bless the same kind of abuse in which the Trevor Law Group engaged -- looking for a hypertechnical violation of some law by a California business and then going after that business under section 17200 as a profit-making venture -- with appellate holy water.

* Rutan & Tucker attorney Layne H. Melzer has published a succinct guide to the headaches s. 17200 can inflict on an unwary California businessperson ("A Step Toward Disarming California's 'Business Practice Bandits'", undated, at Rutan site (PDF))

* On the other hand, as we mentioned Jul. 7, there's a whole blog about s. 17200, written by a class action lawyer who has filed many cases using the law. She has published on the blog a description and defense of the law and a post in opposition to Prop 64. (Fixed 11/1 to correct description of blog's author and to add last-mentioned link.)

* Tim Sandefur (Oct. 28) examines allegations that Prop 64 would impair the enforcement of environmental laws.

* According to the latest Field Poll (Oct. 30, PDF), proponents of Prop 64 have been gaining momentum as the word gets out about the measure. In late September the proposition was behind by twelve points, 26 to 38 percent. Now the deficit has been shaved to five points, 37 percent No and 32 percent Yes, with a gigantic 31 percent of likely voters still undecided. And Gov. Schwarzenegger has started storming the state at rallies to promote his "road trip to reform" which includes a Yes vote on 64, further improving the measure's chances if its supporters can be made to turn out at the polls.

Calif. bounty-hunting, again [reprint]

California's s. 17200 "unfair competition" law, which Proposition 64 would narrow by introducing traditional notions of standing, has been covered extensively over the years on Overlawyered (stored Google search). I'll reprint only a couple of posts, but by following the links the reader can find a great many more. This one is from Overlawyered, Jul. 28, 2003:

The Los Angeles Times's Michael Hiltzik doubts that the cleanup of the Trevor Law Group spells an end to shakedown litigation under California's Section 17200: "As I write I'm looking at a letter sent two weeks ago by a Bay Area lawyer to a San Jose pool company, offering to settle a potential 17200 claim over a supposedly deceptive newspaper advertisement in exchange for a 'reasonable attorney's fee' of $5,000" ("Consumer-Protection Law Abused in Legal Shakedown", Jul. 21). Hiltzik also relates an amusing anecdote about how the Trevor lawyers helped seal their fate: "The group also made the mistake of picking on the wrong victims; thinking that it was suing only ma-and-pa service stations, it named, apparently unwittingly, a couple of repair shops owned by the big tire maker Bridgestone/Firestone North American Tire, which took umbrage and put Sybesma [experienced defense lawyer Edward Sybesma of Costa Mesa's Rutan & Tucker] on the case. 'How was I supposed to know this was Bridgestone/Firestone?' Sybesma recalls one of the Trevor lawyers lamenting one day -- a line one wouldn't be surprised to hear during an episode of 'America's Dumbest Criminals.'"

The Wall Street Journal's free OpinionJournal has now posted our editor's op-ed on section 17200, which appeared in the paper last Tuesday and was linked here in different form last week (see Jul. 22). (Walter Olson, "The Shakedown State", OpinionJournal.com, Jul. 27.) Reader comments, too. And Baseball Crank (Jul. 27) quotes extensively and informatively from Justice Stephen Breyer's dissent in the Supreme Court's recent refusal to hear the 17200 case against shoemaker Nike.

This reprint is #3 of a series of three on the Florida initiatives, and ran Mar. 1 on Overlawyered:

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]

Fla. initiative battle royal [reprint]

This reprint is from Jul. 20, and was #2 of three in a series on the Florida initiatives:

The Florida Supreme Court has certified four initiatives for the November ballot: a doctor-sponsored measure that would "limit lawyers' contingency fees to 30 percent of the first $250,000 in all medical malpractice damage awards and 10 percent of all damages above $250,000," and three lawyer-sponsored "revenge initiatives" aimed at making life tougher for doctors in various ways. The lawyers offered to withdraw their ballot measures if the doctors would withdraw theirs, but the docs said no go. (Alisa Ulferts, "Medical malpractice war gives voters the ammo", St. Petersburg Times, Jul. 17). See Overlawyered, Mar. 1.

Here's another reprinted post, from Aug. 4, #3 in a series of three on the Florida initiatives:

As we reported Jul. 20, Florida doctors have successfully qualified for the ballot an initiative which would limit lawyers' fees on malpractice cases, and plaintiff's lawyers have struck back by qualifying three "revenge initiatives" aimed at making life more difficult for the docs in various ways. Medical blogger Blogborygmi (Jul. 19) engages in a bit of snarkiness regarding one of the lawyer-sponsored initiatives, which would direct that a doctor's license to practice medicine be revoked if he or she were found to have committed three instances of malpractice:
...you can't deny they're doing the public a big favor here, by taking negligent doctors off the wards. Removing physicians with three suits against them is not even in the lawyers' best interests -- they're selflessly depriving themselves of future clients! But if you liked defensive medicine before, wait until you see how many diagnostic tests are ordered by a doc with two strikes.

Maybe the trial lawyers heard that, in many specialties, the average doctor is sued two or three times over the course of a career. So if voters pass the new ballot initiative, all surviving docs will be above average (or, fresh out of residency). ...

At least now it's the in voters' hands. And things always work out swell when Floridians go to the polls!

We would add that, across many states and specialties, the average doctor would be doing very well to be sued only two or three times over a career. In Pennsylvania (see Overlawyered, Jul. 16) a survey of doctors in high-risk specialties found 47 percent had been sued at least once over the previous three years.

It might be added that any "three-strikes" scheme faces the problem of whether or not to deem it a "strike" when a physician and his insurer pay to settle a claim before a jury's verdict. If yes, then a doctor's incentive to agree to a settlement is drastically undercut and a large volume of now-settled cases will instead be held out for trial, with drastic consequences for many of the players involved. If no, then the "three-strikes" feature will not be very effective since few doctors lose as many as three trials and those who fear that they will do so can simply make their settlement offers more attractive.

Proposition 64 [reprint]

Another reprinted post, this one from Jim Copland Sept. 20:

Gail Heriot at the Right Coast has a posting on Governor Schwarzenegger, in particular his recent endorsement of California's Proposition 64. As Heriot explains, the proposition seeks to return the "standing" principle to California's notorious section 17200 law (i.e., to require that a plaintiff actually must show injury to himself in order to sue).

Our editor wrote a Wall Street Journal column last year, "The Shakedown State," that chronicled S. 17200 abuses against small businesses (see also Tim Sandefur's recent post here). Those wanting more background can look at the full transcript of an October 2002 conference we hosted for the Manhattan Institute, "Unfair Competition and Consumer Fraud Statutes: Recipe for Consumer Fraud Prevention or Fraud on the Consumer" (PDF). The panel discussions include leaders on both sides of the debate, such as Duke Law's Francis McGovern, plaintiffs' attorney Elizabeth Cabraser, and defense attorney Sheila Birnbaum -- not to mention our own Walter Olson (in a moderator's role). Among many postings at Overlawyered on the 17200 topic: Jul. 7, Jun. 30, and Mar. 12.

Here's another reprinted post, this one from Jul. 19:

Last year the Colorado legislature enacted a law which endeavors to curb burgeoning litigation over construction defects by: 1) giving builders an opportunity to repair flaws before being taken to court; 2) restricting the availability of triple damages; and 3) making it harder for complaints to allege that a defect is present in all units of a multi-unit complex when evidence of defectiveness has been found for only a few units. Now trial lawyers have struck back with a ballot initiative, Amendment 34, which the Secretary of State has certified for the fall ballot. Intended to overturn last year's law, it would create sweeping new rights under the state constitution to sue over building defects. So sweeping would the new rights be, in fact, that homeowners could be exposed to permanently wider liability to later purchasers of their homes over alleged defects in decks, additions and other improvements. ("Fall ballot issue invites lawsuits" (editorial), Rocky Mountain News, Jul. 3). Political strategist Rick Reiter, who represents a coalition of builders and business interests fighting the initiative, "said that the reason the amendment is on the ballot in the first place is because two law firms -- Vanatta Sullan Sandgrund & Sullan and McKenzie Rhody & Hearn -- each wrote checks totalling at least $117,500 to the campaign." (Leia Baez, "Building-suit battle brews", Denver Post, Jun. 29).

For newcomers to the site who'd like to catch up on the ballot measures that we'll be liveblogging tonight, I'm going to reprint a few older posts on the subject. Here's one from Oct. 25 on the medical malpractice initiatives:

Doctors and lawyers are battling over ballot initiatives in four states this year, with very mixed signals from the voters at the moment:

* Florida's doctor-sponsored Amendment 3 (May 19, Jul. 20), which would limit attorneys' fees in medical malpractice cases, has sunk to only 34 percent public support, down from 45 percent in an earlier poll. One possibly relevant factor is that trial lawyers have dumped $22 million into ads and other spending against the amendment, while proponents have managed to spend only $7 million. Meanwhile, lawyer-sponsored Amendments 7 and 8, "revenge initiatives" which would make life more difficult for doctors by exposing peer-review records to public scrutiny whether or not misconduct is found and would menace doctors with license revocation on the loss of three malpractice actions (see Aug. 4), are believed to be well ahead among voters.

* A new Las Vegas Review-Journal poll shows Nevada's doctor-sponsored Question Three, which would limit medical malpractice pain and suffering awards and attorney fees, has risen to 57 percent voter support, up 11 points from an earlier poll. Meanwhile, trial-lawyer-sponsored alternative Questions Four and Five, which would inscribe various trial lawyer agenda items into the state constitution under pretense of restricting insurance rates and frivolous lawsuits, have dropped sharply in public support and now stand at 39 and 45 percent respectively.

* In Oregon, an Oct. 1 poll found 50 percent of voters backing Measure 35, which would limit noneconomic damages in malpractice cases to $500,000, while 36 percent were opposed.

* No poll data is available on the Wyoming battle over Amendments C and D. Interestingly, trial lawyers are using the same ad (featuring "Becky's family") in Oregon as in Wyoming, notwithstanding many viewers' likely assumption that an ad opposing an initiative on their ballot will feature a family that actually lives in their state.

Prop 64 tug-of-war

If California's Proposition 64 passes today, much credit will go to Gov. Arnold Schwarzenegger for rallying voter support, and this picture of the gov holding high a Yes on 64 placard will probably be widely circulated. If it goes down to defeat, one principal reason will probably be the inclusion of "No on 64" advice in Democratic slate mailers like the one discussed in this article from San Luis Obispo.

If you're wondering why travel agents as a group support Prop 64, the Pacific Business News has details.

Liveblogging the ballot measures tonight

As readers of this site know, voters in six states are considering legal-reform initiatives on today's ballot. I'm planning to post regularly updated live coverage tonight of election returns on the measures, with special attention to any instances where the vote totals prove to be close. (I might also post the odd comment on other races of interest.)

The ballot measures are: Florida's Amendment 3 (limiting lawyers' med-mal fees), lawyer-sponsored Amendment 7 (removes confidentiality of medical peer review) and Amendment 8 (strips licenses of doctors who lose three malpractice verdicts); Wyoming's Amendments C and D (authorizes legislative limits on med-mal awards); Oregon's Measure 35 (limits med-mal awards); Nevada's Question Three (limits med-mal awards) and lawyer-sponsored Questions Four (undercuts med-mal reform) and Five (forbids legislative reductions of liability); Colorado's lawyer-sponsored Amendment 34 (expands right to sue over alleged construction defects), and California's Proposition 64 (narrows scope of s. 17200 "unfair competition" law).

The timing: Florida polls close at 8 pm EST, Colorado and Wyoming at 9 pm, Nevada at 10 pm, and California and Oregon at 11 pm. I'm in the Eastern time zone, and intend to stay up until 2 am (11 pm Pacific) if that's needed to follow any still-unresolved contests.

How readers can help: I'll have access to standard online sources that cover these sorts of votes (big-city papers, Secretary of State websites) but in the past those sources have sometimes been slow to post totals, especially on "down-ballot" issues. I won't have much access to local broadcast sources, for the most part. If you've got fresh news on your state to report, such as a local news organization's calling a ballot contest one way or the other, email me at editor (at) pointoflaw - dotcom.

Assignment desk: NYC real estate

Spartacus, who looks to be an anonyblogger from what we can see, spins a dinner-party tale about the miseries inflicted on the renovators of a Manhattan townhouse by a creatively entrepreneurial lawyer calling himself "Sue 'Em Stu". Because the key personalities and facts are neither identified nor sourced, the story doesn't qualify as news. It does, however, probably qualify as a lead for some news organization with an interest in real estate, which would have to start by emailing "Spartacus" in search of a trail of names and facts that could be followed up.

New blogs

Welcome to some new (or at least new to me) weblogs:

* ProCare, a citizen-activist group tackling health policy with a North Carolina perspective, has a weblog that covers numerous issues of interest to health professionals including medical liability.

* Gene Borio, who for years has assembled interesting information about the cigarette trade on his tobacco.org site, is blogging the trial of the federal government's case against tobacco companies on a site called Tobacco-On-Trial.

* "Law Professor Blogs is a network of web logs ("blogs") designed from the ground-up to assist law professors in their scholarship and teaching. Each site focuses on a particular area of law and combines both (1) regularly-updated permanent resources and links, and (2) daily news and information of interest to law professors." Its publisher and editor-in-chief is the University of Cincinnati's Paul Caron, of TaxProf fame. Among specialties already being covered by the network's constituent sites: antitrust, labor, and white-collar crime.

Welcome Marginal Revolution readers

Welcome to all readers from Marginal Revolution. Tyler, thanks for the link!

According to the Wall Street Journal ($), California Insurance Commissioner John Garamendi is hiring Lerach Coughlin, the San Diego law firm of celebrated class-actioneer Bill Lerach, to sue insurance brokers and insurers in the developing scandal over contingent commissions and bid-rigging. Interestingly, per the San Diego paper, "The crackdown [on insurance-broker practices] was kicked off by a suit filed by San Diego's Lerach Coughlin Stoia Geller law firm against Marsh and several other major brokerages in August" -- that is to say, well before Eliot Spitzer's enforcement actions landed the issue on the front page.

We would very much like to know, but have not been able to discover in the coverage, whether Lerach Coughlin is going to be charging hourly fees for representing the state or instead is going to be into the claims for a contingency share. In either case a pertinent question remains, as Martin Grace puts it (Oct. 20; see also Declarations & Exclusions, Oct. 20): "Doesn't California have its own law enforcement division? Doesn't the insurance regulator have an enforcement division? Why do Californians pay taxes?".

It would also be interesting to explore whether any tension arises between Lerach's prospective representation of California as a public entity and the private suits his firm is pressing, which continue to pile up, as with the following:

On October 14, 2004, Lerach Coughlin, on behalf of United Policyholders, a policyholders� organization, filed a civil action against Universal Life Resources, Inc., an insurance broker specializing in employee benefit plans offering life, accidental death and disability insurance, and various insurance companies, including MetLife, Prudential, Inc. and CIGNA Corporation. The action was filed under California�s "public attorney general" statute, which allows virtually anyone to file a lawsuit on the public�s behalf. Universal Life Resources allegedly breached its duty to clients by failing to disclose contingent commissions and to act in the best interests of its employer clients. It is also alleged that employees unwittingly paid higher premiums for supplemental life and long-term disability insurance because of fees collected by Universal Life Resources from insurers.
(Angela R. Thompson, "Insurance Industry Under Fire Over Bid-Rigging And Contingent Commissions", Jorden Burt LLP/Mondaq, Oct. 28).

Around the medblogs

So much to read of late:

* MedRants on costs of the system, fee-per-visit malpractice surcharges for patients, and assorted thoughts;

* MedPundit reports that "The American College of Radiology [has] once again [taken] action against a member who has abused the expert witness system";

* Chris Rangel on the cost of defensive medicine, settlement economics, and the Hollins case (more on that case), and on the VP debate;

* SymTym on defensive CT scans and nursing ratios;

* Galen on money vs. justice;

* KevinMD on treating lawyers as patients (referencing this Medical Economics piece) and defensive medicine;

* MichMedMal on a new Pew study regarding medical technology and liability (which can be downloaded here).



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.