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January 2009 Archives

Obama pro-union executive order

Carter at ShopFloor digs a bit and finds that the original author of the PDF for the executive order was Craig Becker, a lawyer with the Service Employees International Union (SEIU). Good sleuthing! P.S. I see he's also got this as an update below.

There was a dramatic development Friday afternoon in the unfolding crisis over last year's children's-products safety law: the CPSC announced that given the clearly insuperable difficulties of letting the law go into effect as scheduled, it is suspending for a year its enforcement of most of the law's controversial testing and certification requirements. This may succeed (for the moment) in calming things down from all-out crisis to mere "great big problem" status. I cover the story at Overlawyered.

In addition, I was a guest on the National Association of Manufacturers' weekly audio show "America's Business", in an interview taped on Wednesday. My comments accordingly do not reflect Friday's news, but much of their content remains relevant.

President Obama brought labor leaders to the White House again today, following yesterday's signing of the Lilly Ledbetter Fair Pay Act. Today's occasion was the issuing of three executive orders sought by organized labor, as described by CQ Politics:

  • One order requires government contractors to offer jobs to qualified employees when contracts change.
  • Obama also undid a Bush executive order that required employers to post signs informing workers of their right to limit financial support of unions serving as their collective bargaining representatives.
  • A third directive prohibits government contractors from being reimbursed for expenses incurred trying to influence workers on whether to form unions or engage in collective bargaining.

The orders are not online yet at WhiteHouse.gov, but we did get them through a legal colleague and posted them at Shopfloor:

The White House tried to make the big deal of the day its announcement of its Middle Class Task Force headed by Vice President Biden. A task force! Talking about green jobs!

Meanwhile, a search for "card check" or "Employee Free Choice Act" turns up no references at WhiteHouse.gov. So that's good.

UPDATE (6:20 a.m. Saturday): Judging by the metadata of one file, one of the regulations was written by the SEIU's legal counsel, or associate general counsel, Craig Becker -- although he may have gone to work for the Administration. (See this Shopfloor.org post.) Remember all those headlines from eight years ago along the lines of "White House lets business lobbyists write the law?"

Apparently that's part of the job description of Connecticut Attorney General Richard Blumenthal, who's been going after AT&T over its workforce cuts in the Nutmeg State.

A "double-edged sword"

Lloyd's and Rand Civil Justice Europe have a new report on third-party litigation funding.

Lilly Ledbetter Fair Pay Act

Much of what you think you know about it is wrong, argues Stuart Taylor, Jr. at National Journal. Hans Bader is even more critical of the factual representations being made by many advocates of the law, while Jane Genova wonders whether it's okay to go back 27 years in remembering mistreatment.

As Carter noted the other day, the bill is retroactive, with an effective date of May 28, 2007 (play game first, change rules later!) And, after all, time limits on the right to file lawsuits couldn't really be part of the law's "purpose", could they?

Our coverage of the original Ledbetter suit, the Supreme Court decision in which it resulted, the ensuing controversy, and the newly enacted legislation can be found here.

More: Daniel Schwartz argues that symbolism aside, the new enactment will make less difference than either foes or friends generally seem to realize. George Lenard takes a comprehensive look at the new law. And Prof. Obbie at LawBeat has favorable words for the Stuart Taylor National Journal piece linked above.

Around the web, January 30

  • Just when you think Mayor Bloomberg might be over his nanny phase, here comes Health Commissioner Thomas Frieden wanting to regulate salt in food [NY Times, Overlawyered]
  • "Glitches" in trial preparation led to Seroquel suit dismissal? Hey, reporters, it's okay to ask lawyers follow-up questions [Ron Miller; Beck & Herrmann]
  • Oregon legislature debates tort limitations [Robinette, TortsProf]
  • Hi, I'm from the International Labour Organization, and I'm here to push for more intensely regulatory regimes of labor and employment law [Workplace Prof]
  • "Lawsuit reform progresses in states" [Hillyer, Examiner; Carter at ShopFloor]
  • J. Russell Jackson, Skadden product liability specialist known for his well-researched National Law Journal columns, is now blogging [ConsumerClassActionsMassTorts.com -- he should check out Scott Greenfield's shrewd advice and dump that ungainly domain name in favor of something less SEO-driven and more memorable]

Twombly pleading under attack

Straws in the wind: as federal courts use the welcome new pleading standards to dismiss more weak lawsuits at an early stage, plaintiff's counsel grow discontented and talk begins to be heard of efforts to restore the sue-now, explain-later regime that prevailed earlier. More: Ron Coleman, Likelihood of Confusion.

Kansas judicial selection

Kansas Gov. Kathleen Sebelius used to be director of the state trial lawyers' association and recently filled a state supreme court vacancy with a simpatico member of that fraternity, writes Prof. Stephen Ware, who does not find much transparency in the prescribed selection process (via Pero).

She writes in City Journal on the Greenlining Institute push for legal pressure on foundations to serve "communities of color". Earlier here, here, here, and here.

CPSIA: another coming (un-)attraction

The law will come as a serious financial blow to the amusement-park, tourist attraction and festival sector of the economy, instantly wiping out the value of large inventories of plush animals, t-shirts, toys, souvenirs and so forth, and raising the cost and reducing the variety of what replaces them. Some links here, here, and here. (Part of CPSIA Blogging Day, more than 300 blogs participating).

One of the better blog posts on the subject of the extraordinary burdens of CPSIA was Eric Husman's last month. A few excerpts:

...there are some details. You can't just not use lead or phthalates. You can't just point out that you are using undyed organic hemp and wooden toggles. No, you must prove that you are lead- and phthalate-free. How? Well, at $600-2400 per item, you ship it off to a certified testing lab. Plus, it's destructive testing, so kiss 1-12 samples of whatever it is goodbye. Also, you need to make sure that it is a representative lot, so no more repurposing of used clothes. Also, you need to provide this General Compliance Certificate (GCC) to anyone downstream who wants it. At any time. And be sure you can trace it by lot. Also, you may have to put up a bond in case they want to recall your product so that they know you can cover the cost of the recall.

Now, there's something you may not know about apparel manufacture (and you still won't know at the end of this paragraph because I'm simplifying the heck out of it). You start by developing about 20 styles and see what gets bought. Once buyers buy on the strength of the sample, you order the material and start sewing. The CPSIA testing has to be done on the final product (unit testing), not the inputs (component testing). So even though you are using the same organic cotton cloth and 5 different dyes and 3 different buttons, you can't get by with doing 8 tests (the cloth in 5 colors plus tests on each button). Nope, you have to do testing on 20 different styles x 5 different colors = 100 tests. Of which only 5 styles will ultimately go to market. That's a minimum of $60,000 just for the testing, and you haven't even started to sell yet.

By the way, size does not matter in the eyes of this law. Hanes T-shirts? Yes, they have to test. Grandpa's handmade toys that he sells on eBay? Yep, in fact eBay and Etsy are already noting that legal compliance is a requirement of their user terms of use. Also, manufacturing location does not matter - whether you make in or contract to China, Los Angeles, or Lancaster County, you have to test. ...One further thing: On February 10, if you don't have the GCC, you are selling illegally. ...

Other topics covered: the push by some advocates for phthalate testing on inventories produced before the law's effective date, the surprisingly large size of the manufacturing sector involved, and (inevitably) the leading role of "Saint Nader's" PIRG as well as the Natural Resources Defense Council.

"Incidentally," the piece concludes, "you might want to stock up on interesting children's clothing." A lot of it will be gone this time next year. (Part of CPSIA Blogging Day, more than 300 blogs participating).

P.S. Also on testing, Little Ida has a map of the rather sparse locations of available lead lab testing: many big states have no such facilities at all, which is going to make it an even bigger hassle for small producers to secure the requisite testing.

Heretic! Weigher of costs and benefits!

Cass Sunstein, Obama's pick for regulatory coordinator, comes under attack from the Left, and is defended. Meanwhile, on the (more or less) other side, Sunstein has been flayed for his favorable stance toward animal rights, which seems to include support for empowering more lawyers to sue on animals' behalf, and for banning hunting. More: Terrierman, Ezra Klein.

Grounds for criminal liability if not true in the case of Wachovia's Robert Steel? [Ribstein, Coyote] And Tom Kirkendall has some excellent background on what he calls "the obligation to throw in the towel".

Around the web, January 28

  • Today is CPSIA Blogging Day, in which hundreds of bloggers are expected to protest the new law driving small makers of children's goods out of business; look for posts here and (especially) at my other site, Overlawyered;
  • I spoke last weekend at an excellent Federalist Society one-day West Coast event on Indian and tribal law; I addressed land claims litigation, while my co-panelist Maimon Schwarzschild of U. San Diego compellingly explained ongoing efforts to invoke international law on behalf of "indigenous peoples" including Native Americans [Volokh, Overlawyered; unrelated Michigan State symposium on labor and employment law in Indian country]
  • "One speaker said that, to date, no Canadian court has ever denied a motion to certify a class in a drug or device case." [Beck & Herrmann]
  • "Lott's Name Surfaces in Connection with New Scruggs Suit" [WSJ Law Blog]
  • Aspirations to transparency easier said than done when it comes to trial lawyers' influence on presidential transition [Carter @ ShopFloor]
  • Judge declines to certify class action of persons claiming injury from Teflon fumes [InjuryBoard, South Florida Lawyers via Karlsgodt]

"The Mirage of Pay Equity"

Diana Furchtgott-Roth on the Ledbetter and Paycheck Fairness bills (via NewMajority). More: Bader, CEI.

The House just voted 250-177 to pass S. 181, the Lilly Ledbetter Fair Pay Act, a mostly partyline vote (roll call here). This is the bill that supporters say is necessary to correct the Supreme Court's reading of discrimination law (Title VI of the Civil Rights Act) in Ledbetter v. Goodyear Tire & Rubber. The bill now goes to President Obama for his signature; the White House over the weekend reiterated his full-bore support for the bill.

By lifting all statutes of limitations on employment discrimination suits, the new law will subject employers to many more speculative discrimination lawsuits. That said, organized labor and the activist grievance industry have been the more vocal supporters. Trial lawyers have mostly stayed quiet, a good move in terms of selling the bill politically.

Note the effective date:


This Act, and the amendments made by this Act, take effect as if enacted on May 28, 2007 and apply to all claims of discrimination in compensation under title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e et seq.), the Age Discrimination in Employment Act of 1967 (29 U.S.C. 621 et seq.), title I and section 503 of the Americans with Disabilities Act of 1990, and sections 501 and 504 of the Rehabilitation Act of 1973, that are pending on or after that date.

May 28th? The Supreme Court issued its Ledbetter ruling on May 29, 2007, so Lilly Ledbetter's suit was still pending then. So does she get another shot at her lawsuit?

Earlier posts here.

Asbestos compensation in Japan

L.A. plaintiff's lawyer Seth Davidson has a report based on last November's conference at Ritsumeikan University in Kyoto (earlier). Redress for asbestos disease there "is based on a national workers' compensation scheme".

Roberts Court unduly pro-business?

More discussion from Jonathan Adler and colleagues at Volokh, with special attention to environmental law.

What if the labor board should decide to order the plant to reopen? George Lenard analyzes the possibility. Earlier here, here, here, and here.

New at Overlawyered

If you're not reading my other blog, Overlawyered, you're missing out on a lot:

Around the web, January 26

All labor- and employment-law edition:

  • Flying under the radar, Healthy Families Act would extend scope of FMLA paid leave [Kirsanow, NRO "Corner"]
  • Jeff Hirsch: Oh, go ahead and nationalize workplace law [WorkplaceProf]
  • "Obesity as Disability: An Imperfect Fit" [Pulver via Bales, WorkplaceProf]
  • International Union of Manhattan Drawbridge Operators? Make sure you're following Mickey Kaus on the EFCA debate [Kausfiles, multiple posts]
  • Idea of "time theft", though rather weird and artificial, comes up on both sides in employment disputes [George Lenard]
  • Those wicked, wicked conservatives: institutes at UC Santa Barbara (Nelson Lichtenstein) and UCLA collaborate to sponsor conference demonizing those not on board with new labor measures [program via Workplace Prof]

Courts elsewhere have generally been rightly hostile toward litigation claiming that the sale or ownership of guns creates a "public nuisance", even aside from the preemptive effect of the federal Protection of Lawful Commerce in Arms Act. Now, however, the Supreme Court of Indiana (of all states) has ruled that the city of Gary's nuisance suit should go to trial. Jon Murray at the Indianapolis Star writes that the Brady Center and other anti-gun litigators are heartened, Gary's being the last standing of thirty municipal suits that have otherwise been withdrawn or gone down to defeat.

Prosser's Torts notebook

William Prosser of Berkeley is generally cited as the most influential academic figure in the emergence of a liberal torts jurisprudence in the U.S. after 1950, in particular in the field of products liability; generations of law students learned the subject from Prosser on Torts. Anyone with an interest in this period will want to be aware of the series of publications by Christopher Robinette (Widener and TortsProf) based on the discovery of Prosser's own teaching notebook. An introduction is here.

Rhode Island Superior Court Judge Michael A. Silverstein ruled Thursday that the state must reimburse three paint manufacturers who were charged for costs of developing a lead-paint mitigation plan -- specifically, the costs of "co-examiners" -- before the state Supreme Court had completed consideration (and ultimate vindication) of their appeal. (The judge's decision is here.)

From the manufacturers' news release:

"The Court got it right," said Charles H. Moellenberg, Jr., an attorney for The Sherwin-Williams Company. "These companies should not bear the costs of litigation that the Supreme Court said should have been dismissed at the outset ten years ago. This case demonstrates that state and local governments solicited by trial lawyers to file public nuisance lawsuits should recognize that these cases are not cost-free."

In July 2008, in a long-awaited ruling, the Rhode Island Supreme Court rejected the Attorney General's public nuisance lawsuit filed nine years earlier against former manufacturers of lead pigment used in residential paint, saying the case should have been dismissed at the beginning. After the jury verdict, the state filed a motion seeking costs of more than $1 million. Following the Supreme Court decision reversing the jury verdict, defendants Sherwin-Williams, NL Industries, Inc., and Millennium Holdings LLC, filed a motion seeking reimbursement of $242,121.21 in costs they paid to court-appointed co-examiners whose work began before the Supreme Court reversal.

In its ruling today, the Superior Court said: "With regard to the actions taken by both parties here, as a matter of law and fairness, the Court finds little merit in the State's suggestion that the Defendants should bear the burden of paying the Co-Examiner expenses." The decision added: "The State made a calculated decision to pursue a claim against the Defendants and voluntarily participate in the judicial system, and thus may not invoke sovereign immunity to shield it from the imposition of costs."

Precisely! The companies have more claims for compensation to come. 

And, Ohio Attorney General Richard Cordray, any reason to keep Ohio's public nuisance suit going? Distance yourself from Marc Dann!


The U.S. Senate yesterday passed S. 181, the Lilly Ledbetter Fair Pay Act, sold politically as a limited fix to the U.S. Supreme Court's decision in Ledbetter v. Goodyear Tire & Rubber, disallowing an employee's pay discrimination complaint because she brought it after (years after) the clearly written 180-day statute of limitation expired. The vote was 61-36, with five Republicans voting in support and no Democrats voting in opposition. (Roll call.)

Defeated was an amendment by Sen. Mike Enzi (R-WY) to clarify standing so only the allegedly discriminated employee could bring suit, not just somebody "affected" by the consequences of the discrimination. Table (killed) was an amendment by Sen. Johnny Isakson (R-GA) to limit the law's application to claims resulting from discriminatory compensation decisions that occurred after the act's adoption; the law will now allow the filing of claims years, even decades old. An amendment by Sen. Specter to provide a rule of construction was tabled. And the substitute amendment by Sen. Hutchison (R-TX) was defeated on a partyline-minus-one vote (Snowe being the Republican).

In short, any amendment to limit the opportunities for speculative, excessive and "creative" lawsuits was defeated. Sen. Enzi noted several times the bill was run to the floor without any committee hearings that could have allowed more debate, consensus amendments and some bit of restraint. (Enzi is the ranking Republican on the HELP Committee, chaired by Sen. Kennedy.) The end result is surely a wave of new discrimination lawsuits against employers, increasing the marginal costs of new hires.

President Obama will surely sign the bill. Lilly Ledbetter became a cause celebre for Democrats and organized labor during the campaign, and she joined the President-elect on pre-inaugural train ride to Washington.

P.S. Much was made by Senate supporters of the new, positive tone of the debate. Here's Senator Byron Dorgan recalling the "night of terror" in Occoquan Prison in 1917, when suffragettes were brutally beaten. The point being...

UPDATE (10:30 a.m.): It appears the House will vote on the Senate version of the bill next week, dropping its own version that included the politically problematic Paycheck Fairness Act language, i.e., the stalking horse for comparable worth.

Conte v. Wyeth will stand

The California Supreme Court has refused to review the controversial decision holding a drug company liable for side effects from another company's generic version of its drug. [Beck & Herrmann, first and second posts; California Civil Justice]

"Workplace democracy" a pipe dream?

Rick Hills at Prawfsblawg finds it easy to believe tales of hardball tactics on both sides in union certification elections, of a sort few would deem acceptable in school board elections, and wonders whether the whole metaphor of "workplace democracy" never perhaps amounted to what it was cracked up to be.

Eugene Volokh interviewed

James Cox (Duke), Randall Thomas (Vanderbilt) and Lynn Bai (Cincinnati) have this SSRN paper. Despite the Supreme Court's Tellabs decision, they say, circuit courts have maintained disparate standards on pleading. They carry out an empirical investigation:

...We find that 85% of the securities fraud class actions in our sample are filed in the home circuit of the defendant corporation. In the remainder of cases, those that are filed outside the defendant's home jurisdiction, our analysis shows that differences in the pleading standards do not explain a statistically significant amount of the reason for that decision.

While the differences in the circuits' pleading standards do not have a statistically significant impact on the plaintiffs' choice of venue, we find that plaintiffs are more likely to file low value cases in jurisdictions other than the one in which the defendants' headquarters is located. In particular, we find that cases with smaller provable losses and without an accompanying SEC investigation are statistically significantly more likely to be filed in circuits other than where the defendant's principal place of business is located. We interpret the former result as consistent with the hypothesis that in lower value cases, plaintiffs' counsel is more likely to select jurisdictions that are convenient to themselves rather than to the defendant....

The Senate today continues its debate on S. 181, the Lilly Ledbetter Fair Pay Act, which inspires the most opposition among the business community for its elimination of the statutes of limitations in filing pay discrimination complaints under Title VII of the Civil Rights Act. Instead of requiring a complaint within 180 days of the alleged offense, the time limit is renewed every time the supposed victim receives a paycheck. With those standards, an employee could conceivably file a complaint 20, 30 years after the discrimination supposedly occurred. What business can defend against that?

But there's something equally or even more radical in this legislation, which supporters claim is a limited corrective to the U.S. Supreme Court in Ledbetter v. Goodyear Tire and Rubber. No longer is it only the alleged victim of the discriminatory act who has legal standing, it's anyone who is affected.


Section 706(e) of the Civil Rights Act of 1964 (42 U.S.C. 2000e-5(e)) is amended by adding at the end the following:

`(3)(A) For purposes of this section, an unlawful employment practice occurs, with respect to discrimination in compensation in violation of this title, when a discriminatory compensation decision or other practice is adopted, when an individual becomes subject to a discriminatory compensation decision or other practice, or when an individual is affected by application of a discriminatory compensation decision or other practice, including each time wages, benefits, or other compensation is paid, resulting in whole or in part from such a decision or other practice.

When an individual is affected?

Sen. Kay Bailey Hutchison (R-TX) has submitted a substitute amendment to the bill. In her floor statement yesterday she clearly made the point:

[In] the bill before us there is a major change in common law and in tort law that has also been a part of our legal system and our case law since the beginning of law in our country and in other countries that have the types of laws we do; and that is that a tort accrues a right to the person who is offended or damaged or hurt by another action. It does not accrue to another person who is affected by or might be considered affected by this claim.

Now, there are exceptions to that. But in the main, it is, I think, essential, if we are going to have a statute of limitations that goes beyond the act itself--and in this case it would be 6 months, which is the law today--that it accrue to the person actually injured, the employee, and not some other person on behalf of the person who did not bring the case.

Under the Mikulski bill, the Ledbetter Act, a new right has been given to a person who may not be the person with the injury. So it could be a case where the person dies after working at a place of employment, a business. The person dies, and within 6 months of that person's last paycheck and subsequent death, some other person--an heir, a child, a mother, a father--could bring a case, which the person who has allegedly been discriminated against chose not to bring or did not bring. In such an absurd case, possible under the Ledbetter bill, you do not even have the person discriminated against to testify.

So much for the bill being a "narrow fix" of the Supreme Court ruling.

If you don't know about this consequence of the pending enactment, Michael Moore writes about it at the Pennsylvania Labor and Employment Blog.

Asbestos.com, cont'd

Bill Childs at TortsProf does some more investigating (earlier). Did his sleuthing get the site to be more forthright about its sponsorship, or not? And what of the separate site Asbestos.net, whose fine print claims that it is "not owned by a law firm", which is not quite the same thing as denying that it is in the business of generating leads for lawyers? Keep reading to the end...

Irrational actors and tort law

Via Robinette/TortsProf, a new paper entitled The Free Radicals of Tort by Mark Grady (UCLA) on SSRN. Abstract:

Rational and irrational people are typically held to an identical tort standard when it is a question of their own liability. On the other hand, when it is a question of whether someone else has encouraged some dangerous behavior, as under the doctrines of duty and proximate cause, the encouragers will be liable only when the persons were part of a group whose members typically lack rationality. The courts' apparent purpose is to prevent accidents in every way possible even if it means diluting the incentives of irrational people in order to increase the incentives of responsible people to refrain from creating tempting opportunities for them.
"The SEC as Madoff accessory"

Securities regulation has tended to confer a highly defective seal of approval, notes Larry Ribstein.

"Since President Obama is a former legal academic, it should come as no surprise that he's recruiting so many law profs to join the upper echelons of his administration." [Above the Law] At the New Republic, meanwhile, Noam Scheiber posits a difference in governance between grindy Harvard Law School and philosopher-kingish Yale Law School, complete with this priceless anecdote:

Lanny Davis, the former Clinton White House aide and law school classmate of Bill and Hillary, likes to tell a story about his first day of property class at Yale. The professor, Charles Reich, asked students to write down the words "fee simple" and briefly explained the concept. Then, after a long pause, he instructed the students to drop their pens. "OK everybody, this is the last time you'll ever hear me talk about 'fee simple' or anything else that Harvard Law School teaches. The new title for this course is, 'The intellectual, moral, ethical, and political implications of property ownership in America.'"

Reich was an extreme case, to be sure. He'd authored the counterculture manifesto The Greening of America and had a pedagogical style to match his shaggy hair and ratty jeans. But, at Yale, he was not such an outlier. Whereas Harvard prided itself on instilling discipline, Yale believed its mission was to unlock students' innate brilliance in an atmosphere of freedom, intimacy, and intellectual ferment....

Advice for the new president

Daniel Schwartz hopes Obama will seek moderate counsel and be on the lookout for unintended consequences in employment and labor law matters.

From the Washington Legal Foundation (PDF), and automatically commanding attention around here given the persons involved and the topic:

In this new WLF Monograph, two aggregate litigation experts propose and detail a four-part reform plan to improve how mass tort lawsuits are administered and overseen in the federal multi-district litigation framework. Authors John Beisner and Jessica Miller [O'Melveny & Myers] present a detailed case for their proposal and explain how plaintiffs and defendants will benefit from a system which better ensures that actually injured parties will have their day in court. The Monograph features a foreword by Vanderbilt Law Professor Richard Nagareda, who is deeply involved in the American Law Institute's drafting of a Principles of the Law of Aggregate Litigation.

Press release here, including this very brief summary:

The Monograph proposes four comprehensive, yet basic, procedural reforms that will improve
the multidistrict litigation ("MDL") process for litigating and resolving the mass tort dilemma:

* Expand the diversity jurisdiction of federal courts;
* Adoption of standardized winnowing procedures;
* Eliminate class action tolling of limitation periods: and
* Revise ethical rules to account.

CPSIA and product liability

The CPSIA product-safety law -- which I've been writing on heavily at Overlawyered as well as at Forbes -- is mostly conspicuous as an example of overregulation of an almost insanely zealous and overreaching variety. But the law also has important implications for product liability litigation, which are naturally negative for defendants and positive for plaintiffs (as one would expect of a law promoted by Public Citizen, U.S. PIRG, etc.). Kenneth Ross at Products Liability Prof Blog has a detailed and newly updated paper (PDF) on the subject. And William Ruskin at Epstein Becker's Toxic Tort Litigation Blog foresees that the new database/registry of consumer product safety complaints established by the law (covering products generally, not just those for children) will be open to abuse and manipulation.

"Bad news for medical progress"

You'd really think that in hopes of living down his role in (to name just one) the silicone breast implant affair, Dr. Sidney Wolfe of Public Citizen would long since have quietly withdrawn from public life. Instead, almost incredibly, he's managed to get himself appointed to a four-year term on the FDA's Drug Safety and Risk Management Committee. Virginia Postrel is appropriately outraged and wants to know how this could have happened. More: David Bernstein @ Volokh.

"Explosion" in workplace class actions

ERISA cases are particularly big, finds Seyfarth Shaw's annual survey (via Benefits Counsel).


UCLA professor and corporate law prof Steve Bainbridge, frequently linked by this site, is reorganizing and combining his three blogs into one.

Around the web, January 17

  • New Obama interview seems to hint interest in compromise on EFCA [Ambinder/Washington Post] Don't be reassured, says Peter Kirsanow, EFCA is freight train coming down the tracks [NRO "Corner"; Carter at ShopFloor and more]
  • One survey finds U.S. litigation up 9% in 2008; growth areas antitrust, employment, product safety [Law360 Almanac]
  • Difference between viable and nonviable auto industry: maybe not so much union vs. nonunion, but what kind of union? [Kaus; and earlier quoting Clive Crook]
  • Basic discontents with nature of auto accident litigation, especially in big cities, were well established by the 1960s (and in places like NYC, actually, by the 1920s) [Ron Miller recalling Jan. 10, 1964 Time Mag clip] Areas of litigation that have seen revolutionary growth since then are others: product liability (including after car crashes), employment, toxic torts, negligent security, among a great many that could be named, and in many localities med-mal;
  • Tyler Cowen on Obama as centrist: who's going to be happy, and who isn't? [MargRev] More: Althouse/Krauthammer, Joe Weisenthal;
  • Virginia is latest law school to launch (neutral, you think?) center on animal law with $$ from animal rightser/TV guy Bob Barker [ABA Journal, WSJ Law Blog]

With their customary precision, Beck & Herrmann summarize the state of play, which is not as favorable toward the plaintiff's side as the law firms on that side must have hoped it would be at this point. "Plaintiffs' real gripe is not with promotion of off-label use but with the legality of off-label use itself. But they lost that battle in Buckman Co. v. Plaintiffs' Legal Committee, 531 U.S. 341, 350-51 & n.5 (2001)."

New at Forbes.com: Down with the CPSIA!

I've got a new opinion piece up at Forbes.com on one of the worst pieces of legislation I've seen in many a year, the Consumer Product Safety Improvement Act, and the need to repeal it before it capsizes tens of thousands of small businesses:

Hailed almost universally on its passage last year--it passed the Senate 89 to three and the House by 424 to one, with Ron Paul the lone dissenter--CPSIA is now shaping up as a calamity for businesses and an epic failure of regulation, threatening to wipe out tens of thousands of small makers of children's items from coast to coast, and taking a particular toll on the handcrafted and creative, the small-production-run and sideline at-home business, not to mention struggling retailers. How could this have happened?

Jury selection in New York

The courts are trying to come up with clearer rules.

PensionTsunami blog

Parlous finances of public employee funds: just in case you didn't have enough depressing reading today (via Matt Welch).

The noted Washington lawyer (founding partner of Wiley Rein), who represents Wyeth in the pending Wyeth v. Levine SCOTUS appeal, contributes this guest post at Beck and Herrmann.

Around the web, January 15

  • EFCA aside, federal labor law precedents could fall quickly under an Obama NLRB [NYLJ]
  • Take note fans of economist David Henderson (as are many of us around here): he's started regular blogging alongside Arnold Kling and Bryan Caplan at their popular site [EconLog]
  • Much concealed behind opinion writers' "pay equity" rhetoric [Bader]
  • In Georgia, Gov. Sonny Perdue proposes an FDA compliance defense and a right to attorneys fees for defendants who get cases thrown out early [Pero, Scheuerman/TortsProf]
  • Year-end review of major class action developments in 2008 [Karlsgodt] And in the securities field [LaCroix]
  • Series: "Anatomy of a California Product Liability Case" [CalBizLit]

New York Times profiles Paul Offit

Kudos to the newspaper for its coverage yesterday of the courageous pediatrician/author and his superb new book debunking the "vaccines cause autism" movement. Offit isn't doing a book tour because of the death threats, but you can buy his book here; I'm quoted in it on some of the less publicized trial-lawyer connections of a leading anti-vaccine advocate.

Around the web, January 14

The Television Wars

Thanks to months of government-sponsored commercials for cable converter boxes, almost all of us expect a transition from analog television signals to exclusively digital television next month. But the incoming Obama administration is advocating that the great flipping of the analog switch to the "off" position be delayed, citing a shortage of funding for converter box coupons.

Ars Technica now reports that a key DTV adviser to the Obama transition team may have a financial interest in delaying the DTV transition:

Among those with a vested interest in the debate over a DTV delay is Clearwire, which has been racing to deploy its 4G WiMAX networks ahead of competitors wedded to the LTE standard. And Ars has learned that Clearwire Executive Vice President R. Gerard Salemme has been playing a key advisory role on the DTV changeover within the Obama transition team.

Ars explains how any DTV delay will disadvantage Verizon, a Clearwire competitor:

[A] longer, more disruptive delay might provide some breathing room for Verizon competitor Clearwire. That company is seeking to build market share for its own WiMAX network, a joint venture with Sprint, before LTE is ready for prime time. Clearwire has boasted that it remains years ahead of the competition, but while WiMAX networks in Portland and Baltimore are already up and running, scheduled expansions to other cities have been delayed until late 2009, even as Verizon has bumped up its own schedule. The company's stock has now been in free-fall for months, and several major backers recently announced they would take major write-downs on their investments in Clearwire. (The roster of large investors in Clearwire includes Obama-ally Google.) A toxic negative feedback loop in investor confidence could leave it unable to finance its promised buildouts for 2009. With any transition delay certain to push the spectrum handover into the next quarter of the fiscal year, if not further, the attendant uncertainty could also factor into investment decisions as Wall Street--and equipment makers--decide which standard to back...

[Salemme's] high position with a primary competitor of Verizon--the company most vocally protesting that it would be adversely affected by a delay--creates an unavoidable appearance of conflict of interest.

Litigation may ensue if a transition delay prevents companies that have purchased portions of the soon-to-be-free analog spectrum for new purposes from taking possession on schedule. As FCC Commissioner Robert McDowell stated last week, "there are companies paying hundreds of billions of dollars to use this spectrum, and they expect the goods to be delivered."

Student note (PDF) by James McDonald in the Duke Law Journal, abstract:

When the renowned plaintiffs' firm Milberg Weiss was indicted in 2006 for paying kickbacks to clients, most commentators saw the scandal as the product of five dishonest lawyers. This Note argues that the causes were more complex than the moral shortcomings of a few attorneys; rather, the kickbacks were but one symptom of a deeply flawed system for selecting lead counsel in securities class action lawsuits. Although the Private Securities Litigation Reform Act of 1995 attempted to curb abusive behavior by the plaintiffs' bar, its focus on reforming plaintiff behavior meant that attorneys were left relatively free to continue using whichever tactic served their financial ends. Using Milberg Weiss's behavior to guide analysis, this Note assesses the problems of lead-counsel selection. These problems trace to a common source: an imbalance of information between attorneys vying for appointment as lead counsel and the judge who must select one of these attorneys. To correct this problem, this Note proposes implementing screening and signaling procedures to determine the "most adequate counsel" who can provide quality representation for every member of a class.

And from the text:

...as this Note details, some of the tactics that Milberg Weiss used to reach the top of the plaintiffs' bar were as fraudulent and unethical as any action taken at Enron, WorldCom, or Tyco.

Judge tosses Hood Katrina-insurance suit

A county judge ruled Mississippi Attorney General Jim Hood never had standing to file the action (YallPolitics, O'Brien/LegalNewsLine, NMC @ Folo, ruling in PDF form). Separately, large numbers of private civil actions against insurers, including a high-profile batch filed by now-disgraced Dickie Scruggs, have quietly settled in recent months [Sun-Herald, Lotus @ Folo ("this may have been the easiest money Provost Umphrey ever made. But I'll wager that some local folks have entirely had it with lawyers.")]

Around the web, January 13

  • For second time in past three years, no billion-dollar verdicts in 2008: each of preceding 14 years had at least one [Fisk, Bloomberg]
  • Hard to see any clear winner/loser patterns in the criminalization-of-business lottery [Kirkendall]
  • Quin Hillyer on U.S. Chamber's "Faces of Lawsuit Abuse" [Examiner; more, Newark Star-Ledger on bicyclist case]
  • A new non-correlated asset class: litigation [Kim, FierceFinance]
  • "Trial lawyers ask Obama to expand product liability" [Rizo, MC Record]
  • Urban Justice Center sues New York saying there's a right in the state constitution to higher welfare payments [NYT]

Cass Sunstein as regulatory director

Matt Welch at Reason rounds up reactions to the surprise choice; most of those quoted had a positive reaction (as did I) given Sunstein's outstanding qualifications, in-depth knowledge of the field, reputation for open-mindedness, and other virtues. Adam Thierer, however, reminds readers of one of the law professor's odder and more disturbing (and, one hopes, uncharacteristic) stands: the time he "called for popular or partisan websites to be forced to carry links to opposing viewpoints. Think of it as a combination of must carry mandates and the Fairness Doctrine for the Internet." As Thierer notes, Sunstein later abandoned the idea, saying he had concluded "that it's a stupid and almost certainly an unconstitutional suggestion."

George Will raves about this new book by the well-known author on topics dear to this site. I'm much of the way through my review copy and I can say if you like this website, you'll almost certainly enjoy this book. Author/lawyer Philip K. Howard (The Death of Common Sense) is also a very skillful writer, and, with his organization Common Good, a longtime friend of this site. So why not order a copy today?

(cross-posted from Overlawyered).

P.S. And Carter at ShopFloor has some observations about the ads that accompany the column (as they do countless other articles) at the Washington Post site.

The president-elect's record as Illinois senator suggests that he may be reachable on some elements, at least, of a litigation-reducing platform. Hans von Spakovsky and Andrew Grossman of Heritage urge him to consider agenda items that include curbs on regulation through litigation, preemption, arbitration, confidentiality of settlements, a federalist approach to med-mal, SAFETY Act (anti-terrorism equipment and liability), and bankruptcy.

Around the web, January 12

  • Sorry, Illinois trial lawyers, but there's just no point pretending that med-mal insurance rates have no relationship to payout caps [Miller, Maryland Personal Injury]
  • Marquette lawprof Paul Secunda departs Workplace Prof Blog, Profs. Bales, Hirsch & McCormick will remain [his farewell]
  • In New York, at least, "Cigarette Manufacturers Not Liable for Not Making All Cigarettes 'Light'" [Volokh]
  • Dewey deserve that much, cont'd: Judge Chin cuts Dewey & LeBoeuf request of $100,000/day fees for representing receiver in WexTrust insolvency [WSJ Law Blog; earlier; see also]
  • Policies "stacked" like cordwood for maximum $-combustion: California appeals court sticks insurers with "continuous trigger" exposure in noted Stringfellow Acid Pits environmental saga [Decs & Excs]
  • Lance McMillian, Atlanta-John Marshall, proposes new test for determining whether suit was filed with "nuisance settlement" intent [SSRN; via Beck & Herrmann, who also comment on other recent academic papers including Gideon Parchomovsky/Alex Stein "Torts and Innovation"]

President-elect Obama has promised an unprecedented degree of transparency in the debate on the economic stimulus bill, saying in last Thursday's economic address at George Mason University, "Instead of politicians doling out money behind a veil of secrecy, decisions about where we invest will be made transparently, and informed by independent experts wherever possible. Every American will be able to hold Washington accountable for these decisions by going online to see how and where their tax dollars are being spent."

Excellent intention, but the promise may be harder to keep than the Obama team realizes. We've been looking at Change.gov, the transition site, and its "Your Seat at the Table" transparency project, which is supposed to include citations and documents of all the meetings the transition team has had with outside groups. (See this Washington Post story.) But is every meeting actually annotated? And are the significant meetings and documents being lost in the uploading of everything the public sends in? We'd guess no and yes, in that order.

Put the term "legal" into the search box and you get 11 items (as of Sunday, 4 p.m.), including this headline: Economic Stimulus Meeting. Well, that's not terribly informative. Click on the link, and you see a list of Hispanic activist groups and their representatives who attended, but no documents. Same thing with this: LGBT Leaders Meeting. The names and affiliations of 38 people, and that's it. (Thirty-eight people? You have a productive meeting with that?) Yet this meeting -- Environmental Justice Meeting -- with another lengthy attendance list of lefty legal and environmental activists doesn't show up. You have to search "justice" to find that entry.

Now, search for the term "law" and you get 42 results, including this title: Overview of Corporate Immunity from Lawsuits. The link brings up just a posted document, with no name or affiliation attached. The document is a memo, i.e., lengthy screed, attacking the pharmaceutical industry and the Bush Administration's support for preemption, but from whom? Well, we recognized the inflammatory language as coming from the American Association for Justice (this document especially), but you'd have to be awfully conversant with preemption to get the connection. Transparency falls way short.

The point here is not to knock the Obama transition team or the vows to strive for transparency on economic stimulus or earmarks. It's just to say a great deal is being promised, and it will take significant resources to fulfill those promises. And sometimes too much information, disorganized information, works against transparency.

And, boy, are there a lot of meetings with legal groups and activists.

Speaking of which, the documents from the ascendant American Constitution Society for Law and Policy are here.  The word "Federalist" produces no search results.

Afterthought (4:50 p.m.): Obvious point we failed to mention: The documents we've looked at don't state whom these groups met with, that is, who from the transition team was there. For transparency in decision-making to mean anything, you really need to know whether it was a junior staffer or a major figure in the incoming Administration.

FCPA in 2008

It was a year in which the Foreign Corrupt Practices Act jumped in importance for American and worldwide business, notes Kevin LaCroix.

State laws to counter EFCA?

Peter Kirsanow at NR "Corner":

There's an effort under way to place EFCA-neutralizing referenda on the ballots of at least five states. The initiatives, if passed, would amend the respective states' constitutions to guarantee secret ballot votes for authorizations of employee representatives.

The amusing aspect of such an effort, of course, would be to watch some of our friends on the Left who've shouted themselves hoarse denouncing federal preemption of state law suddenly rediscover its virtues.

Well, actually, wrong.

Following up on Walter's posts of the day, we note the both bills passed on mostly partyline votes, as expected.

The House first passed H.R. 12, the Paycheck Fairness Act, by a vote of 256-163. Roll Call No. 8.

It then passed H.R. 11, the Lilly Ledbetter Fair Pay Act. The vote was 247-171. Roll Call No. 9. House Speaker Nancy Pelosi held the gavel for part of the debate, a symbolic statement of the importance Democratic leadership placed in the bills.

House Republican Leader John Boehner issued a statement in response to passage, "Flood of Special-Interest Bills Begins in Newly-Expanded Democratic Congress." Excerpt:

Today's effort by the Democratic Majority is not about workplace discrimination; it's the first step in an effort to begin rewarding the special-interest allies who helped give the Democratic Party control of Washington. These bills do not reflect the priorities of the American people; they reflect the narrow interests of the powerful trial lawyer industry that last year used its ill-gotten war chest to help the current majority tighten its grip on power.

House Majority Leader Steny Hoyer sees it differently, obviously, issuing two statements praising passage of the Paycheck Fairness Act (here) and the Ledbetter Fair Pay Act (here). I've got quite a few posts up on the bills over at Shopfloor.org. Legal arguments aside, it's indisputable that these bills will raise the marginal costs of labor, discouraging the hiring of new employees -- a strange priority for lawmakers during a time of recession and layoffs.

Hans Bader on Ledbetter/PFA

Legislate in haste, repent at leisure:

The trial lawyers will score another major victory [Friday], by obtaining House passage of two bills backed by Obama that will greatly expand the ability to sue employers. One, the Ledbetter Fair Pay Act , would effectively get rid of the statute of limitations in pay discrimination cases. The other, the Paycheck Fairness Act , would pressure some employers to pay people performing different jobs with very different working conditions the same pay , if the different jobs are predominantly held by different sexes, and the different jobs are deemed comparable based on specified statutory criteria.

Supporters of these bills have relied heavily on false claims about what the Supreme Court held in its Ledbetter decision, which did not adopt, as the bills' supporters claim, a rigid 180-day deadline for bringing pay discrimination cases . (There is a 3-year deadline under the Equal Pay Act , and the 180-day deadline under Title VII, which is simply one alternative avenue for bringing wage discrimination claims, is not rigid , but is subject to equitable "tolling "). False attacks on opponents of the bill were a staple of the 2008 presidential campaign, which featured TV ads from Obama, and mass mailings by state Democratic Parties, falsely claiming that McCain backed wage discrimination against women , simply because he did not support these two bills. Amazingly, the McCain campaign did almost nothing to counter those attacks.

We've often noted the press's lack of curiosity about the interaction between the Equal Pay Act and the issue the Court faced in Ledbetter. More today from a WSJ editorial.

If you're on Twitter, the fast-growing communication channel, you may know that you can "follow" (roughly, subscribe to) a feed of Point of Law posts as well as feeds for the Manhattan Institute, City Journal, and my Overlawyered site (not to mention my own Twitter updates).

We'd been wondering what to use as Point of Law's "icon", the little squarish graphic that accompanies each post. Now, courtesy of photographer Michael in Houston (Flickr - mx5tx) we've got a rather poignant photograph of case reporter books that someone left out to be snowed on -- resources that were once the prized and costly heart of any working law office, and now are fast yielding their place to newer electronic media. If you like the image, by the way, some Creative Commons rules apply on reuse; check Flickr.

Oregon med mal battle looms

Ripples continue in Oregon politics from the state high court's 2007 decision knocking out liability protections for doctors at OHSU, the Oregon Health & Sciences University (via). Earlier here, here, here, here, and here.

With the legislative train poised to leave the station on this employment-law expansion, Andrew Grossman of Heritage urges members of Congress to stop and think before undercutting the principles behind statutes of limitation, which every advanced legal system have found a crucial check on the tendency of disputes otherwise to proliferate without limit.

"Top Ten D&O Stories of 2008"

Kevin LaCroix (D&O Diary) looks back at the implications of a tumultuous year for directors' and officers' liability, corporate governance, and boardroom insurance.

Kathleen Seidel is applying more scrutiny to bills submitted to the federal Vaccine Injury Compensation Program. Earlier at Overlawyered here and here.

Medical device preemption

A big defense victory in the Medtronic cardiac defibrillator litigation. (Beck & Herrmann/Miller).

Allen Farrell (Harvard), Jennifer Bethel and Gang Hu (both Babson) have this paper on SSRN which is part of a forthcoming Brookings volume on the credit crisis (Harvard Corporate Governance Blog via B. Janell Grenier at BenefitsBlog, who notes the ERISA angle).

A site called Asbestos.com

Bill Childs does some digging into who's behind an ostensibly independent source of information on the dangerous mineral.

Around the web, January 8

  • Once the lawyers get through suing over Madoff feeder funds, Big 4 auditing firms might get winnowed down to 3... 2... 1? [Salmon citing NakedShorts and Bronte Capital]
  • Leading advocate of laws to ban "workplace bullying", a cause we've often viewed with skepticism, has his own blog now [David Yamada, Minding the Workplace]
  • Why are venerable law firms shuttering rather than do mergers w/other firms? Partner liability helps explain [Ribstein]
  • Some dismiss "New Deal prolonged the Depression" view as fringey. Are they right? [Tabarrok, MargRev]
  • Will he stand up to pseudo-science? Medblogger Orac on pluses and minuses of Sanjay Gupta as Surgeon General [Respectful Insolence]
  • Bubble-icious public sector: "CalPERS could bankrupt us faster than anything else." [Coyote]

Securities law 2008-in-review webcast

The panel discussion I was on yesterday (earlier) can be found archived at Bruce Carton's Securities Docket. For much more, see this site's categories on Corporate Governance and Class Actions.

Specter on AG-nominee Holder

Sen. Arlen Specter (R-PA) gave a floor speech in the Senate on Tuesday challenging the merits of the nomination of Eric Holder to be the next attorney general. His comments are here. Focus of Specter's criticism: Holder's review or lack of review of Clinton's pardons, especially of Marc Rich and the FALN terrorists, and the failure to appoint a special counsel to investigate Al Gore fundraising improprieties.

New York Times article, "Specter Attacks Choice for Attorney General"

The Senate Health, Education, Labor and Pensions Committee is the first committee out of the 111th Congressional gate to hold confirmation hearings on President-elect Obama's cabinet nominees. (More accurately: pre-confirmation hearings on anticipated nominees.) On Thursday, HELP hears from former Sen. Tom Daschle, the HHS Secretary-nominee, and on Friday, it's Rep. Hilda Solis (D-CA), the Obama pick to head the Department of Labor.

The business community has responded coolly, if at all, to the Solis nomination, given her near-perfect pro-labor voting record (100 percent in 2007, according to the AFL-CIO rankings; lifetime, 97 percent). We expect the hearing to be dominated by Senators' statements and the occasional question to the nominee about the Employee Free Choice and two pro-union, trial lawyer-supported bills to be voted on Thursday in the House, the Lilly Ledbetter Fair Pay Act, and the Paycheck Fairness Act. (See this POL post.)

It's hard to imagine such lines of inquiry producing much more than platitudes, boilerplate and niceties, at least from the nominee. We already know Solis supports the Employee Free Choice Act and has promoted the Paycheck Fairness Act, so is there anything new to learn?

Another, more productive area of questioning would explore Solis' advocacy of "environmental justice," that is, the argument that malign corporations pick out poor, disadvantaged and minority communities for their polluting facilities BECAUSE the communities house the poor, disadvantaged and minorities. At Solis' congressional website, the issue is framed as, "For decades, minority and underserved communities have been forced to live in close proximity to industrial zones, power plants, and toxic waste sites." Forced!

Solis touts her advocacy for this legally couched form of class warfare, taking credit for sponsoring as a California state Senator the "first environmental justice law" in the nation; she also received the "Profile in Courage" award from the John F. Kennedy Library Foundation for her efforts.

Many, many lawsuits against energy or infrastructure projects are represented as a matter of "environmental justice"; the term is the activist attorney's PR friend. (For examples, see this Riverside Press-Enterprise story on transmission lines and this Environmental News Service story, "Eco-Justice Groups Sue Over Chevron Refinery Expansion.")

Along similar lines, Solis embraces the "precautionary principle" in regulation of chemicals, that is, the demand that all chemicals be proved absolutely safe before being introduced into the marketplace.

Per this account; earlier here and here.

Around the web, January 7

  • "Sending Wall Street To Jail": major source of criminal liability could be over-rosy business statements meant to shore up customer, supplier confidence [Roger Parloff, Fortune]
  • Famed Texas injury lawyer Mark Lanier addresses Prof. Jon Hanson's torts class at Harvard [video via Mass Tort Lit]
  • Heritage policy paper on EFCA [Sherk & Kersey] And so no one thinks we're ignoring what the other side has to say, here's a "pro" post [Joseph Slater, Prawfsblawg]
  • Crain's NY and Milberg, sitting in a tree; second verse, same as the first (h/t Bruce Carton)
  • Expect to pay a lot more for mattresses, domestic maker gets Uncle Sam to slap heavy tariffs on innersprings [Blomquist, CEI]
  • Treaties, court decisions give aboriginal groups (First Nations, Metis, Inuit) more clout in shaping business activities in Canada [Corporate Counsel]

Just because this tickled us, an observation from National Review's Jay Nordlinger, a lover of words:

A friend wrote (not in text), "Have you noticed the fashion of calling attorneys general by their adjective? I was reminded just now when Geraldo called Jerry Brown 'General Brown.'"

The 111th Congress convenes at noon today, and House Democratic leadership is starting the week with two bills that appeal to their core constituencies but send the business community into conniptions. The two pieces of legislation -- the Lilly Ledbetter Fair Pay Act and the Paycheck Fairness Act -- are priorities for organized labor, liberal women's advocacy groups, and the plaintiff's bar.

The Ledbetter bill (see POL's many earlier posts) is sold as a fix of the Supreme Court's decision in Ledbetter v. Goodyear Tire and Rubber. In its May 2007 ruling, (opinion here) the court said the employment law requires the filing of wage discrimination claims within a specified period of time. But rather than a limited fix, the bill would lift all statutes of limitations on such discrimination claims, inviting a flood of lawsuits on old, unprovable but potentially expensive claims that employers would find it hard to defend against.

It sounds like this year's bill is the same as the 110th Congress' legislation,  H.R. 2381, passed the House, 225-199, in July 2007.

The Paycheck Fairness Act is potentially worse, in that creates many new grounds for litigation in a supposed effort to fight gender discrimination. The bill, H.R. 1338 in the 110th Congress, passed in July 2008 by a vote of 247-178. It would:

  • Eliminate current caps on punitive and compensatory damages in claims made under the Equal Pay Act;
  • Expose employers to unlimited punitive and compensatory damage awards when unintentional pay disparities have occurred;
  • Eliminate key employer defenses for pay disparities;
  • Prohibit employers from disciplining or discharging employees for publicly disclosing sensitive wage information; and,
  • Mandate new federal government "guidelines" about the relative worth of different types of jobs.

In its original form, the legislation also included the old "comparable worth" guidelines.

We're now hearing that the bills will be debated under a closed rule, probably Thursday, indicating that quick passage rather than measured deliberation is the goal. Once both pass, they'll be combined into a single bill to send to the Senate, so perhaps this politicking is intended less as a reward to the trial lawyers and labor than a signal to the Senate to get moving.

In any case, a combined Ledbetter Paycheck Fairness and Sue Your Boss Act will certainly galvanize business opposition, even as many business groups are trying to work cooperatively with the new Obama Administration.

There are so many messages being sent, but clearly one of those messages goes to the plaintiff's bar. It's "Thank You."

Pants Suit: Roy Pearson appeals again...

Will this never end? This morning we learn that Roy Pearson, the former D.C. administrative law judge, has filed a petition for a rehearing or rehearing en banc, asking the D.C. Court of Appeals to reconsider its December 18th dismissal of his $54 million lawsuit against his drycleaners for supposedly misplacing his pants. (Pearson's petition is here.)

Chris Manning, the attorney for the tormented drycleaners, the Chungs, writes in an e-mail:

Mr. Pearson's Petition is sad and unfortunate. Amazingly, despite two resounding defeats, Mr. Pearson has, once again, decided to prolong the needless agony of this case for the Chungs, for the DC taxpayers and for everyone involved. The Chungs and I hope the DC Court of Appeals will deny Mr. Pearson's Petition and will put this case to rest in this jurisdiction. Most importantly, the Chungs and I call on Mayor Fenty and the DC City Council to amend the very vague and often unfair DC Consumer Protection Act so that cases like this cannot happen again.

A very important point. The media coverage has focused on Pearson's obsessive litigation and the emotional and economic damage inflicted on the Chungs, but reporters have paid less attention to the steps necessary to prevent the recurrence of similar legal abuses.

But the American Legislative Exchange Council, the national association of market-oriented state legislators, announces in a news release that it has available the uniform law, the "Private Enforcement of Consumer Protection Statutes Act" to discourage such abuses. Sherman "Tiger" Joyce of the American Tort Reform Association has also repeatedly called for reforms, as noted in ATRA's news release.

The law firms, including some of national repute like Skadden Arps and Sills Cummis, say they were picked for government work because of their expertise, but critics note that most of them are also active campaign donors or tied in with the state's political establishment in other ways, as is Florio Perrucci Steinhardt & Fader, a law firm founded by former governor Jim Florio, which got $1.6 million in state work last year. "Unless you're politically connected, I don't care who the governor is, Democrat or Republican, you don't get the business," said Sierra Club director Jeff Tittel, who notes that while Gov. Jon Corzine may talk a good game about ending pay for play, not much has changed in practice. [Trenton Times; related transparency/disclosure reform litigation; editorial]

[Bumped from Friday's post as a reminder to interested readers]

I'll be among the participants next Tuesday afternoon at 2 p.m. Eastern in the first of an ongoing series of webcasts on a new "Securities Litigation and Enforcement Channel" being launched by prominent securities-law blogger Bruce Carton. It's free, but registration is required: details here. I'll be the relative amateur, with the other seats at the table held by some very highly qualified observers of the securities law scene: Lyle Roberts (The 10b-5 Daily), Kevin LaCroix (D&O Diary), Francine McKenna (re: The Auditors), and Thomas Gorman (SEC Actions), as well as Carton.

New on SSRN from Patricia Born (CSU Northridge), W. Kip Viscusi (Vanderbilt), and Tom Baker (Penn)(via TortsProf): Existing studies of the effects of tort reforms on liability insurance claim costs have focused on initially reported losses, but later data looking back on actually incurred losses can provide a more accurate picture. In the case of a "comprehensive sample of insurers writing medical malpractice insurance from 1984-2003" the improved data indicate that tort reform may have had a somewhat stronger effect in reducing claims than had appeared in the earlier studies.

Around the web, January 4

  • "Report Details Global Reach of U.S. Securities Class Actions" [RiskMetrics summarized at AmLaw Litigation Daily]
  • Grim Madoff-clawback portent: in Bayou case $20 million of the $33 million recovered from redeeming investors went to pay legal fees [Bloomberg]
  • Investigative journalism about labor unions? Won't be as much if they succeed in gutting disclosure regulations [Wood, ShopFloor]
  • Judge dismisses antitrust suit filed by Louisiana AG Foti post-Katrina and -Rita against casualty insurance companies [AP/Forbes]
  • Top Illinois tort cases of 2008 [Chicago Daily Law Bulletin not online, summarized at Bernabe]
  • New Jersey not on liberal frontier as regards wrongful death damages but bill moving through legislature would fix that [NJLRA]

A blow to off-label promotion suits?

The plaintiff's bar, in concert with certain bulk drug buyers (particularly state and local governments), has ginned up a giant campaign demanding damages over drug companies' promotion of off-label uses of their compounds. Now Beck & Herrmann bring news that a federal court in multi-district litigation against Amgen endorsed the view that the lawsuits at issue in that MDL were "really prohibited back-door attempts at private enforcement of [Food, Drug & Chemical Act] violations. ... The court didn't just dismiss this or that count of the plaintiffs' complaint. Rather, the forbidden attempt at private FDCA enforcement against purportedly illegal promotion was so thoroughly woven through the entire complaint, that for now anyway, the entire MDL is dismissed (albeit with leave to replead)."

Tech firms unite on patent damages

The Recorder: "Oracle, Apple Inc., Yahoo, Intel Corp. and several others are throwing their weight behind Microsoft Corp. as it tries to persuade the U.S. Court of Appeals for the Federal Circuit to overturn a $500 million jury verdict for infringing on a Lucent patent. ...In friend of the court briefs filed this month, the tech companies are urging the court to rein in the 'entire market value rule.' The rule allows the calculation of damages based on the whole product, even if just one feature is infringed."

Around the web, January 3

  • More on EFCA's real kicker, compulsory arbitration [Jackson Lewis, h/t Eric B. Meyer]
  • In L.A. and even Boston, billboards now part of the historic-preservation legacy [Katherine Mangu-Ward, Reason]
  • Big Washington Post what-went-wrong-at-AIG series, parts one, two, three, fascinating but Arnold Kling is left feeling unsatisfied;
  • "Eating VPs for breakfast": Detroit execs learn they'd better stay on union's good side, it could get them fired [Logan Robinson, WSJ]; call it even? carmaker CEOs had private jets, UAW brass has $33 million golf resort [Fox News]; government as backseat driver: more on CAFE and Detroit's plight from Holman Jenkins [WSJ]
  • Malpractice reform and doctor supply in Texas [Silver v. Frank in Overlawyered comments; also KevinMD]
  • Step inside the tent and have no fear, Madoff urged investors, everything in here's regulated by the federal government [Berlau/CEI]; NYTimes remembers: oh, yeah, Arthur Levitt's a big friend of ours, better not slam the SEC too hard [Cunningham, Concurring Opinions on Stephen Labaton]
  • Orac weighs in on unintended consequences of rules limiting work hours of MDs-in-training [Respectful Insolence; earlier]

[N.B.: this particular roundup is based on recent stories I've noted on Twitter. If you use that social media service, do consider following me (thus getting them the moment they're posted) and also following the feed for new Point of Law posts here.]

From the AP:

ST. PETERSBURG - Gov. Charlie Crist appointed Cuban-born lawyer Jorge Labarga to the Florida Supreme Court on Friday.

Labarga, 56, a state circuit judge who Crist appointed to an appellate court position just last month, was named to fill the vacancy created by the retirement of Justice Harry Lee Anstead. It was Crist's third appointment to the state's high court since late August.

Here's Labarga's CV from the 15th Judicial Circuit of Florida's website.

Anticipating the appointment, Ed Whelan of the Ethics and Public Policy Center notes the current 5-4 liberal majority, writing at Bench Memos, "There is intense pressure on Crist from the media, left-wing activists and plaintiff's bar to preserve the liberal majority on the Court." Whelan cites a knowledgeable observer of the court who describes Labarga as "journeyman trial judge" who "has shown no evidence of having a well-formed conservative judicial philosophy."

The conservatives' candidate to come out of the judicial nominating commission was Frank Jimenez. The usual editorial and political calumnies were lodged against him -- a "[Jeb] Bush acolyte" -- drawing a response in the St. Petersburg Times by Raoul G. Cantero III, a former Supreme Court Justice.

The Times condemns his nomination despite Jimenez's sterling credentials: distinguished Yale Law School and Wharton Business School graduate, partner at a well-respected Miami law firm, deputy chief of staff and acting general counsel to Gov. Jeb Bush, chief of staff to then-HUD Secretary Mel Martinez, top litigation counsel at the U.S. Defense Department, and now general counsel of the Navy, one of six civilians of four-star rank who help the secretary of the Navy oversee the U.S. Navy and Marine Corps.

Whelan also praised Jimenez here.

The process for nominating Jimenez came under harsh criticism.

NPR's Supreme Court correspondent Nina Totenberg is enthusiastic about President-elect Obama's intellect and attention to judicial philosophy. Very enthusiastic. In a segment on "Morning Edition" about possible court appointments by a President Obama, Totenberg says:

Barack Obama probably has more knowledge and cares about the substance of this more than any president in memory, in a broad sense. He was a constitutional law professor at the University of Chicago. He devoted a chapter in his book to his idea of what he thinks the role of the court should be and how one should pick Supreme Court justices.

Totenberg notes the chapter on judicial philosophy in Obama's book, which includes criticism of Justice Scalia, his voting against Roberts and Alito, and she reaches the conclusion Obama is not a believer in originalism.

So how will Obama apply his awe-inspiring insight, vast experience and grounded philosophy when nominating a Supreme Court justice? Host Steve Inskeep asks Totenberg, "We could go through a lot of names, I'm sure, but can you name just one person or maybe two that seem like obvious candidates to Democrats to be promoted to the Supreme Court or be named to a high judicial post?"

Totenberg: "Female, female, female."

Inskeep: "You're saying that there's an urge to appoint women."

Totenberg: "Well, there's only one woman on the court, down from two. More than half of the voters in this country are women. A hefty majority of them voted for Barack Obama, and I think it is inevitable that the first appointment be a woman. A Hispanic woman would be even better."

Will be eagerly awaiting this new book (hat tip Burch/Mass Tort Prof) from the prominent Constitutional and federal-courts scholar. Publisher's description:

In recent years, much political and legal debate has centered on the class action lawsuit. Many lawyers and judges have noted the intense pressure to settle caused by the very filing of a suit. Some contend that the procedure amounts to a form of judicial blackmail. Others counter that it is an effective means of policing corporate behavior and assuring injured victims' fair compensation.

This book represents the first scholarly effort to view the modern class action comprehensively through the lenses of American political and constitutional theory. Redish argues that the modern class action undermines foundational constitutional principles, including procedural due process and separation of powers, and has been improperly transformed from its origins as a complex procedural device into a means for altering controlling substantive law in highly undemocratic ways. Redish proposes an alternative vision of the class action lawsuit, one that is designed to enable the device to serve its valuable procedural purposes without simultaneously contravening core precepts of American constitutional democracy.

Patent defendants would find themselves involuntarily checked into the plaintiff-friendly Eastern District of Texas, and they couldn't check out. Now (per The Recorder) the Court of Appeals for the Federal Circuit has "ruled that Eastern District Judge John Ward 'clearly abused' his discretion when he denied TS Tech Co.'s motion to transfer its patent fight with Lear Corp. to a more convenient venue in Ohio." On top of the Fifth Circuit's recent Volkswagen case, it's pretty clear that appellate judges are growing impatient with the district's notorious reputation as a forum-shopping destination.



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.