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November 2009 Archives

Around the web, November 30

  • Dangers work both ways? Third-party litigation finance proposed for the defense side [Longstreth, American Lawyer] Related: "Investing in Lawsuits: 'Litigation Financing' and the Consumer Protection Imperative" [Leichty/Thomason, WLF, PDF]
  • New U.K. reforms: "Barristers will be free to set up in partnership with solicitors or with each other" [Times Online]
  • R.I.P. Edward Stimpson, who helped save the light aviation industry through federal liability reform [Carter at ShopFloor]
  • "Stiff mortgage lenders, advises law professor Brent T. White" [Harney/S.F. Chron via Genova]
  • "Really ... it's all about protecting patients from bad doctors." [White Coat on this Nevada case]
  • Congratulations to superlative juryblogger Anne Reed, picked to run Wisconsin Humane Society [Deliberations; also Turkewitz; cross-roundupped from Overlawyered]

Wal-Mart wins Canadian Supreme Court case

In a closely watched 6-3 decision, the Supreme Court of Canada ruled that Wal-Mart "was within its rights when it shut down a store in Jonquiere, Que., that had been unionized seven months earlier." [CBC]

Louis Bolduc of the United Food and Commercial Workers Union also said the top court's decision opened a door because a labour board will now be able to investigate the reasons for store closures.

"If we can prove the reasons are anti-union then we can sue for damages," he said in a Montreal interview.

John Endean's new paper on the Canadian labor law example mentions Wal-Mart's union difficulties north of the border.

The Washington Legal Foundation will be co-sponsoring a panel discussion with the National Association of Criminal Defense Lawyers this Wednesday morning Dec. 2 in Washington, D.C., with former Attorney General Dick Thornburgh of K&L Gates, Brady Dugan of Akin Gump, Jonathan Marcus of Covington & Burling, and Richard Craig Smith of Fulbright & Jaworski. (Invitation and speakers, PDF; webcast and other info)

Bizarrely overincentivizing stoolpigeonery, part CCLIX in a series. [WSJ Law Blog, Business Insider]

"What the hell -- let's destroy the city"

The New York City Council considers introducing commercial rent control.

P.S.: "Shrinking-wrapping NYC: How Neighborhood Activists Are Strangling a City" [buildable housing in brownstone neighborhoods; Rick Hills, PrawfsBlawg]

The Obama White House puts to use the WhiteHouse.gov website -- its blog -- to rebuke columnist Charles Krauthammer by name for Krauthammer's column, "Kill the bills. Do health reform right." Krauthammer's case included an argument for step-by-step measures, starting with tort reform:

This is money -- the low-end estimate is about half a trillion per decade -- wasted in two ways. Part is simply hemorrhaged into the legal system to benefit a few jackpot lawsuit winners and an army of extravagantly rich malpractice lawyers such as John Edwards....[snip]

In the 4,000-plus pages of the two bills, there is no tort reform. Indeed, the House bill actually penalizes states that dare "limit attorneys' fees or impose caps on damages." Why? Because, as Howard Dean has openly acknowledged, Democrats don't want "to take on the trial lawyers." What he didn't say -- he didn't need to -- is that they give millions to the Democrats for precisely this kind of protection.

The White House's incoming communications director, Dan Pfeiffer, responds in a blog post, "Reality Check: Column Ignores Facts about Health Reform." On tort reform, he writes:

President Obama issued a Presidential Memorandum directing the Secretary of HHS to move forward with an initiative to give states and health systems the opportunity to apply for medical liability demonstration projects. Section 2531 of the House bill also includes a voluntary state incentive grants program to encourage states to develop alternatives to traditional malpractice litigation.

Yep. And the Senate bill includes a "sense of the Senate" statement expressing some support for state demonstration projects. The legislative provisions and the Administration's $25 million HHS grant program are the bare minimum needed to claim, "There is TOO tort reform in there."

Not that they support it.

Climategate: So Who Sues Whom?

An exchange between Hugh Hewitt -- an attorney and law professor -- and columnist Mark Steyn on Hugh's radio program, Thanksgiving eve:

HH: Is it fair to say, Mark Steyn, that everything that the tobacco companies were ever accused of doing with data about cigarettes is now true about the CRU and its global warming data?

MS: Yeah, that's absolutely, that is actually a good way to put it. I mean, I think this idea...they've corrupted the very essence of science. They've corrupted peer review, they've had editors from journals fired who disagree with them, they've corrupted the data. They basically are the antithesis of science. They decide the result, and then figure out how you need to set up the computer model to get the result. This is disgraceful.

CRU is the Climatic Research Unit of the University of East Anglia, whose researchers and correspondents have been shown by disclosed e-mails and computer programs to have manipulated and politicized research. If the tobacco company analogy is apt, then state attorneys general must already be planning their joint legal strategies.

No? Still, the revelations of debased science have far-reaching implications for all sorts of climate-related litigation. Consider the public nuisance suit by eight states against utilities that generate electricity from coal, Connecticut v. American Electric Power. In its opinion that the states could sue, the Second Circuit noted the litigation was based on "reports from the Intergovernmental Panel on Climate Change [IPCC] and the U.S. National Academy of Sciences to support the States' claims of a causal link between heightened greenhouse gas concentrations and global warming." (Page 7)

Yes, and IPCC as well as the Environmental Protection Agency relied on the now beleaguered Climatic Research Unit. In a widely cited and excellent report, "Congress May Probe Leaked Global Warming E-Mails," at a CBS News blog, Declan McCullough writes:

The leaked documents (see our previous coverage) come from the Climatic Research Unit of the University of East Anglia in eastern England. In global warming circles, the CRU wields outsize influence: it claims the world's largest temperature data set, and its work and mathematical models were incorporated into the United Nations Intergovernmental Panel on Climate Change's 2007 report. That report, in turn, is what the Environmental Protection Agency acknowledged it "relies on most heavily" when concluding that carbon dioxide emissions endanger public health and should be regulated.

The EPA connection takes us to Kim Strassel's "Potomac Watch" column today in The Wall Street Journal, "'Cap and Trade Is Dead'," those being the words of Sen. Jim Inhofe (R-OK), commenting on the debased science, its legislative implications and the possibility of an EPA "endangerment" finding.

Mr. Inhofe goes so far as to suggest that the agency might not now issue the finding. "The president knows how punitive this will be; he's never wanted to do it through [the EPA] because that's all on him." The EPA was already out on a legal limb with its finding, and Mr. Inhofe argues that if it does go ahead, the CRU disclosure guarantees court limbo. "The way the far left used to stop us is to file lawsuits and stall and stall. We'll do the same thing."

"Say Goodbye to Big-Screen TVs"

Max Schulz on a new California regulation [City Journal]

The Senate Judiciary Committee holds a hearing Wednesday, Dec. 2, "Has the Supreme Court Limited Americans' Access to Courts?," which we take to be another opportunity to attack the Supreme Court decisions -- Ashcroft v. Iqbal and Bell Atlantic v. Twombly -- that limited notice pleadings by requiring specific factual allegations. On the witness list is Gregory Garre, who as U.S. Solicitor General argued before the U.S. Supreme Court in the Iqbal case on Dec. 10, 2008. (Transcript of oral arguments.) The American Lawyer spoke briefly with Garre, now at Latham & Watkins, in October:

Garre told us that, contrary to reports that called Iqbal a Supreme Court sleeper, "we perceived it to be a very important case all along," not just because the named defendants were former U.S. Attorney General John Ashcroft and former FBI Director Robert Mueller. Garre and his team understood that their case had the potential to establish whether the Court's ruling in Twombly applied only to antitrust cases or constituted a broader interpretation of the Federal Rules of Civil Procedure.

And because the Court's Iqbal opinion specifically addressed the old pleading standard established in a case called Conley, he said, "it was significant in clarifying standards in evaluating the sufficiency of pleading."

Also scheduled to testify at the Judiciary hearing are two critics of the Iqbal decision, John Payton of the NAACP Legal Defense Fund, and Stephen Burbank of the University of Pennsylvania Law School, noted for his writings on federal court rulemaking. (See Tony Mauro, National Law Journal, "Plaintiffs Groups Mount Effort to Undo 'Iqbal.'")

On the Judiciary Committee is Sen. Arlen Specter (D-PA), who has introduced S. 1504 to return the law to a pre-Iqbal standard on pleadings. Last week, Rep. Jerrold Nadler (D-NY)  introduced H.R. 4115, the Open Access to Courts Act of 2009, hailed by the American Association for Justice. (See Mass Tort Defense blog, "Anti-Iqbal legislation update.") Earlier Point of Law posts here.

The city of New Haven, Connecticut announced yesterday that it will promote 14 firefighters (including named plaintiff Frank Ricci) out of the 20 (1 Hispanic 19 white) who had sued the city after it cancelled a 2003 firefighter promotion exam because "too few" minorities had excelled on that exam. The other six plaintiffs, New Haven claims, did not score high enough to be promoted under the standards used at the time (2004).

New Haven's decision follows a federal court dismissal of a suit by seven black New Haven firefighters seeking to delay the promotions.

Here's the CNN report.

Around the web, November 25

  • Consumer columnist's suit against Hartford newspaper could raise novel issues under Connecticut law purporting to apply First Amendment to employers [Schwartz]
  • Climate flap: "If these were internal Exxon-Mobil e-mails, the trial lawyers would be racing out the door with only one pants-leg filled" [Goldberg/NRO via Reynolds]
  • "Colorado Appellate Courts Continue To Tighten Class-Action Claims" [Law Week Online]
  • LaShawn Barber on housing suit and Westchester County voter revolt [ACRI]
  • Med-mal filings surged in Tennessee as reform effective date approached, then slumped afterward [Day, Throckmorton]
  • "This creepy, cultlike form of organizing": unions and "pink sheeting" [NYT]
    Expect less transparency about union doings, though, as DoL switches off the spotlight [Heritage via ShopFloor]

Adam Liptak's article brings front-page New York Times attention to a welcome trend that's been building for years now. Commentary: Adler/Volokh.

The Texas Medical Association, unlike some physician groups, refuses to support the health care bill on Capitol Hill. One of its particular concerns:

TMA wants the legislation to explicitly protect the state's caps on non-economic damages in malpractice lawsuits. The House bill, thanks to an amendment by Rep. Henry Cuellar of Laredo, does. But the Senate bill, according to TMA, does not.

[Dallas Morning News "Trail Blazers" blog; TMA press release]

"Selling Lawsuits, Buying Trouble"

The Chamber's Institute for Legal Reform has published a substantial new study (PDF) of the dangers of third-party litigation financing. The authors are John Beisner, Jessica Miller and Gary Rubin of Skadden Arps. Executive summary:

"Third-party litigation financing" is a term that describes the practice of providing money to a party to pursue a potential or filed lawsuit in return for a share of any damages award or settlement. Litigation-financing companies provide financing for myriad litigation costs, including attorneys' fees, court fees, and expert-witness fees. Funding arrangements also may involve financing the party's living expenses while the trial and any appeals are pending. Third-party litigation financing is a growing phenomenon in the United States, and it has received much attention of late from both proponents and critics, including practicing lawyers, academics, jurists, and policy-makers. Although third-party funding is not widespread, it is playing an increasingly visible -- and potentially harmful -- role in U.S. litigation. If such funding becomes more prevalent, it will pose substantial risks of litigation abuse. This is particularly true in the context of class or mass actions, which are already very vulnerable to abuses.

The root problem with third-party litigation financing is that it introduces a stranger to the attorney-client relationship whose sole interest is a financial one. The stranger wants to protect its investment, and its interest lies in maximizing its return on that investment, not in vindicating a plaintiff's rights. Put simply: the stranger's motive is to pursue investments that will generate returns whether or not the claims underlying those returns lack merit. The stranger, like a law firm, is a repeat player in the lawsuit-financing game. But unlike a law firm, the stranger does not have a privileged, fiduciary relationship with the plaintiff. Eventually, then, the stranger's presence will require a relaxation of the rules governing attorney professional responsibility, compensation, and the attorney-client privilege to accommodate these new realities. This relaxation threatens to chip away at -- and eventually eradicate -- critical safeguards against lawsuit abuse.

This paper begins with an overview of third-party litigation financing. It next examines
current third-party financing practices in the United States. It then sets forth a critique of the practice, particularly the incentives it creates to engage in frivolous and abusive litigation. In this section,the paper also presents a case study on the Commonwealth of Australia, the first jurisdiction to permit third-party litigation funding, where such funding has dramatically increased litigation and given investors pervasive -- even total -- control over a plaintiff's litigation. Finally, the paper proposes that third-party litigation financing be prohibited in the United States to prevent these abuses. At the very least, the paper concludes, such funding should be banned in class actions and other forms of aggregate litigation.

The Chamber more recently released an adapted version of the paper as it applies to Europe (PDF).

State of play on Alien Tort litigation

Lee G. Dunst of Gibson Dunn, writing in the New York Law Journal (PDF), reviews recent cases and concludes that the courts are tending to dismiss most actions filed under the Alien Tort Claims Act (also known as the Alien Tort Statute or Alien Tort Act), but plaintiffs are resourceful and the recent Shell settlement may incentivize more filings. "[E]ven when these cases occasionally survive dismissal, they still have not fared too well with juries at the end of the day.... However, success [for defendants] does not always come fast or easy in these cases."

Higher punitives for wealthier malefactors

Ira Stoll at Future of Capitalism has some doubts about that new $300 million tobacco verdict.

The price of New York ethics, cont'd

Ira Stoll, Future of Capitalism:

The New York state attorney general, Andrew Cuomo, won't accept campaign contributions from people with matters before his office. Conveniently enough, however, he will, and does, accept such contributions from their lawyers, Bloomberg News reports. ...

More: Baxter, AmLaw ("For the most part, [Skadden's Kenneth] Gross says that lawyers have always been exempted from restrictions on contributions."), Hallman/AmLaw Litigation Daily.

A federal district court judge has just ruled that two disgraced Pennsylvania state court judges, Michael T. Conahan and Mark A. Ciavarella Jr., are protected by immunity from facing legal action for courtroom acts that consisted of over 6000 corrupt decisions, including shipping children to "reform schools" that had paid off the judges. [There is still potential civil liability for administrative acts accomplished outside the courtroom.] The decision is considered interlocutory from the plaintiffs' perspective, so it is not clear that any appeal lies for them immediately.

The Supreme Court has held that the sacrosanct Double Jeopardy rule (that a defendant may not be charged a second time for a crime for which he has been acquitted) does not apply when the acquittal was obtained through corruption (jury tampering, etc.), since in effect the defendant was never in jeopardy of being convicted. There had been hopes that, analogously, it might be decided that judicial immunity could not apply when there was no judicial discretion (that is, when the judge's decision had been purchased in advance, leaving no room for reasoned application of the law to the facts).

U.S. District Judge A. Richard Caputo rejected that argument, citing the U.S. Supreme Court's 1988 decision in Forrester v. White. In that case, the U.S. Supreme Court wrote that a judicial act "does not become less judicial by virtue of an allegation of malice or corruption of motive." Caputo added the U.S. Supreme Court's 1978 decision in Stump v. Sparkman held that the question concerning judicial immunity is not related to the intent of a judge or the extent of the judge's error.

Forrester involved an administrative act by a judge (firing someone because of her sex), so anything written about immunity for judicial acts was arguably obiter dictum. In Stump, the egregious action by the judge was committed without corruption. [He had granted a mother's petition to have a tubal ligation performed on her 15-year-old daughter, whom the mother alleged was "somewhat retarded," the same day that the petition was filed, and without a hearing to receive evidence or appoint a lawyer to protect the daughter's interests. The daughter underwent the surgery a week later, having been told that she was to have her appendix removed.] Justice White, speaking for the court, wrote, "A judge is absolutely immune from liability for his judicial acts even if his exercise of authority is flawed by the commission of grave procedural errors." White's decision did not explicitly hold that corrupt, purchased rulings were "judicial acts." I, along with other professors of Legal Ethics, anxiously await an ultimate appeal on these grounds to the Third Circuit.

Around the web, November 23

  • Tide turning against drug-pricing suits? Glaxo SmithKline beats back Kentucky case [Longstreth, AmLaw Daily]
  • Court in Australia deems litigation funding pact improper as "unregistered managed investment scheme" [New Lawyer]
  • Should docs be careful what they ask for? Michelle Mello of Harvard, a prominent advocate of health courts, hopes they'll significantly expand compensation [Gerencher, MarketWatch]
  • Doubts about the latest phthalates scare, and a Daubert angle [Trevor Butterworth, Forbes]
  • Claim: pay-to-play isn't such a big problem with public pension plaintiffs after all [Securities Litigation Watch, more]
  • Chevron, trial lawyer adversaries locked in lobbying combat over Ecuador suit [Politico via Law & More]

An "uproar" has broken out over the state employee pension fund's prospective hiring of lawyers to file securities suits. "At least six firms from around the country have been courting the board of the Missouri State Employees Retirement System, or MOSERS, for more than a year. One of the firms, Labaton Sucharow LLP of New York, hired state Sen. Jason Crowell, R-Cape Girardeau, as 'liaison counsel' in a securities fraud case pending in St. Louis, according to court documents filed in February. Crowell, an attorney, is also one of the 11 members of the MOSERS board." [St. Louis Post-Dispatch] Earlier on Labaton Sucharow in Massachusetts, Mississippi, New Mexico, etc.

Rep. Jerrold Nadler (D-NY) has introduced H.R. 4115, the Open Access to Courts Act of 2009, to restore notice pleadings, i.e., the status quo ante Twombly and Iqbal.

Nadler's news release announced the bill, "Nadler, Johnson, and Conyers Introduce Bill to Overturn Supreme Court Decision And Restore Access to Courts." The list of supporting organizations is an impressive roster of litigation-minded activists and grievance groups.

American Association for Justice had its news release teed up, "AAJ Calls on Congress to Restore Americans' Basic Legal Protections," which claims the Supreme Court decisions "irrationally raised the bar for Americans seeking justice in employment, discrimination, and other civil cases." Irrationally? A serious question: Why does AAJ think it advances its cause to insult people's intelligence?

In a July post, "Back to the bad old days on pleading?," Walter summarized what's at stake: "Make no mistake: the Supreme Court's recent rulings in Twombly and Iqbal offer the best hope in years for curtailing ill-founded litigation and reducing the scope of needless combat in what remains (by focusing and narrowing issues at an early stage and heading off discovery 'fishing expeditions')." For more, see these posts.

Sen. Arlen Specter (D-PA) had previously introduced S. 1504, the Notice Pleadings Restoration Act.

H.R. 4115 is a short bill, so we've put the entire text in the extended entry.

Diana Furchtgott-Roth warns of another labor-backed bill gathering steam in Congress. Earlier here and here.

"Jury rejects prosecutor's rigged game"

Our own Marie Gryphon on the Bear Stearns acquittals.

A "new Associated Press poll says most Americans support curbs on medical malpractice lawsuits. The AP poll found that 54 percent favor making it harder to sue doctors and hospitals for mistakes taking care of patients, while 32 percent are opposed. The rest are undecided or don't know." [AP/Chicago Tribune]

Around the web, November 20

  • Moving beyond judicial elections? Chamber's Institute for Legal Reform has a new report out (PDF) on the subject of "Best Practices in Judicial Merit Selection" More: Gavel Grab. Earlier: here, here, etc.
  • Latest from the Jury Verdict Research people: employers winning less, paying more [Toth, Manpower Blawg]
  • Critique of new Cass Sunstein book on constitutional interpretation [Steven Menashi, Policy Review]
  • Judge refuses to dismiss medical monitoring claim in West Virginia DuPont Teflon pollution suit [Jackson]
  • Alien Tort Statute discussed by Kenneth Anderson at Volokh [first, second, third, fourth posts]
  • Liability is said to add $7.96/visit at one D.C. gastroenterologist's office, and one lawyer-blogger thinks patients oughta be grateful to get off so cheap [Day]

After getting the mammoth $145 billion judgment against it thrown out on the grounds that each member of Florida's plaintiff smoker's class had to sue separately, the suits are coming in, and the latest verdict is not good news for the future of Philip Morris (and, therefore, for the future of its substantial yearly payments to the fifty states...) A Ft. Lauderdale jury favored one its residents, a 61-year-old woman with emphysema, to the tune of $300 million, of which $244 million was punitive and $56 million allegedly "compensatory". Cindy Naugle, sister of Ft. Lauderdale's former mayor, started smoking in 1968 when she was 20, allegedly because she thought cigarettes "made her look older." After several attempts to quit, she stopped smoking in 1993 with the aid of a nicotine patch. Today she requires 24-hour oxygen and must travel in a wheelchair because walking leaves her exhausted, her attorneys said.

There are 8000 more suits pending, and now that it seems clear that PM will be hemorrhaging money, I anticipate a rush to the courthouse to collect before bankruptcy ensues. At $300 million per pop, that's over $2 Trillion dollars. How did the jury come up with this punitive award, given PM's incredible existing exposure?

Many states have never seen $56 million compensatory verdicts for one plaintiff.

There are lots of them, and they're bound to encourage more unionization among health care workers and others, according to this op-ed by A. Kevin Troutman of Fisher & Phillips for the Houston Chronicle.

Waiting for pleural plaques in the UK

The UK government has yet to announce a decision on compensating for pleural plaques other than "as soon as possible." [h/t GlobalTort]

From Global Tort, a summary of asbestos case filings from the week of July 27-31.

From the Global Tort blog on how plaintiff's lawyers react when a defendant goes into bankruptcy. The article is here.

Prospective patients in Connecticut might be interested in the contents of the resulting public database, and we can all think of another group that might be more interested still. [Christine Stuart, CT News Junkie]

Senate Majority Leader Harry Reid released the text of the 2,074-page Patient Protection and Affordable Care Act on Wednesday, now the main vehicle for Senate action on health care. The language on medical malpractice liability is the same non-binding "Sense of the Senate" resolution as contained in the Finance Committee's bill, S. 1796, at best an acknowledgment that tort reform is a legitimate issue.

From page 1858:

Subtitle I--Sense of the Senate Regarding Medical Malpractice
It is the sense of the Senate that-- (1) health care reform presents an opportunity to address issues related to medical malpractice and medical liability insurance;
(2) States should be encouraged to develop and test alternatives to the existing civil litigation system as a way of improving patient safety, reducing medical errors, encouraging the efficient resolution of disputes, increasing the availability of prompt and fair resolution of disputes, and improving access to liability insurance, while preserving an individual's right to seek redress in court; and
(3) Congress should consider establishing a State demonstration program to evaluate alternatives to the existing civil litigation system with respect to the resolution of medical malpractice claims.

State of ethics in Albany

The ethics counsel to the New York state senate told senators to hand-deliver ethics filings, rather than mailing them, to avoid coverage under the federal mail fraud statute. [Brendan Scott, New York Post]

More: John Steele, Legal Ethics Forum ("news that you'd expect to hear coming out of Baltimore or Chicago").

A federal trial judge has found the Army Corps of Engineers to have been grossly negligent, and the proximate cause of the flooding of the Lower 9th Ward and St. Bernard parish (both areas were virtually destroyed) during Hurricane Katrina. [Here is an LA Times story on the ruling.] Judge Stanwood R. Duval found that nonfeasance lay at the base of the flooding of East New Orleans, but that misfeasance was the cause of the "Lower 9th" and St. Bernard disasters. This could potentially be a humongous source of civil liability for the United States.

The Maryland Court of Appeals held on Monday that mere shipment of raw asbestos fibers to that state in transit to locations outside the state does not constitute purposeful availment sufficient for personal jurisdiction over the fiber supplier. In CSR, LTD. v. TAYLOR the estates of stevedores, who handled the defendant's bags of raw fiber in Maryland, sued the fiber supplier, an Australian corporation. The intentional shipment of the raw fibers to the port in Baltimore was not sufficient to constitute purposeful availment sufficient for minimum contacts for personal jurisdiction under the Due Process Clause of the US Constitution.

Background: environmental claims arising from Ecuador oil operations that were dismissed by U.S. District Judge William Alsup after he found that three plaintiffs' "case was 'manufactured by plaintiffs' counsel' after two of the claimants admitted never actually contracting the illnesses they were suing Chevron over." [Baxter/American Lawyer]

Product liability and the CPSIA database

Among the provisions of the overreaching Consumer Product Safety Improvement Act of 2008 is one directing the Consumer Product Safety Commission to establish an online database of consumer safety complaints about products. In a submission on behalf of the Chamber's Institute for Legal Reform (PDF), Cary Silverman of Shook Hardy & Bacon warns that without appropriate sanctions the database could become a source of tactical advantage for product liability plaintiff's lawyers and a method of spreading inaccurate information about products as a means of leveraging settlement.

David Michaels, President Obama's nominee to be Assistant Secretary of Labor for Occupational Safety and Health, just had his nomination voted out of the Senate HELP Committee. Despite serious concerns about Michaels' views on science, law and business -- see Point of Law posts -- the committee never held a confirmation hearing to question him and today's vote occurred with no discussion.

Sens. Tom Coburn (R-OK) and Richard Burr (R-NC) voted no.

Writer sought on class-action project

Are you a skilled writer capable of tackling the topic of class action abuse? A reformist group (not us) is looking for a freelancer, old media refugee or other skillful wordsmith to tackle what could be a substantial project. If you're a serious candidate, drop a line at editor - at- this-domain-name - dot - com and I'll forward it to the group doing the search.

Welcoming guestblogger Jim Twu

Joining us as guestblogger this week will be Jim Twu, who currently has an asbestos personal injury defense practice in Northern California. Previously he was a content producer at the legal website FindLaw where he created the Legal Grounds newsletter in addition to writing other news and case-summary content. He is a graduate of the University of California at Davis School of Law.

Around the web, November 18

  • Lynne Stewart ordered to jail with tougher resentencing [WSJ Law Blog, McCarthy/NRO, Steele, our earlier coverage]
  • "What should we do instead of the Obama health reform bill?" [Tyler Cowen]
  • As EFCA sputters, unions push laws for easier organizing in Oregon and other states [WSJ]
  • Des Moines lawyer Roxanne Conlin, of SomePeopleJustNeedToBeSued.com fame, confirms she'll challenge Grassley for Iowa Senate seat; blames voter sexism, not tax embarrassment, for '82 defeat [DMR, Quad City Times]
  • Joseph Falcone and Morghan Richardson (Chadbourne & Parke) on Notice Pleading Restoration Act in Congress to overturn Twombly/Iqbal [Law.com]
  • Mini-roundup on the Foreign Corrupt Practices Act, all from Mike Koehler at FCPA Professor: "The FCPA As A Foreign Policy Stick"; the recent Frederic Bourke case; "Holder to Corrupt Foreign Officials - We Are Coming After Your Money"; or maybe not, if you're a big enough fish. More: WSJ Law Blog ("biggest ramp up of FCPA prosecutions since the measure was enacted in the 1970s", feds vow to pursue forfeiture).

In any bill of 1,000 pages or more, politics require the tucking in of provisions in to benefit special interests. H.R. 3962, the Affordable Health Care for America Act, is an astonishing 2,016 pages, so there's all the more tucking and the many more special interests. Benefiting in this case is the plaintiffs' bar, gaining more opportunity to sue businesses via the power of state attorneys general.

Victor Schwartz of Shook, Hardy & Bacon* has researched the language in Section 257 (page 151 of the bill) and finds that it provides a state attorney general broad authority to enforce any provisions or regulations under Title II of the act, "Protections and Standards for Qualified Health Benefits Plans." And, the AGs can go after monetary damages on behalf of private plaintiffs for technical violations, and even farm out the work to private law firms. Here's the provision:

Any State attorney general may bring a civil action in the name of such State as parens patriae on behalf of natural persons residing in such State, in any district court of the United States or State court having jurisdiction of the defendant to secure monetary or equitable relief for violation of any provisions of this title or regulations issued thereunder. Nothing in this section shall be construed as affecting the application of section of the Employee Retirement Income Security Act of 1974.

In a background memo, Schwartz writes:

Given the scope of the legislation, it will, as a practical matter, be extremely difficult for defendants to comply perfectly with every provision and corresponding regulation, especially where ambiguous. For that reason, section 257 would effectively grant state attorneys general the authority to target almost any business. The provisions also does not restrict state attorneys general from delegating their authority to pursue state-sponsored litigation to private plaintiffs' lawyers. Thus, the end result of this provision could very easily mean hundreds of millions in liability for businesses based on the whims of the state attorney general or private plaintiffs' attorneys.

And that's just one section, a single paragraph! Imagine all the other provisions favoring this group or that, having very little to do with health care or reform.

* Shook, Hardy & Bacon handles much of the amicus work for my employers, the National Association of Manufacturers.

In West Virginia, judicial reforms proposed

The Independent Commission on Judicial Reform on Sunday submitted its final report on the West Virginia judicial system to Gov. Joe Manchin. (Full 150-page report available here.) Acknowledging the state's reputation as a "Judicial Hellhole" hostile to business, the governor created the panel in early April and appointed members on June 15 (news release). Former Supreme Court Justice Sandra Day O'Connor was honorary chairman.

The commission cited three trends that shaped its report: erosion of the public's confidence in the state's justice system as a neutral and unbiased arbiter; the steadily increasing caseload before the Supreme Court of Appeals; and the surge in judicial campaign expenditures in the past few years. The report's recommendations:

  • First, the Legislature should adopt a public financing pilot program for one of the two open Supreme Court of Appeals seats in the 2012 election.
  • Second, the Legislature should codify a version of the advisory committee process currently used by the Governor to assist in the appointment of candidates to fill interim vacancies in the judiciary.
  • Third, the Legislature should act to establish an intermediate appellate court.
  • Finally, the Commission requests that Supreme Court of Appeals undertake a study of the feasibility of establishing a business court in West Virginia.

The creation of an intermediate appeals court is the most significant change proposed, and the American Tort Reform Association -- which has worked hard on West Virginia's judicial problems -- issued a news release praising that recommendation. ATRA's president, Sherman "Tiger" Joyce, said, "Such a court would ease the burden on the Supreme Court of Appeals, freeing the high court to continue hearing a discretionary docket focused on important or novel legal issues. An intermediate appeals court could also pay for itself within a matter of years, as employers nationwide become more confident in establishing themselves in West Virginia, and the state's economy and tax revenues steadily grow."


Thoughts on the Litigation Lottery II

Professor Tim Lytton takes issue with the characterization of the tort system as a "litigation lottery"—a characterization made not just by me, but also by Obama appointee and Harvard Law professor Cass Sunstein in his recent book Nudge. Lytton writes:

Yet the possibility of erroneous outcomes and variable awards does not make tort litigation a lottery. Indeed, the very possibility of identifying some outcomes as erroneous fundamentally distinguishes litigation from a lottery. Winners in litigation are determined not by chance but by applying the law to the facts of a case. Of course, there is always the possibility of an erroneous outcome when a judge misapplies the law or the jury misconstrues the facts. But this is quite different from the process of random selection whereby lottery winners are selected. It makes no sense to argue that a randomly selected lottery winner should not have won. In contrast, it is certainly possible to criticize litigation outcomes as erroneous--to argue that the prevailing party should not have won--precisely because litigation, unlike a lottery, is governed by the rule of law. Suggesting that the error rate of a decision procedure makes it a lottery is a category mistake since the very possibility of identifying an erroneous outcome, by definition, makes the procedure non-random and therefore not a lottery.

But this seems to be too literal, like complaining that Shakespeare's Sonnet 20 talks of beauty that "steals men's eyes," when the eyes aren't really stolen.

The metaphor of a lottery comes because, like a lottery, in the litigation lottery, the jackpot winner is unpredictable—other than that there will be a jackpot winner at some point. No, the tort system is not as random as the televised selection of ping-pong balls by a beauty queen (though some courthouses coincidentally use ping-pong balls to select the voir dire panel)*: one can throw a number of variables irrelevant to the law or facts into the equation that increase or decrease the chances of jackpot justice, while every lottery ticket generally has an equal probability. But just as it doesn't make sense to talk of a lottery winner as undeserving, it makes no sense to talk of them as deserving. They just happened to be in the right place at the right time; if they had arrived a second earlier or later, their machine would have printed a different ticket that would not have matched the ping-pong balls.

That the justice system at all (or at least so much) randomly strikes out at innocent defendants is contrary to the rule of law or normative concepts of justice. Like parties should be treated alike. The better tort reforms out there promote that predictability and the rule of law, either through improving the accuracy of the trial (Daubert or perhaps Phil Howard's proposal for medical courts), reducing the range of results (caps on damages), or permitting contracting around the tort system in ways judges currently don't allow (allowing the waiver of certain medical malpractice claims as proposed in Rubin's Tort Reform by Contract or Sunstein/Thaler's Nudge). When tort reforms merely redistribute wealth from plaintiffs to defendants without regard to the rule of law, as in collateral source reform, it is unsurprising that they do not have empirically positive results on health and safety.

*Unrelated, but related, story: My mother recently had jury duty in Houston; when she arrived, she filled out a form and put it on top of a pile of forms. When it came time to pick jurors for panels, the clerks merely took the first x forms from the top of the pile. People who, like my mother, were especially conscientious and arrived early, and thus had their forms at the bottom of the pile, never got picked. How that biases jury selection in that particular courthouse I leave to better sociologists than myself, but lawyers with cases in the area may want to be aware of that practice.

Obama judicial nominations and the NYT

Paul Horwitz at Prawfsblawg has some observations about liberal complaints that Obama judicial nominations are proceeding at a slow pace. He notes that a piece in Sunday's New York Times on the subject "reads very much like many such articles -- as serving primarily as a device for one faction in the Democratic Party to send a message to another faction, and an attempt to define the agenda to their advantage." Related: Adler/Volokh, WSJ Law Blog.

The Washington Legal Foundation is hosting a live webcast Thursday morning in D.C. with Susan Dudley, formerly of OIRA and now with George Washington University, and David R. Hill, formerly of the Energy Department and now with Sidley Austin. Details here.

The suits tagged along after the Spitzer-driven crusade against bid-rigging and "contingent compensation" in the insurance brokerage business. Kevin LaCroix has details.

F. Vincent Vernuccio at CEI "Open Market" reports on some panels where they came up.

Trial lawyers found it hard to replicate their stunning success against the Japanese company in followup suits against other laptop makers. That didn't stop the settlement-funded Beaumont Foundation of America from entering a spree of philanthropy, which included scholarships named after prominent plaintiffs' attorneys and other legal figures, in one of the biggest-ever examples of cy pres-style giveaways. The Chamber-backed Southeast Texas Record has another retrospective, following up on its one of last month (background).

Around the Web

Madison County asbestos cases top last year's total [Madison County Record]

San Francisco court plans to create asbestos docket [Legal Newsline]

Iowa Supreme Court holds there is no duty to warn for second hand asbestos exposure [VAN FOSSEN v. MIDAMERICAN ENERGY CO.]

Stop using asbestos? Not so fast [News and Observer]

A Vanderbilt roundtable on the pending Free Enterprise Fund v. PCAOB case includes such notable commentators as Steven Calabresi and Gary Lawson [En Banc via Adler/Volokh]

Connecticut and hedge-fund regulation

Ever-active Connecticut AG Richard Blumenthal favors federal regulation of the currently state-regulated hedge-fund business, a business that of course is distinctively identified with Connecticut itself. Larry Ribstein can think of one possible reason. Related (well, at least somewhat related): Business Insider, For What It's Worth.

John Snyder at GothamSkeptic:

My pediatric practice is situated at the nexus of three Manhattan neighborhoods (the West Village, Chelsea, and the Meat Packing District) that seem to comprise just the right balance of wealth, edginess, and socio-cultural awareness that lends itself to this new mistrust of vaccines. But these neighborhoods are not unique. According to sources at the NYC DOH, the Upper West Side of Manhattan and Park Slope in Brooklyn are also hot-spots of parental vaccine resistance. What stands out about these neighborhoods, and others like them, is that they contain a high percentage of middle to upper middle class families that tend to be young, well educated, and liberal in their political and social views. ... The increasing number of such hot-zones has already resulted in outbreaks of completely preventable childhood disease.

And for a longer, more detailed treatment, don't miss Amy Wallace's cover story on antivaccinationism in Wired, which has already had a wide impact (and led to vicious attacks on its author). There's even a sidebar entitled "The Misinformants" that points an accusatory finger at the egregious Robert F. Kennedy, Jr., though it doesn't mention his ties to trial lawyers.

The Consumer Attorneys of California, the state trial lawyers association, is holding its annual convention this weekend in San Francisco. (Legal Newsline story.) Yesterday's afternoon sessions included those under the rubric, "Miracle Growth for Your Practice," headlined by Mark Lanier of the Lanier Law Firm. Judging from the program, that growth is to be achieved by gearing up lawsuits in the area of predatory lending, patents and copyrights, false claims and qui tam, and USERRA, i.e., the Uniformed Services Employment and Reemployment Rights Act.

Prairie dog bite: $328,370

And other contributors to the $2.78 million that Essex County, N.J. has budgeted in 2009 for legal claims settlement, up from $807,652 in 2000 [Philip Read, Star-Ledger via NJLRA]

Around the web, November 14

A Lot Happens in 15 Years

Take the case of former prosecutor and judge Bobby DeLaughter. Fifteen years ago, he successfully prosecuted Byron de la Beckwith in what is arguably one of the most important criminal cases in Mississippi history. Today, he was sentenced to 18 months for lying to the FBI in one the seemingly endless corruption investigations involving Dickie Scruggs. (see prior coverage here and here).

Interesting political maneuvering last week in the House Judiciary Committee over medical malpractice reform prior to the House debating H.R. 3962, the Affordable Health Care for America Act.

In late October, Rep. Lamar Smith (R-TX), the ranking Republican on the committee, introduced what's known as a "resolution of inquiry," a vehicle for seeking information from the executive branch, in this case the Department of Justice. H.Res.871 asked for...

copies of any document, record, memo, correspondence, or other communication--

(1) received from the American Association for Justice, formerly known as the Association of Trial Lawyers of America, and any of its members, since January 20, 2009, that refers or relates to any recommendation regarding medical malpractice reform; or

(2) that references the American Association for Justice, formerly known as the Association of Trial Lawyers of America, or any of its members, and refers or relates to any recommendation regarding medical malpractice reform, since January 20, 2009.

The resolution came before the committee's business meeting on November 4. Rather than prompt a lengthy discussion of the health care bill's lack of serious tort reform -- the primary reason for the resolution in the first place -- Chairman John Conyers let committee speedily vote it out with no recommendation, and the resolution was sent to Justice.

All that occurred on November 5. And on November 6, Assistant Attorney General Ronald Weich responded, reporting that "no such documents were found." (Copy of the DOJ letter here.)

Really? REALLY? Nobody from AAJ has written, e-mailed or otherwise communicated with the Department of Justice about medical malpractice reform? And the Department was able to determine the lack of correspondence in just a single day?

Astonishingly quick work. Curious result. It would be an interesting exercise for someone to submit a Freedom of Information Act request to DOJ seeking the same information.

We get a mention in Seattle Weekly's coverage of the Westchester housing lawsuit, including the belated scrutiny being given to deputy HUD secretary Ron Sims's assertion that it's "time to remove ZIP codes as a factor in the quality of life in America."

Interesting letter to the editor the other day (Nov. 6) in the Wall Street Journal from Edward Siedle of Benchmark Alert, responding to a Journal editorial. It is reprinted here with his permission:

It is true, as your Oct. 31 editorial "Pay-to-Play Torts" says, that public pension pay-to-play schemes involving plaintiffs law firms deserve the same enhanced scrutiny that many states are now bringing to financial brokers and other intermediaries. There is simply no justification for special treatment of lawyers. Indeed, given the nature of legal services and the special fiduciary duties that apply to the attorney-client relationship, more intense scrutiny should be applied to lawyers than to the public-pension broker or intermediary hires.

Sometimes campaign contributions to public officials by plaintiffs lawyers influence or determine the selection of these firms by these same officials. But campaign contributions alone cannot explain the countless hires of plaintiffs firms by thousands of public-pension managers around the country. A major drawback of campaign contributions is that they are relatively easy to trace. Another drawback is that for most public pensions a single elected official or even multiple elected officials may not control the lay board.
On the other hand, in virtually all public-pension class-action litigation, class-action law firms share fees with local fund counsels in order to secure hires. Public-pension local fund counsels generally have substantial experience in labor matters. Their relationships with labor groups explain their role with the pension funds. They have little knowledge to offer regarding investment matters or securities class actions. In many cases, poor public-pension investment decisions can be linked to ineffectual legal representation in their negotiations with Wall Street investment firms. Yet these local fund lawyers can earn substantial referral fees on class actions which dwarf the standard retainers they receive from pensions.

The amount of fees paid by plaintiffs firms to local fund lawyers are largely undisclosed to public-pension boards. In my 25 years of public pension experience I have never met a public-pension board member who had even the vaguest understanding of the massive referral fees local fund counsels receive. These board members would be shocked to find that their local fund counsel earned more for recommending class actions than from hourly billings for providing advice to the fund.

By far the most common and least transparent form of pay-to-play involving public-pension legal services involves plaintiffs firm hiring or entering into fee-sharing arrangements with local fund counsel intermediaries. Until disclosure is mandated and attention is drawn to the powerful economic incentives impacting these "legal gatekeepers," you will see lots of public funds jumping on the class-action bandwagon.

An anticlimactic sequel to the Supreme Court's recent case on recusals and judicial election campaigns: the coal company defendant has again prevailed in the West Virginia Supreme Court, and by a wider margin than before, 4-1. [Bloomberg]

Veteran Faces Jail Time for Good Deed

A former soldier was convicted on Tuesday for illegal possession of a sawed off shotgun because he turned it in to the local authorities after finding it near his home. "I thought it was my duty to hand it in and get it off the streets," said Paul Clarke, who was arrested at the police station where he turned over the weapon.

No evidence contradicted the defendant's testimony that he intended to assist law enforcement officers, and much evidence supported the story. Nonetheless, jurors took only 20 minutes to find Clarke guilty. Why? Because jurors were told that the law under which Clarke was charged was a "strict liability" offense, meaning that Clarke was automatically guilty of illegal possession regardless of his intent. This case is another example of how the erosion of traditional mens rea requirements in the criminal law is leading to the conviction of ordinary citizens.

CLARIFICATION: This incident occurred in England, a fact that should have been mentioned in the original post.

A source tells Ben Smith they'll ramp it up if it looks as if provisions inimical to their interests might make it into the health bill.

Around the web, November 12

  • Judge Shadur dismisses class action filed against University of Illinois over "clout list" admissions [Jackson]
  • Slippery slopes in "libertarian paternalism" [Somin, Volokh, on Rizzo/Whitman]
  • More about Spanish court's ruling on contingent fees [Hartley]
  • "Law Profs Gone Wild! Philip Bobbitt Slams Milberg in Suit" [claim of missed deadlines as class client; WSJ Law Blog]
  • N.Y.: "The ticking time bomb that is the state pension plan" [Phil Reisman, Journal News]
  • President of Kane County, Illinois Medical Society retired from her own ob/gyn practice two years ago because of malpractice costs [Courier-News]

Beck & Herrmann have some thoughts.

P.S. Also on the topic of punitive damages, Bruce Nye notes the "peculiar" interplay between punitives and joint and several liability in California law. More: Curt Cutting, California Punitives.

Bear Stearns Two acquittal

Some early reactions from Nicole Gelinas/City Journal, John Carney (and more), and Tom Kirkendall.

WSJ on House health care bill...

...and its "buried tort bomb", previously noted in this space. Bonus quote:

States could also provide "early offer" rules, which are supposed to encourage fair settlement of legitimate claims. But as organizations like the Manhattan Institute have noted, those offers only work if combined with restrictions on lawyer fees and damage awards that reduce the incentive to go for the jackpot judgment.

Begins Thursday, and will be liveblogged by Josh Blackman.

The defense-oriented group has been especially active on e-discovery issues; Lewis Collins, its president, is interviewed by Metropolitan Corporate Counsel and outlines LCJ's agenda on a variety of issues including procedure:

(1) pleadings should be fact pleading, not notice pleading;

(2) the scope of all discovery should be limited to material, proportional information, e.g., information necessary to prove a claim or defense or for impeachment;

(3) discovery should be by initial disclosure followed by focused and limited discovery proportionally tied to claims actually at issue;

(4) early disposition of cases through motions should be a priority;

(5) early identification of the issues to be tried should be required; and

(6) courts should consider staying discovery in appropriate cases until a motion to dismiss is decided.

"Survey: U.S. docs want tort reform"

OK, that headline's not exactly news (via Freddoso/Examiner), but the numbers are still useful to have: 92 percent of American physicians want liability relief included in the health bill, and 85 percent "said the threat of medical malpractice litigation is their primary hindrance to practicing medicine as they see fit." The online survey of 1,978 physicians was conducted for Atlanta-based Jackson Healthcare.

San Francisco's asbestos court, cont'd

The county's creation of a court department devoted specifically to asbestos litigation gets a thumbs-up from Alex Tabarrok [Public Nuisance Wire, earlier]

Patent Litigation Weekly makes the most of a peek into the often opaque relationship between litigants and their funders.

Blumenthal's itchy trigger finger?

Was Connecticut Attorney General Richard Blumenthal too quick to attach the assets of the husband of a businesswoman targeted by his office for enforcement action? Don Pesci investigates, and it's not the first critical look he's taken at the doings of the ever-ambitious AG.

Many provisions of the proposed Employee Free Choice Act, the centerpiece of organized labor's agenda in Washington, D.C., were modeled on pro-union legal arrangements familiar north of the border in Canada. How have they worked there? Are they popular and uncontroversial with the Canadian working public? Is it time the U.S. caught up?

The answers may surprise you. In our newest (and original) column, John Endean of the American Business Conference takes a look at Canadian labor law and finds it quite a bit different from what many Americans imagine: more decentralized, more unsettled and controversial, and in certain key respects not in fact as "pro-union" as what American unions tried to push through Congress in early drafts of EFCA. Excerpted last week in Forbes, the paper was commissioned by the Manhattan Institute as the first in a planned series of Institute papers on labor policy; you can read its full-length version here.

Around the web, November 9

  • Small favors dept.: managers of House health bill agree to amendment reducing incentive for states to repeal existing fee/award limits, but states without such limits would still be accorded new incentives not to adopt them [Fort Worth Star-Telegram, Pero] See also: David Frum.
  • "Notes from the 13th Annual National Institute on Class Actions, S.F." [Shannon Wheatman, ClassActionBlawg] Scratched discs: "Federal Court Refuses to Certify 50-State Consumer Fraud Action Against Microsoft over Xbox 360" [Russell Jackson]
  • "New Environment for Climate Change Litigation?" [Kevin LaCroix on prospect of failure-to-disclose suits]
  • "Hersch, O'Connell, & Viscusi Reply to Black, Hyman, & Silver on Early Offers Med Mal Savings" [SSRN via TortsProf]
  • Back story behind the Maryland Court of Appeals ruling on medical malpractice expert witnesses [Miller]
  • Marketing-based claims not pre-empted: "D.C. Court of Appeals Resurrects Cell Phone Radiation Cases" [Weissmann, NLJ]

The lack of medical liability reform in the House health care bill and the political power of trial lawyers were two points argued late Saturday when Republicans moved to recommit the health care bill, H.R. 3962, to committee. A motion to recommit is one of the last procedural moves often used by the minority to highlight a bill's failings.

The Republican whip, Rep. Eric Cantor (R-VA), said:

Mr. CANTOR. Mr. Speaker, any physician in America will tell you that the simplest way to reduce health care costs is to enact real medical liability reform. The fear of being sued by opportunistic trial lawyers is pervasive in the practice of medicine. Our system wastes billions on defensive medicine that should be going to patient care.

That's why real medical liability reform is needed. In fact, CBO estimates that as much as $54 billion can be saved by the Federal Government alone. It is totally unacceptable that this money is being spent in the courtroom instead of the operating room. At the same time, the majority has promised the American people that their health care bill will lower costs, yet the bill before us today, Mr. Speaker, contains no medical liability reforms. And why not? The truth comes from one of the Democrats' own, no less than former DNC Chair and physician Howard Dean, who said last August, The reason that tort reform is not in the bill is because the people that wrote it did not want to take on the trial lawyers in addition to everybody else they were taking on, and that is the plain and simple truth.

Responding for the Democrats was Rep. Bruce Braley of Iowa.

Mr. Speaker, during this entire health care debate, we've heard a lot from our friends on the other side of the aisle about something called medical liability reform, but all day as they've been talking about this point, you have not heard one word about patient safety. If you want to talk about real meaningful health care reform, it's important to talk about the most critical aspect of true, meaningful health care reform-- standing up for patients. Who will speak for the patients?

As Ramesh Ponnuru of National Review notes, Braley is the former president of the Iowa Trial Lawyers Association; he was also a board member of the Association of Trial Lawyers of America, now AAJ. Braley's emphasis on patient rights and medical errors is the same argument AAJ uses against tort reform.

The motion to recommit failed 187-247. The motion contained instructions on Medicare and liability reform, which you can read on Page H2963 of The Congressional Record. For the floor remarks cited above, see Page H21966.

UPDATE (1:10 p.m.): Doing a little more reading, we find a prescient Ted Frank's commentary about the 2006 Congressional race in Iowa posted on Nov. 1, 2006:

The U.S. House of Representatives on Friday voted 230-193 to pass H.R. 2868, the Chemical Facility Anti-Terrorism Act. (Roll call vote.) All but 21 Democrats voted in favor; Republicans all opposed.

With the announcement yesterday of October's 10.2 percent unemployment, opponents stressed the bill's harm to jobs and the economy. (See Shopfloor.org posts here and here.)

But there was also an important, if brief, debate about the bill's introduction of "citizen lawsuits" against the Department of Homeland Security's oversight of chemical plants. Rep. Michael McCaul (R-TX) submitted an amendment to strike the third-party lawsuits language. From McCaul's floor statement:

Allowing any third party--anybody-- to sue the Secretary is both reckless and unnecessary. This provision would be a boon to trial lawyers and to environmentalists at the expense of the Department of Homeland Security and national security interests. Citizen suits have no place in a national security context, and this would be the very first time that Congress would be authorizing such suits in the homeland security arena.

McCaul's amendment was defeated196-232 (roll call vote). More...

The New York Post has now picked up a slightly shortened version of my City Journal piece on the housing lawsuit that contributed to a voter revolt in Westchester.

P.S. The Weekly Standard "Scrapbook" feature discusses the piece, as do John Derbyshire and Ron Coleman. And reader Paul Rath writes: "We face the same issue at the other end of the state, near Buffalo. Unfortunately, we have the same race-baiting and over-simplified arguments in our press here as well." For more on how towns expose themselves to litigation if they attempt to earmark sub-market-rate housing for local residents or workers, see this Oct. 23 New York Times report on Connecticut.

"Chloroform for tort reform"

The Washington Times assails as "dishonest" and a "poison pill" the House health bill's provisions bribing states not to enact limits on malpractice awards and attorneys' fees.

Federal paid sick leave mandate?

The H1N1 virus could provide a foot in the door, observes Daniel Schwartz.

P.S.: And see this on New Jersey's paid sick and family leave mandate.

Small business Sarbanes-Oxley exemption

Rahm Emanuel, for one, is said to be pressing for it [Bloomberg] The New York Times's Floyd Norris is predictably having a fit.

Revoking telecom immunity

"Well, we changed our mind" doesn't strike Carter at ShopFloor as a very good reason for Congress to yank back a former liability protection. Earlier here, here, here, etc.

Beck and Herrmann explain why the Mountain State's inroads on the learned intermediary doctrine are a serious matter, especially since forum-shopping could lead to the application of the state's liberal rule to drug injuries alleged to have occurred in other states.

New Jersey Lawsuit Reform Alliance reports that incoming chief executive Chris Christie has given encouraging pledges on forum-shopping, class actions, and expert witness standards.

Michael Barone in the WSJ:

The unions' unprecedented political push in 2008 has not been unnoticed by the voters. Mr. Corzine's cozy relationship with public employee union heads proved a liability in New Jersey, and in Virginia Mr. McDonnell campaigned hard against card check and the Obama agenda. The Gallup organization reports that Americans are less pro-union than they have been at any time since it first started asking the question in 1936. Maybe around the country union members will start asking their leaders what they have gotten for all the money they've spent on politics.

Earlier, and similarly: Carter at ShopFloor.

I've got a new piece up at City Journal on Tuesday's sensational Westchester County upset, in which GOP challenger Rob Astorino knocked off Andy Spano, the longtime Democratic incumbent county executive, by a convincing 58-42 percent margin. Taxes were a key issue, but so was the county's consent to what was billed as a landmark housing-reform settlement in which it agreed to arm-twist affluent towns into accepting low-income housing. Many Westchester residents were wary of the potential consequences -- and downright insulted when Spano suggested that to resist the lawsuit further would be to make the generally liberal-leaning county a "symbol of racism".

The federally brokered settlement is itself of interest far beyond Westchester, if only as the occasion of a truly remarkable rhetorical flourish from an Obama Administration official, HUD deputy secretary Ron Sims: "It's time to remove zip codes as a factor in the quality of life in America." It was also hailed at once in some quarters as a model for similar legal action against other suburban jurisdictions considered guilty of not being hospitable enough to low-income housing. The Westchester voter revolt, I argue in the piece, may serve as a signal to local officials elsewhere to fight, rather than roll over, when the social engineers and their lawyers come knocking.

New at Forbes.com: John Endean has an important article demonstrating that while American unionists seek to use Canada's pro-union labor laws as a model for their proposed Employee Free Choice Act (EFCA), they seldom mention that Canadians themselves have found it advisable to rethink and retreat from some of those laws. It's a condensed adaptation of a paper that will soon be published here as the first in a planned Manhattan Institute series on labor policy. Check it out here.

In what must be the quickest slapdown of a lawyer-filed suit that I have ever seen, the lawsuit filed by a University of Miami prof against a blogger for Above the Law, described by me earlier, has been dismissed. ATL's notice of dismissal indicates there was no settlement.

Jones v. Harris, cont'd

Given the public choice considerations, Larry Ribstein is not sure there are any scenarios in which mutual fund investors as a group are really going to win. P.S.: Much more on the case from Prof. Bainbridge.

Joan Orie Melvin, a Republican, defeated Jack Panella, a Democrat, to win a 10-year term on the Pennsylvania Supreme Court Tuesday. Her margin of victory was 53-47 percent. (Secretary of State's election results page.)

When Melvin takes office in January, the court's philosophical balance will be 4-to-3 for the -- pick the term -- more judicially restrained, conservative, "rule of law," less activist, Republican. The Republican advantage could figure in the decennial legislative redistricting.

However, Michael Riccardi, editor-in-chief of the Pennsylvania Law Weekly, said, "It's going to continue to be a centrist court on criminal law, and on most civil law matters." (Harrisburg Patriot-News.)

As is typical in judicial races, news coverage focused on campaign spending and negative TV ads. Panella outspent Melvin by almost 3-1, raising nearly $2.35 million -- including a half-million each from the unions and trial lawyers. But the integrity of the state's judicial system has also been an issue with a major scandal involving the Luzerne County courts, where a judge took kickbacks for sentencing juveniles to a private detention facility. (Philadelphia Inquirer coverage.) Last week, the Supreme Court threw out thousands of juvenile convictions.

Then there's the "pay for play" controversy concerning Gov. Ed Rendell's hiring of a Texas law firm and political contributor to sue a pharmaceutical company. The issues resonated with voters, we think. As The Patriot-News reported:

"I think the people of Pennsylvania are hungry to see reform in the courts," said Melvin, who gained statewide notice four years ago when she refused the controversial pay raise passed by the Legislature for all judges and state elected officials.

James Copland, "Tort-Bar Treat"

In the New York Post, Jim Copland explores the Pelosi health care bill's unusual solicitude for the interests of the trial bar (earlier). And some other observations:

After a review of emerging evidence, the nonpartisan Congressional Budget Office last month dropped its old claim that tort reforms generate "very little" cost savings. Instead, the CBO found that nationwide adoption of tort reforms would save $54 billion in government health-care outlays over the next decade.

If anything, that understates the savings. The CBO implausibly found that more savings would come from lowered liability premiums for doctors and less from reducing wasteful "defensive" medical practices -- even though most statistical studies find the latter savings to be far more significant.

More on the CBO numbers: "Non-Partisan Congressional Budget Office: Legal Reforms Could Save $54 Billion" [CJAC] "CBO Underestimates Benefits of Malpractice Reform" [Lawrence McQuillan, Pacific Research Institute]

Around the web, November 4

  • "Illinois Supremes Allow Negligent Infliction of Emotional Distress Claims without Expert Proof" [Jackson]
  • "Turns out that there is indeed legislation pending before [the NYC City] Council to ban sale of menthol cigarettes." [Stoll, Future of Capitalism]
  • Good interview with John Hochfelder on legal blogging [Real Lawyers Have Blogs]
  • "O'Connell & Born on Early Offer Savings for Products Liability" [TortsProf]
  • "S. 1700 ... A Bad Bill" [FCPA Professor on "The Energy Security Through Transparency Act of 2009"]
  • One Texas hospital chain's experience under medical liability reform [Nixon, MySanAntonio.com]

The Association of American Law Schools will host the Jan. 8 event as part of its annual convention in New Orleans. Details here (PDF, see page 2, courtesy TortsProf)

Law Professor Sues "Above the Law"

The National Law Journal reports that a University of Miami law prof. has sued the popular Above The Law blog for false light and invasion of privacy.

Professor Donald Jones was arrested on Aug. 22, 2007 by Miami police for allegedly attempting to offer an undercover officer $20 for sex. Jones protested his innocence, claiming he got lost in the wrong part of Miami, and the charge was eventually dropped. But someone tipped off Above The Law, which posted the police report and noted that Jones had written a book called Race, Sex, and Suspicion: The Myth of the Black Male. The post also (in the words of the NLJ) "poked fun at Prof. Jones for driving a Mercedes but allegedly offering only $20 for sex."

On Oct. 25, 2007 ATL noted that The Miami Herald had reported on Jones' arrest. On Oct. 29, 2007 ATL published a photographic collage submitted by someone claiming to be a University of Miami law student, showing Jones apparently soliciting prostitutes outside a Miami market. ATL's editor referred to the collage as "irreverent, crass, and politically incorrect humor" and noted, "We acknowledge that he merely stands accused of wrongdoing; he hasn't been convicted of anything."

Jones accuses ATL of racism, and has sued ATL for portraying him in a false light, invading his privacy and violating the university's copyright on his faculty photo. He seeks $22 million in damages.

The jibe about avarice comes close to defamation (not sued for, according to the NLJ article). As for the rest, the collage seems to be the most problematic issue from ATL's perspective (if the university owns the copyright to Jones' photo, how can Jones attempt to enforce it? and where is the racism, anyway?). The "humor" tag given to the collage seems meant to obtain constitutional cover for it, as was given to Larry Flynt in his successful defense against an intentional infliction of emotional distress suit by Jerry Falwell after Hustler magazine "humorously" accused him of incest with his mother. Florida apparently has a SLAPP suit statute, and it will be interesting to see if ATL attempts to avail itself of it.

By a party-line vote last month, the House Judiciary Committee voted to approve medical malpractice suits against the Department of Defense by uniformed personnel [Army Times]

Around the web, November 3

All-asbestos edition:

  • Philadelphia judge sentences lawyer to week in jail for "grandstanding" on asbestos experts [Madison County Record]
  • "Update on GM and Chrysler as to Asbestos Claims" [Hartley]
  • That allergic feeling begins: Prof. Anita Bernstein salutes bar's "Asbestos Achievements" [SSRN via TortsProf]
  • San Francisco Superior Court proposes separate section for asbestos suits, 45 percent of its civil jury docket [The Recorder]
  • Time limits on suing: "The Pennsylvania Supremes Adopt a Two-Injury Rule with a Twist" [Jackson]
  • The "next asbestos"? It's still "more asbestos" [Hartley]

Schwab v. Reilly Overview

I have thrown together a few thoughts about the Schwab v. Reilly case, which will be argued before the Supreme Court tomorrow, over at PrawfsBlawg. This case could have significant ramifications for how consumer debtors claim exemptions in bankruptcy and how courts protect creditor interests in consumer bankruptcy cases in the future.

Apropos Philadelphia trial lawyers

In the anti-Chevron movie, "Crude," New York trial lawyer Steven Donziger brings an Ecuadorian attorney and an activist to Philadelphia to meet with Joe Kohn of Kohn, Swift and Graf, the firm financing the litigation. They're there to make the pitch for more money to continue their suit claiming that Chevron is responsible for environmental damage caused by Texaco (which it bought in 2001). Kohn comments on camera:

It is still a long road. It's been 13 years. It was not taken as a pro bono case. You know, a lot of my motivation is that I think at the end of the day it will be a lucrative case for the firm, and I think put us in a position to do more of these kind of cases, but you know, it's going to be a long haul and there's a lot of risk to get there. See, I think we're on the right side of the cause.

Director Joe Berlinger laughably asserts he's produced an objective film, but "Crude" fully accepts the theory of the litigation and campaign against Chevron. Nevertheless, the film does do a good job of representing how Donziger conducts the litigation -- bullying his opponents, coaching Ecuadorians to maximize their emotional impact, and worrying more about PR than the law.

And you do get to see Kohn say, "A lot of my motivation is I think at the end of the day it will be a lucrative case for the firm..."

Updated and reorganized at 12:53 p.m.:

The outcome of Tuesday's election in Pennsylvania will determine the philosophical balance of the seven-member state Supreme Court. Two Superior Court judges are challenging one another: Joan Orie Melvin, Republican endorsed, versus Democrat-endorsed Jack Panella. Philadelphia trial lawyers have been spending on Panella's behalf, and he prominently features union endorsements on his website: Pennsylvania AFL-CIO, Pennsylvania State Building and Construction Trades Council, Pennsylvania SEIU. The Democratic-leaning Philadelphia Inquirer's endorsement of Melvin makes the case:

JOAN ORIE MELVIN of Pittsburgh edges out Jack A. Panella, her Easton colleague on the state Superior Court. Melvin, 53, earned the state bar's highest rating and was cited for being "genial and fair- minded" with a "solid record of performance" on the bench over a 24-year period.

Even though Melvin has a political pedigree, she brings an outsider's viewpoint characterized by her refusal to take the 2005 judicial pay raise. She's also bucking the status quo with her call for an independently appointed agency to police rogue judges. Melvin's capable and equally highly rated opponent has fewer years on the bench and a sizable, special-interest campaign war chest.

Criticizing Panella for accepting so much money from the Philadelphia trial lawyers, Melvin offered, "The public's perception is it is pay-to-play, or justice for sale." In doing so, she reminded voters of the major "pay to play" controversy, that of Governor Rendell hiring the Texas law firm of Perrin, Bailey & Perrin to sue a pharmaceutical company on contingency after a partner in the law firm contributed to Rendell's campaign. (See Point of Law entries.) Granted, Melvin accepted money herself from the Philadelphia Trial Lawyers Association.

UPDATE : Much more detail on the political dynamics from Matthew J. Brouillette of the Commonwealth Foundation, a free-market think tank, "Supreme Nastiness in the Keystone State." Abortion comes into play, the nastiness of Panella's ads, and:

The last issue is related to one of the biggest judicial scandals in Pennsylvania's history, involving Luzerne County Common Pleas judges indicted for sentencing juveniles to a detention center in return for kickbacks from the facility's owner. Their alleged graft occurred while Panella sat on a state board charged with oversight of the conduct of lower-court judges. An Orie TV ad pounds Panella for being asleep at the switch.

Last week, the state Supreme Court threw out thousands of juvenile delinquency sentences, elevating the issue even higher.

Links to coverage and contribution reports below.

The federal government isn't playing straight with the evidence, charges Jacob Sullum.

Blawg Review #236

Is on a Hallowe'en theme, at Eric Turkewitz's.

"Tort lawyers target mutual funds"

In Jones v. Harris Associates L.P., to be argued today, the Supreme Court will consider whether courts should second-guess the fees set by fund managers. [Paul S. Atkins, WSJ; earlier here and here] P.S. Larry Ribstein discusses the case at The Conglomerate and Ideoblog, and the Washington Times editorializes ("Stop suing yourself: Time to nix investor lawsuits that hurt investors"). Yet more: WSJ editorial, The Conglomerate symposium.

Health insurance and property insurance markets operate quite differently, which is fortunate since no one in their right mind would be inclined to replicate Florida's approach toward disaster risk [Tabarrok/Marginal Revolution] Earlier here, here, here, here, etc.

Around the web, November 2

The Wall Street Journal discusses Bernstein Litowitz and Labaton Sucharow ties to officials in Louisiana, Mississippi and Massachusetts, and has some pointed editorial words closer to home:

Back in New York, Attorney General Andrew Cuomo has garnered banner headlines and much praise for his pay-to-play pension fund probe that has already led to four guilty pleas by investors and politicians. Good for him. Yet when asked about pursuing the trial bar for similar behavior, his office says it has no jurisdiction to go after law firms in class action suits. He could at least turn down their campaign money, however.

Mr. Cuomo's campaign happens to have received $200,000 from securities law firms. Perhaps it's merely a coincidence that the expected candidate for governor in 2010 doesn't want to investigate his funders. Mr. Cuomo recently proposed legislation that puts restrictions on campaign donations from investment firms seeking pension business. His proposal does not seek the same restrictions on securities law firms. Perhaps that's another coincidence.



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.