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February 2010 Archives

Around the web, February 26

  • Recommendation for bench appointments in UK official report: "Choose women, gay and disabled judges over white, middle-class men" [Times Online]
  • A law school? Spending upwards of $1 million for stadium naming rights? [Ron Coleman] And how common is it for a law dean to pull down $700K? [AtL, Ribstein]
  • Davis-Bacon helped deaden the stimulus [Kaus]
  • Richard Posner on FDR Court-packing episode [The New Republic] Also, the quotable Posner: "Litigation is not ping-pong" [AtL]
  • New Jersey Supreme Court assumes broad worldwide jurisdiction over manufacturers [Mass Tort Lit]
  • Denver lawprof: just abolishing employment at will isn't enough, let's go even further [Workplace Prof]

Thank you, Congress

Credit cards are now harder to get, with higher fees and lower limits [Mark Perry, Carpe Diem]

Onerous new federal requirements have now been kicked down the road until next January 1 [Bruce Nye/Cal Biz Lit, who has a followup; earlier on the Monsanto case]

From the Toyota show trials

It was quite a day. When Rep Dan Burton (R-IN) began his remarks by saying "Let me just preface my remarks by saying we need tort reform", voice of moderation Rep. Paul Kanjorski (D-Pa.) cut in by saying "We should just forgive these companies and let them kill our people." [Musing Minds, with video of the exchange] Transportation Sec. Ray LaHood denied any tradeoff between safety, and, well, practically any other good: "I haven't seen so much posturing since I graduated Miss Elliot's Charm School for Gentlewomen and Girls." [Megan McArdle] Lawmakers and LaHood profess surprise and horror that large recalls are the subject of negotiation between agency and manufacturer and that the latter sometimes try to persuade regulators to let their products stay on the market when they view allegations as erroneous [NLJ] Electronic throttle control defended, with reader comments on both sides [Auto Prophet via Instapundit] Press coverage uncritically showcases views of Joan Claybrook (Public Citizen) and Clarence Ditlow (Center for Auto Safety) without mentioning those figures' long records of inaccurate if tireless trial-lawyer advocacy [Examiner]. "Thirty-one House Dems quizzing Toyota execs got UAW campaign cash," and that's not counting trial-lawyer support [Mark Tapscott, D.C. Examiner, via same]

More: Akio Toyoda said what he must have thought his captors wanted to hear, writes Michael Fumento.

Nebraska Sen. Ben Nelson insists there is med-mal reform in the ObamaCare bill [Omaha World Herald, earlier from Carter]

More: "Poll: One of Four Healthcare Dollars Spent on Unnecessary Medical Care" [Gallup for Jackson HealthCare and the Center for Health Transformation, press release] And, since we haven't mentioned it in a while, this October CBO report finds a big role for defensive medicine and big potential savings from med-mal reform [PDF, h/t @legalreform]

I recently summarized Singleton v. Wyeth, a round in the plaintiffs' thus far successful war against Prempro, Wyeth's (now Pfizer's) postmenopausal hormonal replacement therapy. Well, hot on the heels's of that victory comes a defense verdict in another case from Philadelphia. After only six hours of deliberation, a Philadelphia jury unanimously returned a defense verdict Wednesday in Foust v. Wyeth, a lawsuit alleging that a hormone replacement therapy drug caused breast cancer in an Indiana woman who died of the disease. The jury did find that Wyeth failed to adequately warn of the risks of breast cancer, but it determined that the decedent already had the disease. Apparently the fact that her identical twin also took Prempro but did not develop cancer weighed on the jury, though it is unclear to me why this affects the causation issue.

Wyeth of course responded to the verdict by noting that, "Many risk factors associated with breast cancer have been identified, but science cannot establish what role any particular risk factor or combination play in any individual woman's breast cancer."

This victory may be a pyrrhic one for Wyeth. Philadelphia juries have awarded as much as $75 million in punitive damages in the nine other HRT cases to have reached verdict -- many have resulted in punitive damages for "wanton" negligence under Pennsylvania law. Every plaintiff's verdict has or will be appealed by Wyeth, and there are 1500 suits still pending in the City of Brotherly Love, a forum clearly preferred by plaintiffs. This suit took four weeks to try. It's very hard to see how Prempro can survive this water torture. Will it go the way of Bendectin?

Lawless nullification by the Illinois Supreme Court will cost the state's health care sector dearly [Mike Colias, Crain's Chicago Business] And: "State Sen. Dave Luechtefeld (R-Okawville) has introduced a constitutional amendment to keep the Illinois Supreme Court from overturning future medical malpractice reform laws." [Ann Knef, MC Record]

The disinterested spirit of science

The politicization of much of the public health establishment and in particular the American Public Health Association (APHA) has been pretty well understood for a while, but in case anyone should happen to doubt it, Ira Stoll catches their newsletter describing as a "debacle" the election of Republican Senator Scott Brown in Massachusetts (first link fixed now).

P.S. And from our Manhattan Institute sister site Minding the Campus, Anthony Paletta on the foreign policy of the anthropology profession and other tendentiousness from the academic associations.

Around the web, February 25

Doroshow's Huffington Puffery

As noted yesterday, Joanne Doroshow, executive director of the pro-trial-lawyer Center for Justice and Democracy (CJD), wrote a column in last Wednesday's Huffington Post that took aim at the Manhattan Institute's new Trial Lawyers, Inc.: K Street report. I published a lengthy rebuttal, pointing out just how deceptive Doroshow's hit piece was, and last night Doroshow went back on Huffington to reply, with a new column entitled (appropriately enough) "Huff and Puff."

What does Doroshow say? She makes no effort to resuscitate any of the arguments in her earlier piece that my rebuttal had exposed. (Draw your own conclusions.) Instead, Doroshow's odd reply boils down to one essential defense: "I was joking." (I kid not; take a look at her piece if you think I'm exaggerating.)

Joanne's reaction isn't surprising, I suppose: here at Point of Law, we've long known that Doroshow and her organization were anything but serious. I just hope the word gets out to the mainstream media the next time they uncritically report on one of the CJD's "studies."

Note, however, that Doroshow couldn't help but throw out a couple more deceptive nuggets -- which I'll take the trouble to correct for those interested:

Toyota hearings, the Waxman way

Would the committee load up the witness list with plaintiff's experts and use the occasion to help advance the plaintiff's bar's anti-arbitration campaign? Do you even need to ask? More links here.

And: "NBC Nightly News last night led off with 11 straight minutes on the Toyota story. 11! Is this Toyota recall some great national emergency that I was not aware of? You would think they were trying to make a point rather than just report a story...." [Instapundit reader Chuck Allen] Possible criminal-law angles [Peter Henning, NYT "DealBook"] (Bumped Wed. afternoon with new links).

To oppose medical liability reform, the litigation industry fundamentally misrepresents the arguments for it. And changes the subject in an obvious way. From an American Association for Justice news release:

WASHINGTON, Feb. 24 /PRNewswire-USNewswire/ -- As President Obama and Congressional leaders prepare for tomorrow's health care summit, the American Association for Justice (AAJ) is today reminding lawmakers to remember the 98,000 patients killed every year by preventable medical errors and how restricting their legal rights will not fix America's broken health care system.

"Opponents of reform have repeatedly attacked injured patients and used the malpractice issue to hijack the health care debate," said AAJ President Anthony Tarricone. "If health care reform makes medicine safer, then fewer patients will need legal recourse - a win for everyone. But it is unconscionable to tell injured patients that they should be left with no recourse if injured through no fault of their own."

Repeatedly attacked injured patients? What a miserable slur.

As we blogged yesterday, the House Republicans' proposed a substitute amendment on the health care, including tort reform provisions. Some of its titles are:

Sec. 301. Encouraging speedy resolution of claims.
Sec. 302. Compensating patient injury.
Sec. 303. Maximizing patient recovery.
Sec. 304. Additional health benefits.
Sec. 305. Punitive damages.
Sec. 306. Authorization of payment of future damages to claimants in health
care lawsuits.

Granted, those are just titles, but do you see any limits on patient rights there?

On Thursday, as the Blair House health care event is under way, the AAJ will be conducting a "phoneathon" out of the Dolan Law Firm in San Francisco to recruit new members. The trial lawyers group has struggled with membership numbers in recent years. One wonders whether the willingness of its leadership to peddle half-truths and calumnies might be driving people away.

Beck et al explain how a four-justice opinion by Chief Justice Roberts last month in Hemi Group, LLC v. City of New York might (if we're lucky) help close the door on them.

Labor "myths" that happen to be true

Around the web, February 24

  • Other comments (besides Michael's) on Supreme Court's opinion reversing Ninth Circuit on corporate jurisdiction in Hertz Corp. v. Friend: Ann Althouse ("all 9 Justices embrace a clear rule over a more nuanced and litigation-breeding interpretation"), California Civil Justice ("a blow against jurisdiction-shopping trial lawyers"), Tom Freeland ("Rumor has it that one Ninth Circuit judge once said 'They can't catch them all.' They seem to be trying.")
  • White House may shake up regulatory review process at OIRA, injecting new criteria related to fairness and social justice [New blog from Robert Hahn and Peter Passell, Regulation2.0] WH announces improvements to RegInfo.gov [Penn Law RegBlog]
  • "Colorado bill would limit surveillance of injured workers" [Business Insurance]
  • Do the client families being blogged about here really all want this sort of Internet publicity for their cases? [a Chicago law firm]
  • Conference at GW Mar. 12 on ALI's Principles of the Law of Aggregate Litigation [Mass Tort Lit]
  • Calif. AG hopeful Ted Lieu, D-Torrance, is big enthusiast for private bar enforcement of consumer laws [Rizo, LNL]

The Supreme Court today unanimously ruled that plaintiffs cannot insist on California jurisdiction for lawsuits against national corporations just because those corporations do more business in the populous state than in any other state.

California employees of Hertz have sued for alleged unpaid overtime and vacation pay. Hertz has tried to remove the suit to federal court on the ground that it was not a citizen of California, but of New Jersey, where it is headquartered. A 9th Circuit panel had ruled that the lawsuit should remain in California state court because Hertz did more business in California than anywhere else.

The Supreme Court, via Justice Breyer, said a company should be considered a citizen of the state where its corporate "nerve center" is located. "In practice it should normally be the place where the corporation maintains its headquarters." But Justice Breyer referred the case back to lower courts to determine whether this means New Jersey or some other state.

This decision unfortunately won't affect product liability cases much, since plaintiffs can always avoid diversity removal to federal court by joining an in-state defendant (typically a local retailer). But it's good news on the contract front.

More than a mention

As blogged below, the White House appears willing to discuss medical liability reform at its Blair House health care event Thursday, but only as it applies to state demonstration programs. The sales pitch is developing, "See, we're even meeting the Republicans halfway on tort reform." From www.whitehouse.gov, "Republican Ideas Included in the President's Proposal":

Advances medical liability reform through grants to States: Provides grants to States to jump-start and evaluate promising medical liability reform ideas to put patient safety first, prevent medical errors, and reduce liability premiums.

* (Sources: S. 1783, "Ten Steps to Transform Health Care in America Act" (Enzi bill); H.R. 3400, "Empowering Patients First Act" (Republican Study Committee bill); H.R. 4529, "Roadmap for America's Future Act" (Ryan bill); S. 1099, "Patients' Choice Act" (Burr-Coburn, Ryan-Nunes bill))

But that's just one, relatively minor provision the Republicans have proposed. The House GOP offered many other substantive tort reform proposals, including them in Division C of their substitute amendment. Here are the legislative provisions:

Sec. 301. Encouraging speedy resolution of claims.
Sec. 302. Compensating patient injury.
Sec. 303. Maximizing patient recovery.
Sec. 304. Additional health benefits.
Sec. 305. Punitive damages.
Sec. 306. Authorization of payment of future damages to claimants in health
care lawsuits.
Sec. 307. Definitions.
Sec. 308. Effect on other laws.
Sec. 309. State flexibility and protection of states' rights.
Sec. 310. Applicability; effective date.

There's a lot to consider there. As we calculate it, federal support for state demonstration grants represents the White House going about 2.72 percent of the way toward the Republican position.

The President's health care plan posted on the White House website in anticipation of Thursday's Blair House "summit" includes this mention of tort reform in the section, "Title VI. Transparency and Program Integrity":

[The] Act reins in waste, fraud and abuse by imposing tough new disclosure requirements to identify high-risk providers who have defrauded the American taxpayer. It gives states new authority to crack down on providers who have been penalized in one state from setting up in another. And it gives states flexibility to propose tort reforms that address several criteria, including reducing health care errors, enhancing patient safety, encouraging efficient resolution of disputes, and improving access to liability insurance.

That's it. The federal government will grant the states flexibility to propose tort reforms that address several criteria. Awfully decent of you, federal government. Too bad the list of criteria doesn't include "saving costs" or "preventing extortionate lawsuits." But then, the federal grant program now being developed by Health and Human Services specifically precludes any such efforts.

The absence of tort reform came up at the media briefing Monday conducted by White House spokesman Robert Gibbs:

My Townhall.com Response to Doroshow

As I noted on Friday, Joanne Doroshow of the Center for Justice and Democracy authored a hit piece in last Wednesday's Huffington Post, which attacked the Manhattan Institute and the Trial Lawyers, Inc.: K Street report. I usually don't comment on the drivel spewed out by the trial-lawyer allied groups, since there's little reason to drive eyeballs to their otherwise lightly trafficked websites. But The Huffington Post has enough readers that I thought it wise to reply, this time. Today, Townhall.com published my lengthy reply, which:

  1. Spells out just what the Manhattan Institute's Center for Legal Policy is, what the Trial Lawyers, Inc. series is, and what the Center for Justice and Democracy is:
    The CJD's name is designed to obscure its actual mission, much like the trial lawyers have done by renaming their lobbying arm, formerly the Association of Trial Lawyers of America, as the innocuous-sounding American Association for Justice. Who, really, could be against justice or democracy? But the Center for Justice and Democracy, it turns out, is an organization that exists for the exclusive purpose of preserving the status quo system of tort litigation in America.

  2. Responds to Doroshow's misleading attacks on the K Street report's accurate claim that "over the last decade, lawyers and law firms--excluding lobbyists--have injected $780 million into federal campaigns":
    [Doroshow] argues that corporate interests also give large sums to the political process, which is unambiguously true. But Doroshow then tries to argue that corporate influence overwhelms lawyers' influence through a clever sleight of hand: she points to tables listing lobbying expenditures rather than campaign donations, which is what we're talking about in our report. They're not the same thing, and Doroshow almost certainly knows that, since the Center for Justice and Democracy--unlike the Manhattan Institute--reports lobbying activities on its own 990 federal tax returns.

  3. Responds to Doroshow's misleading attacks on "our report's detailed recitation of the trial bar's unprecedented efforts to get the current session of Congress to expand liability"--with a particular focus on her characterization of the Franken amendment (which I also discussed in some detail in my Friday post on the K Street report's federal government relations section):
    [Doroshow] mischaracterizes most of the federal legislation she describes. Most egregiously misleading is her description of the Franken amendment: "Al Franken's amendment to the defense appropriation bill[] ensured that women who serve as military contractors and get brutally drugged and raped by their co-workers ought to be able to seek legal recourse in court." Did Franken's amendment do that? Well, yes--but it did much more, too; and Doroshow is merely recycling the lie fed by the trial lawyers to late-night talk shows, the blogosphere, and an uncritical media.

I conclude:
The story of the Franken amendment, and the deceptive claims of the Center for Justice and Democracy's Joanne Doroshow, are good object lessons in how the trial bar feeds a gullible media to further its own political objectives. The Manhattan Institute's Trial Lawyers, Inc.: K Street report is intended to set the record straight; and we'll continue to do so, no matter what names and lies the personal-injury lawyers and their apologists throw our way.

Read the full piece here.

Today's Toyota hearing

I've got some links to background reading at Overlawyered. For earlier Point of Law coverage, check here, here, here, here, here, and here and on the purported whistleblower, here and here. More: The Detroit News looks at possible litigation, AAJ makes clients available for comment (Glenn Thrush, Politico), and Holman Jenkins/WSJ.

Low doses of Wyeth's Prempro, a combination of both kinds of female hormones, progesterones and estrogen, have been proven to relieve hot flashes, night sweats, and vaginal symptoms of menopause. But does Hormone Replacement Therapy cause breast cancer? This is a controversial question. The well-regarded Toronto Breast Cancer Study reported that women who received HRT for less than 15 years are not at increased risk of breast cancer. On the other hand a New Zealand study suggested that women taking may be at higher risk for breast cancer during the first 5 years, but therapy for more than 5 years confers no increased risk of breast cancer. Then the Women's Health Initiative (WHI) study found an increased risk of heart attacks, stroke, breast cancer, blood clots, and pulmonary emboli (blood clots in the lungs) in postmenopausal women (50-79 years old) who took progesterone in combination with estrogens for 5 years. The WHI study received national notoriety because it was discontinued early because of its finding that HRT correlated to an increased risk of invasive breast cancer and other health problems. The study found that among those taking Prempro-like hormone replacement therapy, the rate of breast cancer was 38 per 10,000 women per year. Among those taking placebo, the rate was 30 per 10,000 women per year.

This study has now cost Wyeth, the producer of Prempro, over $9 million. In Singleton v. Wyeth, a Philadelphia jury decided that Wyeth should pay $6 million in punitive damages and $3.45 million in compensatory damages for failing to adequately warn a patient and her doctor about the increased risk of breast cancer. Here's the law.com summary of the case.

Wyeth's counsel emphasized that the warning was reasonable, and that there was scientific disagreement about the cancer risks. But the jury took just seven minutes to reach a unanimous verdict on the punitives.

Prempro is still widely marketed and used. The current "black box" warning states, "Using estrogens, with or without progestins, may increase your chance of getting heart attacks, strokes, breast cancer, and blood clots." That warning is good enough for the FDA. Should it be good enough for a jury?

An "honest services" paradox

Under the controversial "honest services" branch of fraud law, executives can be exposed to criminal prosecution for conduct that wouldn't expose them to civil sanctions for breach of fiduciary duty. [Lisa L. Casey (Notre Dame), SSRN, via Larry Ribstein]

Epstein responds to an article by Jonah Gelbach, Jonathan Klick, and Lesley Wexler which, he says, proposes

another way to pile additional liabilities on hapless employers for race or sex discrimination under Title VII of the Civil Rights Act of 1964. Their article is ingenious because it identifies a mechanism - previously discussed in connection with residential sales by Lior Strahilevitz - whereby employers might seize upon the differential preferences of individuals by sex or by race to offer bundled packages of goods that would make a facially neutral offer more attractive to members of one class than to the members of some other group. The greater rate of acceptance of the offers by members of the first group thus allows the employer to alter the mix of employees by race or sex.

GK&W respond here.

Recusal Wars in Wisconsin, Part 1

Thanks to Walter and the good folks at the Manhattan Institute for the opportunity to blog here. I am a former litigation partner at Foley & Lardner and currently on the faculty at Marquette University Law School. As readers of Point of Law are aware, in last term's Caperton decision, the United States Supreme Court identified a somewhat ill defined duty for a judge to recuse herself whenever "the average judge in [the same] position is "unlikely" to be neutral, or whether there is an unconstitutional "potential for bias." Justice Kennedy, writing for a slim five justice majority, rejected the dissent's suggestion that the newly formulated rule would lead to a blizzard of recusal motions, repeatedly emphasizing that such circumstances would be rare.

Here in Wisconsin, the snow flies. Two years ago, Michael Gableman defeated the incumbent Louis Butler. During the course of the election, Gableman and the independent groups supporting him made much of the fact that Justice Butler had been a public defender widely referred to as "Loophole Louie." One of the ads produced by the Gableman ad was extremely misleading, claiming that Butler had "found" a loophole for a child rapist who had gone on to rape again.

In fact, Butler was the man's lawyer and, although he "found a loophole, the court concluded it was harmless error. Butler's client did go on to offend again but only after serving his sentence for the first offense. The ad was universally condemned - including by Justice Gableman's conservative supporters. It represented extremely poor judgment although it is not, in my view, the measure of the man.

Criminal defense lawyers have now filed motions seeking to recuse Justice Gableman in criminal cases because he is claimed to have demonstrated "bias" against criminal defendants and their lawyers. But the calls for recusal are not limited to criminal cases.

In both the Gableman-Butler race and a race one year earlier in which Justice Annette Ziegler was elected to the Court, independent groups spent heavily - far more than the candidates themselves. One was a business advocacy group known as Wisconsin Manufacturers Commerce. It spent somewhere around two million dollars on the race. There were public calls for Justice Ziegler to recuse herself in a pre-Caperton case in which WMC was not a party, but had a filed an amicus brief.

I am something of an agnostic on judicial elections, but, if we are to have them and they are going to be something other than a clash of meaningless platitudes and endorsements (often fueled by subterranean politics), judicial candidates are going to need room to discuss issues in the (often too simple) way that the public can understand or will attend to. A broad reading of Caperton is in tension with that need and with the Court's recent endorsement of robust free speech rights for judicial candidates in Republican Party v. White.

And there is a back story to this. Aggressive recusal standards are often promoted by individuals and organizations who oppose judicial elections, preferring some type of merit selection system. There is an ideological cast to this because merit selection tends to be dominated by bar associations which themselves tend to be dominated by political liberals.

More to come.

Over the last week, I've covered the topics discussed in more detail in our new Trial Lawyers, Inc.: K Street report (PDF). The entries are listed below:

  • The Big Picture. Discusses the Trial Lawyers, Inc. series broadly, and asks three questions: How much do lawyers give? Don't other businesses give a lot, too? And why should we care?
  • Foundations. Explains in brief the evolution of substantive and procedural law that led to the growth of litigation in America, as well as the growth of the institutional plaintiffs' bar.
  • Public Relations. Examines how the trial bar influences public opinion through its connections to the legal academy, media, and consumer groups.
  • State Government Relations. Describes how the trial bar works to influence state government, looking at the judicial, legislative, and executive branches.
  • Federal Goverment Relations (I). Briefly reviews recent legislation passed by Congress that enriches the trial bar, by expanding employment liability, consumer liability, and whistleblower liability, and by limiting private arbitration for government contractors.
  • Federal Government Relations (II). Looks at prospective legislation, discussed in the K Street report, that will expand litigation by loosening pleading standards, expanding securities litigation, limiting federal preemption of state tort suits, restricting private arbitration contracts, and lowering taxes for contingent-fee-financed litigation.

CPSC's punitive new approach

A $200,000 civil penalty for toymaker Schylling could discourage voluntary hazard disclosures by manufacturers, notes Rick Woldenberg at Amend the CPSIA. More: Mary Giorgi, Abnormal Use.

Harvey Shulman in the New York Times on the bad (but seemingly unrepealable) 1986 law that pressures employers into characterizing software and other technical contractors as payroll employees even if both sides would rather keep the relationship as one of independent contracting.

The Detroit News editorializes: "If the governor is interested in diversifying the state's economy, she will drop this sop to the trial lawyers."

My last post showed some of the major legislative efforts that trial lawyers have successfully pushed through Congress in the last 2 years. But as Carter's post last month on the trial lawyers' legislative "agenda" shows, they're hardly slowing down. Trial Lawyers, Inc.: K Street focuses on five of the most significant efforts currently underway to increase the litigation industry's profits: loosening pleading standards, expanding securities litigation, rolling back federal preemption, limiting private arbitration, and cutting taxes on plaintiffs' litigation.

  • Pleading standards. Point of Law readers are already familiar with the Supreme Court's recent decisions to limit the outer boundary of notice pleadings in Ashcroft v. Iqbal (2008) and Bell Atlantic v. Twombly (2006) (see postings for each, here and here, respectively), as well as the Congressional effort to reverse the two decisions. What's most important to keep in mind about the legislation purportedly designed to overturn Twombly and Iqbal (S. 1505, H.R. 4115) is that it would do far more; as the K Street report notes, it "would likely interfere with statutory pleading requirements well beyond the scope of the Court's recent decisions." (See also Michael Dorf's comments here; Gregory Garre's testimony here).
  • Securities litigation. In another bill designed to overturn a Supreme Court decision, Arlen Specter's Liability for Aiding and Abetting Securities Violations Act (S. 1551) would undo the Supreme Court's 2007 decision in Stoneridge v. Scientific-Atlanta. In Stoneridge, as our readers will recall, the Supreme Court considered a class action lawsuit filed by a cable company's shareholders against other companies that had done business with their own and thus, the shareholders alleged, "aided and abetted" the company's accounting frauds. Finding no evidence of Congressional intent to authorize third-party securities through private rights of action, the Court determined that to do so would "expose a new class of defendants," raise "the costs of doing business," deter "[o]verseas firms . . . from doing business here," "raise the cost of being a publicly traded company under our law," and "shift securities offerings away from domestic capital markets." Senator Specter's bill would do just that.
  • Federal preemption. A fourth Supreme Court decision in the trial-lawyer lobby's crosshairs is Riegel v Medtronic (2008), in which the Court, by a vote of 8 to 1, determined that the 1976 Medical Devices Amendments to the Food, Drug & Cosmetic Act expressly preempted state tort lawsuits for Class III medical devices that had gone through the FDA's extensive premarket approval process. (For an extensive discussion of the preemption issues in this and related cases, see this report that I authored with my Manhattan Institute colleage Paul Howard last spring.) As the K Street report notes, the proposed legislation (H.R. 1346, S. 540) would "permit suits to proceed that stem from injuries that originated long before the law's effective date, if otherwise valid under state law."
  • Private arbitration. As I noted in my last post, discussing the Franken amendment, the trial lawyers are doing their best to push federal legislation that broadly bars private arbitration agreements in hosts of contexts. Pro-litigation legislators have introduced bills that would limit or eliminate arbitration clauses in nursing home agreements (The Fairness in Nursing Home Arbitration Act, H.R. 1237, S. 512), for mortgage loans or home-equity lines of credit (The Mortgage Reform and Anti-Predatory Lending Act, H.R. 1728), for payday loans (The Payday Loan Reform Act, H.R. 1214), for tax-refund loans (The Taxpayer Abuse Prevention Act, S. 585), in consumer contracts (The Consumer Fairness Act, H.R. 991), and in all employer, franchise, and consumer contracts (The Arbitration Fairness Act, H.R. 1020, S. 931).

  • Contingent-litigation taxation. Finally, Senator Specter has also introduced a bill (S. 437) that would give contingent-fee lawyers a $1.6 billion tax break. Traditional prohibitions against champerty and maintenance precluded what today is commonplace -- trial lawyers fronting their clients' expenses. As the K Street report explains, "the personal-injury bar's financing structure -- the 'contingent fee,' the share of the proceeds that a winning client pays his attorney, who has fronted the cost of the litigation -- runs afoul of the historical understanding of champerty. Therefore, expenses in contingent-fee cases have been treated by courts not as support of litigation per se but rather as loans to clients, to be repaid upon a winning lawsuit's resolution." Senator Specter's legislation would, for federal taxation purposes, change the status of contingent-fee litigation costs from loans to expenses -- thus allowing plaintiffs' lawyers working on contingency an immediate deduction of all costs against their taxes. Specter argues, in essence, that lawyers should be treated no different than any other business (a telling statement on the evolution of the legal "profession" into an industry). However one views this question as a theoretical matter, there's no question that Specter's legislation would pour lots of new money into the trial bar's coffers -- and lots of new lawsuits onto judges' dockets.

Those keeping count will note that the above legislation includes efforts to overturn four different Supreme Court decisions (Iqbal, Twombly, Stoneridge, and Riegel). A fifth piece of legislation (H.R. 1478), mentioned only briefly in the K Street report, would overturn a 60-year-old Supreme Court decision, Feres v. United States, 340 U.S. 135 (1950) (holding that the United States is immune from liability suits by active duty personnel under sovereign immunity principles). And of course, two of the recent bills already signed into law also reversed recent Supreme Court decisions (The Lilly Ledbetter Act, overturning Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007); and the Fraud Enforcement and Recovery Act, overturning Allison Engine Co. v. United States, 128 S. Ct. 2123 (2008)).

Around the web, February 21

  • "Ford failed to warn seating unsafe for obese persons" suit fails [Abnormal Use]
  • Plaintiff's lawyers battle over Zyprexa fees [Beck]
  • Humor quaint: Litigation Lobby claims Wall Street crash would never have happened if Bill Lerach and Mel Weiss had really been cut loose to do their thing [CJD] From the same source, another overwrought attack on Towers Perrin tort-cost survey numbers [AIR]
  • Class action in Canada: "Cadbury pays to avoid chocolate-bar lawsuit" [Montreal Gazette]
  • Tennessee: "Post Tort Reform Med Mal Filings Down 60%" [Robinette, TortsProf]
  • Suffolk county-exec Steve Levy could offer fiscally conservative choice in NY governor's race [Stoll]

James Panero at City Journal on IATSE's Local One.

As my last installment on Trial Lawyers, Inc.: K Street, I'm scheduled to discuss the trial bar's federal efforts to expand litigation opportunities. Because the K Street report is national in scope, these efforts are extensively covered, and federal legislation comprises two subsections of the report, roughly twice as much material as is devoted to state activities. Thus, I'm breaking my posts into two parts: first, today, I'm going to go into already-passed legislation. Then, over the weekend, I'm going to do a second post with proposed/pending legislation. Finally, I'll add a brief concluding post, with a roadmap back over where we've been.

As we note in our report, the lawyers' aggressive affirmative agenda in Washington is something of a paradigm shift. "Until recently, the main purpose of Trial Lawyers, Inc.'s involvement in federal politics was to block reform legislation that would deny it various lucrative lines of business" -- such as Bill Clinton's veto of product liability reform legislation and securities class action reform legislation in the 1990s (the latter overridden and enacted), or Senate Democrats' stifling of medical-malpractice and asbestos litigation reforms during the Bush administration.

In the last two years, Congress has acted to expand consumer litigation, expand employment litigation, expand qui tam litigation, and limit private arbitration. Many of the pieces of federal legislation will be familiar to our readers, but a brief summary is still in order:

Libel tourism, a hearing

Next Tuesday in the Senate Judiciary Committee, a hearing, "Are Foreign Libel Lawsuits Chilling Americans' First Amendment Rights?"

Testifying are Kurt A. Wimmer, a partner at Covington & Burling LLP, and Bruce D. Brown, a partner at Baker Hostetler.

In January, the Center for International Media Assistance released a report, "Libel Tourism: Silencing the Press Through Transnational Legal Threats." CIMA also sponsored a panel discussion on Jan. 12, with Wimmer one of the panelists.

In addition to contributing some $780 million to political candidates in federal campaigns over the last decade, lawyers have funneled $725 million to state-level campaigns. As noted in the Trial Lawyers, Inc.: K Street report:

Whereas trial lawyers' giving at the federal level tends to focus on Congress, at the state level the money is spread among all three branches of government. Because state judiciaries make most tort law--and have the power to invalidate statutory tort reforms as unconstitutional--the plaintiffs' bar has long concentrated on getting its allies onto the state bench . . . . State legislatures, as the source of statutory tort reform, are another arena of interest: any state legislator who tries to advance tort-reform legislation immediately becomes a target of the trial bar and can expect a very expensive reelection campaign. The litigation industry has even begun to turn its attention to the executive branch, since state attorneys general can farm out representation of the state's civil lawsuits to attorneys in private practice, and state treasurers and comptrollers, who control public-employee pension funds, can hire outside lawyers to initiate securities-fraud lawsuits . . . .

I'll briefly discuss how trial lawyers play in the political process for each branch of government; further detail can be found in the report itself, here.

  1. Judicial branch. Since tort law is common law governed by the courts, and many states elect their judges (39 in total, and 21 for the highest court), it is hardly surprising that the plaintiffs' bar focused much of its early political efforts on ensuring that its allies filled state supreme courts. In 1990, a trial lawyer "brazenly told Forbes magazine: '[U]ntil last year the plaintiff bar owned and controlled the Texas Supreme Court.' "

    What happened, also unsurprisingly, is that business interests figured out that they could pool their resources and influence judicial elections, too--setting off an arms race that grew increasingly unseemly, the worst excesses of which were exposed in last year's U.S. Supreme Court case, Caperton v. A.T. Massey Coal Co. The need to campaign creates inherent conflicts of interest "between judges' role as neutral interpreters of the law and their status as elected officials with a need to fund-raise for campaigns," and as both Walter and I have noted here in the past, there's much to be said for the decision by the framers of the U.S. constitution to separate the federal judiciary from the electoral process.

    There are no easy solutions, however, and as Ted Frank noted here, much of the campaign for "judicial independence" is little more than a thinly veiled effort by George Soros and others on the left to achieve supremacy. As Ted notes, for these advocates, the "idea that judicial decision-making is beyond questioning by other branches of government . . . . somehow only appl[ies] to criticism of left-wing judges and judicial decisions." Tellingly, these same voices purportedly concerned about any criticism of the judiciary raised not a peep when President Obama upbraided Supreme Court justices for their Citizens United ruling--when the justices were seated before him, surrounded by hostile partisans, in the televised State of the Union address; instead, they were busy decrying the same judicial decision themselves.

  2. Legislative branch. The trial bar has long been giving to state legislative races, too. Historically, these efforts were largely defensive: "the trial-lawyer lobby largely contented itself with blocking legislative reforms, depending on state supreme courts to invalidate, on constitutional grounds, those that somehow achieved enactment." As previously suggested, those efforts are still ongoing (realized most recently in the Illinois supreme court's decision to overturn legislatively enacted medical-malpractice-law reforms, again, on dubious constitutional grounds). But of late, the trial bar has embarked on a more aggressive, affirmative legislative agenda, as they've sought to exploit recent electoral shifts that "produced or increased majorities of trial-lawyer-friendly Democrats in state legislatures."

    Among the trial bar's legislative successes are expansions of consumer-fraud statutes in Iowa and Washington; the creation of new qui tam statutes in New Mexico, New Jersey, and Oklahoma; the addition of new theories of non-economic damages in Iowa and Illinois; and an increase in statutory limits on damages recoverable against the state in Oregon. This legislation, as well as other trial-bar-backed efforts introduced but not passed into law, is summarized in the Trial Lawyers, Inc.: K Street report, as well as recent articles and reports by the American Tort Reform Association (see here and here (PDF)).

  3. Executive branch. Finally, it will come to no surprise to regular readers of this site--or those who have read Walter Olson's The Rule of Lawyers--that lawyers have also become increasingly active in working to influence state attorneys general and others with the capacity to engender litigation from the executive branch. Since Ron Motley and the now-incarcerated Dickie Scruggs pioneered this tactic in the multistate tobacco litigation, it has ballooned into a major part of the business model for the plaintiffs' bar.

    The week before we released the K Street report, this issue got significant media attention: The Washington Times (in an editorial) explored the trial bar's "pay to play" tactics with state AG's who hire outside contingency counsel; and The Wall Street Journal (in an in-depth investigative piece) looked at the securities-class-action bar's political contributions to various state and local politicians who influence or control public employee pension funds (among the biggest investors in the market, and thus the best able to control such lawsuits under the Private Securities Litigation Reform Act of 1995). More detail is available in the full report, here.

(I'd like to apologize to our readers for not posting a summary of our Trial Lawyers, Inc.: K Street's state government relations section before this morning: I got preoccupied penning a lengthy response to a disingenuous hit job on the report, which was written by Joanne Doroshow of the trial-lawyer-allied Center for Justice and Democracy (there's lots of stuff on that outfit and its shoddy and misleading work in our archives, and here); stay tuned for my reply.

Anyway, notwithstanding that I'm just getting around to my state government relations posting, I still intend to wrap this up with a post about the trial-bar's federal government relations activities sometime later today, so stay tuned for that, too.)

Around the web, February 19

  • Hmm: plaintiffs have hoped to unseal documents of purported Toyota whistleblower, now a subpoena from House oversight committee might compel them to be made public [Bronstad, NLJ]
  • Public can't stand Citizens United? "Self-Interested Polling, Questionable Results" [Carter at ShopFloor] Federalist Society online debate continues [Ribstein]
  • Northeastern U. lawprof Tim Howard, prominent in Toyota class actions, has finger in many pies [his Wikipedia page]
  • California Supreme Court Justice Moreno: arbitration is becoming "judicialized" [Rizo, LNL]
  • "In Retrial, N.J. Jury Awards $25 Million to Accutane User" [NJLJ, NJLRA; inflammatory bowel disease (IBD) allegations]
  • Okay, it's official: we miss Judith Kaye as chief judge of NY high court [Glaberson, NYT]

In Presbyterian Church of Sudan v. Talisman Energy, the Second Circuit recently held that "aiding and abetting liability [in Alien Tort Statute suits over alleged international human rights violations] attaches only where plaintiffs can show that defendants act with the purpose of facilitating an underlying violation." Jonathan Drimmer of Steptoe & Johnson analyzes the case in a Backgrounder (leads to PDF) for the Washington Legal Foundation, and concludes: "Talisman's purpose test creates a higher barrier for plaintiffs pursuing ATS suits than the knowledge test in use elsewhere, and it will limit corporate ATS cases to some extent. Yet the holding is confined to the Second Circuit, plaintiffs have found success under other theories of liability, and evidence sufficient to show knowledge can sometimes create an inference of intent. So while Talisman will have an impact, corporations are not yet out of the ATS woods. "

John Stossel on 9/11 dust suits

The Fox Business broadcaster takes a look at the weaknesses in the litigation, and quotes our own Jim Copland (more: AP). He also spots a new report indicating that -- contrary to what you'd think if you accepted certain lawyers' theories -- cerebral palsy rates in infants may actually be on the rise.

[cross-posted from Overlawyered, where comments are open]

If blogging has been lighter than usual, one reason is that I've been racing forward on my new book on law schools and their influence, tentatively entitled Schools for Misrule: Legal Academia and an Overlawyered America, which is in the catalogue for Winter/Spring (a year hence) from Encounter Books. I reached first draft in December and am rapidly whipping that rough copy into something closer to final shape.

My original nickname for the book was Ten Bad Ideas from the Law Schools -- and How They Changed The World. We decided to go with something a little more dignified, but the book still tries to answer the underlying question of why so many bad ideas -- and certain kinds of bad ideas, especially -- keep emerging from the law schools. Along the way it looks at some sociological and political angles, such as why modern liberal-left leadership so often is formed in the elite law school milieu (Barack Obama, Bill and Hillary Clinton, etc.) Then it takes up a series of issues -- from institutional reform litigation and school finance to slavery reparations and international law -- in which legal academia has led campaigns to challenge and redefine the nature of government sovereignty, with consequences that have been usually unforeseen and sometimes calamitous.

I'll be blogging more on all those points over the coming year, but in the mean time I've got a request ("bleg" = blog request, or begging post) for this site's well-informed readers. One of my chapters takes up the now-ubiquitous phenomenon of law school clinics in which students represent outside clients, sometimes in "cause" litigation and sometimes not. I trace the origins of this movement (a big philanthropic push from the Ford Foundation made the difference), the resistance it met from law-school traditionalists and its eventual triumph, as well as some of its present-day manifestations, which are not always those foreseen by the circa-1970 visionaries who started the programs. The chapter is pretty good as is, I think, but I'd like to add a little more illustrative detail about the clinics, especially vignettes from the early years shedding light on what it was expected they would accomplish in changing society (a subject that isn't as well documented on the web as I'd like). Responses can be made in comments or by email to editor - at - overlawyered - dot - com. (And, yes, I've already read Heather Mac Donald's interesting City Journal critique and some of the responses it provoked.)

Employee misclassification liability

Wage and hour suits are already an expensive legal area for employers, and now, as the Florida Employment & Immigration Law Blog relates, the Obama administration in its budget is contemplating a big further crackdown. (via Hyman)

P.S. And here's a front-pager by Steven Greenhouse in today's New York Times, playing up the tax-collection angle, mentioning the labor union push for the crackdown, but mostly missing the litigation aspects.

Conte doesn't travel

Beck et al report that the California decision holding the maker of an original drug liable for damages done by a generic version has not had a vigorous afterlife as precedent: "no court anywhere has followed [it]."

For the third installment on the Trial Lawyers, Inc.: K Street report, I'm going to discuss, briefly, the lawyers' public-relations activities. For a fuller discussion, see this section of the report, online.

Trial lawyers realize they aren't popular--as their decision to re-brand themselves the American Association for Justice would suggest. Opinion-poll data suggest that the broader public is largely disaffected with the legal system: "Eighty-three percent of Americans think that the legal system makes it too easy to assert invalid claims." For a group wholly dependent on government power to make its money, a negative public opinion presents a significant problem for the trial bar.

The plaintiffs' bar works to counter public skepticism with a sophisticated public-relations operation. First, the trial bar develops a veneer of legitimacy through its web of ties to the legal academy; although the general public isn't much aware of what legal academics do, they're highly influential over judges, policymakers, and the elite media. Next, lawyers aggressively court the media directly, by feeding them stories that agitate public opinion in favor of litigation. Finally, lawyers heavily fund various purportedly independent "consumer groups" that work in conjunction with media coverage to further drum up public-safety concerns--and directly argue against legal reforms.

  1. Legal academics. The trial bar discovered early on that befriending influential leaders in the legal academy could work to its advantage. The King of Torts Melvin Belli befriended former Harvard Law School dean Roscoe Pound, when the professor was in his 70s. In his later years, Pound had shifted from being a common-law critic to its fiercest advocate, largely because he was skeptical of the New Deal, and "he came to view the common law of tort as a substitute for the bureaucratic state." By 1958, Pound "worried aloud that those pushing for expansive strict product liability were 'not looking squarely at all the facts' and that such a program would have 'consequences beyond the law of torts.' Roscoe Pound, The Ideal Element in Law 340 (1958)." But the damage was done: Pound had penned a "glowing introduction" to Belli's book Modern Trials in 1954, and the trial bar had established a think tank in his name, the Roscoe Pound Civil Justice Institute, in 1956. The organization that bears Pound's name continues to conduct judicial seminars and publish papers supportive of expanded litigation.

    As we note in the K Street report, "The tort bar continues to cultivate relationships with academics who are willing to speak on its behalf." In many cases, professorial apologists for litigation are not the disinterested observers their university affiliations might suggest: "Law professors can [and do] earn hefty sums as 'expert' witnesses by giving an academic seal of approval to mass-litigation settlements, dodgy fee arrangements, and questionable theories of injury." I want to emphasize that I'm not trying to accuse the litigation-industry apologists in the professoriate of venality; most of these law professors are genuine believers in the views they espouse. But the trial-bar regularly levels ad hominem broadsides against its critics: the communications director of the American Association for Justice attacked the K Street report by calling the Manhattan Institute a "front group" for "insurance companies and Wall Street banks." Such attacks are even shallower than they appear when one considers how much money many law professors are getting from their trial-bar ties, often undisclosed: "the same trial bar that attacks any study even partly funded by industry tries to obscure its own role in enriching its ivory-tower advocates."

  2. Media. The trial bar also aggresively works the media to its advantage. Unlike professors, reporters aren't being funneled any money in litigation. But reporters do want to break the next "big story" detailing public danger, which wins them acclaim. For every scare that is legitimate--if often far less dangerous to most consumers than public hysteria would suggest--there are others that are "phantom risks," like breast implants or Bendectin. For the reporter, it matters little if the stories are founded in sound science: they're unable to tell the good from the bad, so they take what the lawyers feed them, uncritically. John Stossel, who won nineteen Emmy Awards as a consumer reporter, details the game:
    This partnership between reporters and trial lawyers is not a good thing, but it's hard for us reporters to resist, because trial lawyers are a perfect source. They do most of the work for us. We don't need to make phone calls to search for victims; the lawyers identify the most telegenic of them, the people whose stories make you cry, and they'll bring them right to our office.

    Then they identify the "bad guy" for us. We don't need to do much original investigating, since the lawyers use their subpoena power to force companies to turn over just about every record they've ever produced. The lawyers usually find some dirt (bet they'd find dirt on you if they got all your papers) and hand it to us. We double-check it, but we're following the lawyers' script.

    These consumer-media reports are reinforced by television and movie scripts that lionize trial lawyers' role in exposing and fighting corporate wrongdoing (think movies like The Rainmaker (1997, with Matt Damon), A Civil Action (1998, with John Travolta), Erin Brockovich (2000, with Julia Roberts), or The Runway Jury (2003, with Dustin Hoffman); or television shows like Ally McBeal, The Practice, and Boston Legal). Although such mythological portrayals do not undo broad public skepticism about our legal system, they do undergird the trial bar's defensive efforts by maintaining the illusion that plaintiffs' lawyers are the last, best, and only reliable protector of a vulnerable public.

  3. Consumer groups. The K Street report also details the symbiotic relationship between the trial lawyers and various "consumer groups" that purport to be independent watchdogs of corporate misbehavior. Some of these groups exist solely to defend tort litigation, like Citizens for Justice and Democracy (which headed by Ralph Nader disciple Joanne Doroshow). But groups with broader missions nevertheless work hard to help the lawyers: "Public Citizen, for example, pushes Trial Lawyers, Inc.'s agenda directly, through its Litigation Group, which fights preemption of tort claims, arbitration clauses, and other issues adverse to the interests of the plaintiffs' bar; and indirectly, through its Health Research Group, which publicly attacks the safety of hundreds of drugs and medical devices that are the bread and butter of the mass-tort bar."

    As the K Street report details, these consumer groups are often heavily funded by trial lawyers: "prominent California plaintiffs' attorney Herb Hafif has said that the trial bar supported Nader 'overtly, covertly, in every way possible.' " Again, I do not mean to suggest that pecuniary interests drive consumer groups' activities--"many of 'Nader's Raiders' and their successors are true believers in their cause"--but the consumer groups can ill-afford to offend their legal benefactors. And the leading consumer advocates' admiration for the trial bar is profound: Ralph Nader has long planned to build an American Museum of Tort Law in his hometown.

The trial bar's public-relations activities blunt public pressure for liability reforms and offer a metanarrative for elected officials who do the tort bar's bidding. Tomorrow, I'll begin to explore just how the tort bar is wielding its political influence, at the state level.

Around the web, February 17

  • Iowa federal judge hits EEOC with $4.5 million attorney fee award over "sue first, ask questions later litigation strategy" in sex bias case against trucking company CRST [McCormick/Workplace Prof, Coyle/NLJ, Hyman]
  • Bayer vitamin case: court says piggybacking on FTC, consumer-group allegations isn't enough to support class action [Wajert, Mass Tort Defense]
  • "Arizona Toughens Burden of Proof in Malpractice Cases" [Latner, Renal & Urology News]
  • "EEOC Discrimination Complaints Near Record Highs in 2009" [LaCroix, NLJ]
  • "UK Asbestos Working Party More Than Doubles Estimate to 11 Billion Euros" [Hartley, with more here and here on the British government's continuing deliberations on asbestos claim reform]
  • Mess in Albany: lawmakers can hold outside jobs (mostly at law firms) with scant disclosure [Greenfield]

At WashingtonPost.com, "Poll: Large majority opposes Supreme Court's decision on campaign financing":

Americans of both parties overwhelmingly oppose a Supreme Court ruling that allows corporations and unions to spend as much as they want on political campaigns, and most favor new limits on such spending, according to a new Washington Post-ABC News poll.

Eight in 10 poll respondents say they oppose the high court's Jan. 21 decision to allow unfettered corporate political spending, with 65 percent "strongly" opposed. Nearly as many backed congressional action to curb the ruling, with 72 percent in favor of reinstating limits.

The story casts the Citizens United ruling and the issue of a legislative response in partisan terms, as a dispute in which political parties have lined up and that's what matters.

Also, we don't see the immediately see the polling document, and do hope the pollsters asked: "Should Congress be able to make a law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances?"

UPDATE (Thurs., 10 a.m.): The Post now has the polling questions online here. I've also commented further at Shopfloor.org, "Questionable polling, self-interested results."

For today's entry on Trial Lawyers, Inc.: K Street, I'm going to briefly summarize how we got to this place (i.e., how did the law evolve, and plaintiffs' bar evolve with it, to get to its current position of power?). The legal evolution is covered briefly in the report (here), though in far more detail in earlier published writings, like my colleague Peter Huber's Liability (particularly good on substantive law, chs. 2-5) and my colleague and our editor Walter Olson's The Litigation Explosion (particularly good on procedure, chs. 4-6 & 9). The best accounting I know of the institutional development of the plaintiffs' bar is my law school classmate John Fabian Witt's Patriots and Cosmopolitans (ch. 4).

For substantive law, the major trends were the erosion of contract in product liability (see, e.g., Henningsen v. Bloomfield, 161 A.2d 69 (N.J. 1960)); the emergence of strict liability for at least some tort claims (see, e.g., Greenman v. Yuba Power Products, Inc., 59 Cal.2d 57 (1963)); and the enshrinement of such standards -- and the "failure to warn" doctrine that's led to those wacky warning labels -- in the Second Restatement of Torts, Restatement (Second) of Torts sec. 402A (1965). Lawyers pretty much take these doctrines for granted today, but they were a pretty radical shift, in a very short period of time, led primarily by California justice Roger Traynor (who wrote the Yuba Power opinion) and law professor William Prosser (who led the drafting of the Restatement for the American Law Institute).

Procedural rules also shifted radically, both before and after the substantive law's overhaul. The 1938 Federal Rules of Civil Procedure, crafted principally by Yale Law School dean Charles E. Clark, gutted the old, formalistic common law pleading rules and substituted two key underpinnings of modern litigation: open-ended "notice" pleading (Rule 8(a)) and mandatory, open-ended discovery (Rules 26-37). As we note in the K Street report: "Clark's vision was to allow virtually any claim to have its day in court -- where the truth of the matter would be determined -- but it failed to anticipate the economic realities that the new system would create. The Federal Rules' new, open-ended discovery process enabled wildly expensive fishing expeditions and -- in combination with the 'American rule' that each side in litigation must bear its own costs -- encouraged shakedown suits and other forms of what was, in effect, legal extortion." The pleading rules that Arlen Specter views as sacred writ were in fact key underpinnings of the litigation explosion. When the Federal Rule for class actions (Rule 23) was changed in 1966, from an "opt in" to an "opt out" rule -- effectively letting lawyers drum up cases without clients -- a whole new class of litigation was born.

These trends in substantive and procedural law hardly tell the full story of legal expansion. Melvin Belli -- the flashy lawyer who Life magazine dubbed the "King of Torts" in 1954 -- not only played a major role in the evolution of substantive tort law (he was the plaintiffs' counsel for Escola v. Coca-Cola Bottling Co., 24 Cal.2d 453 (1944), in which Justice Traynor in concurrence laid out his enterprise liability theory that would be come the law in Yuba Power), but also helped to formulate theories of noneconomic damages and the presentation of evidence that drove up jury awards. The U.S. Supreme Court got in on the game, both by creating the conditions for forum shopping, see Erie v. Tompkins, 304 U.S. 64 (1938) (eliminating almost a century of federal common law); International Shoe v. Washington, 326 U.S. 310 (1945) (beginning the trend toward sweeping personal jurisdiction of state courts over corporate defendants), and by establishing a First Amendment right for attorney advertising, Bates v. State Bar of Arizona, 433 U.S. 350 (1977).

Unsurprisingly, given all these shifts that expanded liability -- and America's open democratic process -- the plaintiffs' bar emerged as a powerful political lobby. Melvin Belli played a key role here, too. In 1949, Belli convinced the nascent National Association of Claimants' Compensation Attorneys (NACCA), a group formed to lobby for more generous workers' compensation payments, "to admit all tort lawyers rather than merely those representing injured workers." As Witt tells it, "Within just a few short years, the NACCA had become an organization dedicated not to the improvement of the workmen's compensation system, but to its rollback. By the early 1950s, NACCA advocated the abolition of workmen's compensation."

In 1960, the group now representing the institutional plaintiffs' bar changed its name to the National Association of Claimants' Counsel of America. In 1964, it became the American Trial Lawyers Association (ATLA), keeping the acronym but switching to the Association of Trial Lawyers of America in 1972 (in reaction to an objection by the more august American College of Trial Lawyers). In 2006, ATLA rebranded itself the "American Association for Justice," which, as we note in the K Street report, is "a moniker less suggestive of a lobbying group for plaintiffs' lawyers than of the Justice League of America, the team of superheroes in the 1970s Saturday-morning Super Friends cartoons."

ATLA's first political action committee, the Attorneys Congressional Campaign Trust, was founded in 1979, when it gave $400,000 to campaigns. As noted in yesterday's overview, that amount quickly grew until the lawyers' PAC was a dominant player in political giving. Even more significant, however, were the state of post-Watergate campaign finance reforms and the Supreme Court's decision in Buckley v. Valeo, 424 U.S. 1 (1976), which -- as I suggested yesterday and in my Wall Street Journal column -- facilitated the emergence of the plaintiffs' bar as the top bundler of political contributions to federal campaigns.

Before turning to the effects of that political influence, at the state and federal level, tomorrow I'll look at lawyers' public relations efforts, with a focus on their outreach to three constituencies: the academy, the media, and consumer groups.

Our newest featured column is by Richard Esenberg, professor of law at Marquette, on the Supreme Court's recent Citizens United decision. Prof. Esenberg, who blogs at Shark and Shepherd, has specialized in topics that include election law, law and religion and the Wisconsin Supreme Court. Having admired his work for a long time, we're also delighted to announce that he'll be joining us here as a blogger. Welcome!

For months both plaintiffs' and defendants' camps have been buzzing about the new rules requiring settling parties in injury litigation to take steps to make sure the federal government is reimbursed for health care expenditures it has made over the sued-on injuries. On December 1 the federal government filed an action under the provisions, over a large and well-publicized 2003 Alabama settlement over allegations of toxic injury from a Monsanto (later Solutia) chemical plant. It chose to sue both the plaintiffs' and defendants' sides, along with insurers. [GullenLaw, Claims Spot, Business Insurance, Cuyler] According to MedVal, "the amended statute permits retroactive enforcement back to 1980, as if it had been part of the Medicare Secondary Payer Act as originally enacted." Earlier here, here, here, etc.

This week, I'm going to be offering daily postings on the Manhattan Institute's new report, Trial Lawyers, Inc.: K Street--A Report on the Litigation Lobby 2010. This is the sixth full-length report and the fourteenth overall entry in the Trial Lawyers, Inc. series, which we launched in 2003. All the reports are available here.

(The press coverage and other reactions are currently listed in the sidebar to the right and can also be located here. Some readers might be particularly interested in listening to our teleconference release event (including comments by the ranking members of the Senate and House Judiciary Committees, Jeff Sessions and Lamar Smith; the 75th Attorney General of the United States, Ed Meese; and Victor Schwartz, a partner at Shook, Hardy & Bacon and co-author of Prosser, Wade & Schwartz's Torts, the most-used torts casebook in law schools). Those with less time available (the full teleconference is about an hour) can download a podcast with me and Manhattan Institute Vice President Howard Husock.)

As described in our original 2003 report, the series is intended to "shed light on the size, scope, and inner workings of an industry poorly understood by the media and the general public," namely the plaintiffs' bar. The glossy publications have the look of annual reports; we noted that "public corporations must disclose their financials in 10-Ks according to SEC regulations," but lawyers "have shielded their financials from public scrutiny." So the Trial Lawyers, Inc. series is our effort to undo some of this information imbalance.

Prior iterations in the series have focused on specific litigation business lines (like asbestos or health care) or geographic areas (states, like Illinois or California). This newest entry focuses on a part of the lawyers' business that is vital: its public-relations and government-relations apparatus.

In summarizing the report, I'm dividing up my daily posts as follows. Today, I'm going to look at the big picture, with an eye toward answering the following questions: How much do lawyers give? Don't other businesses give a lot, too? And why should we care?

Tomorrow, I'll discuss the historical evolution of the plaintiffs' bar, which got us here. On Wednesday, I'll go over the lawyers' public-relations efforts. Thursday, I'll look at the lawyers' state-level government-relations activities. Finally, on Friday, I'll sum up their government-relations efforts at the federal level and offer some concluding thoughts.

For today, the Big Picture:

The Florida Justice Association's political operations have been in turmoil since last year, when top staffers sent out a race-baiting mailer against the state Senate candidacy of legal reformer and former Speaker of the House John Thrasher, who won special election. The FJA's executive director, Scott Carruthers, resigned, and other employees were disciplined.

To head the association's political work, the FJA has now hired the former state director for the Obama for President campaign, Steve Schale, referred here and there as a "political guru."

Trial lawyers still love Specter

That's the title of my op-ed in today's Pittsburgh Post-Gazette, which builds upon the claims I made in last week's Wall Street Journal column and goes into more detail on the legislation Specter's proposing. (This legislation is discussed in even more depth in Trial Lawyers, Inc.: K Street, here and here. Stay tuned: I'm going to write a week-long series on the new Trial Lawyers, Inc. installment, here at Point of Law, starting later today.)

The takeaways from today's column:

In the past year, Pennsylvania Sen. Arlen Specter has shifted from the Republican to the Democratic caucus, but his alignment with one interest group -- trial lawyers -- has been a constant in his political career. A 2005 Manhattan Institute report singled out Mr. Specter as trial lawyers' "favorite senator," and in a new report looking at the political clout of personal injury attorneys, he stands out as the paradigm example of the lawsuit lobby's influence in Washington. . . .

Mr. Specter has not sponsored three bills beneficial to the plaintiffs' bar because lawsuits are popular. To the contrary, 83 percent of Americans think the legal system makes it too easy to assert invalid claims, and the lawyers' tax-break bill was deemed sufficiently unpopular by the trial lawyers' main lobbyist that she publicly hoped to "tuck it into something" else, such as a bill extending research-and-development tax credits.

But Mr. Specter must fund his campaigns, and lawyers have been generous to the Keystone State's senior senator. In this political cycle, they have donated more than twice as much to Mr. Specter's campaign coffers as has any other industry or profession. One of the senator's top four donors is the plaintiffs firm Kline & Specter, which bears the name of the senator's son, Shanin, one of Philadelphia's top personal injury attorneys. Shanin's friends in the lawsuit industry don't care whether his father is a Democrat or a Republican -- as long as he keeps feathering their nest.

As I noted Saturday, Mr. Specter was not very happy with my column last week. I have a hunch he'll be even less pleased by today's piece, which gives the Senator's legislation the fuller treatment it deserves.

My NY Post Column on 9/11 lawsuits

Last week, The New York Post reported that lawyers stand to earn about half of the proceeds to be distributed in the mass-tort litigation pending before Southern District judge Alvin Hellerstein. As I write in today's Post, we shouldn't be too surprised:

This was entirely predictable: As I wrote in The Post in October 2006, federal district Judge Alvin Hellerstein's decision to allow these lawsuits to proceed against New York City was "simply wrong." I warned that, for all Hellerstein's claims that he didn't want to "enrich lawyers with endless stratagems of motions and delays," his ruling would do just that.

Here we are, 3 1/2 years later, and defense lawyers hired by the city have already made some $200 million, plus $75 million in administrative expenses. The lawyers for the plaintiffs, meanwhile, expect to collect big-time if they win - contingency fees that will eat up a third of the award, plus expenses that (as The Post reported) will push their total past the halfway mark. . . .

It didn't have to be this way. If, back in 2006, Judge Hellerstein had properly given the city the immunity to which it was entitled under the state Defense Emergency Act, our elected representatives could have crafted a reasonable plan to take care of those injured in brave service during our time of tragedy.

It wouldn't have been easy or costless, but out-of-court government compensation systems in other contexts have shown themselves to be fair, with much faster payout times and much lower administrative costs. With $1 billion in federal cash on top of billions more in available insurance proceeds, even New York's inept City Council could have developed a better system than what we're witnessing in Judge Hellerstein's courtroom.

That approach would not have enriched the litigation industry. And it wouldn't have allowed Judge Hellerstein to preside as king in the latest mass-tort legal farce. But it would have been better for everyone else involved.

UPDATE: John Stossel reacts here. And watch O'Reilly tomorrow night (2/16), where John is scheduled to comment on the 9/11 cases.

Around the web, February 15

Lawsuit landings in Maui, a response

As noted last month in a post, "See the fabulous sites of Hawaii from the air, take notes, sue," the American Association for Justice promoted helicopter tours of Maui as part of its winter convention, while at the same time sponsoring a talk by a California attorney about suing helicopter tour companies.

The lawyer/lecturer in question, Kristine Meredith of the Danko Law Firm in San Mateo, responded at her aviation blog on Feb. 4, a post, "Aviation Attorneys Convene in Hawaii." She posted her Powerpoint presentation and writes, "First, the risks are, for the most part, unknown. Unknown to people travelling to Hawaii, and unknown even to the AAJ, a group which is, generally speaking, keenly aware of industries that place profits over consumer safety. Thus, the title, 'Under the Radar.'"

Sounds like an argument for suing the AAJ if things ever went amiss.

Specter responds

Speaking of Sen. Arlen Specter (R-turned-D, Penn.), my Wall Street Journal op-ed seems to have gotten under his skin. Apparently, to the Senator's keen legal mind, my differing with him over the merits of his proposed legislation amounts to defamation. The good Senator writes in to the Journal:

I read with some dismay James R. Copland's op-ed of Feb. 9, "How the Plaintiffs Bar Bought the Senate." A responsible lawyer wouldn't descend to defamation, especially when wrong on the facts.

When the Supreme Court's decision in Ashcroft v. Iqbal (2009) changed decades of case law, I introduced legislation to reinstate notice pleading. It was hardly to allow "legal fishing expeditions . . . for filing baseless claims." When aiders and abettors are criminally liable under federal law for fraud in securities law violations, it stands to reason such misconduct should make them liable for civil damages. It is absurd to label that a "shakedown."

The U.S. Court of Appeals for the Ninth Circuit correctly allows lawyers to expense advancing litigation costs. Making such deductions allowable in other federal circuits would put those lawyers on an equal footing with other taxpayers who can deduct similar expenditures in the year when made.

A little civility in journalism would be helpful, as well as in Congress.

Sen. Arlen Specter (D-PA) has been a boon ally of the American Association for Justice this session of Congress, introducing several priority pieces of legislation for the trial lawyers, including S. 437, to allow the deduction of attorney-advanced expenses and court costs in contingency fee cases, and S. 1504, the Notice Pleadings Restoration Act, to return federal pleadings to the pre-Iqbal and Twombly standards.

No surprise, then, the AAJ's political action committee contributed $4,000 to Sen. Specter's re-election campaign in 2009 ($1,500 on May 13 and $2,500 on August. 5.) You stick by your friends...

All your friends, apparently, even when they're fighting one another. The American Association for Justice PAC also contributed $5,000 to Specter's Democratic primary opponent, Rep. Joe Sestak.

Granted, half of that amount was given before Sestak announced his challenge of Specter (Feb. 23 and March 23), but half was also given in June (here and here) after Sestak had announced his Senate candidacy.

Contributing to both candidates is not that unusual of a maneuver for political action committees, but we doubt Specter appreciates the sentiment: Thanks, Senator. If you have to lose, we hope it's to Sestak.

And in fact, now that we look at December reports, we see that the AAJ PAC kicked in another $5,000 to Specter, this time identified for the Senator's general election campaign. So, total $9,000.

Drop in the bucket, in any case. According to Federal Election Commission records, AAJ PAC raised $2,558,746 in 2009 and gave $1,810,500 to campaign committees. The Center for Responsive Politics reports that 95 percent of the contributions went to Democrats in the current election cycle. (Another $1 million plus change went to pay principal and interest on a loan from Private Bank and Trust of Chicago, for what we don't know.)

UPDATE (Saturday): Digging a little deeper, we see that the AAJ, ne ATLA, has previously taken out and repaid major loans from the Chicago bank. (See 2003-04 summary from Open Secrets and the 2005-2006 summary.) Campaigns do this sort of borrowing to manage cash flows, in our experience.

Richard Blumenthal, the Connecticut Attorney General who is now running for U.S. Senate, has long been a subject of fascination to this site because of his remarkable success in pushing businesses around. Many other state AGs have been known to grandstand on occasion, take overreaching legal positions, try cases in the press, use aggressive litigation tactics, and so forth, but few if any have combined these practices into a smoothly humming machine the way Blumenthal has. Over his career, despite -- or perhaps because of -- these propensities, Blumenthal has enjoyed an almost unremittingly good press, and all the favorable coverage has presumably contributed to his high standing in voter popularity polls.

A trial outcome late last month might do something to change that. In a verdict the Hartford Courant called "stunning", a jury awarded $18 million to Gina Malapanis, a computer firm owner who had been the target of a lengthy and aggressive Blumenthal crusade. Malapanis's firm, Computers Plus, had sold computers to the state government for years, and when state officials decided that the machines they were getting did not match the specifications they thought had been agreed on, they protested. Blumenthal proceeded to sue for $1.75 million, and send out aggressively worded press releases. More dramatically, police arrested Malapanis at her Hebron, Ct. home., on criminal charges that were later dropped.

Malapanis sued claiming that Blumenthal had violated her rights and ruined her business in part through false allegations. It's hard from a distance to sort out the details, but it sure sounds as if the jury wasn't buying Blumenthal's defense. Besides the Hartford Courant account, details on the verdict also appeared in the Waterbury Republican-American, a paper critical of Blumenthal, which called him a "one-man wrecking ball".

Connecticut political columnist Don Pesci sees a wider pattern, and in earlier posts offered plenty of details about Blumenthal's distinctly aggressive pursuit of a Bethel tea and herbal product vendor and an Enfield wood-pellet company.

Reading through the stories, you do wonder whether at some point they might even begin to affect Blumenthal's political untouchability.

More coverage for this week's significant report on plaintiff-bar lobbying from the Manhattan Institute's Trial Lawyers Inc. project:

"Court shouldn't 'fix' what isn't broken"

Another newspaper, the Decatur Herald-Review, deplores the Illinois Supreme Court's ghastly malpractice decision.

So argues Harvard's Laurence Tribe. [Washington Legal Foundation, PDF (with co-authors Joshua Branson and Tristan Duncan), via Adler] (cross-posted from Overlawyered).

At Abnormal Use, a new blog on product liability from the South Carolina firm of Gallivan, White & Boyd, Laura Simons surveys the liability risks for manufacturers of cellphones and other small devices.

Ralph Nader on Citizens United

Larry Ribstein takes the lawyer advocate to task for "profound ignorance of how corporations operate, and of the constraints they face in participating in politics." More: Damon Root, Reason "Hit and Run".

Outrage at Illinois med-mal decision

The Facebook group and the petition, among other reactions (earlier).

James Meigs provides a corrective to Claybrook/Waxman hype [Popular Mechanics via Instapundit]

"Think Davis-Bacon on steroids"

"The Obama administration is considering a proposal that would heavily favor government contractors that implement policies designed by organized labor. The 'High Road Contracting Policy' would give preference to companies that adopt practices above and beyond existing labor laws. Multiple sources have confirmed the discussions, which are part of the White House's attempt to spur economic growth through procurement reform and are driven by the Center for American Progress and the Service Employees International Union." [Gautham Nagesh, Daily Caller; Michael Fox, whose phrase is quoted in the headline above]

"Arnold's worst idea"

"A draconian global-warming law will harm California's economic recovery." [Ben Boychuk, City Journal]

Around the web, February 10

"Trial Lawyers Inc. -- K Street"

The Manhattan Institute report on plaintiff's bar lobbying is now online.

Coverage: John O'Brien, Legal NewsLine, Blog of Legal Times.

IMPORTANT NOTE: To anyone who was planning on attending MI's live event on Capitol Hill this afternoon, at which we were to unveil the newest Trial Lawyers, Inc. report, Trial Lawyers, Inc.: K Street--A Report on the Litigation Lobby 2010, we've had to cancel due to projected inclement weather, speaker and attendee unavailability, and Senate office building closure to the public.

In lieu of the live event, we're sponsoring a conference call and online presentation, at the same time (2 pm). Stay tuned for details.

UPDATED: Conference call information.

The largest individual award to a Florida smoker will be reduced, Judge Jeffrey Streitfeld (Broward County Circuit Court) ruled Friday. [Here's the story on Law.com]

Judge Streitfeld called the $300 million jury verdict, rendered months ago, "excessive" and "shocking," based on anger (which the judge attributed to poor lawyering tactics on the part of the defense) and not merely on the desire to compensate and punish. The verdict, discussed in POL previously, awarded $56.5 million in compensatory damages and $244 million in punitive damages to Cindy Naugle, an emphysema patient who quit smoking in 1993. Florida law caps punitive damages at three times compensatory damages, absent extraordinary circumstances -- and in the Naug case the compensatories (including millions for pain and suffering) as well as the punitives were challenged as excessive. Under Florida law, judges must reduce jury awards found to be excessive.

The Naug case is currently #1 on the hit parade 8,000 individual suits against cigarette manufacturers that were filed after the Florida Supreme Court decertified struck down a $145 billion punitive class action award on the grounds that smokers must sue individually. That decision held that the class action jury's finding that smoking is dangerous and addictive and causes disease could not be questioned in the individual suits.

Judge Streitfeld did not indicate when he would determine the amount of the reduction.

In today's Wall Street Journal, I have an opinion piece that explains how the plaintiffs' bar is using its campaign-funding largesse to buy political influence:

Since 1990, the sums donated to federal political candidates by lawyers--excluding lobbyists--exceed $1 billion, according to CRP. Lawyers as a group have given more to federal candidates than any other industry or profession. Their ability to keep tort reform out of the health-care reform bills is unsurprising: Congressional campaign contributions by lawyers in the last election cycle were about $25 million more than the combined total of political donations from doctors, pharmaceutical companies, HMOs, hospitals and nursing homes.

While some of these campaign donations come from defense lawyers (who also profit from the litigation status quo) giving by plaintiffs attorneys is far higher per lawyer (16 to 120 times greater, depending on the firm, according to Manhattan Institute estimates), and more tightly focused. Over the current six-year senatorial election cycle, four of the top seven donors to the campaign committee and leadership PAC of Senate Majority Leader Harry Reid (D., Nev.) were plaintiffs firms. Plaintiffs firms were the top two donors to Senate Majority Whip Dick Durbin (D., Ill.).

I go on to list some of the goodies the trial bar has been getting out of Congress, as well as some of the top items on its wish list, many of which will be familiar to the regular readers of this site.

Moreover, I argue that the political power of the plaintiffs' bar is integrally linked to the post-Buckley campaign-finance regime: "Contribution limits favor those best able to 'bundle' donations. The plaintiffs bar, with thousands of well-heeled members willing to write $2,000 checks, is well-situated to play this game."

My op-ed today summarizes arguments and facts presented in much more detail in the Center for Legal Policy's newest installment in its Trial Lawyers, Inc. series, Trial Lawyers, Inc.: K Street--A Report on the Litigation Lobby 2010, which will be available later today here.

"A railroad company's dogged pursuit of conspiracy and fraud charges against an asbestos law firm is unfolding in a federal appellate court and with a major assist from business and tort reform groups." [Marcia Coyle, NLJ]

Baltimore Sun on med-mal reform

Colorado: "Trial Lawyer Hypocrisy Act"

Colorado House Bill 1168, which restricts subrogation by insurers who have paid for an accident victim's injury, would drive up insurance premiums and not coincidentally benefit trial lawyers, argues Mark Hillman in the Denver Post.

More concerns on Becker NLRB nomination

Kevin Williamson at NRO calls nominee Craig Becker "The 'Shut Up' Candidate":

He has argued that workers should be allowed to choose only between unions, not between a union and no representation, and he wants employers to be banned from even attending NLRB hearings about union elections. On the subject of the NLRB itself, he has gone so far as to write that "employers should have no right to be heard in either a representation case or an unfair labor practice case, even though Board rulings might indirectly affect their duty to bargain." In other words: "Shut up."

Plight of community banks

Kevin Funnell at Bank Lawyer's Blog says blunt regulation threatens to wipe them out.

P.S. And a protest in New Mexico.

Another suspected toxic-exposure cluster goes the way of the Long Island breast cancer scare and many other epidemics-that-weren't [Boston Globe via Fumento/CEI]

Dan Walters on Schwarzenegger proposals

The veteran California political columnist describes what the governor is trying to do, but offers this blunt assessment: "Don't hold your breath. The Legislature's Democratic majority is symbiotically welded to the trial bar." [Sacramento Bee first, second columns via Pero, earlier]

"If you just can't get enough of personal injury ads on daytime TV, then Bott & Co solicitors has launched a new iPhone application designed to win compensation should you suffer a car crash or 'incident.' Would be claimants will get instant access to a personal injury solicitor if they have been involved in an accident with the 'Car Incident Assistant' application." [MacWorld UK; Bott & Co., PR Newswire]

Germany's Daimler -- which is also objecting to the South African government's turnabout on the suit -- and Barclays Bank are among those protesting the creative legal theories. Earlier here.

More: Princeton Lyman (Council on Foreign Relations), NYT op-ed. And also on the Alien Tort Statute, here's a YouTube video in which Linda Kelly, director of legal education programs for the Searle Center on Law, Regulation, and Economic Growth at Northwestern Law, discusses the center's efforts related to the statute.

New York City is under pressure to settle.

State of the Union address

Why Justice Thomas doesn't attend -- with comments on Citizens United, too.

It's for the third time, and confirms that the court simply will not be bound by the duly enacted acts of the legislature when certain issues important to its lawyer constituency are at stake. I made these comments for the Heartland Institute:

"The court's supposed separation of powers rationale simply can't be taken seriously. Legislatures pass new laws prescribing the legal consequences of civil breaches all the time, and no one imagines that the court would have struck down this legislative intervention had it expanded damages as opposed to limiting them.

"At this point, if Illinois wants to put the voters and their representatives back in charge, it will need either to alter its constitution or--perhaps a better idea--alter the composition of its supreme court."

On page 21 of its opinion, the court has to confront the fact that the Illinois legislature has often limited common law damages in other circumstances without being found unconstitutional. An Innkeeper's Protection Act, for example, limits the liability of hotel owners to a fixed sum no matter what the value of the goods lost by the guest. The court absurdly seeks to distinguish this instance by noting that the innkeeper statute "also allows the parties to contract around the statutory limit." As if it would have upheld malpractice limits had they been paired with an option of contracting around the statutory limit!

The court's decision yesterday, like its earlier two decisions striking down medical liability limits, is lawless. It is best understood as a peremptory act of will and a power play in the familiar, if ugly, tradition of Illinois politics.

P.S. From the ABA: we disagree with the Illinois statute's policy content. Must be unconstitutional! More coverage: Chicago Tribune, Chicago Daily Law Bulletin, Madison County Record, Dan Pero/American Courthouse. And a strong editorial reaction from the Chicago Tribune ("A disastrous decision"):

...The court threw out a sound law that has worked. The court threw out a sound law and essentially told the state's lawmakers: Don't even bother to try this again. ...

Justice Lloyd Karmeier, joined in a dissent by Justice Rita Garman, wrote that the court's wisdom in that previous decision "has not only been rejected by the federal courts, it has failed to carry the day in any reported decision in any other state in the United States since it was filed 12 years ago."

Nobody has recognized the wisdom of the Illinois Supreme Court on this matter ... except the Illinois Supreme Court.

Around the web, February 5

  • One-way injury fee shifts? More on ominous procedural proposals in England and Wales [Burch, Mass Tort Lit]
  • Client-chasing legal "news services" often inaccurately recount air mishaps [Aero-News.net via Steele, LEF]
  • Feds to probe alleged cluster of cleft palate cases near Kettleman City, Calif. waste dump [L.A. Times, more]
  • Saying "So..." in a certain way might let slip your Yale Law background [Horwitz, Prawfs]
  • In an unfree country, corrupt officialdom may be better than the alternative [FCPA Blog, more]
  • Lots of trade associations expressing policy views in one place: Biz Central (via Pat Cleary)

Ergonomics, Public Citizen, Cars and NPR

The Occupational Safety and Health Administration on Jan. 28 proposed a new rule requiring employers to report more detail on musculoskeletal injuries. Business interests fear OSHA's move is just an interim step toward reviving the Clinton Administration's ergonomics regulation, enacted in January 2001 but subsequently blocked by Congress. (See Financial Times, Feb. 3, "Business opposes work safety proposal"; Sacramento Bee, Feb. 24, 2009, "Obama could restore ergonomics work rules.")

OSHA cannot admit its goal is a new ergonomics rule because the agency would run afoul of the Congressional Review Act used to revoke the 2001 regulation. The law stops agencies from re-promulgating disapproved rules without specific legislative approval. [Section 801(b)(2)] Comments from OSHA officials on the possibility of a new ergonomics rule have been all over the map. (Earlier Point of Law posts.) But the Naderites at Public Citizen were not so restrained in the group's release praising the new musculoskeletal mandate:

OSHA states that this recordkeeping change does not imply that the agency will issue a standard related to musculoskeletal injuries and illnesses, commonly known as an ergonomics standard. Public Citizen believes such a standard is needed and urges the agency to issue one without delay.

Apropos Public Citizen, NPR's "Morning Edition" today carried a lengthy report on Toyota's troubles and the role of the National Highway Traffic Safety Administration (NHTSA). The primary interview for the report was Joan Claybrook, identified only as a former head of NHTSA during the Carter Administration -- a scanty description for a woman who targeted the auto industry for two decades as head of Public Citizen. NPR lionized her last August with a piece, "Consumers' Crusader Joan Claybrook Steps Down."

The "Morning Edition" story also brought up the usual allegations of a "revolving door" -- lobbyist to official to lobbyist, with the Bush Administration being the point of complaint. OK, but wouldn't it then warrant mention that the current head of the NHTSA, David Strickland, is a former lobbyist for the American Association of Trial Lawyers? The trial lawyers' lobby, now American Association for Justice, is offering materials to its members designed to aid them in litigation against the car company.

FCPA bust: the conspiracy angle

Federal prosecutors in the Africa-scam case are alleging that the nearly two dozen arms-dealer defendants were part of a single conspiracy, which if accepted would make the case a lot easier to press. Notes FCPA Blog:

But will the single-conspiracy approach set up the entrapment defense? Reuters quoted two defense attorneys as saying "they believed their clients barely knew each other beyond perhaps an occasional handshake when their paths happened to cross in the industry." That suggests some defendants might argue they were a group of strangers recruited into an illegal conspiracy promoted and run entirely by the feds and their mole.

It's getting under way online with participants that include Larry Ribstein (Illinois, Ideoblog) and Howard Wasserman (Florida International, Prawfsblawg).

Around the web, February 4

"A California appeals court has ruled that Waters & Kraus, one of the nation's leading asbestos litigation firms, did not engage in 'judicially sanctioned extortion,' as a Los Angeles trial judge contended last year." The trial judge had been highly critical of the "asbestos two-step" practice of filing in Texas in order to take advantage of favorable discovery rules, dismissing the case, and refiling in California. [Amanda Bronstad, NLJ; earlier here, here, and here]

M. Patricia Smith nomination

House Republicans say the nominee for the key post of Labor Department Solicitor wasn't candid (PDF) in her representations to committee staff, but Democrats seem intent on ignoring their protests. More: Carter at ShopFloor.

In the week following the Supreme Court's decision in Citizens United v. FEC, members of Congress introduced 10 pieces of legislation to limit the impact of the decision. (List here.) Other bills had been introduced before the decision, as well.

In his prepared statement today at a hearing by the House Judiciary Subcommittee on the Constitution, Civil Rights, and Civil Liberties, Sean Parnell of the Center for Competitive Politics of Alexandria, Va., explained that the legislative approach is fundamentally flawed.

Among the options that are unlikely to be permitted by the Courts would be any sort of tax levied on the exercise of a constitutional right, as proposed in H.R. 4431, or the enactment of legislation that would simply restore the pre-Citizens United status quo through the back door such as H.R. 4435, a bill that would apparently forbid companies listed on stock exchanges from engaging in independent expenditures....[snip]

[The] Courts are likely to be skeptical of laws and regulations that impose burdens upon only some disfavored incorporate entities while leaving other, favored speakers free of similar burdens. For example, laws that require for-profit corporations to seek shareholder approvals for expenditures, such as H.R.s 4487 and 4537, might be struck down in court because no similar requirement is imposed on unions or other non-profits.

The others testifying ...

Laurence H. Tribe
Carl M. Loeb University Professor, Harvard Law School, Cambridge, MA

Monica Y. Youn
Counsel and Director of the Campaign Finance Reform Project
Brennan Center for Justice, New York University School of Law, New York, NY

Donald J. Simon
Partner, Sonosky, Chambers, Sachse, Endreson & Perry, LLP
Washington, DC

Sen. Chuck Schumer (D-NY) chaired a Senate Rules and Administration Committee hearing Tuesday, "Corporate America vs. The Voter: Examining the Supreme Court's Decision to Allow Unlimited Corporate Spending in Elections." His over-the-top opening statement on the Citizens United ruling would have been funny were the Senator not so intent on regulating the First Amendment:

If this ruling is left unchallenged, if Congress fails to act, our country will be faced with big, moneyed interests spending, or threatening to spend, millions on ads against those who dare to stand up to them. The threat alone is enough to chill debate and distort the political process in ways that hurt the voice and influence of the average citizen.

Stopping those big bonuses by bailed out firms? Forget about it. Pushing back against polluters to protect the health of our children? No more. Regulating dangerous chemicals in drugs and children's toys? Much less of a chance.

This opinion can allow foreign interests to influence our elections, special interest spending to go unchecked and undisclosed, and corporate America to rule the day.

Sen. Robert Bennett (R-UT), the only Republican Senator attend the hearing, gave an opening statement that eschewed hyperbole for expression of principle: "This decision means one thing and one thing only - that there will be more free speech in our political campaigns. That is a good thing. It should not be feared. It should be cheered and celebrated."

The hearing webpage has video of the hearing and links to the prepared testimony. We've also posted the links in the extended entry section below.

Also, a House Judiciary subcommittee held a hearing on Citizens United this morning, and the prepared statements are posted here.

Reason.tv on Citizens United

With Nick Gillespie:

Plus: Heritage has a panel discussion tomorrow in Washington, D.C. on "The Impact of the Citizens United Decision on Federal Elections." And Ilya Shapiro at Cato-at-Liberty explains why "When Individuals Form Corporations, They Don't Lose Their Rights."

Around the web, February 3

  • "Obama's Stealth Push for Card Check" [Chris Brown, Frum Forum, Bret Jacobson/Roll Call, ShopFloor coverage of yesterday's Craig Becker confirmation hearing]
  • "We're not finished with Toyota," says transportation secretary LaHood [Stoll, earlier; Reuters via Robinette]
  • Powering New England at permanent recession levels? Pollution suit seen as bid to close Salem Harbor coal-fired utility plant [Boston Globe] Opponents seeking immediate closure of Vermont Yankee nuclear plant [WCAX]
  • More on SEC global warming disclosure guidance [Carter at ShopFloor, earlier]
  • "Game-changing day at the SEC": now it can use cooperation agreements and deferred prosecution agreements [FCPA Professor]
  • That's what happens (well, at least sometimes) when you let nonlawyers write legal blogs [Turkewitz]
"Pay to play with AGs"

Updated: Readers of Point of Law have known about many of these specifics for years, but here comes another wave of major media coverage: the Wall Street Journal weighs in with a front-page news account on the contributions and other cozy relations between politicos in Ohio, Massachusetts, Rhode Island and elsewhere and leading class action firms. And it quotes a dissident in the class-action ranks:

"Plaintiffs' lawyers donate because they think it buys them access to people who make decisions over how pension funds select counsel," says Fred Isquith, a partner at Wolf Haldenstein Adler Freeman & Herz LLP, a plaintiffs' firm in New York. Such giving "creates an appearance of complete impropriety," he says, and "should be outlawed."

Earlier: A Washington Times editorial reviews some eyebrow-raising episodes in outside-counsel-hiring by the past or present attorneys general of California, New Mexico and Alabama.

"The Lancet's Vaccine Retraction"

WSJ editorial: "even reputable publications can become conduits for junk science when political causes run hot." Earlier here, etc.

On hold just temporarily, or dead for this session? "On January 6, Assembly Member Marty Block pulled his bill, AB 989, before it could be heard before the Assembly Insurance Committee. The bill would have let private lawyers become self-deputized vigilantes and go after insurance companies to get damages and -- no surprise -- attorney's fees. It would allow lawsuits against insurers by anyone alleging to be harmed -- including people who aren't even policyholders." [California Civil Justice; background from John Sullivan, Capitol Weekly]

Now Richard Blumenthal is demanding that Connecticut, not Maine, labor be used on a bridge project financed by federal stimulus money. On what legal basis? [Legal NewsLine] It's the latest of numerous ways the oughta-be-controversial AG has seemingly put the power of his office at the disposal of labor unions.

New boom in antitrust enforcement?

Looks like lawyers will be kept busy (WSJ):

The Justice Department is looking for test cases to expand its antitrust authority. And the FTC wants to circumvent the courts' narrow interpretation of the Sherman Act by reclaiming a legal tool it has hardly used in more than two decades--Section 5 of the 1914 law that created the agency.

Invoked in the FTC's Intel suit, that law allows the FTC to act against a company that engages in "unfair methods of competition." The law largely fell into disuse after courts repeatedly slapped down the FTC for using it too broadly.

More: WSJ Law Blog.

Chicago Tribune on Illinois med-mal

A good editorial in anticipation of the state high court's ruling:

This time the legislature was very careful to draft a law that could pass muster with the Supreme Court. The caps are limited to non-economic damages, just in medical malpractice cases. It was a restrained response to an acute health crisis in this state.

And it has worked.

What a cheesy logo (so they say)

At American University's Washington College of Law, malcontents are flaying the school's new logo with its kidnap-note font mismatching and "Crayolas under a tent" graphic [Above the Law, Kenneth Anderson/Volokh]

The teaching hospitals associated with Harvard Medical School recently issued a directive forbidding top personnel from involving themselves with private health-care companies in various ways, as by accepting seats on the boards of drug companies. The Manhattan Institute's Medical Progress Today site assembles a roundtable on this topic that draws on a glittering display of talent, including Jack Calfee (AEI), Richard Epstein (Chicago), Thomas Stossel (Brigham & Women's), Thomas Huddle (U. of Alabama), Rita Numerof (Numerof & Associates), Lance Stell (Davidson College), and Elizabeth Whelan (American Council on Science and Health).

Around the web, February 1



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.