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January 2011 Archives

Judge Vinson strikes down PPACA

John O'Brien at Legal Newsline and Hans Bader have the most comprehensive coverage of the opinion so far. Of course, with contradictory rulings from the district courts, it will very much come down to what the Supreme Court says.

SCOTUS slaps down Ninth Circuit repeatedly

In unanimous opinions at that. Compare the Washington Post coverage with the more incisive Debra Saunders column in the San Francisco Chronicle. See also Kerr @ Volokh and some interesting comments on that post.

Around the web, January 31

  • "Fighting Suits Saves Money for Chicago." Too many defendants fail to recognize that the short-term benefit of settling a single case cheaply costs more in the long run by attracting lawsuits that wouldn't have been brought otherwise. [NYT via @icjl]
  • Glenn Reynolds interviews Benjamin H. Barton, author of "The Lawyer-Judge Bias in the American Legal System." [PJTV; Bainbridge]
  • Avandia MDL judge, having made a bad Daubert decision on general causation, makes a bad one on specific causation as well. [Schachtman; earlier]
  • Ed Warren and Dan Troy on punitive damages. [GMU Law]
  • PLF brief in the Wal-Mart v. Dukes case. [PLF]
  • Todd Zywicki isn't surprised that credit card rates are at a record high after recent "consumer-protection" legislation. [Volokh]
  • IJ begins its fight on behalf of vending trucks. [Daily Caller]
  • Susan Saladoff of "Hot Coffee" runs away from interview with lawyers who might be skeptical of her one-sided take. [Abnormal Use]
  • Don't be so impressed by China's airports. [FrumForum]

The Blog of the Legal Times reports that the new members of the Senate Judiciary Committee will be Sen. Richard Blumenthal (D-CT) and Sen. Mike Lee (R-UT).

The Competitive Enterprise Institute last year identified Blumenthal as the second worst attorney general in the country. According to the report by CEI's Hans Bader, "The Nation's Worst State Attorneys General":

A left-wing ideologue who has used the power of his office to spread largesse to cronies, Blumenthal was rated the nation's worst attorney general in our
January 2007 ratings. Blumenthal has not gotten any better since then, but the competition for worst AG seems to have gotten fiercer.

Blumenthal helped mastermind the multistate tobacco agreement that turned attorneys general into national lawmakers, threws off hundreds of millions of dollars to the trial lawyers, and helped spread the abuses of state-hired contingency fee lawyers. As AG, Blumenthal also launched the Connecticut v. American Electric Power suit that seeks to create national climate change and emissions policy by distorting federal public nuisance law.

The Senate Judiciary Committee is already burdened by one activist, anti-business former AG from New England, Sen. Sheldon Whitehouse (D-RI). Now there's two. Well, as we always say, maybe they can do less harm in the Senate than as state attorneys general.

As for Sen. Mike Lee (R-UT), a Tea Party favorite, he's already coming under attack for his constitutional views. (See Think Progress, "GOP Puts Guy Who Thinks Federal Child Labor Laws Are Unconstitutional On Senate Judiciary Committee .") Daniel Foster at National Review Online comments: "This is going to be good. Lee's a J.D. from Brigham Young and twice clerked for Samuel Alito, once on the Third Circuit and again on the Supreme Court. He also killed at the Federalist Society last year."

The Salt Lake Tribune has more, "Lee to join Hatch on Judiciary Committee. " A waiver of Republican Conference rules was required to seat two Senators from the same state on the panel, Ed Whelan reports.

Thompson v. North American Stainless

The Supreme Court's unanimous decision, authored by Justice Scalia, expanded the scope of the 1964 Civil Rights Act for plaintiffs—reversing several Courts of Appeals with decisions authored by Carter and Clinton appointees. Can we stop saying that the Supreme Court is in the pocket of business yet? [Whelan; Bader]

Around the web, January 27

  • The learned intermediary rule and direct-to-consumer advertising in pharmaceutical litigation. [Beck]
  • Seems obvious: if unemployment is an issue, reduce the costs to employers of hiring people by reducing the legal expenses associated with employment. A shame the US has gone in the opposite direction in the last four years. [Olson @ Cato]
  • In Wisconsin, third party permitted to conduct discovery of therapist-patient relationship in claim against therapist over "recovered memories." The therapist is a quack, but it's hard to see a good limiting principle for this third-party claim that isn't going to eventually intrude on legitimate privacy interests. Hard cases make bad law. [On Point]
  • Cass Sunstein 1, House Republicans 0. [Weigel @ Slate]
  • Money does not play a dispositive role in politics. [Sullum @ Reason]
  • Greg Mankiw's clever idea for reducing the deficit. [Mankiw]

In Wisconsin, a rush to the courthouse

Milwaukee Journal-Sentinel, "Tort reform bill sparks filings":

With Gov. Scott Walker poised to sign into law broad new protections from lawsuits for businesses, plaintiffs' attorneys are hustling to file personal injury cases before the measure takes effect.

The bill approved by the Legislature on Thursday would limit punitive damages in personal injury lawsuits and damages for pain and suffering in medical malpractice cases involving nursing homes. That's left lawyers looking to make sure their clients aren't limited in collecting those.

"You have to protect your clients' rights based on whatever investigation you've done to date," said Rob Jaskulski, an attorney who filed a case for a client on Thursday - one of a number of cases that he said are being filed by his prominent firm Habush, Habush & Rottier.

The bill is special session Senate Bill 1. (Earlier post.)

Two House membrs from Georgia and the chairman of the House Judiciary Committee have introduced H.R. 5, Help Efficient, Accessible, Low-cost, Timely Healthcare Act, that is, the HEALTH Act. The chief sponsor is Rep. Phil Gingrey (R-GA), an OB-GYN doctor, and he's joined by Rep. David Scott (D-GA), and Rep. Lamar Smith (R-TX), the Judiciary chairman.

State medical associations have endorsed the billbased on its provisions including:

  • A $250,000 cap on noneconomic damages;
  • A sliding scale cap on attorney fees;
  • Collateral source rule reform with a ban on subrogation;
  • Periodic payment of future damages; and,
  • A three year from incident/one year from discovery statute of limitations

Apropos Ted's comments about President Obama's SOU use of the elastic term, "frivolous lawsuits," we see Chairman Smith also regards them as a target for legislation. From the joint news release, "Gingrey, Smith, Scott Call on President to Support Medical Liability Reform":

Chairman Smith: "The medical profession is plagued by frivolous lawsuits that are nothing more than the legalized extortion of doctors and hospitals. According to the Harvard School of Public Health, 40% of malpractice suits filed in the U.S. are 'without merit.' These suits drive up the cost of health care for all Americans and drive many experienced medical professionals out of business.

"Medical malpractice reform is the best way to reduce the costly practice of defensive medicine. The HEALTH Act incorporates lawsuit abuse reforms that have proved effective in states at reducing costs and enhancing the quality of care by limiting frivolous lawsuits.

The American Association for Justice is aghastly appalled, angrily, issuing a statement, "AAJ: House Medical Liability Bill 'Beyond Extreme'.

More on Obama's version of deregulation

In the WSJ ($), Paul Rubin draws upon his experience attempting deregulation in the Reagan administration to give another good reason why we should be skeptical of Obama's promise to deregulate. WLF, channeling a different WSJ editorial, looks a bit closer why the combination of the language of executive order and the Obama administration's existing record on regulation gives grounds for skepticism. Earlier.

Phosphate ban in detergents

In the Weekly Standard, Jonathan Last describes the process by which all of our dishwashing detergents stopped working in July. If Last's description of a "voluntary agreement" to not sell detergents with phosphates is accurate, it just may violate the antitrust laws, as Josh Wright describes in response to my suggestion. Class action?

Obama's SOTU medical malpractice plank

In last night's State of the Union, President Obama seemed to support medical malpractice reform, and Republicans and the Chamber of Commerce cheered. I'm going to take a Missouri-esque "Show Me" attitude. Obama's one sentence on the subject was "I'm willing to look at other ideas to bring down costs, including one Republicans suggested last year—medical malpractice reform to rein in frivolous lawsuits." The catch there (aside from the lukewarm "I'm willing to look at") is "frivolous lawsuits," an amorphous term that can be narrowly constructed to the point of pointlessness for any reform. Remember that even John Kerry and John Edwards proposed limiting frivolous lawsuits in medical malpractice suits in their 2004 campaign, and the details demonstrated that they proposed exactly nothing that would reduce costs or the lawsuits that doctors consider "frivolous."

North Dakota lawmakers are expected soon to take up a bill to codify the traditional legal understanding of trespassing, preventing its reinterpretation through the courts that could make property owners subject to a new wave of ridiculous injury claims. The legislation merits action in state houses all across the country.

The bill is H.B. 1452, to clarify the liability for injuries suffered by trespassers, reflecting model legislation developed by the American Legislative Exchange Council (ALEC). The legislation addresses a problem that arose with the American Law Institute's Third Restatement of Torts, which changed the standard for the duty of care owed to a trespasser by an owner, occupier or lessee of private property.

As an ALEC fact sheet summarizes:

The common law in most states traditionally has held that these parties owe no duty of care to the trespasser, and thus cannot be held liable for personal injury claims. In many states, such as Texas, the duty of care owed to a trespasser is merely not to injure him "willfully, wantonly, or with gross negligence." There are a few commonly found exceptions. In most states, an owner can be held liable if a trespassing child is injured by an "attractive nuisance." Additionally, an owner can be liable for injuries to frequent or known trespassers caused by highly dangerous activities or artificial conditions.

However, the Third Restatement contradicts these principles and declares that an owner of property does owe a duty of care to a trespasser, unless that person is a so-called "flagrant" trespasser, a concept undefined by either existing common law in the states or in the Restatement itself. While the Restatement is not a binding source of law, it is widely used and accepted by the legal community. An article in TRIAL, the monthly publication of the trial bar, observed that this new standard of liability for trespassers is a "powerful new tool" for trial lawyers. Though a state's common law remains unchanged, legislators must take a proactive, preemptive approach to prevent attempts to exploit the Restatement. ALEC's model bill, The Trespasser Responsibility Act, aims to codify in binding statute what the common law in a state already holds, and in many cases has held for nearly a century, in order to clarify the inexplicable discrepancy in the Restatement and instill predictability to the system.

Mark Behrens of Shook, Hardy & Bacon has written a piece for the latest edition of the Inside ALEC publication that clearly assesses the threats posed by such an extra-legislative reinterpretation of trespass law:

Overall, the new Restatement's land possessor provisions are radical, would threaten to bring about fundamental changes that have little or no support in existing law, and would have a substantial adverse impact on land possessors, from the largest companies to the smallest individual homeowners, and their insurers. The Restatement could result in higher insurance premiums for homeowners and businesses.

UPDATE: Here's the Trial article from the American Association of Justice celebrating the Third Restatement, "The new restatement's top 10 tort tools."

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Bad litigation, good films

John Nolte, editor in chief of the conservative entertainment blog Big Hollywood, has just completed a fun bit of list journalism reviewing "The Top 25 Left-Wing Films. The evils of corporate America are a recurring theme, naturally, and the litigator as hero variation is found in two "honorees."

No. 11 is "The Insider," targeting the tobacco industry, and No. 14 is "A Civil Action." Nolte comments on the latter:

"A Civil Action" is based on a true story and by all accounts, unlike the bogus "Erin Brockovich" suit, the facts of this case stand true. So my argument is not with the movie itself or this specific case. By all accounts this was a real tragedy, where due to toxic poisoning in the groundwater, a lot of people got sick and died, including children.

My argument is, however, with Hollywood's relentlessly out-of-context, choosing of only these kinds of stories to build up the drip-drip-drip effect necessary to craft an unfair and dishonest narrative that always portrays corporate America as homicidal maniacs. As an example of how out of whack Hollywood's lack of context is, I know of no American corporation responsible for as many deaths as the EPA's politically motivated decision to ban DDT in 1972.

Nolte asks, where's the movie about that? And... "Where are the David and Goliath films about the man who built his business up from nothing only to have it destroyed by a feeding frenzy of greedy trial lawyers bankrupting him with frivolous environmental and discrimination lawsuits? Where are the movies about the family businesses destroyed by bullying unions and an overbearing federal government led by predator attorneys, soulless bureaucrats, and self-righteous Marxists disguised as environmentalists?"

Oh, and the Oscar nominations are out. They nominated "Gasland" as a feature documentary? True, there's no category for Best Anti-Energy Agitprop, but still.

UPDATE (Jan. 31): Walter Olson suggests Mr. Nolte was too quick to approve of the claims in a "Civil Action." He alerts readers to The Woburn Skeptics Page summarizing all the buncombe spread about the litigation over contamination at Woburn, Mass.

Audio podcast on Proxy Monitor

I speak with Broc Romanek of TheCorporateCounsel.net blog about our new Proxy Monitor website, here.

Speaking in Chicago Monday and Tuesday

I'm giving talks on obesity litigation at Northwestern Law and University of Chicago Law Monday and Tuesday (with likely ironic food being served for lunch) courtesy of those schools' respective Federalist Society chapters. Still waiting to hear about the format. Come say hi.

Regulatory creep in action

So: the Supreme Court and Congress refuse to provide protection under tort law to pharmaceutical manufacturers who comply with federal labeling-law regulation, forcing transfers of billions of dollars from researchers to attorneys, and the Obama administration acts to roll back preemption even further (except when local government seeks to follow federal law and investigate immigration violations). And then creates a gigantic health-care intervention that suggests that new pharmaceutical inventions down the line will be subject to monopsony pricing. And is now surprised that pharmaceutical research and development spending has dropped, so proposes to create a new bureaucracy to spend $1 billion on politically attractive pharmaceutical research projects that the free market has not thought worthwhile, all while ignoring the absence of basic research supporting the spending. One can quickly see this won't end well (it's reminiscent of the $20 billion wasted by the Carter administration on "synfuels"), but you won't see the left pointing out that the Obama administration is politicizing science. Or that the problem of pharmaceutical companies being deterred from research spending has a tort-reform solution that is both much more efficient and much cheaper to taxpayers.

A 16-year-old girl attended a homecoming dance at Richmond High School, but got bored and left. After leaving, she went drinking brandy with a classmate and four men. Alas, her drinking partners were not gentlemanly sorts, and when she blacked out from drinking too much (.355 blood-alcohol level), they stripped, beat, raped, and robbed her. This was, her lawyer argued, the fault of the West Contra Costa school district (rather than, say, the half dozen accused of raping her, and another dozen or so who watched and took cell-phone photos), and the district avoided trial by agreeing to pay her $4 million. Six men ranging in age from 17 to 44 are facing criminal trial and life in prison; charges were dismissed against a seventh, younger defendant. (Shelly Meron, "Richmond teen settles civil lawsuit against school in gang rape case," Times-Herald, Jan. 22; Contra Costa Times.)

The American Association for Justice's winter convention begins Friday, Feb. 4, at the Loews Miami Beach Hotel. As usual the agendas for the "Litigation as Sunrise" sessions offer an interesting overview of what's new, hot and even-more-speculative than usual in personal injury, products liability and class-action lawsuits.

The Tuesday, Feb. 8, session starts at 6:30 a.m. Presenters get 10 minutes to make their pitch.

  • Mixed-Motive Employment Cases in the Wake of Gross v. FBL Financial: The History, Current State, and Future for the Cause of Action -- Matthew S. Sarelson, FL

  • How to Identify the FLSA Case: Common Fact Patterns and Case Types -- Charles Lance Gould, AL

  • Cruise Ship Injuries and Actions: What You Need to Know -- John H. (Jack) Hickey, FL

  • Plastic Surgery Malpractice -- Spencer M. Aronfeld, FL
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One problem with the idea of court screening of scientific experts under Daubert is that some judges simply don't have the scientific training not to be snowed by the same junk science that has the risk of unfairly snowing jurors. (I saw this in a class action settlement where a junk-economics expert waved his hands and gave an ipse dixit that requiring defendants to sell larger gallons of gas would mean that class members would get millions of dollars of free gasoline in the future. Oy.)

Attorney Nathan Schachtman (via Childs) finds a very good example in the Avandia MDL, which independently raises the question why judges who don't understand science or questions of statistics are assigned to MDLs where science and questions of statistics are going to be decisive factors. [more from Schactman]

Schactman also has an interesting post about the misuse of historians as expert witnesses.

Around the web, January 20

16-year-old Devonte Tisdale didn't make a sound decision when he ran away from home and stowed away in the wheel well of a US Airways plane at the Charlotte airport. Tisdale died from either exposure or from falling from the well into the yard of a Milton home when the plane lowered its landing gear on approach to Boston. This is, his parents say, not their fault, but the fault of lax security at the airport, and they have a Florida lawyer, Christopher Chestnut, happy to pursue these claims. [Boston Globe via ABA Journal]

Update: more (and more links) from Overlawyered.

In other corporate governance news, Stephen Bainbridge has just released a paper, Corporate Governance and U.S. Capital Market Competitiveness -- a topic near and dear to my heart. Steve's conclusion: "litigation and regulatory reform remain essential if U.S. capital markets are to retain their leadership position. Unfortunately, the article concludes that federal corporate governance regulation follows a ratchet effect, in which the regulatory scheme becomes more complex with each financial crisis. If so, significant reform may be difficult to achieve."

New website: Proxy Monitor

Here at Point of Law, we've always had at least some focus on corporate governance. With the passage of the Dodd-Frank financial reforms, such issues are now more relevant than ever.

As displayed on the right-hand column, yesterday the Manhattan Institute Center for Legal Policy launched a new website, ProxyMonitor.org, designed to shed light on trends in shareholder proposal activity. At this time, the database contains information relating to all shareholder proposals submitted for shareholder vote between 2008 and 2010, for the 100 largest American public companies. (The database contents will be updated and expanded over time.) The database information can be searched based on year, company, industry, proposal sponsor, or proposal type (corporate governance, executive compensation, social policy); and further sorted by other criteria, such as company revenues and vote totals for the proposals. Users can find our own customized output for each proposal or follow a link to the actual proposal on the proxy statement on the SEC's website. And all output can be exported to a spreadsheet.

We think this is a very valuable tool for investors, reporters, academics, and policymakers interested in corporate governance.

While we've yet to do the deep empirical work that the site enables, we have done some preliminary research looking at summary statistics that does illuminate some interesting trends:

  • Perhaps unsurprisingly, the largest companies are targeted by the highest number of shareholder proposals. Energy and financial companies seem to be particular targets.

  • The most significant sponsors of shareholder proposals are individual investors (e.g., Evelyn Davis, John Chevveden); labor unions (e.g., the AFL-CIO, AFSCME); and certain religious orders.

  • A plurality (38%) of all shareholder proposals are related to social policy goals unrelated to traditional concerns of corporate governance (e.g., human rights, animal welfare, political activity). 30% are related to executive compensation, and 32% are related to other traditional corporate governance concerns (e.g., separation of chairman and CEO, voting rules).

  • No social policy proposals were adopted by shareholders over the time period. Shareholders adopted 7% of proposals related to executive compensation and 19% of proposals related to more traditional corporate governance concerns.

  • While there was some variance in the number of proposals submitted over the 2008 to 2010 timespan, the more striking trend was on the percentage of proposals being adopted by shareholders. The percentage of shareholder proposals adopted rose from 5.2% in 2008 to 10.8% in 2009, before declining somewhat to 8.4% in 2010.

Read the full report here.

More thoughts on Obama on regulation

Following up on yesterday's post, Walter Olson, Jacob T. Levy, John Carney, and, Jonathan Adler weigh in.

The executive order itself has no bite, because agencies performing cost-benefit analysis are permitted to "consider (and discuss qualitatively) values that are difficult or impossible to quantify, including equity, human dignity, fairness, and distributive impacts." So an agency can rationalize a regulation that saps the economy of billions of dollars because of an argument that no price is too high to ensure "fairness" or "environmental aesthetics"; only the most obviously perverse regulations could flunk the test, and not even then if the regulatory administrator is equally perverse. Meanwhile, as the Heritage Foundation pointed out last year (via Olson), the government has been regulating at a record-setting pace.

Levy's observation is sound:

Note that Obama's op-ed named just one example of overregulation, already repealed: the classification of saccharine as hazardous waste by the EPA. And it foresees new or stiffer "safety rules for infant formula; procedures to stop preventable infections in hospitals; efforts to target chronic violators of workplace safety laws." The emphasis of the piece is hardly on any claim that in fact there is too much regulation in any area. The tone is generally one that says "we've been doing things basically right and now we will confirm that will a self-audit."

As a political move, however, Obama has had success: the Left is throwing a fit and the Chamber is praising Obama's "good first step," creating the illusion that his op-ed reflects a centrist change in policy. In that sense, it might be the best Sister Souljah moment ever: effective triangulation with a 1-degree angle.

Smith v. Bayer

Obama triangulates on regulation

It was odd to me when conservatives targeted the nomination of Cass Sunstein to the Office of Information and Regulatory Affairs. Yes, the law professor (for whom I briefly served as a research assistant at the University of Chicago Law School) has scary views on freedom of speech and can be twee in the way only an academic can be on the issue of animal rights; I wouldn't want him in the judicial branch. But in terms of executive-branch regulatory policy, he has been one of the more sensible people on the left side of the aisle. The nomination was eventually confirmed, and then Sunstein disappeared from sight.

One can see Sunstein's hand in the WSJ op ed by Barack Obama announcing a new executive order (not yet on line) that will supposedly require that regulations not "place unreasonable burdens on business." (The line about saccharin is a giveaway.) One can cynically suggest that Obama is triangulating, moving to the center (or worse, trying to create the appearance of moving to the center without actually moving) to try to regain the business community's support lost in the first two years of his administration. But if the executive order language is good, and if regulatory agencies follow it, we can be pleased with the result no matter how sincere the motive.

Of course, the language may not be good. One concern is that Obama singles out the top-down and economically inefficient fuel-economy regulation as a good one. Another is that cost-benefit analysis can be meaningless if the regulators are permitted to put unrealistic estimates of "benefit" onto futile attempts to control global warming with today's technology—the EPA regulation on carbon will be a test of how sincere the administration is. And one wonders why the Obama administration revoked similar Bush administration executive orders in the very first month of his administration if the policy stated in the WSJ was this administration's long-term goal. Finally, the administration's request for reversal in the pending Mazda Motors v. Williamson Supreme Court case would undo over a decade of preemption law, raising business costs with no concomitant benefits.

Can an attorney retroactively seal a brief?

Eugene Volokh points out "what seems like an innovative attempt to suppress publications that criticize a lawyer's motions" and suggests publishers might wish to intervene.

The idea that any brief filed in a taxpayer-supported court should be sealed, prospectively or retrospectively, is itself extraordinary. As Judge Easterbrook states in Union Oil Co. of California v. Leavell, 220 F.3d 562, 567-68 (7th Cir. 2002):

"Even disputes about claims of national security are litigated in the open. Briefs in the Pentagon Papers case, New York Times Co. v. United States, 403 U.S. 713, 91 S.Ct. 2140, 29 L.Ed.2d 822 (1971), and the hydrogen bomb plans case, United States v. Progressive, Inc., 467 F.Supp. 990, rehearing denied, 486 F.Supp. 5 (W.D.Wis.), appeal dismissed, 610 F.2d 819 (7th Cir.1979), were available to the press. ... People who want secrecy should opt for arbitration. When they call on the courts, they must accept the openness that goes with subsidized dispute resolution by public (and publicly accountable) officials. Judicial proceedings are public rather than private property, U.S. Bancorp Mortgage Co. v. Bonner Mall Partnership, 513 U.S. 18, 27-29, 115 S.Ct. 386, 130 L.Ed.2d 233 (1994); In re Memorial Hospital of Iowa County, Inc., 862 F.2d 1299, 1302-03 (7th Cir.1988), and the third-party effects that justify the subsidy of the judicial system also justify making records and decisions as open as possible. What happens in the halls of government is presumptively public business. Judges deliberate in private but issue public decisions after public arguments based on public records. The political branches of government claim legitimacy by election, judges by reason. Any step that withdraws an element of the judicial process from public view makes the ensuing decision look more like fiat, which requires compelling justification."

It seems to me that if a client is aggrieved by a commentator publicizing the arguments of his attorney's briefs, his remedy is to sue his attorneys for legal malpractice for making those arguments in the public record rather than to ask the court to censor that work.

A major tort reform package could pass the Legislature and be on its way to Wisconsin Gov. Scott Walker for his signature by the end of the week. While other new Republican governors -- notably Tom Corbett in Pennsylvania and Rick Scott in Florida -- have also declared civil justice reform to be a priority, Walker is being most aggressive, aided by heavy Republican majorities in both houses of the Legislature. His first act as governor was to call the Legislature into special session to enact tax, government-reform and economy-related legislation, including tort reform.

Walker's Executive Order #1 set specific goals for the liability reform bill:

Limiting noneconomic damages awarded in actions against long-term care providers; actions against manufacturers, distributors, sellers, and promoters of certain products; confidentiality of health care services reviews; use as evidence of information regarding health care providers; reporting of quality indicators identifying individual hospitals; homicide or injury by negligent handling of a dangerous weapon, explosives, or fire; criminal abuse of individuals at risk; criminal abuse and neglect of patients and residents; evidence of lay and expert witnesses; damages for frivolous claims; and punitive damage awards.

Both the Senate and Assembly Judiciary Committees held hearings on the legislation last week, with the Senate Judiciary passing the bill out for a vote on the Senate floor on Tuesday. A House vote would follow Thursday.

The bill is SB1JR1. After being amended by the Senate committee, the bill would impose a cap of punitive damages of twice compensatory damages or $200,000, whichever is greater. State standards of proof would now reflect the Daubert standard, and the law's provisions would be applied prospectively only.

In the House, a medical liability debate

The absence of any substantive medical liability limits in last year's health care legislation will undoubtedly come up in this week's House of Representatives debate on H.R. 2, the bill to repeal the 2010 Patient Protection and Affordable Care Act. Still, the real discussion of tort reform will probably not occur until afterward.

After the health care vote, the House will also consider H.R. 9, which requires four committees to report on changes to existing health care law, changes that fall under their respective jurisdictions. The committees are: Education and the Workforce; Energy and Commerce; Judiciary; and Ways and Means.

Judiciary Chairman Lamar Smith (R-TX) has scheduled a committee hearing for Thursday, "Medical Liability Reform - Cutting Costs, Spurring Investment, Creating Jobs." In a Jan. 5 news release, "HJC to Play Key Role in Health Care Debate," Smith said:

Democrats' health care plan ignores common sense solutions to skyrocketing health care costs. According to the Harvard School of Public Health, 40% of medical malpractice suits filed in the U.S. are "without merit." The threat of these lawsuits forces doctors to conduct tests and prescribe medicines that are not medically required. The widespread practice of "defensive medicine" drives up the cost of health care.

The Congressional Budget Office estimates that lawsuit abuse reform would save taxpayers $54 billion over the next decade. This would help American families struggling with health care costs and protect medical personnel who are overburdened by the cost of malpractice insurance.

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The new Republican governor of South Dakota, Gov. Dennis Daugaard, included a call for liability reform in his State of the State address, arguing that a 10-year statute of repose could encourage civil aircraft manufacturers to expand in the vicinity of Andrews Air Force Base. From The Rapid City Journal, "Aeronautics industry officials see merit in Daugaard idea":

In the aviation industry, "everybody's trying to pare back right now," said Allan Tamm, president of the aviation consulting firm Avicor Aviation. "When they're paring back on stuff, they're looking for tax breaks, cheaper locations and cheaper labor in order to keep their taxes down. ... States like yours are in a good position to bring companies in."...

Daugaard's proposal to give aircraft manufacturers immunity from liability for product failures after 10 years is another key to attracting aeronautics companies, who have that immunity in states such as Kansas.

"It's very attractive," Tamm said. "Litigation and liability issues are always very high in the priority and importance list for any manufacturer, especially in the aviation group."

But low taxes and friendly liability laws might not be enough to attract manufacturers to the Black Hills.

See also Bob Mercer's report at The Mitchell Daily Republic, "Daugaard sees potential in aviation manufacturing as one new step in economic development plan."

It's difficult to see how a state law could provide enough protection to an industry involved so heavily in interstate commerce and transportation. It took the 1994 General Aviation Revitalization Act, which created a federal 18-year statute of repose for manufacturers, to encourage the rebirth of the civil aircraft industry in the Unite States.

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The oh-so-civil Robert F. Kennedy Jr., is headlining this year's "Progressive Voices Cruise," touring the Eastern Caribbean on board a Holland American Lines cruise ship. Nothing says progressive like drinks at the Grand Turks and Caicos.

We find it telling that a trial lawyer is featured among the peripatetic progressives, to wit, Mike Papantonio:

Mike Papantonio is a senior partner of Levin, Papantonio, Thomas, Mitchell, Echsner, Rafferty & Proctor, P.A., one of the largest plaintiff's law firms in America , having handled thousands of cases throughout the nation including Asbestos, Breast Implants, Pharmaceutical Drug Litigation, Factory Farming, Securities Fraud, the Florida Tobacco Litigation, and other mass tort cases. "Pap" has received numerous multi-million dollar verdicts on behalf of victims of corporate malfeasance.

Well, since economic redistribution is the hallmark of the current progressivism ...

Former Rep. Alan Grayson (D-FL) is among the speakers. Should be a civil presentation.

Meanwhile, Kennedy's political ally, former Florida Gov. Charlie Crist, has thrown his lot in with Florida's preeminent personal injury lawyers. From Morgan and Morgan via its website, forthepeople.com, "Former Florida Governor Charlie Crist joins Morgan and Morgan":

Former Florida Gov. Charlie Crist has joined Morgan & Morgan. While serving in office, Crist was often referred to as "the People's Governor." His dedication and commitment to the people of Florida will remain the same as he works with the firm's mass tort and class action department, fighting "for the people." Crist said, "It's truly a privilege for me to have this opportunity to work all over our beautiful state. John Morgan has set up an incredible firm of very gifted people and it's truly an honor and a privilege to have this day come."

Although Tim Carney gets the best headline out it, "Charlie Crist couldn't catch Rubio, so now he's chasing ambulances," for the best summary of how Crist's decision reflects his core principles, we recommend Florida writer Neal B. Freeman's piece in National Review Online, "Charlie Crist, Attorney at Law."

Bet the former governor winds up speaking at this year's winter convention of the American Association for Justice, which takes place next month at the Loews Miami Beach. Enjoy the ballet!

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If only there had been Congressional hearings and scrutiny of the substance of H.R. 847, the James Zadroga 9/11 Health and Compensation Act, to go along with the campaign of media and political threats that produced its passage.

  • The Queens Courier, "Zadroga bill covers undocumented Ground Zero workers": "After months of fighting to be protected under the James Zadroga 9/11 Health and Compensation Act, undocumented Latino Ground Zero workers from Queens finally got what they wanted. For the several Latino clean-up workers who were left out of the $713 million settlement following a lawsuit against the city over exposure to World Trade Center dust, the legislation recently signed into law by President Barack Obama would allow them to qualify for health benefits and compensation payments."

  • DNAInfo (NYC News), "Gillibrand's Staff Confuses Downtown Residents Over 9/11 Fund Eligibility: "LOWER MANHATTAN -- Staff from Sen. Kirsten Gillibrand's office disseminated misinformation about the new 9/11 health law to a group of angry downtown residents at a meeting Monday night. Gillibrand's staff told Community Board 1 that downtown residents who got sick after 9/11 are not eligible for the new $2.5 billion Victim Compensation Fund. But in fact, the James Zadroga 9/11 Health and Compensation Act does not exclude anyone, and residents, students and office workers, along with rescue and recovery workers, are all welcome to apply for the fund, Rep. Jerrold Nadler's office said Tuesday morning."

  • DNAInfo (NYC News), "9/11 Healthcare Advocate Recommends 5 Reliable Lawyers": "LOWER MANHATTAN -- John Feal, a leading advocate for first responders sickened at Ground Zero who helped push the federal 9/11 healthcare bill into law, has released a list of five lawyers he trusts to help those eligible collect the federal payouts. Feal previously warned responders not to sign any agreements with lawyers who had already started circling even before President Obama signed the James Zadroga 9/11 Health and Compensation Act earlier this month. But over the weekend, Feal and his staff at the FealGood Foundation released the names of those firms they feel are reliable, well-established, and prepared to fight for thousands of rescue and recovery workers to receive a share of the newly-created $2.8 billion Victim Compensation Fund."

  • Politico, "Schumer: TARP czar for 9/11 fund": "Sen. Chuck Schumer (D-N.Y.) asked Attorney General Eric Holder Thursday to appoint Kenneth Feinberg to administer the fund created by a recent law that provides health care and other benefits for some 9/11 first responders. Feinberg -- the former 'pay czar' for the Troubled Assets Relief Fund -- volunteered in a letter to Schumer to oversee the fund, which designates $4.3 billion to assist responders who became sick after in the aftermath of the World Trade Center attacks. Feinberg offered to do the job pro bono."

  • Confederation of Indian Industry, Jan. 5, news release, "Unfortunate to see US continue down protectionist path: CII," protesting the funding mechanism for the bill: "While CII understands and appreciates the need to compensate victims of terrorist attacks in the US, the new-found and easy practice of unfairly targeting foreign companies to pay for domestic imperatives is unjustified. Several critics have pointed to the absurdity of the provisions, which would be akin to India requiring US companies to pay for healthcare compensation of victims of the 26/11 terrorist attacks in Mumbai. Indian Ministry of Commerce and Industry has also termed it a 'retrograde step' in US-India economic relations."

The fine print

Notable judicial figures who admit in speeches that they don't read the fine print in the last year: Chief Justice Roberts (ABA Journal; LA Times), Judge Posner (Blackman), Judge Easterbrook (Blackman, @tedfrank). It should pretty much be a standard interview question for judges and legislators at this point, no?

Around the web, January 13

Ransom v. FIA Card Services

When future advocates continue to push the myth of the right-wing pro-business Supreme Court, they'll count Ransom v. FIA Card Services, a bankruptcy statutory interpretation case where the Court sided with a bank against a debtor, in the right-wing pro-business column. But note that yesterday's 8-1 majority opinion was written by Justice Kagan (her first judicial opinion of any sort), and the dissenter was Justice Scalia. These decisions are not made on ideological grounds. More: BLT; Kerr @ Volokh; Blackman.

Class action attorney Bill Lerach once boasted "I have the greatest practice in the world. I have no clients." Technically, that's not supposed to happen: the lead plaintiff in the class action is supposed to be overseeing the case, and FRCP 23(a)(4) requires the lead plaintiff to be an adequate representative of the class. But very often, the class action plaintiff is just a figurehead: see, e.g., OL July 2008, OL May 2007, and numerous other examples.

In the pending case of In re HP Laser Printer Litigation (a C.D. Cal. case related to the Inkjet printer case I mentioned yesterday), we see an extraordinary allegation of this. One of the two lead plaintiffs, James C. Young—whose signature appears on the coupon settlement—has filed an objection to his own class action settlement, claiming that his lawyers, Kabateck Brown Kellner never told him that he was the lead plaintiff or what precisely he was signing. (Practice tip: this is why defense counsel should always depose the proposed lead plaintiff.)

KBK has filed papers with their own side of the story, though it's far from clear to me why they think they can file ex parte to get a deposition, or why Mr. Vlastone's testimony would save their class action.

Disclaimers: As Mr. Young mentions in his objection, the Center for Class Action Fairness (which is not affiliated with the Manhattan Institute) has a pending objection in this litigation; our objection is based on basic legal principles regarding coupon settlements, rather than any of Mr. Young's allegations. Mr. Young has also repeatedly attempted to contact me to ask me to represent him in the litigation; because the court has appointed Mr. Young lead plaintiff of the class and appointed counsel for the class, I am avoiding any return contact with Mr. Young to avoid any question of ethical impropriety; I am also in no position to represent the entire class against HP. I hope some lawyer out there offers to represent this whistleblower.

A "fountain of fees"

At Forbes.com, Daniel Fisher discusses the Center for Class Action Fairness's appeal of a rubber-stamp approval of a $21-million fee award for a coupon class action settlement in litigation against A.G. Edwards. The trial-court judge, Angela Quigless, who signed off on the windfall for the former Milberg Weiss, is frequently mentioned as a possible candidate for the federal bench in St. Louis. Earlier.

Update: more from Allison Frankel.

Around the web, January 11

  • More on the Demetrious Biller suit, including the arbitral opinion. [Corporate Counsel/law.com; earlier @ POL]
  • ADA amendments: bad for business? California small businesses getting sued would probably say yes. [Harned/McBride @ Fed Soc; SF Chronicle]
  • No tears shed for Henry Waxman losing his chairmanship. [Olson @ Cato]
  • "The Insider Trading Bread and Circus" [Silverglate @ Forbes]
  • Law schools are tournaments, not lotteries. [CHE]
  • Parents of deceased lesbian challenge validity of same-sex marriage for inheritance purposes. [ABA J]
  • Watch what you say about lawyers dept.: Kentucky plaintiffs' lawyer sues Twitterer over line "But she should have hired a reputable attorney!" Court dismisses: "It matters not if such opinion was wrong, uninformed or pernicious. His comments were, and are, constitutionally protected." It's nice when a court resolves something so straightforward in only two months. [Cincinnati Enquirer; Cincinnati Enquirer]

The U.S. Supreme Court today denied the petition of mandamus from plaintiffs who in Comer v. Murphy Oil Co. had sued energy companies and manufacturers for contributing to global warming, which strengthened Hurricane Katrina, which worsened property damage in Mississippi, so pay up. (Order List)

This is the suit that ran such a strange course through the lower courts.  U.S. District Court Judge Louis Guirola, Jr., of the Southern District of Mississippi originally dismissed the lawsuit in August 2007, ruling the plaintiffs lacked standing and the tort claims had to be resolved through the political system. (Opinion here, via Global Climate Law Blog.) The plaintiff's appealed to the Fifth Circuit, and on Oct. 16, 2009, a three-judge panel ruled two-to-one that the lawsuit had indeed raised justiciable issues that should be heard at trial. (Opinion here.)

The Fifth Circuit than agreed to consider the case en banc, but then one more appellate judge recused herself for a conflict of interest, eliminating the necessary quorum to hear the case. Since the three-member panel's ruling had been vacated, the case was dismissed (ruling), and the plaintiffs were forced to pursue the mandamus route in an attempt to keep the litigation alive.

Two other federal global warming/public nuisance suits remain: American Electric Power v. Connecticut, on appeal to the U.S. Supreme Court, and Native Village of Kivalina versus Exxon Mobil, on appeal to the Ninth Circuit.

See also, Climate Law Blog, "SCOTUS Denies Petition for Mandamus in 5th Circuit Climate Nuisance Suit," and earlier, Jonathan Adler at Volokh.com, "Writ of Mandamus Sought in Comer v. Murphy Oil." Earlier POL posts here.

Jared Lee Loughner and the Tucson massacre

The massacre in Tucson has provoked a lot of punditry and finger-pointing; Glenn Reynolds and Jack Shafer and Ross Douthat have adequately refuted the stupidity and shamelessness of blaming "political discourse," (Loughner appears to have taken his ideas from a conspiracy theorist "David-Wynn: Miller," who believes the extra hyphen and colon in his name protects him from government mind control, and has held a grudge against Giffords since 2007) so let me turn to a separate and more important issue.

Loughner was widely viewed by those who interacted with him even only briefly as unstable, mentally ill, and dangerous—dangerous enough that Pima Community College hired lawyers and must have felt it was risking a lawsuit to get him off campus. An armchair psychologist would quickly diagnose schizophrenia. How can society protect itself against the psychotic?

The question is a tough one that requires balancing of interests: if it's too easy to institutionalize and forcibly medicate someone involuntarily, there are obvious liberty implications reminiscent of the Soviet Union's hospitalizing political prisoners. But waiting until a schizophrenic actually shoots up Virginia Tech or a Tucson parking lot before incapacitating them has obvious public safety issues. And any policy will be enforced by fallible human beings who will make mistakes: no matter where you set the public policy, you will have false negatives that could have been avoided by more aggressive intervention or false positives that could have been avoided by a government more solicitous of liberty interests. It's a serious debate to be had and, ironically, Congresswoman Giffords was apparently one who took issues of mental illness seriously.

Ten years ago today, a person with untreated mental illness shot and killed 19-year-old Laura Wilcox and two others. My rule of thumb is a strong presumption that any law named after a victim is poor public policy enacted by legislators who confuse voting against a law with voting against an innocent person, and I'm therefore skeptical of "Laura's Law" in California, which "authorizes court-ordered treatment for individuals with severe mental illness who meet specific legal criteria." But I admit ignorance where exactly the balance should be struck.

On that question, in the wake of the Virginia Tech shootings, Sally Satel wrote persuasively in the Weekly Standard in 2006 that public policy has shifted too far away from the public-safety balance because of threats of litigation from a federal government agency that you probably have never heard of, the Substance Abuse and Mental Health Services Administration, which is part of HHS, and from state agencies funded by the federal government. SAMHSA activism has precluded "Laura's Law" from being executed in more than two of California's 58 counties.

HP tries a coupon settlement

If I were to buy a three-pack of color ink for my inkjet printer today, it would cost me $42.99 at HP.com and $36.99 at Amazon.com. That's not a big deal—unless HP is trying to settle a class action by giving class members $2 coupons that can only be used at HP.com (and can't be transferred or stacked, and expire in six months). And even if the coupon was larger (some class members get $7 coupons) HP makes much more money selling ink at HP.com than at Amazon.com, all else being equal: this is a marketing program for them. And the attorneys are claiming that they're entitled to $2.9 million for such a lame settlement because the coupons are "worth" $5 million. And even if one attributed full face value to the coupons (which the parties try mightily hard to not call coupons), I strongly suspect far less than $5 million of coupons will be claimed or redeemed.

The Center for Class Action Fairness (which is not affiliated with the Manhattan Institute) filed an objection December 30 in the Northern District of California.

RIP, Judge John Roll

A news release posted at the U.S. District Court of Arizona:

The U.S. District Court for the District of Arizona has suffered a grievous loss today with the untimely death of Chief Judge John M. Roll, who was shot and killed when a gunman opened fire on a crowd at an event hosted by Congresswoman Gabrielle Giffords in Tucson, Arizona. Judge Roll was appointed to the federal bench in 1991, and served as chief judge of the district since 2006. The devoted husband, father of three, grandfather of five, and friend to all who knew him, will be greatly missed by his family and community. He was a warm, compassionate judge and inspirational leader in what is one of the busiest districts in the country. His death will leave a significant void in the District of Arizona and the entire federal judiciary, and we are all deeply saddened. posted at the website of the U.S. District Court of Arizona.

Sen. John McCain (R-AZ) issued a statement on the passing of Judge Roll. McCain recommended Roll to President George H.W. Bush for the federal judgeship in 1991.

From the Illinois Civil Justice League, an e-mail alert.

SPRINGFIELD - Legislation that would allow loans to litigants in lawsuits as cases proceed through court systems was overwhelmingly blocked Thursday by a coordinated effort by business organizations, including the Illinois Civil Justice League, Illinois Insurance Association, Illinois Chamber of Commerce and others.

SB 3322, the "Non-recourse Civil Litigation Funding Act" -- or more commonly referred to as the "Lawsuit Loan Shark" bill -- is not dead yet but an amendment by the sponsor, Rep. Louis Lang, D-Skokie, was trounced on the House floor, 87-28, Thursday afternoon.

Substantive language had been stripped from the bill and he amendment, agreed to in the House Judiciary Committee earlier Thursday, became the substance of the bill and it's rejection on the House floor means the bill is dead, most likely for the balance of the current legislative session which technically ends early next week when the 97th General Assembly begins.

The bill's text and legislative history are available here.

Illinois Lawsuit Abuse Watch has been actively working against the bill. Give The Chicago Tribune credit, as well, for helping to prevent the bill's passage through its Dec. 23 editorial, "Lawsuit loan sharks," reminding readers of the crime of champerty. Excerpt:

The bill before the General Assembly would carve out a special new niche for this industry through the Department of Financial and Professional Regulation: Lawsuit lending would be exempt from the state's consumer-loan regulations, circumventing dusty prohibitions against champerty as well as up-to-date fair-lending laws.

The bill would require specific disclosures spelling out terms of the loans. But those consumer protections amount to mere window dressing. Borrowers easily could wind up handing over their entire proceeds from a settlement to cover the loans they got when their cases started.

And there's ample evidence that litigation lending leads to abuses, including cases brought only because lenders see the potential for a payoff.

With legislatures convening all across the country this month, it would pay to keep an eye out for similar pieces of law-distorting special interest legislation in other states.

Sen. Charles Grassley (R-IA) will Sen. Jeff Sessions (R-AL) as ranking member on the Senate Judiciary Committee, Main Justice reports. Committee membership are still up in the air while the Senate works through the partisan disputes over the chamber's rules, filibuster included.

Rep. Lamar Smith (R-TX) today announced the new chairmen of the House Judiciary Committee's subcommittees:

President Obama has renominated 42 judicial candidates returned to the White House after the Senate adjourned on Dec. 22. His list contains the four controversial nominees we've been tracking: Edward Chen, Goodwin Liu, Louis Butler, Jr., and John "Jack" McConnell.

Missing from the list, however, is Robert Chatigny, previously nominated to the Second Circuit.

The list of the nominations starts on Page 3 of The Congressional Record's Daily Digest.

Time for new generation of "Schoolhouse Rocks" videos, this one on how a federal judicial wins confirmation ... or doesn't. You could illustrate it with a symbolic black-robed figure walking up and down Pennsylvania Avenue, back and forth between the White House and the Senate. Or perhaps something more modern: The candidate could use the Pennsylvania Avenue bike lane to cycle between the two locations, with Chatigny sidelined with a flat.

Earlier posts.

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The case of Dimitrios Biller

It's never been clear to me why Dimitrios Biller got any publicity in the last year; when plaintiffs' lawyer E. Todd Tracy succeeded in 2009 in getting sixteen Toyota defense verdicts and settlements reopened to review Biller's files, he ended up walking away saying there was no smoking gun. Nevertheless, throughout the sudden acceleration hysteria, the former Toyota in-house attorney has continued to get mainstream media coverage by propounding a conspiracy theory of coverups, even though he didn't work on sudden acceleration issues, and even as he has engaged in additional credibility-destroying actions such as firing his attorney and proceeding pro se in an arbitration to recover his severance for breach of contract. Biller has now lost that arbitration decisively, and is on the hook for $2.6 million of the $3.7 million severance. [Toyota and Bloomberg via ABA Journal]

Around the web, January 6

  • Professor Bainbridge weighs in on yesterday's post on securities litigation. [Bainbridge]
  • Fifth Circuit rejects questionable Katrina class action settlement. [Beck; In re Katrina Canal Breaches Litig.]
  • $950/hour law professor vouches for Ken Feinberg's ethics; plaintiffs' lawyers complain that BP is using the same tactic plaintiffs' lawyers regularly use to prove their own ethics. [AP/law.com]
  • Damned if you, damned if you don't. Fox News doesn't hit the sweet spot between too much and not enough discipline to enforce hostile-environment policies, and gets with a lawsuit by white news anchor who was fired after using the N-word; the lawsuit has survived a motion to dismiss in the E.D. Pa. [On Point]
  • Compassion and humanity, or just bad judgment? The case of Sonia Sotomayor. [Epstein @ Ricochet]
  • Does educational affirmative action have adverse effects on minority representation in white-collar careers? [Heriot @ Fed Soc]
  • Most ridiculous lawsuits of 2010 winners. [ILR]
  • Lawsuits meant to silence critics. [Overlawyered]

In the British Medical Journal, Brian Deer provides extraordinary detail of the extent of fraud in Andrew Wakefield's paper, which, at the behest of trial lawyers, created a gigantic anti-vaccine scare that persists to this day, with untold numbers of measles cases resulting. Can you imagine the fuss if a doctor paid by a pharmaceutical company falsified study results for the profit of that corporation with adverse health effects? No signs of any class actions against trial lawyers or Robert F. Kennedy, Jr., though.

The Lancet paper was a case series of 12 child patients; it reported a proposed "new syndrome" of enterocolitis and regressive autism and associated this with MMR as an "apparent precipitating event." But in fact:

  • Three of nine children reported with regressive autism did not have autism diagnosed at all. Only one child clearly had regressive autism

  • Despite the paper claiming that all 12 children were "previously normal," five had documented pre-existing developmental concerns

  • Some children were reported to have experienced first behavioural symptoms within days of MMR, but the records documented these as starting some months after vaccination

  • In nine cases, unremarkable colonic histopathology results--noting no or minimal fluctuations in inflammatory cell populations--were changed after a medical school "research review" to "non-specific colitis"

  • The parents of eight children were reported as blaming MMR, but 11 families made this allegation at the hospital. The exclusion of three allegations--all giving times to onset of problems in months--helped to create the appearance of a 14 day temporal link

  • Patients were recruited through anti-MMR campaigners, and the study was commissioned and funded for planned litigation.

Update: Daniel Fisher independently makes the same point at Forbes; and Jonathan Adler @ Volokh has more links and quotes.

Not quite, says a study in the Financial Analysts Journal by Rob Bauer and Robin Braun. If a suit is for something other than illegal insider trading, the long-term effects of litigation for shareholders are not good, despite the fact that many cases involve injunctive relief with supposed corporate governance improvements. I've long theorized that most injunctive relief in class action settlements is for the benefit of attorneys to claim that they accomplished something when they are unable to obtain pecuniary relief; the fig-leaf of trivial changes allows the attorneys to claim fees. Coverage from Fisher @ Forbes, Frankel @ Litigation Daily ($), WSJ Law Blog, and Coyote via OL.

Judicial confirmations

At the end of the day, Obama did pretty well for himself with judicial confirmations compared to other presidents, and to the extent he didn't, it's because he made only 41 nominations for 92 pending vacancies. Goodwin Liu, Louis Butler, and John McConnell were not among the confirmed. [Whelan; Kerr @ Volokh]

As I've pointed out, 2009 legislative restrictions on credit-card fees and interest-rate changes made it unprofitable for credit-card companies to offer low-interest credit-cards or credit cards to high-risk consumers. In today's WSJ ($), Todd Zywicki explores further: while lower-income Americans have less access to credit cards now, their borrowing needs haven't changed, so they have been forced to substitute expensive payday lenders or, worse, illegal loan sharks. And Dodd-Frank will have additional pernicious effects on lower-income Americans. Just another example of how well-meaning consumer protection laws can end up hurting consumers.

"Cobell lawyers say they deserve more"

When Congress signed off on providing $3.4 billion of funding for the Department of Justice to settle the 15-year-old Cobell v. Salazar suit over government mismanagement of Indian trusts, it was on the condition that the settlement capped attorneys' fees at $100 million. But the plaintiffs' attorneys filed papers with the court stating that the court has the right to ignore that limit and award as much as $223 million. The Indian Country Today coverage suggests that this framing is meant to discourage the judge from awarding less than the $99.9 million they have agreed to request. The attorneys hint that Cobell herself will ask for a $2 million incentive award above and beyond her share of the underlying settlement fund and reimbursement of millions of dollars of expenses. The court has provided preliminary approval of the class action settlement, with objections due in April for a summertime fairness hearing.

President Obama sat down amid tropical greenery in Hawaii today to sign H.R. 847, the James Zadroga 9/11 Health and Compensation Act, into law. News reports on the signing were perfunctory, as in The New York Daily News' article, "Obama signs 9/11 health care bill into law."

The Calcutta Telegraph reports an angle that we did not see raised in all the news, the possibility that the new funding mechanism violates the WTO agreements to which the United States is party. From "US 9/11 treatment tax upsets India":

New Delhi, Jan. 2: New Delhi may take Washington to the World Trade Organisation's dispute panel over its move to fund a free-treatment scheme for 9/11 victims through legislation that will cost Indian IT companies millions of dollars, officials said.

Washington plans to raise the money in two ways. One, by imposing a two per cent levy on goods and services it imports from certain developing countries that include India. Two, by extending a fee hike for certain categories of the H1B and L1 visas that are extensively used by Indian professionals working in America....

"We plan to seek consultation with Washington at the WTO (an international body dealing with the rules of trade between nations) to discuss the legislation," an Indian commerce ministry official said. "We would not hesitate to take the matter to the dispute settlement panel of the trade body if the issue does not get resolved."

These new taxes and fees were added by the U.S. Senate in the final week of the 111th Congress, replacing the House's plan to increase taxes on foreign multinational corporations incorporated in countries with which the United States does not have a tax agreement.

Yet the tax-writing committees of Congress, Senate Finance and House Ways and Means, never held hearings on the legislation. Well, at least The Daily News examined these important issues in its voluminous coverage of the 9/11 bill. What? It didn't? Well, then, Jon Stewart surely did. (And to be fair, we missed this angle, as well.)

More ....

The Nevada Supreme Court has upheld an earlier ruling in Bahena v. Goodyear Tire & Rubber Co., a case in which a Clark County district judge had imposed the ultimate sanction against the company for supposed discovery violations -- prohibiting Goodyear from defending itself. The state Supreme Court's ruling reaffirms this "civil death penalty."

From The Las Vegas Sun/McClatchy:

The Nevada Supreme Court has refused to rehear its decision to uphold a $32.2 million judgment in Clark County against Goodyear Tire & Rubber Co. in a single-car accident that killed three people and injured seven others.

The court, in a 6-1 decision written by Justice Mark Gibbons, said it did not overlook any material facts or misapply the law. But it took the court 10 pages to clarify what it meant in its first decision last July in upholding the rulings of District Court Judge Sally Loehrer.

Justice Kristina Pickering dissented and said she would have granted a rehearing.

She said the default judgment in the case rested on the District Court "choosing to believe one side's lawyers over another's with no evidentiary hearing, no cross-examination and a genuine dispute over willfulness, fault, and prejudice."

The court's ruling is here.

We covered the Clark County case and the civil death penalty in an Aug. 4, 2010, Point of Law post, "Civil 'death penalty' leaves no defense."



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.