This NYT article notes the guilty plea of Judge DeLaughter for obstruction of justice for tipping the scales in favor of asbestos and tobacco maven Dickie Scruggs. Stories of this sort are unfortunate reminders that John Grisham will never run out of grist for his novels exploring the many seamy sides of trying to dance on both sides of the many sharp edges in our legal system .
For years, many have posed the question: what is the next "asbestos" ?
The answer usually has been: more asbestos.
Here is one recent example of why the answer remains largely true. The example is a plaintiff's firm press release urging the need to treat taconite as if it is asbestos even though its never before been classified as asbestos. There are some real health issues as to taconite, which you can see from this University of Minnesota web page addressing an ongoing study. The point here though is that the next asbestos is more asbestos. The second point is that the underlying JOEH article it cites purports to find a medical link between the presence of pleural plaques and pain in this particular person. The plaintiff's bar no doubt will continue to use this article as part of the always ongoing campaign to find reasons why money should be paid to persons without actual impairment of their day to day activities.
Is it ethical for government lawyers to demand, or a plaintiff's lawyer to sign, a tort claim settlement agreement that includes terms that purport to limit the use of the settlement agreement in future litigation? "No" is the answer provided in this article addressing the issue in the context of government and private lawyers involved in tort and civil rights claims against the City of Chicago. The article is:
SETTLEMENTS YOU CAN'T SIGN: ETHICAL
IMPLICATIONS OF CHICAGO'S MACHINERY OF DENIAL
By Craig B. Futterman, Jason E. Huber, and Pier Petersen
The article is interesting and valuable in multiple ways. One is its discussion of the settlement secrecy actics formerly used by the City of Chicago, but now apparently abandoned. More value lies in its footnote 32 citation to laws around the US that in one way or another require public access to most settlement agreements arising from tort claims against the government. Also valuable is its closing reminder/discussion of the many cases in which courts have enforced similar unethical settlement agreement terms despite the seeming perversity of that result.
Hat tip to Jerry Crimmins for reporting on the existence of the article and other related background facts in a July 17 , 2009 article in the Chicago Daily Law Bulletin.
News articles here (best one), here and here are out with news from Italy that the criminal and civil trial for the Eternit asbestos defendants is to start December 10, 2009. The date was set after the trial court denied objections by the defendants, including objections to the location of the trial. The trial will not end quickly - Italian trials in some ways move slowly and include a variety of procedures not directly comparable to American trials.
The criminal and civil claims arise from something around 2,500 injuries and deaths alleged to arise from Italian manufacturing operations of the global Eternit businesses. For more background, a prior post here described the criminal and civil claims being pursued in Italy against former officers of Eternit, and includes links to background articles. There are myriad Eternit entities around the world, and they are not all part of one corporate family. However, most have some roots in manufacturing asbestos-cement products.
The claims and attendant publicity are noteworthy for a variety of reasons. One is that the US media now has company with other global media that devote articles, blogs and websites to "asbestos exposure" and "the dangers of asbestos. " To test the point, try Google searches on "eternit," "schmidheiny" (the last name of one of the defendants) or "amiante" (asbestos). Publicity and fear tend to lead to increased tort litigation.
Another point is that it is increasingly easy for claimant's group to disseminate information that may damage corporate reputation in general and reduce the overall enterprise value. Consider, for example, this website that provides a basic account of the Eternit proceedings and seeks to heap shame on Eternit. Considered in the light of the events of the past year, and this type of an event, one can readily grasp why the SEC has made statements to the media and proposed new rules (go here) regarding public disclosure of the board's role in risk management and the overall corporate risk management strategy.
Contrary to prior statements, Lord Chancellor Jack Straw of the Ministry of Justice said yesterday in Parliament that the government's formal follow up on the pleural plaques consultation will be provided "after" the summer recess. He indicated the response will include steps aimed at improving tracking of records that will assist plaintiffs, which are records regarding employment locations and employer insurance. He also intimated plans to have the UK lead the way on asbestos-related medical research. Specifically, he said:
"Jack Straw (Lord Chancellor, Ministry of Justice; Blackburn, Labour)
On 30 June, the Government published to the House two reports on the medical aspects of pleural plaques, one from the chief medical officer's expert adviser and a second from the Industrial Injuries Advisory Council. The Government will give further consideration to the issue of compensation for people diagnosed with pleural plaques before publishing a final response after the recess.
In addition, we are actively considering measures to make the United Kingdom a global leader in research on the alleviation, prevention and cure of asbestos-related diseases, and to help speed up compensation claims for those who develop serious asbestos-related diseases such as mesothelioma. The latter includes examination of the process for tracking and tracing employment and insurance records, as well as looking into the support given to individuals who are unable to trace such records." (emphasis added)
Further discussion was as follows, or read it online here at the website of "They Work for You."
Stephen Hepburn (Jarrow, Labour)
Will the Secretary of State assure us today that pleural plaques sufferers will not be treated any differently in terms of compensation regardless of whether they lodged their claim prior to the 2007 Law Lords judgment or after it and of whether live in Scotland, England, Wales or Northern Ireland?
Jack Straw (Lord Chancellor, Ministry of Justice; Blackburn, Labour)
As I said, we are giving active consideration to that. I understand my hon. Friend's concern, but we have to make our own decisions in this jurisdiction. I am sure that, in turn, my hon. Friend will wish to pay very careful attention to the conclusions of the expert appointed by the chief medical officer and to IIAC; they came to unanimous conclusions, including those backed by the three trade union representatives.
Nigel Dodds (Belfast North, DUP)
Following on from the Scottish Government's decision to legislate in this area, did the Secretary of State note the recommendation of the relevant Department in the Northern Ireland Assembly that there should be a change in legislation to allow those with pleural plaques to sue in the courts and get compensation? Also, following on from what Mr. Hepburn said, whereas the regions of devolved government will have taken action to redress this terrible injustice to those who suffer from pleural plaques, will it not be perverse if the only area where people cannot claim is England and Wales?
Jack Straw (Lord Chancellor, Ministry of Justice; Blackburn, Labour)
As I said, or implied, in answer to my hon. Friend, it is the essence of devolution that different decisions can be made. It would be very curious indeed if the result of devolution was that each jurisdiction had to follow the decisions of the other. We are seeking to consider the evidence very carefully, and I commend the evidence of the chief medical officer's expert's report and IIAC to all hon. Members, whichever constituency they represent.
This article reports that China is taking away law licenses from and fining lawyers who have been filing civil rights claims and claims for victims of the "tainted milk" scandal. Reading this type of news certainly provides a moment to pause and reflect on how lucky we are in the US, and the great value of a free press able to report on developments and occurrences in our legal system.
Are anti-bribery statutes actually trade sanctions that discourage investment, and should such statues be modifed? For more on that topic, see this post at Conglomerate and its link to a scholarly article on the topic.
The tort litigation industry is seeing new battles emerge at the micro and macro level regarding the techniques and rules used on Wall Street, in tort trials, and by government to shift financial responsibility for payments for expenses arising from legitimate and illegitimate tort claimants. The battles are ongoing at both the micro and macro level, and will take years to resolve. Over time, billions and ultimately trillions of dollars are at stake when one considers direct and indirect payments, plus stock price changes, legal fees, and other associated costs and expenses of tort litigation and ancillary litigation. Posts over the next few weeks will present examples of the battles and their consequences. Throughout, one key is to look for whether, when and how one person/entity (or a group) are allowed to make deals that increase or decrease the risks and financial obligations for others involved in the same tort.
Today's example is a micro battle being fought in Illinois in a case arising from falling scaffolding killing Mr. Ready during a construction project at a power plant. One issue is whether fault can be apportioned at trial against defendants that settled before trial. Why does that matter? Because the plaintiff and one or more defendants can and may agree to a settlement contract because the settlement monies paid 1) will give plaintiff some level of financial certainty and 2) will shift to the remaining defendants the risk and financial obligation for the plaintiff's losses as determined at trial because the settlement, if approved, will by statute block the remaining defendants from suing the settling defendants for "contribution," and may block the trial defendants from asking the jury to apportion a percentage of fault to the settling parties. Further, the settlement also may influence whether the remaining defendants can offer trial proof of the actions of the settled defendant even if even if the jury is not allowed to apportion a percentage of fault to the settled defendants.
So, the most basic macro issue is whether and when this private settlement contract between three private parties will become the operative event that will enable the government (the courts) to take pre-existing claims and legal rights of the other defendants. In this instance, the defendants are Mr. Ready's employer, the general contractor and a subcontractor. In teh case, the employer and the general contractor settled, leaving the subsontractor exposed to a trial, which it lost. And, of course, lurking in the background are the insurers for those entities. But, for the macro level, bear in mind that some companies are self-insured, and some companies were insured but that insurance is or may be gone because the insurer actually is insolvent or may be trying to run away from "incurred but not reported" losses (that is, future losses) by ceasing its business operations and/or invoking a dissolution process specific to insurers. And, the issues arise in the context of events during a trial held during a period of time for which a "tort reform statute was said to be applicable.
In short, the Illinois Supreme Court held, under the statute, that the jury could not apportion fault against the settled defendants. Thus, the private settlement was converted into a government enforced agreement with legal consequences for the remaining defendant, which had not objected to the settlement. Left open by the Supreme Court was whether the jury should have been allowed to hear evidence about the actions (or inaction) of the settled parties. On remand, the appellate court held that the trial court should have allowed the jury to hear evidence of the actions of the settled defendants. The case may now be headed back to the Supreme Court of Illinois.
The Illinois Supreme Court's opinion from late 2008 is here (for now, but will move later when the opinion is archived.) Here is the June 30, 2009 opinion of the appellate court on remand. Here is a press article updating the case history, and explaining that the case is perhaps headed back to the Illinois Supreme Court. Here prior commentary by a large law law firm that represents corporate defendants.
Susan Beck has a great AmLaw summary article today with links to underlying complaints, and to a Wall Street Journal article on the same topic by Nathan Koppel. The articles explain that ratings agencies are defending claims by Calpers and others based in part on the notion that their pronouncements are constitutionally protected opinions that invoke First Amendment standards. The articles, however, do not address whether that argument will fly against, for example, investors not based in the United States. Claims by non-US investors plainly will create choice of law issues.
In Illinois, there are fairly well-settled rules regarding claims for negligent misrepresentation of information. Inquiry will focus on, among other things, the scope of the duty related to the information supplied. A 2006 Illinois Supreme Court opinion (here) states the rules as follows:
"To state a claim for negligent misrepresentation, a plaintiff must allege: (1) a false statement of material fact; (2) carelessness or negligence in ascertaining the truth of the statement by the party making it; (3) an intention to induce the other party to act; (4) action by the other party in reliance on the truth of the statement; (5) damage to the other party resulting from such reliance; and (6) a duty on the party making the statement to communicate accurate information. Board of Education of the City of Chicago v. A, C & S, Inc., 131 Ill. 2d 428, 452 (1989). See also Fox Associates, Inc. v. Robert Half International, Inc., 334 Ill. App. 3d 90, 94 (2002); Neptuno Treuhand-Und Verwaltungsgesellschaft Mbh v. Arbor, 295 Ill. App. 3d 567, 572-74 (1998). Where, as here, purely economic damages are sought, this court has imposed a duty on a party to avoid negligently conveying false information only if the party is in the business of supplying information for the guidance of others in their business transactions. Brogan v. Mitchell International, Inc., 181 Ill. 2d 178, 183-84 (1998); Moorman Manufacturing Co. v. National Tank Co., 91 Ill. 2d 69, 89 (1982)." (emphasis added).
James Hardie's asbestos trust continues to create issues. Here is an article regarding the Australian tax regulator seeking and gaining access to asbestos-related papers, apparently including papers exchanged with its accountants. Trusts are plainly an excellent concept for resolving asbestos and other toxic tort claims without massive litigation waste, but they are indeed complex undertakings.
The AmLaw Daily has more here on whether the Chicago Cubs corporate entity may file for chapter 11 to cleanse itself of potential claims by creditors. Various involved lawyers were contacted but declined to be quoted. The article goes on to say:
"Should the committee approve the proposed sale, Tribune plans to have the Cubs seek bankruptcy protection in a quick process that could last anywhere from a few days to several weeks, according to several sources. (All agree that the idea of a one-day bankruptcy procedure, which has been floated in some news stories, is unrealistic). The Chapter 11 process would clean up the team's books in preparation for a sale." (emphasis added)
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Some uses of chapter 11 create constitutional and bankruptcy law issues because the bankruptcy court orders/injunctions approving the asset sales or a plan purport to cut off present or future state law claims and other property rights held by some persons or entities. (For much more on this topic from a lawyer who argued for tort claimants in Chrysler, go to this blog by Steve Jakubowski.) When I mentioned the Cub's possible use of chapter 11 to a friend ( a Brooklyn native), the response was brilliant:
"It is the bottom of the 8th in a crucial game against the Cardinals. Cards lead 4 to 3. There are 2 outs. Cubs have the bases loaded with Derek Lee at bat. The count is 2 and 0. Would you need bankruptcy court approval to put "on" the take sign ?"
Here is an excerpt fron this blog post by Kevin LaCroix at The D + O Diary:
"The Latest Stanford Financial Group Lawsuit: According to a July 13, 2009 Bloomberg article (here), Stanford Group investors have filed a class actoin lawsuit in the Southern District of Texas against The Commonwealth of Antigua and Barbuda, alleging that the Caribbean nation helped the financier engineer a massive fraud. The complaint (here) , purports to be filed on behalf of all individuals and investors who were customers of Stanford International Bank as of February 16, 2009, alleges violations of and seeks to recover damages under RICO.
I have added this latest lawsuit to my running register of all Stanford Group-related litigation, which can be accessed here."
Set out below are two paragraphs from the Complaint:
"3. Antigua is sovereign, but not above the law. It became a full partner in Stanford's fraud, and reaped enormous financial benefits from the scheme. Stanford stuffed Antigua's coffers - and its officials' pockets - with money stolen from unsuspecting customers throughout the United States, Canada, Central America, South America, and elsewhere. Antigua worked tirelessly to protect and nurture Stanford's criminal enterprise and, in return, eagerly accepted its share of criminally-procured funds.
4. As described more fully below, Stanford's massive fraud would not have been possible without the active, knowing, and essential assistance of Antigua. Antigua: (i) provided a safe haven for Stanford to operate; (ii) provided essential assistance in Stanford's efforts to portray itself to Plaintiffs and other members of the Class as a legitimate provider of financial services; (iii) participated with Stanford in a variety of commercial activities in Antigua that provided a pretext for the transfer of criminal proceeds from Stanford to Antigua; (iv) provided false and fraudulent information to the Securities and Exchange Commission ("SEC") and other regulators in order to thwart the SEC's investigations into Stanford; and (v) shared in the criminal proceeds of the conspiracy, all or substantially all of which were stolen from the Plaintiffs and other members of the Class. "
Update of July 14 to May 7 post reposted below: The National Law Journal includes a July 13 article updating on the case below. The update is that some defendants sought interlocutor appellate review of the trial judge's order in which he "reluctantly" declined to bar a deposition transcript created under the circumstances described below. Thus far, review has been declined by California's intermediate appellate court and by the California Supreme Court. The defendants, however, will continue to press the issue through other appeals and when it arises in other cases.
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May 7 post
More and more legal news outlets have picked up on some parts of the asbestos litigation gamesmanship. Walter Olson's Pointoflaw uses the humorous (for lawyers) title "Asbestos: The Texas- California Two-Step" to link back to a California blog article (from Cal Biz Lit) that links to and quotes from a California trial judge's opinion (available here in full text) sharply criticizing the Waters & Kraus plaintiff's firm for its litigation tactics. Specifically, Judge Munoz criticized the firm for at least 10 times filing cases in Texas and then refiling in California after the plaintiff has been deposed in Texas. The same opinion was picked up in Legal News Line and today by law.com via the National Law Journal, and the ABA Journal online.
Why do plaintiff's play that game? Because it helps the plaintiff avoid meaningful scrutiny in depositions. How/why is that true? Because some states, including Texas and Illinois, have rules that limit depositions to six hours. Specifically, as Judge Munoz explained in his opinion:
"Plaintiff's law firm, which is a multi-state firm, has, in at least nine other cases, filed cases in Texas which were then dismissed after the plaintiffs' deposition had been take."
The reason for this procedure is apparently because under Texas law the deposition is severely limited to six hours per side. Additionally, under Texas law the failure to mention the defendant's product is a basis for summary judgment. The law in this state is to the contrary."
"It is the court's opinion that the filing of the Texas action was deliberately done to prevent the defendants from having adequate discovery and to prevent the filing of motions for summary judgment because of the California rule requiring specific questions about product identification."
Judge Munoz is correct that the tactic can and often does prevent a meaningful defense. Why is that - shouldn't six hours be enough? No, not even close in many cases. Why? Because in many cases, the plaintiff sues dozens of defendants and makes claims involving alleged "exposure" at dozens or hundreds of job sites. For example, the plaintiffs often are tradesmen (say an electrician or a pipefitter) who worked for a business that serviced dozens of businesses large and small (for example, stand alone power plants and power generating facilities at factories or refineries). That person may well have worked at dozen or more facilities a year, and may well claim that he was "exposed" to asbestos at each such site. In that situation, the defense lawyers need to carefully depose the witness to prove that in fact there was no actual inhalation of fibers from a specific job site. That proof is gathered by asking about the specifics of the work at the job site.
For example, in a typical deposition, the defense lawyer may be given a job site list from the plaintiff. The lead lawyer taking the deposition will then say: "I see you have listed the Acme Manufacturing Plant as a job site at which you claim you were exposed to asbestos. Please tell me about why you think you were exposed there?
The plaintiff may well respond: "I think I was exposed at the XYZ company because I brought in electric lines to a circuit breaker, and there were big pumps about 30 feet away from me. I assume the pumps contained gaskets that contained asbestos, and I assume the pipes leading in and out of the pumps were insulated with asbestos."
Once that testimony is on the record, then the defense lawyer for the gasket company needs to question witness in detail to find out the specifics of the pumps (who made them, what he knows about them) and then needs to take testimony to prove that in fact there was no actual "exposure" because, for example, 1) the plaintiff never touched the pump, and 2) the gaskets, if any are inside the pump, and the pumps were operating at the time of the plaintiff's work, so that fluid was flowing through the pumps and therefore any gaskets were wet and incapable of releasing a respirable asbestos fiber. Doing that takes time, but it has to be done if the company wants to obtain summary judgment when that "exposure" (or a few like that) are the only basis for potential liability. So, for a plaintiff with a long job site history, the deposition process may take literally several days if the testimony is to be taken well so that defense lawyers can make a record that proves up a solid defense for trial for each defendant in the position of the gaskety company. The plaintiff's lawyers, however, seek to limit the depositions to six hours to avoid the strong defenses, and of course will say it's their job to zealously represent their clients.
Isn't this all silly - shouldn't the plaintiff refrain from putting at issue job sites and alleged "exposures" where realistic lawyers who know their science also know that there was no actual inhalation at all of asbestos fibers or no meaningful inhalation? Yes, but that's not what happening in the tort system. Instead, the problem is that some but not all plaintiff's lawyers are pursing the "any fiber fiber counts" theory, supported by a small cadre of experts who will testify to their opinion that "any and all fibers add to the risk. "' Some courts have rejected that theory, but others let it go to the jury and others do not yet have concrete appellate case law. For much more detail on the "any fiber" or "every fiber" theory, the experts, and the case law, look to Mark Behren's very recent article "What's New in Asbestos Litigation" at pages 528-531.
The deposition time problem is made worse by the plaintiff's who claims that the pump maker should be held liable for failing to warn the plaintiff about the insulation that someone else installed over the pipes that connect to the pump . That legal theory also is popular in asbestos litigation today - for more specifics on the theory and the rulings to date, once again see Mark's article, but this time at pages 542-545. Here, though, the point is not to debate the merit of the legal theory. The point instead is to explain that because of that theory, the pump maker's lawyer needs to spend time questioning the witness about the insulation in some detail. E.g. does he know the age of the insulation (in the US, it won't have asbestos if it ws installed after about 1973, absent unusual facts), does he "know" if it contained asbestos (the answer should be no), was the insulation ripped or torn (properly jacketed insulation does not release fibers) , was anyone working on the insulation (could release fibers), did he touch the insulation (he probably did not but that's needed for the summary judgment motion). The result is that a six hour time limit often times denies a defendant its due process right to a meaningful opportunity to gather evidence and have a meaningful trial.
Some but not all plaintiff's lawyers typically will respond in at least two ways. First, they will say that some defendants send to depositions some ill-prepared defense lawyers who ask stupid questions because some insurers and some clients are too short-sighted to pay for well-trained lawyers who know their facts and science. That complaint is sometimes valid. Indeed, I've seen it happen. But that's NOT the fault of the well-prepared gasket company lawyer who must be accorded the due process chance to gather meaningful evidence to protect her client. The remedy instead is for the plaintiff's lawyer to bring a motion for protective order specific to that lawyer or defendant.
Second, plaintiff's lawyers will complain that some defendants play their own asbestos litigation games, such as removing cases to federal court just before trial of a dying mesothelioma victim, with the result being the loss of the trial date and the plaintiff's death before the trial is rescheduled. I'm told that has in fact occurred. But, once again, that's not the fault of all defendants and it's not relevant to the question of deposition time limits.
Finally, some will say that the problem is that the plaintiff came in and hired counsel just before death and there is not enough time. That can happen, but it's getting harder and harder to justify or believe that excuse in this age of non-stop mesothelioma ads online and on tv. And, in any event, when counsel was hired does not control the number of hours needed for deposition.
What steps would help to end this game. There is no one answer. One step would be an asbestos case-management order that automatically grants an extension of the deposition time in any case involving more than 5 defendants and 10 job sites. Another good step would be to have an activist trial judge who understands the science and the law, and who will take calls from depositions to block time-wasting by anyone, and who will ensure that each defendant receives a meaningful opportunity to prepare its defense.
The following item from Crain's Chicago Business speaks for itself as to today's use of chapter 11 to manage/resolve risks and "liabilities." In some instances, though, the table is being set for constitutional law battles ahead on just how much a bankruptcy judge can do to alter rights arising under state law or the law of other nations.
http://www.chicagobusiness.com/cgi-bin/news.pl?id=34725&ba=1
Cubs may file for bankruptcy protection to speed sale: report
By: Todd J. Behme July 13, 2009
(Crain's) -- Tribune Co. may file for Chapter 11 bankruptcy protection for the Chicago Cubs to smooth the sale of the team, according to a report.
A short bankruptcy would be a legal move to prevent the Cubs from having any liability related to the bankruptcy case of Tribune, which filed for Chapter 11 protection in December, Bloomberg News said, citing four unnamed sources familiar with the matter.
Spokesman for Tribune, Major League Baseball and Tom Ricketts declined to comment to Bloomberg. The Ricketts family reportedly has reached a deal with Tribune to buy the team.
It's possible the team could be sold without a bankruptcy protection filing, the sources told Bloomberg.
A Chapter 11 filing could ensure that the team isn't tangled up with Tribune's creditors, Michael J. Cramer, an assistant professor of sports management at New York University and who formerly was president of the Texas Rangers, told Bloomberg.
"This would make sense for Major League Baseball," he told the news service. "They would like to see that asset be stand-alone, very clean, not tied up in other issues."
A filing by the Cubs would be meant to provide for quick selling of the team assets, the sources told Bloomberg.
Filing for bankruptcy protection would not mean that the Cubs are having financial problems, Gregory A. Cross, head of the bankruptcy practice at law firm Venable LLP, told Bloomberg.
"You do not have to be insolvent to be in bankruptcy," Mr. Cross, who is not involved in the matter, told Bloomberg. "All you need is a legitimate business reason."
PointofLaw (Walter Olson) has a post here with a link to the online convention brochure for the the American Association for Justice, which is the trade association for the plaintiff's bar in the US. It's well worth reading to see what's ahead. For example, there are entries indicating panels or presentations aimed at increasing sophisticated issues at all levels of the claiming process and international issues:
1) tips on following insurance back to include reinsurance,
2) tips on delaing with ERISA, subrogation and the "make whole" doctrine;
3) an international practice section focused on Mexico, Canada, England and the US;
4) the "resort tort" litigation group; and
5) a review of tort reform in Canada. which the brochure calls "tort recovery restrictions."
In general, it seems inevitable that itigation as an industry will keep growing because:
1) non-US countries such as the UK and Australia increasingly treat treat law as the business it is and are allowing outside investment in litigation and law firms ,
2) litigation funding is booming thanks to investors that include insurance companies seeking better ROI, and
3) science is finding more and more "bad things" out in the world, ranging from endocrine disruptors to the cancer rate rising materially around the world.
The world plainly is growing smaller and is more subject to empiric evaluation. To me, those are great trends for many reasons, including my preference for facts instead of hearsay and anecdote. So, I follow the Empirical Legal Studies blog. The following post is germane for lawyers around the world seeking to better understand the activities of the European Court of Justice.
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from Empirical Legal Studies by Jason Czarnezki
Alec Stone Sweet and Thomas Brunell have posted three data bases, on the activities of the European Court of Justice, and the adjudication of EU law, under Articles 226 (infringement proceedings - brought by the Commission against a Member State), 230 (annulment actions in administrative law brought by individuals and companies against the EU), and 234 (preliminary references from national judges to the ECJ). They collected these data over the course of 12 years, and they are unavailable outside of the Court, which does not provide public access to them. The home for these data is the Robert Schuman Centre, the European University Institute. The datesets, accompanying codebooks, and papers providing summary analyses of the data can be found here: http://www.eu-newgov.org/datalists/deliverables_detail.asp?Project_ID=26. Since 1996, scholars have used these data in a wide variety of research projects, including doctoral dissertations, books, articles in economics, law, sociology, and political science.
Hard to resist posting on this classic law school issue, even if not really a tort. The article below is excerpted from the Chicago Daily Law Bulletin's story on a June 26, 2009 Illinois appellate court opinion.
http://www.chicagolawbulletin.com/case/get_story_text.cfm?id=100004556
"Plaintiff James Carroll filed a two-count replevin action against defendant Alison Curry after their romantic relationship ended. Count 1 sought the recovery of an engagement ring and Count 2 sought to recover other items of personal property, including a plasma television and audio equipment.
The record showed that the plaintiff proposed marriage to the defendant in late April 2000 and at that time, he gave her a ring he purchased specifically for the proposal. The defendant accepted the proposal, the two became engaged and some months later the plaintiff moved into the defendant's residence. On Nov. 16, 2005, the parties' relationship ended after the defendant accused the plaintiff of infidelity and ordered him to leave her home.
The trial court in April 2007 granted the plaintiff's motion for summary judgment on Count 1. The trial court said that the appropriate analytical framework for the case lay in contract principles and that "fault" was not a consideration in the determination as to whether the plaintiff was entitled to the return of the ring.
The appeals court affirmed. The court said that replevin is a strict statutory proceeding and that the statute must be followed precisely. The primary purpose of the replevin statute is to test the right of possession of personal property and place the successful party in possession of the property, the appeals court said.
In this case, the appeals court said that the evidence showed that the plaintiff was entitled to possession of the ring because there was no dispute that the plaintiff alone purchased the ring or that he gave the ring to the defendant for the explicit purpose of proposing marriage.
"Thus it is undisputed that the ring was a give in contemplation of marriage. Gifts given in contemplation of marriage are deemed conditional on the subsequent marriage of the parties and the party who fails to perform on the condition of the give has no right to property acquired under such pretenses," the appeals court said.
"Given that the parties in this case did not marry and that defendant intended to terminate the engagement when she ordered plaintiff to leave her home, clearly the condition attached to the gift of the engagement ring was not fulfilled. The record reflects that plaintiff established his right of possession," the appeals court said.
In addition, the appeals court said that the plaintiff established that the defendant wrongfully detained the ring and that her continued possession of the ring constituted wrongful detention for purposes of the replevin statute. The appeals court rejected the defendant's contention that because the plaintiff breached his promise of fidelity and caused the engagement breakup, she was entitled to keep the ring.
James B. Carroll v. Alison E. Curry, No. 2-07-0812. Justice Susan F. Hutchinson wrote the court's opinion with Presiding Justice Kathryn E. Zenoff and Justice Donald C. Hudson concurring. Released June 26."
A July 10 article in the Mirror reports (bitterly) that the British government has taken a decision not to reinstate compensation for pleural plaques. The decision follows up on last summer's government Consultation paper available here. The decision apparently will be formally announced this coming week ahead of the July 20 recess date for Parliament. The apparent decision in London stands in marked contrast to Scotland's mistaken decision to legislate to reinstate compensation for pleural plaques, a decision presently under legal attack as described here back in April.
According to the Mirror article, the government in London has made the wise decision not to encourage pleural plaques claiming. Specifically, the government apparently will not pass legislation to overrule the Rothwell decision by the House of Lords. The gist of the Rothwell was the holding that pleural plaques are not compensable because they virtually never cause any physical impairment or pain, and therefore there is no compensable injury. According to the Mirror article, the government will, however, establish an online research center for asbestos-related disease and will pay compensation of ยฃ5,000 to about 6,500 persons whose claims predate Rothwell.
According to the Mirror article, unions are unhappy with the decision taken by the government. However, one hopes that on reflection, the unions and their members will appreciate the wisdom of the long-term decision. Why? There are myriad reasons, most of which I described in a detailed paper submitted last fall in opposition to the extreme parts of the proposals set out in the UK government's Consultation paper. Overall, the big picture point is that experience in the US has proven that paying compensation to persons without impairment is bad policy that drains away resources (medical, financial, judicial, and governmental) that should be focused instead on coping with the terrible burdens inflicted by mesothelioma tumors and certain other asbestos-related cancers that tend to arise in some parts of the body for persons with material amounts of work in certain occupations.
Ultimately, the folly of paying compensation to the unimpaired is evidenced by the tidal waves of claims that swamped US courts and asbestos trusts to the point they ceased to provide anything even remotely close to justice for injured persons or corporate defendants, as has been detailed by Professor Lester Brickman, with key excerpts set out in the opposition paper. Ultimately, claiming by the unimpaired became so enormous and costly it rendered the Johns-Manville asbestos trust insolvent more or less on the day it opened its doors, causing it to shut down operations in 1990, two years after it opened in 1988 after 6 years of legal wrangling. Then, after about 5 more years of lawyering, the Manville trust reopened but paying only a tiny fraction of the amounts that would otherwise be available to mesothelioma victims.
For more specifics, read the Manville trust history here on the Manville Trust website. Then read Judge Weinstein's 2009 paper lamenting the reality that the US legal system has done at best a lousy job dealing with mass tort issues. Judge Weinstein's words deserve special heed because he was central to Manville, Agent Orange and other mass tort cases described in his thoughtful paper. Also read the 2005 RAND report that details developments in the US asbestos claiming process. Finally, read through at least some of Professor Lester Brickman's voluminous law review articles and Congressional testimony regarding the disastrous developments in mass asbestos-claiming by unimpaired persons.
The unions and their members also should heed the growing need to focus on cancer because the cancer situation is only going to get worse in the UK for - at least - another decade and perhaps much longer. Specifically, after the UK Consultation was issued last summer and after oppositions to the Consultation were submitted in fall 2008, the case against paying compensation for pleural plaques became even more compelling when a cadre of highly qualified and experienced UK researchers published a landmark medical article further detailing the growing UK epidemic of mesothelioma tumors. The article explains that widespread and long-running use of amphibole asbestos fibers in the UK has resulted in the UK having the highest mesothelioma rate in the world. The conclusions and work of the group, lead by the much-honored Professor Julian Peto, are summarized here, and an online paper is here. The work of the research group is ongoing until at least 2015 - a clinical research description for the ongoing work is here. The citation for the landmark paper and related online paper are:
Rake C, Gilham C, Hatch J, Darnton A, Hodgson J, Peto J. Occupational, domestic and environmental mesothelioma risks in the British population: a case-control study. British Journal of Cancer. 2009;100:1175-1183.
Peto J, Rake C, Gilham C, Hatch J. Occupational, domestic and environmental mesothelioma risks in Britain: a case-control study. Health And Safety Executive Research Report RR696 (2009) published online here.
The D + O Diary, a blog on D + O liability, includes this post about a new German law that seeks to change behavior of corporate officers and directors by imposing 10% of a loss on the individual officers subject to an annual cap. Here's the gist of the law as described by the post:
"Among other things, this new Act will impose a new requirement that German Stock Corporations (Aktiengesetz) purchasing D + O insurance for their executives must impose a personal deductible to be borne by the directors in an amount equivalent to at least 10% of the relevant loss, up to an annual cap. Comments accompanying the Act specify that the annual cap must be set at not less than one and one half the annual fixed remuneration of the director."
The post goes on to cover issues/methods that may come into play if Ds and Os and their companies seek to skirt the new law. In short, an interesting article about an interesting new law, but perhaps the ultimate point is that the article proves that most any government has a heck of a time actually regulating business because lawyers and business persons often can find or create a way to skirt many laws, for better or for worse.
Wow - see here for a basic article on the Lehman fees, and here is a link saying that Prof. LoPucki thinks fees may end up at slightly less than $ 1 billion.
Among the fee earners, lawyers are doing well as shown by the exceprt below from an article on Lehman by LAW360 is a subscription service.
http://bankruptcy.law360.com/articles/110521
By Anne Urda
***
Thus far, Lehman has paid the firm an estimated $114 million for its services, which has included Marsal taking over the reins at Lehman and guiding it through the bankruptcy process.
In May and June alone, the firm earned $18 million for the interim management provided, according to the report.
Lead counsel Weil Gotshal & Manges LLP has also raked in an estimated $63 million for the work it has performed on the massive bankruptcy case thus far, with special conflicts counsel Curtis Mallet-Prevost Colt & Mosle LLP collecting an estimated $6 million over the past few months for the work performed, the report revealed.
Milbank Tweed Hadley & McCloy LLP, which serves as lead counsel for the creditors committee, reaped just over $17 million for the hours logged, while court-appointed examiner's lead counsel Jenner & Block LLP has been paid more than $6 million for services rendered so far, according to the report.
An interesting and detailed post here from Empirical Legal Studies on the future of legal education, including recent "radical" but great questions/issues posed by maverick Paul Lippe of Legal Onramp.
Updated: Nothing is simple. Some links below are not working to see the underlying documents were uploaded as "pdf packages" instead of simple .pdf files. So, while the link provider figures why a package is a problem at least on some browsers, you may find it easier to see the papers on the free THAN website, which is here. See docket numbers 453 (objection of Waters & Kraus), 454 (Kraus Declaration), 455 (Debtor's response), 456 (Bae declaration), and 457 (Kozen declaration). My apologies for the hassle.
How much money are asbestos claimants obtaining from asbestos bankruptcy trusts ? Unfortunately, different people will give you different answers, and they can sometimes get away with it because most if not all of the asbestos trusts fail to act in a transparent manner. However, some concrete facts about payouts from one trust in formation have now surfaced in papers filed in the Thompson-Hayward asbestos-driven chapter 11 case (commonly known as the THAN case). The papers are especially significant because they include facts about asbestos payments that are set out in a declaration from a credible source - highly successful plaintiff's lawyer Peter Kraus. And, his declaration is backed by confirming emails and spreadsheets. The bottom line, further explained below, is that his declaration and supporting spreadsheets prove significant tort system payments by THAN to Waters + Kraus clients, and that his law firm expects equally large payments for the firm's clients when the THAN trust starts operation. How much? Over $ 700,000, per Waters + Kraus claimant.
How has this information surfaced ? Claimants represented by the Waters + Kraus firm filed with the bankruptcy court late last month a last minute and technically untimely objection to plan confirmation ( I say technically untimely because bankruptcy court deadlines are often absurdly short, and one could very well make that argument here.) The facts about present and expected payments are set out in the Waters + Kraus objection and related papers. The objection already has been denied by Bankruptcy Judge Gerber (yes, the same Bankruptcy Judge Gerber who is hearing the GM case). But, denial of the objection does not change the facts stated in the papers. Meanwhile, Waters + Kraus has filed an appeal to the district court.
What do the papers show about tort system payments? The papers show that the THAN-related entities and Waters + Kraus agree that there was an average tort system payment of at least $ 710,000 per claimant to about 65 mesothelioma claimants represented by the Waters + Krause firm. Why so much ? Mr. Kraus' declaration attributes the average to his firm's zealous investigation of and ability to prove up THAN's history as a seller of asbestos fibers (fyi, THAN also was a maker of Agent Orange). Mr. Kraus' declaration includes supporting spreadsheets listing the claimants represented by his firm by name, along with the 4 digits of their social security numbers. His declaration also includes an interesting form of agreement with respect to solicitation of votes for the prepack.
What do the papers say about payouts from the upcoming THAN trust? read it for yourself, but to me the essence of Mr. Kraus' declaration is the assertion that the Waters + Kraus lawyers agreed to recommend that their asbestos clients vote in favor of the THAN plan based on prepack negotiations in which lawyers for THAN and related entities assured Mr. Kraus that the trust would be created so that payouts to clients of his firm would be on average at least as ample as the tort system payouts.
What are the exact numbers? The papers, indicate a slight disagreement as to the average amount of tort system payments to the 65 claimants. Mr. Kraus asserts that the average payment in the tort system for Waters + Kraus claimants was $ 721,000 per claimant. But, as Mr. Kraus acknowledges, counsel (Mr. Kozen) for an entity known as PENAC (a Phillips Electronics entity) had asserted $ 710,000 as the average, with this modest disagreement apparently never brought to a close.
What other testimony is in the record? Lawyers for THAN (Mr. John Bae) and PENAC (Mr. Michael Kozen) submitted declarations to counter Mr. Kraus' testimony as to exactly how the deal was negotiated and expressed. I commend reading the papers to make your own decision about whether they actually assert a meaningful distinction from the statements of Mr. Kraus. But, plainly their testimony does not take issue with Mr. Kraus' fundamental assertion that he ended the negotiations understanding that the trust is expected to make payments to Waters + Kraus claimants that are consistent with the tort system payments of well more than $ 700,000 per Waters + Kraus claimant. Under the "forthright negotiator" line of reasoning, what he and they knew about the negotiations are relevant facts.
Where are the papers? At least for now, all the papers are available on the free THAN website, which is here, or of course are available through PACER. In addition, copies of some of the papers I thought relevant have been posted to a hopefully permanent spot on the web. Mr. Kraus' Declaration (with exhibits) is here. Briefs and other motion papers are here. And here are the declarations from Messrs. Bae and Rozen.
A future post will provide more on why these numbers are so important in underlying tort cases, and why the numbers and papers provide yet another example of why it is poor policy to allow most if not all of the chapter 11 trusts to operate, as they do now, with virtually no automatic transparency at the claimant by claimant level and with layers of hoops and burdens "baked in to" trust distribution procedures to thwart, delay and increase the expense and difficulty of obtaining meaningful information from the trusts. As always, please bear in mind my continuing disclosure about my work and history to the extent anyone wishes to say they color or inform my statements.
Judge Gerber denied a stay of the asset sale and denied a direct appeal to the 2d Circuit; the order is here (Docket No. 3046). Basic news articles are here (WSJ) and here (NYT).
What the news articles do not mention is a bankruptcy appeal doctrine known as the "equitable mootness" doctrine. Under that doctrine, appeals are sometimes dismissed as moot after the relevant bankruptcy event has happened. Here, the relevant event would be the consummation of the upcoming asset sale that Judge Gerber has refised to stay.
For a recent, cogent and free law review article explaining the "equitable mootness" doctrine and why some say it is unconstitutional, go here for a Santa Clara Law Review article by a law student, Katelyn Knight.
There is irony to the current events in GM. Why? Because in various asbestos chapter 11 cases, counsel for asbestos claimants and counsel for futures representatives have argued and used the equitable mootness doctrine as a leverage point to try to shield chapter 11 plans they approved when many, many millions were being set aside for asbestos claimants. Now the equitable mootness doctrine may hit them as a sword. So goes life in litigation where much time is spent trying to dance on both sides of a sharp edge.
An Amlaw article here details global government cooperation with respect to potential claims arising from the Madoff ponzi scheme. Accoridng to the article:
"Gerhard Jarosch, spokesman for the Vienna public prosecutor's office, told The Associated Press his office is aiding the U.S. Justice Department and Britain's Serious Fraud Office in separate investigations of Bank Medici AG and its chairwoman, Sonja Kohn."
***
"The Wall Street Journal, citing affidavits filed in the case, reported Friday that prosecutors from all three investigations believe Madoff -- sentenced a week ago to 150 years in prison -- paid Kohn in exchange for allegedly funneling billions of dollars in European investments to Madoff. "
An AmLaw blog article here reports some GM bondholders are not appealing because they lack funds to fight after Judge Gerber refused to appoint an official committee for which legal fees would be paid by the estate. The article includes a helpful link back to a prior article regarding the refusal to allow an official committee.
According to the article:
"Second, and perhaps most interesting for bankruptcy gurus, Richman argues that the sale of GM under ยง363 of the bankruptcy code stretches ยง363 to a place it wasn't supposed to go. Here's his direct quote: "Our position on appeal would have been that in enacting section 363 as part of Chapter 11, Congress intended that it would only be used for legitimate sales to commercial purchasers, and not for a government-sponsored rescue where the government is the only purchaser."
The AmLaw blog post here describes and includes a link to a newly filed complaint that seeks $ 1 billion and a class action for Mexican investors hurt by the Stanford ponzi scheme. The complaint invokes aiding and abetting claims against Willis and an insurance broker. Of note, the complaint was not filed by a typical class action firm and instead was filed by Strasburger & Price, an old-line and full-service Texas law firm typically aligned with corporate interests that some might think would indicate the firm would not file a class action suit. According to the article:
"The complaint states that the defendants gave Stanford Financial "safety and soundness" letters designed to help it market its investments. "Willis and BMB crossed the line from being mere insurance brokers for the Stanford Financial Group," the complaint alleges. "In creating and submitting these letters into the stream of commerce, [the defendants] actively and materially aided Stanford Financial to perpetrate the massive Ponzi scheme now alleged by the SEC."
The Ad Hoc Committee of Asbestos Claimants notice of appeal in GM is here but says only that an appeal is taken(Docket No. 2988). The appeal lists as counsel both Stutzman, Bromberg, Esserman + Plifka, as well as the Caplin + Drysdale firm. Like the other product liability claimants, the Ad Hoc Asbestos Claimants also have moved for a direct appeal to the Second Circuit. The Ad Hoc Committee also has moved for a stay of the sale approval order entered on Sunday night the 5th of July.
The core of the Ad Hoc Committee's substantive argument is as follows:
"12. Congress has proscribed the very conduct that the Debtors seek to accomplish through their improper Section 363 Sale--i.e., the transfer of substantially all of their assets to a "new" entity that will simply continue operating free from the liabilities of the old entity--in two parallel provisions of the Bankruptcy Code: Sections 1141(d)(3) and 727(a)(1). The Second Circuit has held that claims--and specifically successor liability claims--are not discharged by a corporate iquidation in bankruptcy. In re Goodman, 873F.2d 598, 602 (2d Cir. 1989). The Bankruptcy Court's erroneous interpretation of Section 363(f) effectively nullifies Sections 1141(d)(3) and 727(a)(1) by improperly allowing the Debtors to circumvent these Code provisions under the guise of a Section 363 sale.
13. Furthermore, the Sale Order purports to allow the Debtors to sell substantially all of their assets free and clear of "claims." However, successor liability is not a "claim," but rather is a status a purchaser has under applicable state law. Thus, Section 363 cannot apply to strip a purchaser of that status."
The Goodman case is a chapter 7 case, not a chapter 11 case, so GM presumably will argue it does not apply. Goodman, however, is a fairly compelling case for the product liability claimants. In Goodman, a businessman and his wife cover a period of years created a series of three businesses to do essentially the same work. The first company was party to labor contracts the later companies did not want to honor the prior labor obligations that had become inconvenient and expensive, and the first company had tried to discharge the obligations through chapter 7.
The Second Circuit held that the bankruptcy court order could not oust the jurisdiction of the NLRB to determine if the later entities were in fact successors to the old business regardless of the corporate niceties that purported to create differences between the different entities. So, in GM, the argument for the claimants runs that just as the bankruptcy court in Goodman could not deprive the NLRB of its power to consider whether the new entities should suffer successor liability under labor laws, the bankruptcy court in GM can not oust state courts of their traditional jurisdiction to decide whether and when to impose state law tort liability on alleged successor entities. The issues could be decided as matters of statutory construction grounds or constitutional law grounds (due process, 5th amendment takings , and maybe even equal protection under Bush v. Gore), but standard legal rules urge courts to resolve issues as a matter of statutory construction before reaching constitutional issues.
(Ironically, by the way, the Goodman case was argued and lost by Mr. Bruce Zirinsky while at Weil, Gotschal. Today, Mr. Zirinsky is with Greenberg Traurig and is the lead lawyer for the debtor in the Thompson -Hayward Chemical Co. asbestos chapter 11 case for which a chapter 11 plan was recently approved by the same Judge Gerber. Thompson-Hayward is a former manufacturer of Agent Orange and seller of asbestos fibers that is using chapter 11 to end its asbestos litigation issues and to settle out hundreds of millions of dollars of insurance policies that might otherwise be available to future claimants who could file direct actions against insurers.)
Meanwhile, the Individual Accident Litigants in GM also have sought a direct appeal to the 2d Circuit; the papers are here (Docket No. 2990). The accident litigants point out that the 2d Circuit still has not issued an opinion in Chrysler to explain the reasoning behind its judgment to approve the 363 asset sale. The accident litigants argue that this appeal in GM may also inform the Chrysler opinion the 2d Circuit said it would issue in due course, thus sharpening the issues for ultimate appeals to the Supreme Court in both Chrysler and GM.
The Individual Accident Victims further frame the issue in broad societal terms, arguing that society has a real stake in whether Code section 363 can be used to indestructible asset sales followed by de facto liquidations, a technique Wall Street can and does use to cause the bankruptcy code to cause immediate distributions of remaining assets before long tail tort claims emerge and are compensable. The Accident Victims frame the 363 issue as follows:
Indeed, this issue is one of the most important issues facing bankruptcy practitioners and distressed debtors generally.Satisfactory uniform resolution of the scope of Section 363 is critical for the entire nation, particularly since, as Professors Baird and Rasmussen wrote in The End of Bankruptcy, 55 Stan. L. Rev. 751, 752 (2003):
"Corporate reorganizations have all but disappeared. Giant corporations make head-lines when they file for Chapter 11, but they are no longer using it to rescue a firm from imminent failure. Many use Chapter 11 merely to sell their assets and divide up the proceeds.... Rarely is Chapter 11 a forum where the various stakeholders in a publicly held firm negotiate among each other over the firm's destiny"
Here's a new example of changes in science causing changes in law. An article here reports the Danish government has now paid industrial compensation to some 40 women for incidents of breast cancer when they had 20-30 year careers working night shifts. The article includes a UK defense lawyer at Eversheds warning that studies by IARC and the Danish decision may put UK employer's on notice of the risk. Here are key excerpts:
"Are workers at risk of developing cancer because of their shift patterns? That is the question that will be troubling UK employers now a UN study by the International Agency for Research on Cancer (IARC) has concluded that working night shifts raises the risk of breast cancer.
The UN study found in particular that nurses and flight attendants involved in night-shift working over a period of 30 years had an increased incidence of breast cancer.
The study is not definitive - for one thing, it only looked at a limited number of occupations - and the IARC itself has called for further research. However, the Danish government has been sufficiently concerned to recognise as an industrial injury breast cancer developed after night-shift work. That finding cleared the way for compensation payments to approximately 40 women who had worked night shifts for some 20-30 years where there was no other significant factor to explain the development of the cancer.
But even though employers may not yet have the full picture, the courts have decided that it is only necessary to know that some harm is foreseeable to its workers - not the exact type of harm.
The HSE has issued no guidance in this country, and its own research into the potential link is not expected until 2011, but that is not a complete defence when an EU government is already paying out on such claims. Employers cannot ignore this research when assessing the risks to which they expose their workforce. Employers who have made such assessments and given warnings are in a better position to ward off claims."
The General Motors chapter 11 asset sale was approved on Sunday night in an opinion that is 50 pages, plus appendices. The opinion is here. A first read of the opinion indicates that Judge Gerber agreed with GM on all material issues regarding freeing GM from liability for tort claims except to the extent "New GM" agreed to assume financial responsibility for some but not all future claims. More later wth additional specifics.
A notice of appeal was filed this morning by individual auto accident victims, and is here.
Ironic the difference a continent can make. In the US, companies usually do not promote their involvement in current or past production of asbestos-containing products. Not so in India, where an online stock analyst item regarding Eternit Eeverst Ltd. lauds the profit in the company's production of asbestos-cement products. It states:
"The Tatas and the Eternit Group of Belgium set up the pioneer of asbestos fibre products in India, Eternit Everest Ltd . The company is a pioneer in the manufacture of fibre cement roofing products and flat sheets. Eternit enjoys a market share of over 20%. Everest Industries Limited provides you with the world-class building solutions to meet your construction requirements, in the Industrial, Commercial and Residential sectors. Historically, Everest has provided rural shelters by making corrugated roofing sheets available to farmers at a competitive price. The company is poised to capitalize on the opportunities in rural India where various housing and infrastructure initiatives are envisaged by the Government.
Products & Services
Everest offers a complete range of building solutions which includes Ceilings, Walls, Flooring, Cladding, Doors, Roofing and Pre-Engineered Steel Buildings. These are produced at Everest's state-of-the-art ISO: 14000 certified manufacturing facilities at Kymore, Nashik, Coimbatore, Kolkata and Roorkee. With over 4000 retail points spread across the nation together with the strength of over 1285 highly qualified and experienced engineers, designers and technicians, Everest provides you building solutions that successfully meet the highest standards of quality and durability.
Everest, the second largest player in the roofing industry, manufactures various asbestos and non-asbestos based products like roofing sheets, flats and boards that find application in housing, false ceiling, partitioning, interior etc. The company has embarked on a project to add capacities of non-asbestos products that also demand higher margins. It expects to capture square meter corrugated sheet market in the country. Following the break through in exporting this product in the Sri Lankan market, the company plans to tap the export market as well.
However the company is increasingly looking at international markets to widen its revenue base; it expects exports to increase in the coming years. Everest is actively looking at opportunities in African and European markets (where asbestos is banned) to widen its geographical reach. With the increasing share of exports in its total sales, the operating profit margin of the company will improve, as exports fetch better margins than domestic sales.
Valuations
At current market price, stock is trading at 7.82 P/E multiple of its FY2010 estimated earnings. We recommend investors to buy "Everest industries Limited" with medium to long term investment horizon."
After an updated review, the UK's Industrial Injuries Advisory Council (IIAC) has issued a June 30, 2009 paper announcing that it continues to recommend against paying compensation for pleural plaques because plaques are not actually disabling. The IIAC announced online last fall that it was considering the topic and invited comments. The panel concluded that plaques should not be compensated as an industrial disease because the plaques are very seldom symptomatic and do not by themselves correlate to an increased risk of cancer. Instead, they are simply markers of past inhalation of asbestos fibers. The paper is 60 pages long, and includes a detailed review and table summary of medical literature on pleural plaques as they relate to disaility or cancer risk.
According to a very pro-claimant article in the Scotsman, the UK government will consider this report before meeting its self-imposed deadline of July 21 for stating a view on the pleural plaques consultation that was started last year. Specifically, the article states:
"Though the IIAC said its report was not meant to advise on the issue of civil compensation, the Ministry of Justice said its decision would be "informed" by the report, which would "make an important contribution to the debate".
On this our nation's anniversary of its independence, you may find interesting/amazing a Pravda article on 1940s era use of cement bombs made from asbestos cement. And, by the way, this post was written long ago but set to post today. http://english.pravda.ru/main/18/87/344/10033_concrete.html
Soviet Invention of the 1940s: Concrete Bombs
20.05.2003 Source: URL: http://english.pravda.ru/russia/2851-concrete-0
Although the USA says concrete bombs used in raids on Iraq are the latest innovation, the USSR used them already in WWII.
The wonderful weapons that Americans used in raids on Iraq, the concrete bombs, were produced by Soviet plants already in the beginning of WWII. However, it seems that the USA hasn't hit upon another know-how of the Soviet Union. These are slate mines that were produced by the Soviet enterprise Kommunar in the 1940s.
Samples of this "weapon" can be seen in the city preserve museum in the Russian city of Novorossiisk. Deputy Director of the museum Lev Stepko describes the exhibits and speaks about their negative and positive aspects. The waterproof body of the weapon increases its reliability. Only the fuse is made of metal, which makes the slate mine immune to mine-detectors.
However, series production of concrete bombs and slate mines was started because of the availability and low price of the stuff they were made of. Weapons of this kind had several disadvantages as compared with the conventional arms: they were very fragile and could be damaged in long transportation. Concrete bombs and slate mines were used by the Soviet army in the Caucasus battle.
However, there are just few documents in the Novorossiisk city museum saying how civil enterprises producing construction materials were turned into defense enterprises. For example, documents in the archives of the concrete department of the People's Commissariat for Construction Materials say, a production line for making concrete bodies for bombs was opened at the enterprise Proletariy. About 20,000 concrete bodies for bombs were produced at the enterprise.
Historian Sergey Novikov searched the archives of the concrete industry museum and found documents proving that all concrete-making enterprises started this kind of production from November 1941 and finished it in August 1942, when German troops neared the city of Novorossiisk. Equipment of the concrete enterprises was evacuated to Georgia and Central Asia then. As Sergey Novikov says, the concrete enterprises mastered a unique technology. Concrete bombs were mostly used for training purposes, but those produced in the cities of Nevyansk, Volsk and Novorossiisk were used at war. Workers in Novorossiisk made concrete bodies even for unique 5-ton bombs.
The usage of those cases depended upon the stuffing. Explosives or chemical agents could be placed inside the concrete bodies; chemical agents were also used in target indicators. Those indicators were dropped on targets, but they didn't detonate and indicated the area for bombing which was clearly seen by pilots in the sky. It is highly likely that concrete bodies were sent to the arsenals where the military filled them with tolite and trotyl. There is also a version saying that concrete producers even had to stuff the bomb bodies themselves.
Documents in the archives reveal anxiety of top managers at the Novorossiisk concrete enterprises: they realized that strict discipline measures must be taken at the enterprises because they were given an unusual task of filling concrete bodies with explosives. As for production of slate mines at the enterprise Kommunar, historian Sergey Novikov even managed to find a woman participating in the production in the 1940s. Maria Leonova didn't assemble slate mines herself; she worked as an electrician in the production workshops of the enterprise.
She says that production of the weapon was started in the autumn of 1941. The production cycle wasn't difficult. Fresh asbestos-concrete mass (so-called eternit) was placed into moulds made of wood. The newly-made slates were used for making boxes of different sizes. Prominent edges of the newly-made boxes were moistened and trimmed. Bodies of mines were placed into special chambers for drying. Those mines were used against tanks. As it becomes clear from the story told by Maria Leonova, the slate boxes were stuffed with explosives somewhere outside the enterprise. Although, the workers of the enterprise didn't have to deal with explosives, they all the same had to keep the details of the work secret.
The war in Iraq has demonstrated that all modern innovations were developed long ago and were recently just furnished with modern details, such as high-precision laser pointing systems. As representatives of the US and UK Air Force say, the latest concrete bombs are meant for hitting particular targets. There is no explosive inside these bombs; the effect of these bombs is based upon kinetic energy and high percussive power. As the coalition forces say, concrete bombs don't split into pieces and consequently cannot injure accidental victims. They may say whatever they wish, but the present-day hostilities have already demonstrated that there cannot be absolutely humane weapon at all. Svetlana DobritskayaNovorossiisk Rabochy
ยฉ 1999-2006. ยซPRAVDA.Ruยป. When reproducing our materials in whole or in part, hyperlink to PRAVDA.Ru should be made. The opinions and views of the authors do not always coincide with the point of view of PRAVDA.Ru's editors.
July 4 seems like an appropriate day for a post on whether our legal forerunners in London will follow us in making the mistake of passing legislation to reinstate obtaining compensation for persons with pleural plaques. (To digress for a moment, I happened to be in London a few years back on one of the five days they had for oral argument in the appellate court on pleural plaques. It was a treat to hear US precedents cited to a British court after all the time spent in law school reading musty old British cases - who could forget the rule in Shelley's Case. )
Back on topic, there was more committee debate on July 1 on the pleural plaques legislation, but no real action. You can read it all here on a very nicely done volunteer website known as TheyWorkfor You. The bottom line is that once again it was said that the government will announce a decision before summer recess, but no specifics were offered.
Due to how the UK government publishes its online draft legislation (to the great frustration of the volunteer group) the website does NOT include the full text of the legislation. Instead, you have to go to the official website here to get the text of the bill.
Here is a blog entry from one of the lawyers at the Conglomerate explaining part of the personal and moving story behind how and why Major League Baseball is commemorating this July 4 as the 70th anniversary of Lou Gehrig's still-powerful "Luckiest Man" speech. It's a great reminder and its great to see this consciousness-raising, especially in this year of debate about health care reform. Such a shame we do not yet have a cure for this insidious disease and related diseases.
Jones Day lawyers wrote a detailed article on new Chinese Supreme Court rules regarding litigation over non-performing loans and state-owned banks. This is not quite tort litigation, but provides yet another example of the accelerating relationships between legal sytems, and the difficult issues that may arise when dealing with state-owned entities.
You can see the article here on Mondaq if registered or here on the Jones Day website.
Yesterday, representatives of the asbestos plaintiff's bar argued in opposition to the terms of GM's proposed asset sale, as briefly described in the NYT article here. The WSJ covered it here , but said even less.
Accounts of the hearing and other information sources also indicated that New GM will be aiming for an IPO next year, as described in this WSJ article. It surely will be interesting to read the disclosures and caveats in the prospectus when New GM tries to sell shares next year and the prospectus tries to disclose and explain the material long-term legal risks inherent in the present rush through chapter 11 in a manner that raises significant issues regarding the enforceability/constitutionality of the present proceedings.
Down the line, expect that disappointed asbestos claimants and/or car dealers may well sue New GM regardless of the bankruptcy court orders and/or may proceed with collateral attacks of the sort that were successfully raised in the Agent Orange cases when "later" tort claimants were allowed to sue the Agent Orange makers despite the prior class action and prior settlement. Why were the "later" claimants allowed to sue? Because they were not yet hurt and so did not yet have claims when the Agent Orange issues were in court, and no one in court actually protected their interests in a conflict free way. In short, the future claimants did not receive due process during the original Agent Orange proceedings.
How does that apply here? When New GM goes to sell shares, one can expect that disappointed asbestos claimants and car dealers will assert that this chapter 11 case has been unconstitutional. The result presumably will be the IPO share price will fall due to whatever value the market gives the uncertainty about whether New GM really is immune from future claims. If/when that happens, everyone will find themselves back in the type of situation that arose when the goal was to create a public market for shares in the Manville entity that emerged from chapter 11. Back then, concerns were raised that Manville shares were undervalued because of uncertainty regarding whether the outcome of the Manville bankruptcy would be legally sustainable over the long term due to constitutional and other legal issues arising in Manville's chapter 11 case. Ultimately, to help drive up the share price, Congress in 1994 enacted bankruptcy code section 524(g) to retroactively "bless" the result in the Manville bankruptcy.
How did 524(g) work? The statute did well to create short-term value that Wall Street could sell. But, the terms of section 524(g) ultimately proved to be a huge mistake since the section gave enormous leverage to holders of even meritless or de minimis tort claims. How did that happen? Section 524(g) says that a 524(g) injunction can issued to bar future asbestos claims only if the chapter 11 plan is approved by 75% of the asbestos claimants, and the statute did not on its face draw lines between the holders of meritless claims and the holders of more meritorious claims, such as the claims of victims of mesothelioma, a disease plainly caused in many cases by inhalation of asbestos. Therefore, due to the terms of section 524(g), and due to various tort law developments, the game for plaintiff's lawyers and claimants became all about aggregating thousands of asbestos claims, regardless of merit. Thus, in trying to fix a short-term problem, Congress itself helped to incentivize the x-ray vans and other union screenings that later lead to mass filings of law suits that started spiraling up in the mid to late 1990s and by 2000-2001 had exploded to the point that even more companies were driven into chapter 11.
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P.S. The absence of transparency in bankruptcy continues. It would be interesting to read the argument and questions underway in GM, and indeed one would think that would be easy for this nationally important case for which the public and other businesses could and should be fully informed through prompt online publication of free copies of the hearing transcript. But that will not happen for 90 days because GM, the official committees, Judge Gerber and the Obama Administration's Auto Task Force have not taken the simple step of entering an order allowing immediate electronic posting in the docket of the hearing transcripts, a step that is taken 90 days after the hearing. Instead, they continue to tolerate (enjoy?) the antithesis of transparency, which is a short-sighted bankruptcy court rule requiring 90 days of delay for publication of hearing transcripts due to fears that a social security number or other like information might be uttered during the hearing and then published in a piece of paper.
In a painfully minor nod to this lack of transparency problem, the Court's website says that audio tapes will be put on PACER, but this week's hearings still are not online as audio files as of July 2 at 12:00 pm. So, for now, those with extra money can buy unofficial transcripts for however many hundreds or thousands of dollars they are being sold. Or, one can wait and slowly wade through the e online audio transcript when they some day are made available through PACER. Or, you can wait and be fully informed long after the information is most useful. Go here to read more about the audio transcripts. The same text also is set out below. If you do listen, let me know if you hear the lawyers or Judge Gerber mention any social security numbers.
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Announcement
The United States Bankruptcy Court for the Southern District of New York is pleased to announce a pilot project to make digital audio recordings of court proceedings relating to Chrysler LLC, 09-50002, and General Motors Corporation, 09-50026, publicly available online. The audio files are accessible through the Public Access to Court Electronic Records (PACER) system. Registration for PACER access may be obtained at http://www.pacer.psc.uscourts.gov/
Please remember that these digital recordings are copies of court proceedings and are provided as a convenience to the public at the cost of $0.08 per audio file. In accordance with 28 U.S.C. ยง 753 (b) "no transcripts of the proceedings of the court shall be considered as official except those made from the records certified by the reporter or other individual designated to produce the record." A list of approved transcription companies can be found on the court's website.
The substance of sponsored medical literature remains a controversial issue. A 2009 article by Mark S. Frankel in the ABA's SciTech lawyer raises a variant issue. The article is titled "Clinical Trials and the Financial Markets, " and is online here. The article recounts market knowledge and manipulation issues arising from leaks of information involving sponsored clinical trials and other clinical trials. The following quote caught my eye especially since the 2009 ASCO Conference ended a few weeks ago nd I was watching articles pop up online from the conference on cancer treatments. Some of the results/articles plainly did move the markets, which of course is fine so long as the information is accurate:
"Recognizing these challenges for researchers, at least one scientific society has taken a strong stand on researcher- investor relationships. The American Society of Clinical Oncology (ASCO) recently issued recommendations for how its members should conduct themselves in relation to investment analysts. First and foremost, it is on record as discouraging its members from establishing "relationships with investment firms that put them at risk."However, realizing that such researchers are free to engage in discussions with investors, the society cautions its members to "beware of the underhanded approaches used by investment firms to to obtain nonpublic information." It also "require[s] that relationships with investment advisors be disclosed in the context of ASCO activities," such as reviewing papers, serving on society committees, and advising on society meeting programs. Although this is a good beginning, other societies whose members conduct clinical trials also need to take similar action."
In light of this morning's news from the General Motors chapter 11 case, and emails landing in my inbox of late, this seems an apt time to mention that the recession, chapter 11 cases and asbestos litigation are all intersecting at upcoming asbestos litigation conferences.
For one, Perrin Conferences is hosting a September 14-16 asbestos litigation conference in San Francisco. In a nod to the recession and slashed corporate budgets, Perrin Conferences is offering free registration to inside corporate lawyers. Go here for the agenda.
The entire conference looks excellent for both substance and speakers. My eye was particularly caught by the seminar's day three panel on chapter 11 cases related to asbestos claims. Who knows what the world will look like by then, but for now, the panel is top notch:
9:00 AM - Asbestos Bankruptcy: New Filings, Confirmations & Dismissals
Overview of the current Chapter 11 asbestos bankruptcy landscape, Part I: Why are these companies still in bankruptcy?
Overview of the current Chapter 11 asbestos bankruptcy landscape, Part II: Who are these new filers and how are they doing?
Overview of the asbestos trust process, the Three "C's": Claims, Contribution and Cooperation
Will there be any defendants left? The automotive industry and bankruptcy
Joseph F. Rice, Esq., Motley Rice LLC, Mount Pleasant, SC
Charles Mullin, Litigation Resolution Group LLC, Washington, DC
Robert Phillips, Esq., SimonsCooper, LLC, East Alton, IL
Lucy P. Allen, SVP, Mass Torts and Product Liability Chair, NERA Economic Consulting, New York, NY
In the GM bankruptcy, Judge Gerber has entered today his order [Docket No. 2857] denying the asbestos claimant's motion for appointment of a futures representative for asbestos claimants. He also adjourned to another day the motion requesting appointment of a separate official committee to represent asbestos claimants against GM. The latter motion may be put back on for hearing on three day notice. One wonders what negotiations are ongoing and what evidence is being gathered. The order is here.
Suppose the following. You are the General Counsel of a company that's been sued in a few hundred asbestos cases. You've timely notified all the primary insurers of the underlying claims, and some have paid defense expenses. But, assume also that a primary insurer known as Home has filed for the insurance equivalent of bankruptcy (see opinion here re Home) and is not paying any claims. Assume also that an insurer known as London has denied that it should pay claims because the insured cannot provide originals of the small pieces of paper known as "slips" that denoted issuance of its insurance, and assume further that London has created a purported successor entity you are forced to deal with and also has claimed that it is on the brink of insolvency (see Wikipedia here or see all the things that a lawyer for insureds has to say on his insurance coverage blog here) Assume next that your company obtains virtually nothing from Home even though it issues lots of insurance, and assume your company settles with London for about 90 cents on the dollar of the policy limits of London, with you figuring that litigating to death will cost more than just eating the difference, and who knows, London may in fact prove to be insolvent some day. Under these facts, can you recover from excess insurance policies above the policies issued by Home or London ?
For that general counsel, the sad reality is that some courts might well preclude recoveries from excess policies due to the circumstances of Home and London. Really? Yes ! For the specifics, see the informative article by Gilbert Oshinsky coverage lawyers Richard Shore, Stephen A. Weisbrod, and Andrea K. Hopkins. And, yes, the article also explains why they disagree with the rulings. After reading the article, you'll better appreciate the difficulties of managing legacy liability issues.
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