One MDL Magistrate Judge Says Narrow Discovery May Be Taken Regarding Prefiling Investigation in a Mass Tort MDL Situation

How much pre-filing inquiry is needed for a "mass tort" product laibility claim, and when must be it done ? A recent opinion in the Digitek MDL is related to those issues, but is limited to a narrow discovery issue. Digitek is a drug. The claims in essence are that a batch of the drug was mismanfucatured, resulting in sales of doses more potent than usual, with the more potent doses caapable of causing material physical harm.

The discovery requests at issue are defendants' requests for admissons. The requests seek admissions that medical and pharmacy records had not been obtained by plaintiff's counsel when 39 particular claims were filed. The defendants acknowledged the obvious reality that the discovery requests are aimed at generating evidence to support Rule 11 motions that defendants might seek to file in the future. That's important because some opinions have warned against Rule 11 motions spawning "satellite litigation."

A Magistrate Judge's opinion approves the discovery requests over plaintiff's objections. The opinion is a basic work a day paper with limited analysis, and a weak discussion of legal privilege issues (although the outcome seems correct. That said, there are precious few opinions out there on precisely these issues, so the opinion is worth reading and tucking away for persons commonly involved with mass tort litigation. The opinion is here.


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Hat tip to LAW360 for publishing an article on the opinion and including the opinion with the article.

Sanford CFO Guilty Plea Implicates Lawyer A and then Proskauer and Partner Sued in Class Action

Talk about a global tort. While waiting to transport one of my daughters this evening, I spent a few minutes reading the guilty plea (thanks, NYT) by Sanford's CFO, James Davis. What raw fraud and greed. Hard to imagine why it was so hard for regulators to figure it out.

Reading the plea, it seemed to me plain that "Lawyer A" will be soon charged with being a central part of the fraud over at least the last two or three years of the scheme. So, I ran a quick Google search to see who might be lawyer A. The search turned up a late Friday AmLaw blog post that provides lots of reminders about past stories on Sanford, and reports in this post that an investor class action was filed late Friday afternoon against the Proskauer law firm and Thomas Sjoblom, saying he is "Lawyer A."

Not a good year for the legal profession.

New Science - Creating a Test to Find People with Specific Genetic Defects to Create a Unique Cohort for a Clinical Trial

This August 27 press release from Abbott and Pfizer exemplifies another way science is changing and will over time create new legal issues as to remedies for tort claims. The pertinent part of the press release is quoted below; the gist is that the two are undertaking a joint effort to create a diagnostic test to find persons with a specific genetic defect so that a clinical trial can be then undertaken only with patients with that particular genetic defect. Soon enough, plaintiffs will be able to have good science behind requests asking courts to order a risk -creator to pay for much more than just a traditional annual check-up.

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Des Plaines, Illinois and New York -- Abbott (NYSE: ABT) announced today that it has entered into an agreement with Pfizer Inc to develop a molecular diagnostic test intended to screen non-small cell lung cancer (NSCLC) tumors for the presence of gene rearrangements. Pfizer has developed a novel investigational agent that selectively targets cancer-causing genes implicated in the progress of many cancers. To be eligible to receive Pfizer's oral therapy, a particular genetic translocation (rearrangement) known to be found in NSCLC tumors and a wide variety of other cancers, but not in normal cells, must be present.

Under terms of the agreement, Abbott will develop a companion diagnostic test that will determine a patient's genetic status and will be used in patient selection for future clinical trials of PF-02341066.

"We are very pleased to partner with Abbott to develop a companion diagnostic test for non-small cell lung cancer and ensure its global availability for patients and physicians who need this information to make the best treatment decisions," said Garry Nicholson, General Manager, Pfizer Oncology Business Unit. "This test will allow us to focus on the patient population most likely to benefit from our NSCLC candidate. Working in close partnership with the experienced Abbott team, we are confident that we will deliver yet another application of personalized medicine to address a currently unmet medical need in NSCLC."

"Pfizer's novel compound for treating non-small cell lung cancer appears to be ideally suited to individualized therapy," said Stafford O'Kelly, head of Abbott's molecular diagnostics business. "Abbott is a leader in the development and commercialization of companion diagnostics and we're delighted to collaborate with Pfizer, a leader in cancer therapeutics, on the development of a test to identify patients who might benefit from this important compound."

The Evolving Litigation Industry - Real and Mock Jurors Now Part of Litigation Seminars

The litigation industry continues to evolve. Starting a couple of years back, it became far more more common for judges in repetitive types of litigation (e.g. asbestos, medical malpractice) to appear on panels at litigation seminars. Now things are going the next step and jurors are appearing at seminars in various ways.



Here are two examples. First, HB Litigation Seminars issued this press release to further advertise that a panel of an upcoming asbestos litigation seminar will include two former jurors from asbestos trials. According to the press release:



"SAN FRANCISCO, Aug. 24 /PRNewswire/ -- Sharon Boothe, partner and head of programming at HB Litigation Conferences LLC, announced today that she has added to the faculty of HB's Sept. 23-25 "National Asbestos Litigation Conference" individuals who served on juries at trials of two high profile California asbestos cases.
"These jurors will join 11 judges and a phalanx of experienced asbestos attorneys and experts, plus more than two dozen in-house counsel at what promises to be the most informative asbestos litigation program we have produced since we started running these events in 1992," Boothe said.


The jurors come from Haupt v. A.W. Chesterton and Woodard v. Alfa Laval, both of which involved mesothelioma claims that resulted in large verdicts where the U.S. Navy was held responsible for the bulk of the awards. The Haupt case resulted in a $1.45 million award. The jury in the Woodard case returned a nearly $17 million award, thought to be the largest asbestos mesothelioma verdict returned in Los Angeles County."



The second example of jurors in seminars comes from a rival litigation industry service provider, HarrisMartin. Last June, that litigation seminar firm ran this asbestos litigation seminar that consisted of a mock trial with jurors wired up to provide real time reactions to arguments and questions. I attended a similar prior seminar from the same firm and it was quite good because it allows many people to obtain the benefit of mock jury studies all at one time. That's helpful because mock jury studies are not cheap, and so insurers and clients sometimes make short-sighed decisions not to undertake the expense or effort, sometimes leading to trial disasters.

The Litigation Industry - 1 Lung Cancer and 17 Mesothelioma Lawsuits - A Week's Worth of Madison County New Asbestos Case Filings

Many words have been written and said about asbestos litigation and class action litigation in Madison County. Disturbingly, academics and many others lack meaningful access to many concrete facts regarding the day in, day out events in Madison County and other courts that are very active in tort litigation. Instead, war stories and antecdotes - often but not always extreme - tend to dominate the media and academic exchanges, and produce many disputes about what really is and is not happening. In that light, the points of this post are 1) to provide an example of one week of asbestos claims filed in Madison County and 2) also to point out that the litigation industry now includes free news sources focused on providing a continuing flow of information regarding some of the active forums for tort litigation.

One group of sources for data consist of "the Record" publications that focus on Illinois' Madison and St. Clair counties, Southeast Texas and West Virginia. Specific to Illinois are the Madison and St. Clair County Records. All are free online publications, with paid print versions. The publications are run by private ownership, with an investment from the U.S. Chamber of Commerce. The Chamber of course has a view but that does not change the facts nor the reality that these publications provide by far the best real time, free and easy windows in to the goings on in these active venues that are so much a part of the litigation industry.

Free email subscriptions bring readers the news each week as defined by the Record; subscription sign up is available at the Ma,dison Record's home page (here). More or less each week the Record publishes a summary of the new asbstos case filings ( I keep bugging them to also put the complaints online, but so far that has not happened.) Set out below is the weekly summary for the week July 27-31.

As you read the case summaries, note how few of the cases appear to have a meaningful connection to Illinois. And, beyond considering the litigation industry view, consider also the widespread impact of cancer. Imagine what these families have been through or are going through as they try to cope with the devastion caused by these 18 of the 1.4 million cancers that will be diagnosed this year in the United Sates according to this detailed Powerpoint presentation for 2009 from from the American Cancer Society.

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18 new asbestos cases filed July 27-31


8/20/2009 8:39 AM
By Kelly Holleran

A total of 18 new asbestos lawsuits were filed in Madison County during the week of July 27 through July 31.

The following claims were filed:

--Norbert and Marjorie Bossen of Iowa allege Norbert Bossen developed mesothelioma after his work in the United States Navy from 1944 until 1946; as a boilermaker in the late 1940s and early 1950s; with Gilbert and Bossen Farm Implements from the early 1950s until 1967; as a pipe fitter from 1967 until 1982; and performing home remodeling work to his homes in the mid 1970s. The Bossens are represented by Robert Rowland and Elizabeth V. Heller of Goldenberg, Heller, Antognoli and Rowland in Edwardsville. Sean P. Worsey of Levin, Simes, Kaiser and Gornick in San Francisco will serve of counsel. Madison County Circuit Court case number: 09-L-795.

--Walter Derby of Colorado, an aviation mechanic, consulting engineer, police officer, security guard, laborer, tree trimmer and contractor/construction worker at various locations throughout Illinois, California, Colorado and Oklahoma from 1967 until 2007 claims mesothelioma. Derby is represented by Timothy F. Thompson Jr. and Ryan J. Kiwala of Simmons, Browder, Gianaris, Angelides and Barnerd in East Alton. Madison County Circuit Court case number: 09-L-789.

--Catherine Fridmanski claims her recently deceased cousin, Andrew Mulato, developed mesothelioma after his work as a bricklayer and steelworker at various locations from 1940 until 1980. Fridmanski is represented by Andrew O'Brien, Christopher Thoron, Christina J. Nielson, Bartholomew J. Baumstark and Gerald J. FitzGerald of the O'Brien Law Firm in St. Louis. Madison County Circuit Court case number: 09-L-792.

--Josie Gonzales of Texas claims her recently deceased husband, Eulalio Gonzales, developed mesothelioma after his work as a laborer and foreman at various locations throughout Illinois, Missouri, Colorado, Kansas, New Mexico and Texas from 1958 until 1985. Josie Gonzales is represented by Amy E. Garrett and W. Brent Copple of Simmons, Browder, Gianaris, Angelides and Barnerd in East Alton. Madison County Circuit Court case number: 09-L-798.

--Joseph and Sandra Goudreau of Michigan claim Joseph Goudreau developed mesothelioma after his work as a laborer, painter, operator and engineer at various locations in Illinois, Michigan, Alabama and Wisconsin from 1950 until 2000. The Goudreaus are represented by Timothy F. Thompson Jr. and Ryan J. Kiwala of Simmons, Browder, Gianaris, Angelides and Barnerd in East Alton. Madison County Circuit Court case number: 09-L-801.

--Julie Hied of Montana claims her recently deceased husband, Lyle Woolston,developed mesothelioma after his work as a rancher and mechanic at various locations from 1968 until 1978. Hied is represented by Robert Phillips, Perry J. Browder and Rosalind M. Robertson of Simmons, Browder, Gianaris, Angelides and Barnerd in East Alton. Madison County Circuit Court case number: 09-L-775.

--Betty Hughes of Virginia claims her recently deceased husband, Cecil Hughes, developed mesothelioma after his work as a laborer and carpenter from 1970 until 1979. Hughes is represented by Robert Phillips, Perry J. Browder and Rosalind M. Robertson of Simmons, Browder, Gianaris, Angelisdes and Barnerd in East Alton. Madison County Circuit Court case number: 09-L-776.

--Robert and Barbara Krupp of Illinois allege Robert Krupp developed lung cancer after his work in the U.S. Coast Guard from 1952 until 1955; as a laborer at Mallinckrodt Chemical Company from 1955 until 1957; as a laborer at The New York, New Haven and Hartford Railroad Company from 1957 until 1961; as a laborer at Stickland Trucklines from 1962 until 1965; and as a laborer at Manufacturers Railway Company from 1965 until 1991. The Krupps are represented by Randy L. Gori and Barry Julian of Gori, Julian and Associates in Edwardsville. Madison County Circuit Court case number: 09-L-777.

--John Lappin of Missouri, a machinist and steelworker from 1947 until 1992, claims mesothelioma. Lappin is represented by Andrew O'Brien, Christopher Thoron, Christina J. Nielson, Bartholomew J. Baumstark and Gerald J. FitzGerald of O'Brien Law Firm in St. Louis. Madison County Circuit Court case number: 09-L-772.

--Ronald H. and Karen L. Larson claim Ronald H. Larson developed mesothelioma after his work as a field lineman with the United States Army from 1960 until 1963 and as a steel plate inspector at Bethlehem Steel from 1963 until 1987. The Larsons are represented by Randy L. Gori of Gori, Julian and Associates in Edwardsville. W. Mark Lanier, Patrick N. Haines, C. Taylor Campbell, J.D. McMullen and William H. Barfield of The Lanier Law Firm in Houston will serve of counsel. Madison County Circuit Court case number: 09-L-781.

--Christopher Morelli of New Jersey claims his recently deceased wife, Michelle Morelli, developed mesothelioma after her work as a laborer at Lockheed Martin in 1982. She was also exposed to asbestos fibers while doing abatement work during the late 1990s and was secondarily exposed through her husband, who owned a painting, drywall and texture company from 1982 until now, according to the complaint. Christopher Morelli is represented by Randy L. Gori and Barry Julian of Gori, Julian and Associates in Edwardsville. Madison County Circuit Court case number: 09-L-782.

--Jimmy E. and Rosalee Murphy of Arkansas claim Jimmy Murphy developed mesothelioma after his work as a manufacturer from 1967 until 1971 at Tucker Duck and Rubber Company, Fort Smith Table and Chairs and Bowmen and Company; as a laborer for Capco from 1971 until 1976; as a welder for Structural Steel in 1976; as a forklift operator for Farmland Feed Mill from 1976 until 1980; as a welder for Branham Industries from 1980 until 1981; as a welder for Interstate Electric from 1983 until 1986; and as an assembly line worker for Trane from 1986 until 2000. The Murphys are represented by Elizabeth V. Heller and Robert Rowland of Goldenberg, Heller, Antognoli and Rowland in Edwardsville. Madison County Circuit Court case number: 09-L-793.

--Shirley Jo Peeler of Ohio, a cashier for Liberal Markets from 1953 until 1956 and an employee at Revco and a press operator at Stanhope Products from 1956 until 1958, claims mesothelioma. Peeler is represented by Elizabeth V. Heller and Robert Rowland of Goldenberg, Heller, Antognoli and Rowland in Edwardsville. Madison County Circuit Court case number: 09-L-794.

--Larry C. and Bettye M. Sims claim Larry C. Sims developed mesothelioma after his work as an engineer and machinist mate while in the U.S. Navy from 1962 until 1987; as a maintenance man at Dorchester School District in South Carolina from 1987 until 1998; as a home remodeler at his house from 1960 until 1970; and as a shadetree mechanic from 1959 until 1979. The Sims are represented by Randy L. Gori of Gori, Julian and Associates in Alton. W. Mark Lanier, Patrick N. Haines, Angela B. Greenberg, Sam T. Richard, Bridget B. Truxillo and Lauren H. Ware of The Lanier Law Firm in Houston will serve of counsel. Madison County Circuit Court case number: 09-L-779.

--Toni Solano of Texas claims her recently deceased husband, John M. Solano, developed mesothelioma after his work as a laborer and division engineer for Burlington Northern Santa Fe Rail Road from 1975 until 2005. Toni Solano is represented by Elizabeth V. Heller and Robert Rowland of Goldenberg, Heller, Antognoli and Rowland in Edwardsville. Madison County Circuit Court case number: 09-L-796.

--Robert A. and Darlene M. Switzer claim Robert A. Switzer developed mesothelioma after his work as a service representative, products liability specialist, maintenance, expert claims witness for Caterpillar Tractor Company from 1953 until 1988; while being enrolled in officer's candidate school where he learned and performed duties on Navy ship from 1944 until 1946; while working for a road equipment contractor and on welded metal tracks from 1949 until 1953; as a farmer at Norvel Switzer Farm from 1926 until 1944; as a shadetree mechanic from the 1950s until 1980; and in residential construction from the 1950s until 1980. The Switzers are represented by Randy L. Gori of Gori, Julian and Associates in Edwardsville. W. Mark Lanier, Patrick N. Haines, R. Craig Bullock and J. Kyle Beane of Houston will serve of counsel. Madison County Circuit Court case number: 09-L-780.

--Leo J. and Ruth A. Vietmeier claim Leo J. Vietmeier developed mesothelioma after his work as a laborer, assembly line worker and maintenance man at American Vitrified in the 1950s; as a laborer while in the AFL-CIO Union in the 1960s; as a mine worker at Pegg's Run Coal Mill in Pennsylvania in the 1970s; as a meat cutter at Giant Eagle from 1980 until 1996; as a home remodeler at his home from 1967 until 1990; and as a shadetree mechanic on his automobiles from 1950 until 1980. The Vietmeiers are represented by Randy L. Gori of Gori, Julian and Associates in Alton. W. Mark Lanier, Patrick N. Haines, Angela B. Greenburg, Sam T. Richard, Bridget Baragona and Lauren H. Ware of The Lanier Law Firm in Houston will serve of counsel. Madison County Circuit Court case number: 09-L-778.

--Mary Ellen White of New Hampshire claims her recently deceased husband, John Grohosky, developed mesothelioma after his work in the U.S. Navy from 1944 until 1964 and as a forklift driver from the early 1970s until 1988. White is represented by Randy L. Gori and Barry Julian of Gori, Julian and Associates in Edwardsville. Madison County Circuit Court case number: 09-L-784.

--Fred Young of Wisconsin, who served in the British Navy from August 1940 until August 1954 and who worked as a mechanical researcher from 1954 until 1956; as a mechanical researcher at AV Roc from 1956 until 1958; as a design engineer for Pratt and Whitney from 1958 until 1960; as a design engineer at the GE Nuclear Power Demonstration Plant from 1960 until 1963; as a senior reactor operator at Ontario Hydro from 1963 until 1965; as a maintenance supervisor at Thunder Bay Generating Plant from 1965 until 1967; as a maintenance supervisor at Wisconsin Electric Point Beach Plant from 1968 until 1972; as a laborer at Bechtel from 1972 until 1984; and as a consultant at Wisconsin Electric Point Beach Plant from 1984 until 1989, claims mesothelioma. Young is represented by Randy L. Gori and Barry Julian of Gori, Julian and Associates in Edwardsville. Madison County Circuit Court case number: 09-L-797.

The Chapter 11 Game Goes On - Cubs to Use Chapter 11 for a Quick Cleansing and Injunction

This prior post reported on the possibility that the Tribune would put the Cubs into chapter 11 to cleanse the entity of risks. It's now happening as reported in this article in the Tribune, which states that the Cubs want a short stay so that the entity can get all the benefits of chapter 11, but no detriments:

"In court papers, Tribune Co. lawyers outlined a two-step process for court approval, which includes having the team file for bankruptcy at a later date. The company wants the team to be in bankruptcy for just a few days, according to court documents. An extended stay in court could damage the Cubs' baseball operations, team Chairman Crane Kenney said in court papers."The process of competing for player talent in MLB is incomparably fierce, and by operating in Chapter 11 the Cubs would face a severe competitive disadvantage in their ability to retain, acquire or trade for players, based on the perception that the transaction would require Bankruptcy Court approval or might be unwound at a later date," Kenney said." I (emphasis added).

So, now we have yet another example of chapter 11 being used more or less solely to obtain injunctive relief against the possibility of future claims. One has to wonder what has happened to chapter 11 when it can be used for benefits but not detriments, with little or no notice to the rest of the world, and does not save any jobs or a business and instead is just legal engineering. For much more on this topic from a lawyer who argued for tort claimants in Chrysler, go to this blog by bankruptcy lawyer Steve Jakubowski.

All that said, I still love and so will repeat the comment I heard when discussing the Cub's possible use of chapter 11 with a colleague who is a bankruptcy law expert and a Brooklyn native. The response was brilliant; he said:

"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 ?"

Great Summary of Twombly/Iqbal Rulings

This August 6 post from the Device and Drug Law Blog provides a great summary of Twombly/Iqbal rulings over the last couple of years.

Madison County's Asbestos Judge, Daniel Stack, to Retire in 2010

This article from the Madison County Record reports that Judge Daniel Stack has decided to retire as of 2010. Judge Stack is well known as the Madison County judge who took over the asbestos docket from Judge Byron. Judge Stack is generally credited with having made Madison County a less extreme place to litigate for asbestos defendants, although that's relative praise. That said, Madison County continues to grind out trial dates and settlements for asbestos cases, and so claims for 2009 are up from recent years.

Chrysler Opinion by 2d Circuit - Todd Brown Comments On the Sacrifice of Rights of Future Claimants and I Pile On Regarding The Scope of Future Claima

Todd Brown is a former defense-side lawyer (Wilmer Hale and Jones Day) now teaching law in Buffalo after a stint at Temple. Mr. Brown has written pretty extensively and astutely on deep flaws in asbestos bankruptcies (see my post here regarding his prior law review on section 524(g)). Mr. Brown has been guest blogging and commented here on Pointoflaw on two aspects of the 2d Circuit's Chrysler opinion. As it pertains to tort claimants, Mr Brown said the following:

" Second, the panel addressed the various arguments that the Chrysler assets could not be sold free and clear of successor liability for various personal injury type claims. Here, the panel adopted a fairly broad reading of the "interests" that can be cleansed in a Section 363 sale, reasoning that this interpretation is more consistent with the purpose of this section and the priority scheme of the Bankruptcy Code.

The panel refused to weigh in on the question of whether a Section 363 sale can cleanse future claims (such as those that might arise from asbestos exposure). This not only makes sense in the abstract; it is the right approach for future claimants. As we have seen in the 524(g) context (which requires setting aside funds to pay current and future asbestos claims, among other things), future claimants' interests are often sacrificed by those currently asserting asbestos claims against bankruptcy estates. Now that courts have started taking a harder line against these schemes, it is easy to see how the 363 sale approach might be viewed as a possible end-run around 524(g)'s limitations on front-loading recoveries. Until the "free and clear" sale's applicability to future claimants is clarified, however, such an end-run remains, at best, extremely risky for most asbestos defendants." (emphasis added).

Todd certainly is correct that the the interests of future claimants have repeatedly been been sacrificed in the asbestos chapter 11 cases. To go further, recognize that future claimants are NOT just the personal injury claimants, and instead there are multiple types of future claimants against the debtor's estate. Future claimants may be, for example, state agencies that want to recoup expenses from a debtor that caused personal injuries or created an environmental mess. Future claimants also include underlying case co-defendants which want to pursue cross-claims against former co-defendants now hiding behind chapter 11 injunctions The same applies to those insurers with subrogation and indemnity rights. against debtors.

Bankruptcy judges and plan proponents may in the future rue the day they did not 1) give due process notice to these groups of future claimants, and 2) did not cause appointment of a futures representative who actually intended to and actually did represent the interests of these other groups of "future claimants."

Plaintiff's Bar and US Chamber of Commerce Agree - Let's Make It Easier to Sue Non-US Manufacturers

Catching up on things I missed while on vacation. PointofLaw includes this interesting post on a draft federal statute to require overseas manufacturers of many consumer products to appoint registered agents in the US for service of process. The point is to make it equally easy to sue overseas companies. According to pointoflaw, the bill amazingly produced harmony between the plaintiff's bar and the US Chamber of Commerce- - now that's quite a feat:

"The bill follows on the footsteps of a Senate Judiciary subcommittee hearing in May, "Leveling the Playing Field and Protecting Americans." As the sponsors show, the issue crosses partisan lines. General support is also broad: Witnesses at the hearing included a representative of the trial lawyer lobby, AAJ, as well as Victor Schwartz, testifying on behalf of the U.S. Chamber."

W.R. Grace, Solvency Findings, Asbestos Liability Estimates, and Injunctions that Bind Others

Today's post follows up on this August 13 post regarding asbestos plaintiff's lawyers asking the Court to order the rest of the world not give any effect to whatever the Court finds on Grace's solvency, and item 4 of this prior post of May 12 regarding Nobel prize winner James Heckman's expert report in Grace in which he and the non-asbestos creditors indicted bankruptcy court estimation proceedings as having no scientific validity.

The topic today is Grace's August 7 trial brief asserting that it is impossible for the Court to determine whether Grace is solvent or insolvent, and that instead it should just find that Grace will be solvent and viable if the plan is confirmed. Grace's brief [Docket 22732] is available through PACER or here.

Key quotes from the Grace brief are below. The gist is that estimates of its "personal injury liability" range from a low end of $ 200 million (from Grace's expert, Tom Florence) to $ 6.2 billion (plaintiff's expert Mark Peterson). In addition, its "property damage liability" is estimated by some at about $ 3-5 billion, with one calculation suggesting $ 82 billion. The facts, as argued by Grace, are set out below. The question I pose is this:

In tort cases, we say that good science must be applied. In business litigation, the general rules is that damages must be proved with reasonable certainty. Given those rules, why would it be socially useful and/or constitutional for bankruptcy courts to issue world-wide injunctive orders without making actual factual findings on key issues when the factual claims are so extremely different as they are in the Grace case, and the answer on solvency plainly could come out on either side of the solvency question?

In posing that question, I recognize that Grace and others will and do say that what we need most are deals that end litigation and that courts should accept deals. But, isn't it also fair to say that individual case settlements are much different because, unlike Grace's desired confirmation order, those other settlements do not include sweeping injunctions purporting to bar and limit the manner of future prosecution of tens or hundreds of thousands of present or future claims to be asserted by personal injury claimants, and that also will enjoin cross-claims or subrogation claims to be asserted by underlying case co-defendants and/or insurers in those same hundreds or thousands of future personal injury claims?

The Grace brief states the following, at 12-14:

"Among the most significant hurdles that the Committee and the Lenders must overcome
before they even get to the analysis under section 1129 is the requirement that they prove the Debtors are solvent. This they cannot do. The most significant component of Debtors' liabilities, the Asbestos PI Claims, has never been agreed upon or adjudicated. The estimation proceeding, which was designed specifically to estimate the value of the Asbestos PI Claims,was not completed. And there has never been an agreed upon or adjudicated resolution of Debtors' potential property damage asbestos claims. Without such adjudication, the liabilities cannot be established, and the Lenders and Committee cannot prove that the Debtors are solvent.

The incomplete estimation proceeding only highlights the fact that, absent the Plan, there is an enormously wide range of estimated values of the Debtors' asbestos liabilities. For example, the Debtors' estimation expert, Dr. Tom Florence, estimated that value of Debtors'asbestos personal injury claims ranged between $200 million and $989 million with a median value of $468 million. But Dr. Denise Martin, another one of Debtors' experts, determined that at the standard 95% confidence interval for scientific reliability, Dr. Florence's estimates could range from $4.6 million to $6.3 billion. The PI Committee's expert, Dr. Mark Peterson, could
offer no more definite estimates of Debtors' asbestos liabilities. He opined that Debtors' potential liabilities for asbestos personal injury claims were "between $4.7 and $6.2 billion and most likely between $5.4 and $6.2 billion." See Expert Report of Dr. Mark Peterson in Connection with the Asbestos Personal Injury Estimation Hearing, dated June 20, 2007 at ES-5 (Dkt. 16113, Ex. A).

Likewise, the value of the Zonolite Attic Insulation ("ZAI") claims is also highly
uncertain and disputed. While the Plan provides between $54.5 million and $58 million to ZAI (and potential additional contract payments), ZAI made substantially higher demands. For example, ZAI claimants have previously stated that ZAI could potentially be in 11 million homes5 with a value of$5,000 to $7,500 per home,6 for a total of up to $82.5 billion. Even using the claimants' lower estimates of 1 million homes7 at a value of $3,000 to $5,000 per home, the total liability would be $3 billion to $5 billion. The range of non-ZAI Propert Damage liability is also entirely uncertain. While the Plan provides $ 49.3 million for non-ZAI Property
Damage claims, the potential claim was much greater. Together, the total potential Property Damage liability, absent a Plan, reaches at least $3.149 billion to $5.149 billion and may be much greater.


B. The liability disputes foreclose any demonstration of solvency. The Plan
disposes of that liability and therefore cannot be relied on to prove solvency.

As described above, there has never been an adjudication of Debtors' asbestos liabilities, and estimates of those liabilities vary greatly. There is simply no estimation method that can accurately measure the Debtors' asbestos liabilities. Without a binding determination of Debtors' potential asbestos liabilities, there cannot be a final and binding determination that Debtors are solvent. Zily Aff. ~ 4.9

As discussed infra, the Lenders' new expert, Robert 1. Frezza, relies on estimates from the never-completed estimation hearing to attempt to "determine" Debtors' solvency. This attempt is unavailing. Indeed, the only way that Mr. Frezza can even begin to argue Debtors' solvency is by relying upon the Plan, the very one to which the Committee and the Lenders now object. Absent the Plan, there is no cap on Debtors' asbestos liabilities. As already noted, the Proposed Asbestos Settlement, which forms the basis of the Plan, does not represent an adjudication of the Debtors' asbestos liabilities. Rather, it represents a compromise that disposes
of the need to adjudicate those liabilities. Without the Plan, all that is left are potentially enormous amounts of asbestos liabilities, the adjudication of which would determine whether Debtors are solvent. In other words, the Plan does not prove solvency; it paves the way for solvency from and after the Effective Date."

Glaxo, Sponsored Writing and Paxil

This article from the Associated Press in the August 19, 2009 issue of the NYT reports on Glaxo's program in which "ghostwriters" were hired to assist doctors in writing medical journal articles regarding Paxil. The information provided is rather skimpy in terms of trying to evaluate the scope and influence of the ghost-writing and whether it actually produced incorrect statements. The article states:

August 19, 2009
Glaxo Used Ghostwriting Program to Promote Paxil
By THE ASSOCIATED PRESS
Filed at 5:07 p.m. ET
WASHINGTON (AP) -- Drugmaker GlaxoSmithKline used a sophisticated ghostwriting program to promote its antidepressant Paxil, allowing doctors to take credit for medical journal articles mainly written by company consultants, according to court documents obtained by The Associated Press.
An internal company memo instructs salespeople to approach physicians and offer to help them write and publish articles about their positive experiences prescribing the drug.
Known as the CASPPER program, the paper explains how the company can help physicians with everything from ''developing a topic,'' to ''submitting the manuscript for publication.''
The document was uncovered by the Baum Hedlund PC law firm of Los Angeles, which is representing hundreds of former Paxil users in personal injury and wrongful death suits against GlaxoSmithKline. The firm alleges the company downplayed several risks connected with its drug, including increased suicidal behavior and birth defects.
A spokeswoman for London-based Glaxo said the published articles noted any assistance to the main authors.
''The program was not heavily used and was discontinued a number of years ago,'' said Mary Anne Rhyne.
According to the memo, which dates from April 2000, the CASPPER program was designed to ''strengthen the product positioning and overcome competitive issues.''
At the time, Paxil was competing with rival antidepressant blockbusters like Eli Lilly's Prozac and Pfizer's Zoloft. Paxil has since lost its patent protection and competes against cheaper generic versions. Sales of Paxil last year totaled $849 million.
Drug companies frequently hire outside firms to draft a manuscript touting a company's drug, retain a physician to sign off as the author and then find a publisher to unwittingly publish the work.
But the use of ghostwriting by drug companies has come under increased scrutiny by members of Congress, including Sen. Charles Grassley, R-Iowa, a longtime critic of the industry's influence over physicians. Grassley and Sen. Herb Kohl, D-Wis., are pushing a bill that would require companies to disclose all payments to physicians over $100.
According to ghostwriting expert Dr. Leemon McHenry, Glaxo's program was unusually intertwined with its internal sales and marketing department.
''We know that GSK has engaged in ghostwriting for many years,'' said McHenry, who works as a research consultant for Baum Hedlund. ''But to create an internal ghostwriting program and have the gall to name it after a cartoon ghost demonstrates their juvenile attitude and careless disregard for patients.''
McHenry acknowledged that ghostwriting is legal in principal, but said it could contribute to illegal activity if the information is misleading and causes harm.
''If these ghostwritten publications are contributing to the harm of patients because they're making false claims, then that's illegal,'' McHenry said.
Articles from the company's program appeared in five journals between 2000 and 2002, including the American Journal of Psychiatry and the Journal of the American Academy of Child and Adolescent Psychiatry.
Drug company salespeople often present medical journal articles to physicians as independent proof that their drugs are safe and effective.
Publication in a medical journal also is a point of prestige for physicians, a fact Glaxo's memo seems to acknowledge: ''Physicians will be eager to participate in CASPPER regardless of their professional stature,'' the brief notes.
(This version CORRECTS spelling of 'Baum' in graf 4.)

New Science - Observable Brain Changes in Rats Subjected to Stress

More on brain rewiring and damages potentially recoverable in current or future tort litigation. This prior post provided some fact patterns and legal issues on future damages issues as drawn from research breakthroughs described in a wonderful book on brain plasticity - The Brain That Changes Itself -- Stories of Personal Triumph from the Frontiers of Brain Science, by Dr. Norman Doidge.

Now, here's more to think about as both individuals and as tort lawyers who end up in arguments about what is "harm," how it is proved and measured, and how it is compensated. Specifically, yet more news on brain rewiring is out and indicates that stress does produce physical changes in the brain, thus providing possible evidentiary support for claims that stress is indeed a physical injury.

This August 17, 2009 NYT article by Natalie Angier summarizes new research on brain plasticity as it relates to stress. The gist is that scientists in Portugual this summer published an article in a prestigious medical journal regarding their findings on brain changes when rats were subjected to stress. The not so good news is that stress does indeed destroy brain wiring. The better news is that the brain can rewire and return to "normal" when the stress is reduced back to normal levels. Here are key quotes:

"Reporting earlier this summer in the journal Science, Nuno Sousa of the Life and Health Sciences Research Institute at the University of Minho in Portugal and his colleagues described experiments in which chronically stressed rats lost their elastic rat cunning and instead fell back on familiar routines and rote responses, like compulsively pressing a bar for food pellets they had no intention of eating.

Moreover, the rats' behavioral perturbations were reflected by a pair of complementary changes in their underlying neural circuitry. On the one hand, regions of the brain associated with executive decision-making and goal-directed behaviors had shriveled, while, conversely, brain sectors linked to habit formation had bloomed. (emphasis added).

****
But with only four weeks' vacation in a supportive setting free of bullies and Tasers, the formerly stressed rats looked just like the controls, able to innovate, discriminate and lay off the bar. Atrophied synaptic connections in the decisive regions of the prefrontal cortex resprouted, while the overgrown dendritic vines of the habit-prone sensorimotor striatum retreated."


If I were a plaintiff's lawyer, the NYT and Science article would be dropped into my bag of citations and evidence to argue for a broader range of treatment after, for example, suffering a trauma from a one time physical event or after cancer has been countered via surgery, chemotherapy or other means. As a defense lawyer, I'm probably going to argue this is not (yet) accepted science and try to keep it out of evidence under the Daubert rules. But, one might also ask what makes sense for the long term - perhaps injured people should receive some paid for r & r to get them into good patterns and a better recovery that may save money in the long run. Then we lawyers can argue about who should pay for it - the health insurer, the Comphrehensive General Liability insurer, the tort defendant or some government agency.

Transparency - Another Effort to Force PACER to Become Free

This article from Wired, also pasted below, describes clever computer people devising a way to push harder towards forcing the federal courts to stop using court records in PACER to generate money, thereby limiting transparency. In essence, new software on Firefox tells you if a document you want already is in a free database, and also picks up copies of documents pulled out of PACER and adds them to the free database. Through this and other steps, perhaps some day even bankruptcy courts will be transparent.

Firefox Plug-In Frees Court Records, Threatens Judiciary Profits

By Ryan Singel
August 14, 2009
2:07 pm
Categories: The Courts

Access to the nation's federal law proceedings just got a public interest hack, thanks to programmers from Princeton, Harvard and the Internet Archive, who released a Firefox plug-in designed to make millions of pages of legal documents free.
Free as in beer and free as in speech.
The Problem: Federal courts use an archaic, document-tracking system known as PACER as their official repository for complaints, court motions, case scheduling and decisions. The system design resembles a DMV computer system, circa 1988 -- and lacks even the most basic functionality, such as notifications when a case gets a new filing. But what's worse is that PACER charges 8 cents per page (capped at $2.40 per doc) and even charges for searches -- an embarrassing limitation on public access to information, especially when the documents are copyright-free.
The Solution: RECAP, a Firefox-only plugin, that rides along as one usually uses PACER -- but it automatically checks if the document you want is already in its own database. The plug-in's tagline, 'Turning PACER around,' alludes to the fact that its name comes from spelling PACER backwards. RECAP's database is being seeded with millions of bankruptcy and Federal District Court documents, which have been donated, bought or gotten for free by open-government advocate Carl Malamud and fellow travelers such as Justia.
And if the document you request isn't already in the public archive, then RECAP adds the ones you purchase to the public repository.
The plug-in was released by Princeton's Center for Information Technology Policy, coded by Harlan Yu and Tim Lee, under the direction of noted computer science professor Ed Felten.
That's a pretty good hack, but it's still just a stop-gap measure until the federal courts figure out that in the age of the internet, charging citizens to search and read public documents should be a federal crime.
Using it should not cause journalists, lawyers or law students (PACER's main customers) any legal trouble. After all, court documents are never copyrightable.
But you never know how the justice system might react. Last fall, the federal court system shut down a pilot program that offered free PACER access at a few libraries around the country after it figured out that Malamud and hacker Aaron Swartz took them at their word and started downloading court decisions by the gigabyte.
That got Malamud 20 percent of the fed's court filings and an interrogation by FBI agents earlier this year.
Hopefully RECAP will get a friendlier reception from the U.S. Federal Court System.

Differences In Legal Systems - Mexico and the US On Criminal Law

How different is the Mexican legal system from the US system? The article pasted below provides a glimpse in to the current signficant differences between the US crininal law system and the Mexican criminal law system. The article is from the August 14, 2009 issue of the Chicago Daily Law Bulletin.


School helps Mexico change trial process

By Jerry Crimmins Law Bulletin staff writer

Chicago-Kent College of Law is playing a role in the sweeping reform of the ancient criminal justice system of Mexico.
For hundreds of years criminal trials in Mexico -- if you could call them that -- have been hidden, according to David A. Erickson, associate director of Chicago-Kent's Trial Advocacy Program.
They were seen by neither the victims, the defendants, the witnesses nor the public.
"There was nothing to watch,'' he said. "There was no trial in our sense. The entire system for the last 500 years has been written....
"The prosecutor writes up all his evidence," Erickson said. "The defense attorney writes up all his evidence.... The lawyers stood in front of a judge and handed the stuff to his secretary, and that was it.
"A year or two later, the judge writes his decision,'' and sometimes the delay in the verdict is longer than that, Erickson continued. "They never put on a witness, and a defendant in this system never gets to see his judge.''
The Mexican criminal justice system is "inquisitorial,'' Erickson said, because the judge asks all of the questions.
But now, pushed by President Felipe Calderon, Mexico is moving toward nationwide adoption of an accusatorial, oral trial system like the one in the United States.
This eventually will mean public trials, public questioning of witnesses, defendants sitting at their own trial who get to see their accusers and the judge, and the presence of the public and news media, Erickson said.
"This is a total, 180-degree change for them. It takes a lot of courage for them to do this,'' he said.
The reforms are expected to take eight years. They are intended, according to Chicago-Kent, to fight corruption and instill public confidence in the judicial system.
Chicago-Kent's job, with a $1.2 million grant from the U.S. government, is to train judges, lawyers, law professors and students on how to conduct open trials.
"We've been down there twice, the first time for a planning session in January,'' Erickson said. "Our partner law school [Technologico de Monterrey in Mexico City] built a million-dollar courtroom in its law school for us to train.''
In June, Erickson, along with Chicago-Kent Professsor William Douglas Godfrey, Adjunct Professor Ljubica D. Popovic, and student Mariana Munoz, went to Mexico again to teach lawyers and judges how to try a case in the open.
Godfrey and Popovic are former prosecutors. Erickson has wide experience in criminal law. He started out as a prosecutor and became first assistant state's attorney of Cook County. He also has served as a Criminal Courts judge, a Juvenile Court judge and justice of the Illinois Appellate Court.
Munoz' father is from Mexico and her mother from the U.S., and she is fluent in Spanish.
"I had Mexican lawyers on their feet doing direct examinations, cross-examinations, opening arguments, closing statements,'' Erickson said. "They did it just like we did here in the United States.''
Until recently, he said, Mexicans' only knowledge of open trials came from movies and TV. "They think everything is like 'Law and Order.'
"First we taught their entire faculty of 26, all the professors,'' Erickson continued, "then about 20 lawyers. I lectured 16 judges."
Ten students from the law school also came and watched. Although they hadn't been invited. Erickson insisted that they be allowed to stay.
"The younger the lawyer, the more they're in favor of this,'' he said. "Judges are more reticent.''
Partly they are afraid that, if they are known, they may be killed due to the widespread violence perpetrated by drug gangs, he said.
Erickson said one judge told him, "I can go to a coffee shop now and nobody knows I'm a judge. In this new system everybody knows.''
Prosecutors and police are often opposed to open trials in Mexico, Erickson continued. "The current president ramrodded this through.''
As part of widespread reforms approved by the Mexican government a year ago, Mexico copied and adopted the Fourth, Fifth, and Sixth amendments to the U.S. Constitution.
In the U.S., the Fourth Amendment guards against unreasonable searches and seizures; the Fifth prohibits double jeopardy and forced self-incrimination, and provides for due process and property rights; the Sixth provides for speedy public trials, the right to confront accusers, the right to bring one's own witnesses and the right to a lawyer.
The Mexican criminal justice amendments are expanded, Erickson said. "They mandate in the constitution a federal defender program, and also a victims' bill of rights.... It allows the victim of a crime to retain a private attorney and to sit at the counsel table and participate in the trial.''
Mexico has started to use open trials in a few locations. The training program conducted by Chicago-Kent and Technologico de Monterrey will educate lawyers in Nuevo Leon, Baja California and Morelos. The program is also intended to train Mexican law professors who will then teach others.
A few Mexican lawyers, including two this coming school year, will attend Chicago-Kent to study international law, with an emphasis on criminal law, and earn LLM degrees.
The Mexican reforms do not include jury trials. Judges still will decide verdicts.
Erickson said Mexico also has hired Americans from New Mexico and Arizona to build crime labs for them.
"They realize they have no concept of forensic evidence the way we do,'' he said.
And although Mexico does have a criminal appellate court, "they are going to have to embrace the concept of precedent and stare decisis,'' Erickson said, although the reforms have not yet gone that far.
jcrimmins@lbpc.com
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Asbestos Plaintiff's Lawyers Ask W.R. Grace Bankruptcy Court to Order that Its Findings - on Solvency - Do Not Matter In any Other Forum

The W. R. Grace chapter 11 case has produced a striking motion that highlights the too often bizarre and unconstitutional nature of much that happens in mass tort chapter 11 cases. In their motion, available here [Docket # 22543], the Asbestos Creditors Committee and the Futures Representative ask the bankruptcy court, Judge Judith Fitzgerald, to issue an order that any post-trial findings she makes on the solvency of Grace are to have no effect outside of her courtroom. The motion goes on to say that Grace does not object to the motion or proposed order.

As proof that I am not making up this motion "to pay no attention to the findings," set out below are key quotes from the motion and the proposed order. The full text quotes are followed by analysis of why the motion is rather absurd, why it was filed, and why it is unfair to co-defendants who remain stuck in asbestos cases in which Grace was, is or should be a co-defendant. The short answer, in my opinion, is that the motion to pay no attention to the findings is a transparent ploy to game the state courts by having them treat Grace as if it is insolvent even though it is in fact solvent. Why? Because Grace being viewed as insolvent by state court judges will in some cases block state court proceedings from properly allocating fault and/or monetary losses to Grace, thus defeating state laws on allocating fault and loss among multiple tort defendants.

1) Key Quotes from the Motion to Pay No Attention

The following are the key portions of the motion to "pay no attention to the findings:"

"In support [of this motion], the ACC and the FCR state as follows:

1. As the Court is aware, the Bank Lenders, various unsecured creditors, and the Official Committee of Unsecured Creditors (collectively, the "Unsecured Creditors") object that the Debtors are solvent and, therefore, the Unsecured Creditors are entitled to receive post-petition interest. The Unsecured Creditors have indicated that they intend to litigate this issue at the upcoming confirmation hearing.


2. Whether the Unsecured Creditors are entitled to post-petition interest, and
if so, at what rate is, at bottom, a contractual dispute between the Debtors, on the one hand, and the Bank Lenders and other Unsecured Creditors, on the other hand. Neither the ACC nor the FCR are parties to the relevant contracts, and are not participants in that dispute. Accordingly, the ACC and the FCR are not required, and do not intend, to present evidence on these issues."

Here is the request for relief:

"WHEREFORE, the ACC and the FCR respectfully request entry of an order, in the form of the proposed order attached hereto, providing that any findings or conclusions by the Court with respect to solvency shall only be used for the purpose of determining whether the Unsecured Creditors are entitled to postpetition interest and shall not be used by any party for any other purpose, and granting such other and further relief as the Court may deem just."

Set out below is the key portion of the proposed order - note that it is NOT limited to the bankruptcy court case and instead refers to any proceedings anywhere, such as a state court asbestos law suit where Grace being solvent might make it possible for other defendants to allocate fault or liability to Grace:

IT IS HEREBY ORDERED that:

Any findings made or conclusions reached by the Court with respect to the Debtors' solvency shall be used only for the purpose of assisting the Court to resolve the question of whether Unsecured Creditors, as defined in the Motion, are entitled to postpetition interest and shall not be used by any party in any proceeding for any other purpose. (emphasis added)

IT IS SO ORDERED.


2) Analysis of the Motion to Pay No Attention to the Findings


The ACC's motion is striking for multiple reasons. To begin with, consider its premise. According to the ACC and Futures Rep, they are parties to the case with notice and a meaningful opportunity to be heard, but they say they can just sit back and not present evidence and not be bound by whatever happens. That certainly seems rather absurd when the entire chapter 11 case was driven by present and future asbestos claiming. Indeed, the ACC spent several years contending that Grace is insolvent due to an alleged $ 6 billion or more of "asbestos liabilities." But, the ACC and the Futures Representative caved in and settled the present and future asbestos claims against Grace for far less than $ 6 billion after Grace went to enormous effort and expense to prove the bogus nature of many or most asbestos claims against it. The settlement in fact is said by Grace to have a present value of less than $2.5 billion and even the plaintiff's lawyers are said in this AmLaw article to have conceded the present value is less than $ 3 billion. And, when one looks at the settlement, only $ 250 million of present cash is being paid out by Grace itself before 2019- the deal,as described before here, is:

"The trust that will pay out asbestos claims will be funded by a $250 million cash contribution from Grace (payable on the company's emergence from Chapter 11); an additional $1.55 billion from Grace paid over 15 years, beginning in 2019; Grace's asbestos insurance coverage, worth an estimated $600 million; warrants to purchase Grace shares; and more than $1.2 billion in previous settlements with companies accused of fraudulently purchasing Grace assets."

It's rather hard to imagine that $ 250 million is even close to being the tipping point for Grace between solvency and insolvency.

The motion of the ACC and the Futures Representative also is striking for what it says about bankruptcy court proceedings. If anyone can figure out whether any entity such as Grace is or is not solvent, doesn't it make sense that it might be an experienced bankruptcy judge? And, if the court does make findings on solvency, why wouldn't the findings bind parties such as the ACC who were given meaningful prior notice of the hearing and the opportunity to participate in the hearing ?

As referred to above, another question of course is: why have the ACC and the Futures Representative asked the bankruptcy court to order that its findings on solvency should not mean anything anywhere else in the world. And, why would Grace not object to the motion when it has spent several years in arguments denying the extent of its alleged "asbestos liabilities" and, thus, its insolvency ?

In my opinion, the motivation for the motion is that a bankruptcy court finding that Grace is solvent would create an inconvenient truth for asbestos plaintiffs. Why? My view is that the asbestos plaintiff's bar does not want Grace found solvent because that ruling would have an adverse impact in state court asbestos tort cases where various state law rules apply to the allocation of damages and/or fault to solvent and insolvent entities.

Specifically, so long as Grace is viewed as insolvent, the laws of some states will completely block or limit the ability of co-defendants in asbestos trials to have financial liability or fault allocated to Grace. But if Grace is deemed solvent, those joint and several liability rules may not be applied and then co-defendants could use trial to have fault or damages attributed to Grace even if Grace does not have to actually pay out any cash. For example, in some states, a trial finding that Grace is 50% or more at fault could cause other defendants to become only severally liable for economic losses equal to their allocated percentage of fault. Thus, a finding that Grace is solvent could and should cause plaintiffs in some individual cases to collect less money from co-defendants when a jury or judge finds that Grace in fact was at fault for a particular person's asbestos disease. In short, joint and several liability rules why the ACC and the Futures Representative filed their motion asking that the bankruptcy court to order the rest of the world not to pay any attention to what the bankruptcy court says about Grace's solvency.

The ACC/Futures Rep. motion to "pay no attention to the findings" also indirectly highlights other absurdities and inconsistencies in the relationships between and interactions of state and federal tort trials and chapter 11 proceedings. The absurdities arise in both chapter 11 cases actually caused by mass tort claiming and in chapter 11 cases such as GM and Chrysler where the chapter 11 case was not specifically caused by a mass tort problem but the chapter 11 case injunctions have huge impacts on underlying tort cases as they purport to cut off present and future rights to bring lawsuits against debtors, insurers and others. Trying to cover all the inconsistencies would require a book, but the following provides some examples.

One example of inconsistency arises from the positions the plaintiff's bar takes regarding the role of federal supremacy. In most state court tort cases, plaintiff's lawyers bitterly oppose federal supremacy and federal preemption. Time and again, plaintiff's lawyers argue that state law should control tort issues. And, in the GM and Chrysler chapter 11 cases, the ACC and other tort claimants argued at length that state law rights could not and should not be cut off by an order and injunctions issued in a chapter 11 judge court. And, in the future, tort claimants of all kinds no doubt will say that plaintiffs were denied due process in the GM and Chrysler cases, and are not bound by those federal court orders.

In other contexts, however, the plaintiff's personal injury bar and future's representatives go to great lengths to support the power of bankruptcy courts to issue sweeping orders binding everyone in the world to whatever went on the bankruptcy court. In asbestos bankruptcies, the plaintiff's bar time and again argues that bankruptcy courts can and should deem themselves to have incredibly broad powers to create billion dollar trusts to help debtors exit chapter 11 and at the same time pay money to real - and not real - "victims." Along the road to the creation of such trusts, plaintiff's lawyers unabashedly sell the certainty created by the bankruptcy court injunctive orders under section 524(g) of the bankruptcy code. Look back at the terms of the Grace deal above - the plaintiffs bar sold certainty to Grace, to insurers, and to entities that bought assets from Grace.

Particularly worth noting is the way the plaintiff's bar sells certainty to insurers. The deal invariably is: agree to pay $ x now, $ x over ___ future years, and then you, the insurance company, can have the benefit of a federal court injunction protecting your company and its insurance policies from any more lawsuits involving asbestos or any other tort claims arising from the debtor. That certainty, it is said, will protect the insurer against "direct action" claims by plaintiffs, against contribution claims by other insurers, and against claims arising from what the insurer may or may not have hidden from the public. Indeed, being able to sell that kind of certainty was the central point of the facts related to this year's Supreme Court opinion in the Manville/Travelers case, which I've touched on before at posts such as this one. Thus, in that context, plaintiff's lawyers embrace and extol federal bankruptcy court supremacy and want bankruptcy court orders to apply in every case and every time so that the plaintiff's can sell more certainty to more entities at higher prices. Thus, that's one example of glaring inconsistency as the plaintiff's bar extols federal supremacy in that setting, but denies it in other state court settings and seeks to moot it through their motion to "pay no attention to the findings." (And by the way, the Supreme Court's oral argument questions - and its opinion - in Manville/Travelers both reflect the Court's lack of a meaningful record on or other knowledge of what actually happens in the chapter 11 mass tort cases that some of the justices characterized as "mysterious.")

3) Conclusion

The plaintiff's bar is enormously clever and creative. They have created two different compensation systems - one composed of $ 30 billion or more of asbestos trusts and the other composed of ordinary tort law suits. To better serve their clients and their own pocketbooks, the plaintiff's bar seeks to keep the two compensation systems apart so that they can have their cake and eat it too (a phrase Bates White has been the first and most public to apply to the situation). The motion to "pay no attention to the findings" is merely one of the more recent examples of how the two systems can be and are in fact being gamed. How can this happen? Because the two different systems are run by judges who have little or no detailed understanding of what is happening in the other system, and because almost all bankruptcy and state court trial court judges view their primary job as getting individual cases resolved, regardless of the consequences for others.

One final thought. Doesn't the motion bring to mind the Wizard telling Dorothy and the others to pay no attention to the man behind the curtain?

# 2 - Want More on the Interplay Between Asbestos Trusts and Litigation ? Attend the Lexis/Nexis International Asbestos Seminar - London- 9/29- 30

(Caveat - the following includes shameless self-promotion.)

Asbestos litigation, and asbestos trust issues, are no longer uniquely American issues. To the contrary, asbestos litigation and asbestos trusts are growing rapidly outside the US.

Really ? Yes. Due to soaring mesothelioma rates that will not peak until 2020 or so, asbestos litigation is climbing rapidly across the EU (especially in the UK) and in Australia. There also are a close to a couple of hundred asbestos claims pending in Japan and a handful starting in Korea. Future claims are a certainty because asbestos use has for years been rising rapidly across Asia and Russia, not to mention ship-breaking and other activities in which asbestos is often removed in terribly primitive and unsafe conditions.

Asbestos trusts also are global, in at least three way. First, Manville and other trusts take claims from around the world and are receiving materially increasing amounts of claims. Second, as part of the Federal-Mogul bankruptcy, a trust was set up under UK law for claims arising from Turner & Newall. Third, private trusts have been set up by entities hoping to limit or avoid litigation. The trusts take claims arising from Cape, James Hardie and Eternit, among others.

Multinationals, insurers, Wall Street and lawyers are missing a significant part of the asbestos picture if less than a global view is being taken. The answer? Attend the Lexis/Nexis seminar on 29 and 30 September in London on International Asbestos Claiming. Yours truly is chairing the seminar. I think an excellent panel of lawyers is on tap from around the world, including David Miller, an authority on asbestos litigation in Australia, and Rod Freeman, an authority on product liability and asbestos litigation in the EU. And, because the US litigation s part of the world view, Motley Rice's Anne Kearse and Shook Hardy's Mark Behrens will speak from their divergent perspectives. I will speak on international asbestos trust issues and hopefully will challenge other speakers with some good questions. And, finally, Selvyn Seidel of Burford Advsiors will speak about third-party litigation funding - a topic everyone should know about because it's going to change the world of litigation in a big way.

The general website for the seminar is here, the agenda is here, and the roster of speakers is here.

Want More on the Interplay Between Asbestos Trusts and Judicial Proceedings ? Go to the HB Asbestos Seminar in San Francisco 9/23-9/25

As posts on this blog reflect, there are in my view enormous issues out there regarding the interplay between asbestos trusts (mainly chapter 11 trusts) and the state court tort system. Happily, asbestos litigation seminars are paying an increasing amount of attention to the issues arising from the two parallel compensation systems. Two upcoming seminars offer great opportunities to learn more about the asbestos bankruptcy issues and much more.

Here are some specifics for the first of the two seminars:

1) HB Asbestos Litigation Conference Sept. 23-25 in San Francisco

The HB group took over from Mealey's and is running an upcoming 3 day asbestos litigation seminar. The program in general is excellent and is of special interest to me because of its focus on asbestos bankruptcy issues and because one of the chairs is fomer Chicagoan, Joe O'Hara, a lawyer who has tried asbestos cases for years for Owens-Illinois. Joe is now the Asssociate General Counsel for Owens-Illinois and a great lawyer I've known for more years than I want to admit. Joe and OI are very tuned in to the asbestos bankruptcy issues, and so the seminar program includes two Sept. 23 sessions focused on asbestos trusts and asbestos bankruptcy issues. In addition, numerous state court judges will be there and will end up hearing and/or saying a lot about these issues. Despite lots of other competing life events at that time, the sessions look so good to me that I'm flying out for just that day.

The specifics for the two asbestos trust and bankruptcy sessions are as follows; the speakers are quite knowledgeable:


2:30 Asbestos Claims Processing

•What bankruptcy trusts are operating and what are they paying?
• Timing of claims filing
• Best Practices - efficient methods for claim submissions
• Avoiding mistakes - areas of concern for claimant processing & payment
• W-9 forms, tax issues, 1099's to clients
• TDP's and processes within that may benefi t defendants
• Accounting for the money still in trust, the value of average mesothelioma claims & future projections on claims vs. assets and funds availability in trust

Francis McGovern, Esq., Professor of Law, Duke University School of Law
Larry Haden, President, Claims Resolution
Nicholas Vari, Esq., K&L Gates


3:45 The Surge in Bankruptcy Trust Payouts: Can You Make Everyone Happy? Maximizing Recoveries and Creating Fair Credit Allocation

• What adjustments should be made in the tort system to account for the bankruptcy payouts?
• What disclosure obligation should exist regarding pending trust claims, actual payouts, and expected future trust fi lings?
• Should the tort system encourage or leverage plaintiffs to file claims with the Trusts before the claims leave the system?
• Third party practice and the Defendants' interaction with the Trusts

Moderator: Joseph O'Hara, Jr., Esq., V.P. & Associate G.C., Owens-Illinois
Hon. Richard Aulisi, Supreme Court Justice, 4th Judicial District of New York
Hon. Ken Kawaichi, (Ret.), JAMS
Hon. James McBride, Superior Court of California
Joseph Belluck, Esq., Belluck & Fox LLP


To register, the HB home page is here. The entire asbestos agenda is here. In this tough yuear for budgets, note that inside counsel from corporations and insurers are invited to attend free of charge.

AWI Asbestos Personal Injury Trust Selling Shares Under Prepaid Variable Forward Sales Contract - Is This The Way a Court-Ordered Trust Should Work ?

When and how does an asbestos trust own enough shares of the company for which it assumed "asbestos liabilities" ? And, should chapter 11 trusts be involved in transactions of a type that some say are sometimes tax dodges?

These questions are posed for several reasons. One is that under bankruptcy code section 524(g), a chapter 11 asbestos trust is required to own prescribed amounts of shares of stock of the company for which it assumed asbestos obligations. That rule, some say, is mainly honored in the breach.

Another reason for posing the questions is that it is interesting to watch the ways in which the trusts sometimes act much like, if not exactly like, the corporate financiers that plaintiff's lawyers often trash in the course of jury trials. How so? Below are the facts and links regarding the AWI Trust recently using a prepaid variable forward sales contract to cause the more or less sale of shares of AWI.

What is a prepaid variable forward sales contract? It is one of the many exotic financial paper created by Wall Street to create new ways to own and sell shares of stock without, they say, selling shares. (One is reminded of Humpty Dumpty's scornful proclamation " When I use a word, it means just what I choose it to mean -- neither more nor less." )

The IRS has declared a war of at least strict scrutiny on these transactions as potentially or actually illegal tax shelter transactions, as described here by the TaxProfBlog and here by the NYT. This WSJ article explains that the transactions also have been attacked as tools used by executives to sell shares ahead of price drops without really selling shares, they say.

Call me naive, but doesn't it seem odd that trusts operating under the aegis of federal courts would engage in transactions of a type the IRS deems dubious ? No doubt the trustees and the trust advisory committee would counter that they have a fiduciary duty to make money for claimants. Maybe true, but that sounds an awful lot like the corporate argument that we have a duty to our shareholders to make money. In personal injury jury trials involving risks and cost benefit analysis, plaintiffs love to attack the corporate duty to make money argument as putting profits ahead of people, or profits ahead of morals.

On the subject of the AWI Trustees and the Trust Advisory Committee (TAC ) wouldn't you think the Trust's website would identify them? If it does, I sure can't find the names anywhere despite using the search box on the website to search for names including Kazan, Weitz and Cooney. I dropped the trust an email this morning asking for the names and whether I missed them on the website. We will see if an answer comes back.

____________________________________________

On August 11, Armstrong World Industries announced that its Asbestos Trust is raising $ 180 million in cash by selling some shares outright and more shares pursuant to a prepaid variable forward sale contract that is said to be part of reinvigorating AWI. According to the press release from Armstrong World Industries:

"Armstrong World Industries Comments on Sale of Asbestos Trust Shares to TPG
LANCASTER, Pa., Aug. 11 /PRNewswire-FirstCall/ -- TPG Capital ("TPG") announced it has agreed to purchase seven million shares of Armstrong World Industries, Inc. ("Armstrong") (NYSE: AWI), and economic interests in an additional 1,039,777 shares, from the Armstrong World Industries Inc. Asbestos Personal Injury Settlement Trust ("the Trust"). TPG's purchase price per share of $22.31 is the 20-day trailing volume-weighted average price through Friday, August 7. The transaction is expected to be completed during the next several weeks, and will result in approximately $180 million of proceeds for the Trust. (emphasis added). "


A form 4 from the Trust explains the transaction as follows:

"Explanation of Responses:
1. On August 10, 2009, the reporting person entered into a prepaid variable forward sale contract with TPG Partners V, L.P. and TPG Partners VI, L.P. (collectively, "TPG"). The contract obligates the reporting person to deliver to TPG 1,039,777 shares of AWI common stock (or cash as provided in the contract) on the maturity date of the contract. The maturity date is the 20th trading day beginning on November 4, 2013. In exchange for assuming this obligation, the reporting person will receive $23,197,425 at closing of the contract.
2. The reporting person pledged 1,039,777 shares of AWI common stock (the "Pledged Shares") to secure its obligations under the contract. While the reporting person retained dividend and voting rights in the Pledged shares during the term of the pledge, the reporting person is obligated to pay TPG dividends received on such shares and is party to a shareholders agreement with TPG relating to such shares.
3. The settlement price will be based on the 20 day AWI common stock price preceding the settlement transaction date, and the contract can be settled in cash or in the release of sufficient Pledge Shares to satisfy the settlement payment (as determined at the settlement price)."

Science, Intensive Therapies and Damages - New Issues Ahead ?

More on science and tort law. Suppose medical malpractice destroys a woman's inner ear balance function to the point she can stand up only when supported by a wall or other structure. Suppose you are the insurer for the doctor - how much do you offer to compensate for her inability to work or to live any kind of a normal life? Is the offer a structured settlement worth perhaps $ 10 million over 30 years? If you are the woman, do you accept that offer? Or, do you commit yourself to an experimental but potentially highly successful new approach to restore your balance by going around the destroyed system ?


The experimental approach may well be the better alternative for both the victim and the insurer. What is it? Helping the woman's brain to rewire itself through an intensive therapy process that calls for rebuilding and rewiring the brain and balance system by routing signals up to the brain through a Rube Goldberg hat with wires connected to the tongue. In fact, as is detailed below, this technique worked and restored - fully - "the wobbler's" balance. And, the therapy subsequently has worked repeatedly for other persons with similar problems.



Or, suppose you are the disability insurer for a physician who suffers a stroke in the prime of life and loses significant bodily function. Do you pay out millions in disability over the years or pay hundreds of thousands of dollars for an intensive therapy that may restore function by once again rewiring the brain ? The latter may well be the right choice.


Suppose you are a disability insurer facing the prospect of thousands more Alzheimer's claims than the underwriters had expected. What to do - pay, take the insurance company into "run-off" or pay for "learning software" for which there is objective clinical data indicating that use of the software therapy helps to block or delay the onset of Alzheimer's by helping the brain form new links ?



For all of the above fact patterns, consider some additional questions. Suppose the issues do not arise from insurance policies and instead arise from a lawsuit seeking remedies/damages for an injury caused by negligence ? Suppose the claim is based on strict liability - does that matter? Suppose the victim smoked or took some other action plainly viewed - today - as contributory fault - does that limit the remedy or damages?

Does the insurer get to choose the option or does the insured/victim make the choice? Suppose the insured/victim chooses not to try the intense therapy despite a proven track record of success in "like" patients - should that limit the amount of damages payable ? How "like" does "like" have to be ?

Suppose the therapy is available only at one or two facilities in the US - is there an obligation to pay for the travel and hotel expenses? How nice a hotel? What about paying for food and shelter for a supporting family member? What about paying for a family member or a professional nanny to stay with children while the wife goes through therapy and is supported by her husband? What about paying a supporting family member who goes with the patient to support the patient through the intensive, months-long therapy? What happens when the victim is from country x, speaks language y, and the therapy is - for now- available only in country q where they speak language b?


Excluding the insurance company parts, the examples above are all drawn from real world situations covered in a fantastic book on brain science. The thrust of the book is that brain rewiring principles today are well-accepted and indeed proven by "brain mapping," but 30 or so years ago were considered heresy. The most basic scientific principle? Contrary to conventional medical wisdom, the brain in fact can and will rewire itself IF worked intensely by therapists who know what they are doing. Are the results purely subjective? No - they've been objectively proven by laborious "brain mapping" and by observable results.


The book? The Brain That Changes Itself -- Stories of Personal Triumph from the Frontiers of Brain Science by Dr. Norman Doidge. Who is he? A physician turned researcher who took the time to write a brilliantly readable book explaining for everyone why and how science can cause seemingly miraculous recoveries for victims of strokes, disease, traumatic accidents and even psychological traumas. The book is in part an explanation of the insights of dedicated scientists who rejected conventional thinking about the brain and proved that in fact the brain is a remarkably "plastic" organ that can change and overcome profound injuries to the brain itself. The book also explains how the brain rewires to compensate for and overcome injuries to other parts of the body. The book begins, for example, with the story alluded to above regarding the brilliant new technique for rewiring the brain of the "wobbler" injured by a physician's error. Other chapters describe how intense, out-of-the -ordinary therapies produced virtually complete recoveries for victims of strokes, some birth defects and even some mental health issues.


The book also is a must read for everyone worried about dementia in old age. Pages 70-91 describe demonstrably successful software and exercise programs being developed by a company known as Scientific Learning that has developed a program known as Fast For Word, and other software developed by Posit Science. Also significant is the description of the Aerosmith School at pages 36-44.

Conclusion? New issues lie ahead. Centers of excellence with intensive therapies can and do offer some people wonderful, life-saving opportunities not available anywhere else. Which lawyer among us is good enough to - successfully - argue to a jury why the injured person is not entitled to access the center of excellence when the requested remedy is based on sound logic and science ? And, aren't all sides better off if the intensive therapy succeeds and produces fewer overall costs ?

Cancer Cures and Tort Law - Where Is Science and Where Is It Going ?

Today, more on science, cancer and law. Why do I think these topics are worth writing about for tort lawyers and perhaps some policy-makers around the world? Because science brings us a fast arriving future, as is detailed below. And, if the US actually achieves health care reform and more sophisticated rules at the FDA, cures will arrive even sooner. The results for lawyers, cancer victims and persons at risk ? Over the next few years, we will see more highly specific lawsuits seeking specific kinds of medical monitoring (tests for proteins, specific types of scans) and specific leading-edge clinical treatments. You can read here a summary of the cases Phillip Morris is fighting and note that two (in New York and Massachusetts ) are medical monitoring cases seeking CT scans for certain groups of smokers. More such suits are sure to come as science moves ahead. And, damages claims are going to increase around the world as even the poorest persons from any nation seek what they will argue is the fundamental human right to funds for and access to a meaningful chance for a cure for cancer. Thus, the financial and human stakes will continue to rise for parties to litigation and national policy-makers.

To start with, consider some numbers regarding cancer. About 2,4oo hundred or so annual mesothelioma cancer deaths in the US have caused the payment of hundreds of billions of dollars in settlement payments and legal fees. The mesothelioma rate is exploding over seas, especially in Australia and Europe where amphibole use was rampant and continued far longer than it did in the US. Meanwhile, many nations are increasing the use of asbestos, including some use of chrysotile that contains amphiboles.

Now look outside asbestos and see how small mesothelioma is in the grand scheme. Per statistics from the American Cancer Society, over 1.4 million new cancers will be diagnosed this year just in the US and 4% of Americans are cancer survivors. Every two days, more people in the US die of cancer than died on 9/11/01. Mesothelioma is a modest problem in that scale (a statement which is not to minimize the horrible and almost always fatal nature of mesothelioma.)

Now, think about another form of cancer, such as non-Hodgkin's lymphoma. The annual rate used to be over 50,000 per year (in just the US) but now has climbed to well over 60,000 diagnoses per year. Please see this prior post for links to the American Cancer Society data and for Gina Kolata's prior article summarizing the slow pace of generating cures.

In view of those numbers, consider where science is on research. Ms. Kolata last week published this important new article detailing the moribund pace and utility of clinical trials for new cancer drugs. It's depressing reading as she details multiple problems, including lack of volunteers for the trials, and design flaws that require too many participants. Yet another problem - highly relevant today - is that most existing insurance reimbursement plans financially and practically discourage doctors from helping patients find and join appropriate clinical trials. So, for policy-makers and voters, here is proof that our present system is exactly backwards as it discourages clinical trials needed to find and prove cures for cancer. Thus, we now have further objective proof that our existing health care insurance system is built to generate revenues instead of cures, and so is deeply flawed for persons with serious diseases, which of course is the group that most needs health care and insurance. Hopefully a revised system will include some clever economic choice Nudges from the conservative and creative new regulatory czar, Cass Sunstein ( go here for the blog tied to the recent and wonderful book Nudge by Messrs. Sunstein and Thaler).

But, despite those flaws, is science now at a point to make real progress and actually put in place cures for at least several cancers? Some say yes. Who says so? Nobel Prize winner Dr. James Watson, one of the two leaders of the team that explained DNA's double-helix. Go here for his powerful article explaining that mapping the genome and other advances mean that science has made enough progress so that there is now a scientific tool kit that can actually work for some people with some cancers and can be applied to an increasingly wide range of cancers. Here's the opening paragraph of his article:

"THE National Cancer Institute, which has overseen American efforts on researching and combating cancers since 1971, should take on an ambitious new goal for the next decade: the development of new drugs that will provide lifelong cures for many, if not all, major cancers. Beating cancer now is a realistic ambition because, at long last, we largely know its true genetic and chemical characteristics." (emphasis added).

Go here for Dr. Wendy Harpham's full post on Dr. Watson's article, but here is Dr. Harpham's summary of his recommendations:

"Watson believes :

The new signal-blocking drugs (e.g., Herceptin) will lead only to improved lengths of survival.
Most anticancer drugs can reach their full potential only if given in combination with other drugs.
We must change F.D.A. regulations to allow testing in combination new drugs that, when given alone, have proved ineffective.

The NCI should provide funds to smaller biotech companies doing innovative work and to major research-oriented cancer centers doing low probability-high payoff projects."

Do clinical trials and science actually translate into lives saved even while science is ongoing? Yes, sometimes. Want proof ? Go to this blog (On Healthy Survivorship) to read Dr. Harpham's personal success story. She is a physic an who was forced to give up her patient treatment practice back in the early 1990s due to repeated onsets of non-Hodgkins lymphoma. Thwarted, she refocused to writing a great series of books and a blog about cancer and healthy survivorship. Today, she is a healthy survivor because of clinical trials and monoclonal antibodies, and healthy, realistic hope, as she describes in this post in particular and her blog and books in general.

Conclusion ? I'd say defense lawyers and corporations face future waves of claims based on new science and new lawsuits seeking new remedies. Specific causation and other defenses of course will continue to exist, but when the plaintiffs can invoke names of credible scientists such as Dr. Watson, the defense side will start to see one aspect of the whittling back of science as major weapon against tort claims.

Decisions on Efforts to Press Legal Malpractice Claims Against Class Counsel and the Scope of the Legal Duties

DRI's blog includes this post by Shari Claire Lewis providing a concise summary of two recent appellate decisions involving attempted legal malpractice claims against class counsel by absent class members. One decision is by the New York Court of Appeals and one is from California's intermediate appellate court. Both decisions protected class counsel.

The New York decision precluded discovery into class counsel's files. This could be an important precedent so many collateral estoppel and class action cases are won or lost based on whether class counsel provided adequate representation for a group of claimants. The issues may be even more complex when global class actions are involved.

Tort Claim Damages - The Impact of Immigration Possibilities and Claims for Lost Wages

With respect to tort claiming around the world, one frequent comment is that claiming will not increase very much because persons from developing nations may well have very limited claims for lost wages. That may be true in some cases, but the plaintiff's bar of course seeks ways to move by that barrier. One way to do that is to focus on the prospect that the claimant might have been able to or perhaps planned to immigrate to a more developed country and would have been gainfully employed in the new country. Reposted below is a Mondaq article on that topic from the Kennedys law firm. The article provides a useful example of the arguments being advanced to support and oppose claims of that sort.

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United Kingdom: Kennedys' Settlement Of Claim Involving A Polish Citizen Highlights Tactics For Defending Claims By Migrant Workers For Loss Of The Chance Of A UK Earnings Model


28 July 2009Article by Mark Burton, Partner

Kennedys has recently settled a claim by a Polish citizen for a fraction of the amount claimed by raising arguments in relation to the assessment of loss of a chance and making use of our network of international offices to gather relevant evidence.
In 2004, the Claimant in this case was studying for a business degree in Poland. She was the victim of a very unpleasant assault by an employee of a bus company whilst on holiday in London. Kennedys was instructed by the bus company.

Liability was not in dispute but significant issues arose in relation to quantum. In particular, the Claimant alleged that from the summer of 2005 she would have come to England and found employment at the average UK graduate starting salary and remained in employment here, receiving regular salary increases


Loss Of A Chance

Kennedys argued that the career model put forward heaped speculation upon speculation to the point where the Claimant failed to satisfy the threshold test of a "real or substantial chance" as required by law on loss of a chance. The numerous imponderables thrown up by the facts of the case included:

The fact that she might have decided to stay in Poland with her family.
She might have come over to the UK, not liked it or failed to find suitable work and returned home.

She might have worked in the UK for a while, then lost her job due to the recession or started a family and opted not to go back to work.
Following the approach adopted by the Court of Appeal in Langford v Hebran [2001] Kennedys advanced a model comprising 5 career options in descending order of likelihood. We proposed that the most likely option was that the Claimant would have worked as an estate agent in Poland, in line with her pre-accident work experience. We then assigned percentages to the chances of her obtaining additional income from better paid careers in both countries. Only a 10% chance was applied to the likelihood of her spending the whole of her working career in the UK.

Importantly, we argued that the Poles who did prosper by coming to the UK were those with a trade to fill a vacuum in the British market during the boom years, especially in the construction sector between 2004 and 2007. We did not accept there was a co-existing vacuum in the graduate sector or that Polish qualifications would necessarily be sufficiently competitive in the UK graduate market.

Kennedys' London office worked on this case with our associated Warsaw office, which assisted with assessing the likely levels of income the Claimant might have attained in Poland and the significantly lower Polish rates for residual care and therapy.

Comment

The latest Government statistics show that over half a million people arrived to live in the UK in 2007. The highest inflow of any individual citizenship was from Poland, with an estimated 96,000 Polish citizens migrating into the UK that year. In this context it is not surprising that defendants and their insurers are seeing increasing numbers of claims involving migrant workers.

Invariably many of these claimants will seek to maximise their claims by alleging that their careers would have progressed in the UK. As the above case shows, it is important that defendants adopt a strong and careful approach to these claims. They should break down the possible career options and consider the realistic prospects of the claimant achieving these. If the claimant has returned home, evidence may be needed as to local rates for any residual claims. The financial difference between the two countries can often be quite striking. By these means, settlements at much more reasonable levels will be achieved

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Judging Opinions and Other Writings Using Plagiarism Software

Great post on Conglomerate with links to lots of specifics about using plagiarim software to figure patterns and averages regarding the writing of Supreme Court opinions and other documents.

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2d Circuit Issues Chrysler Opinion Explaining Prior Ruling

The 2d Circuit has issued its opinion explaining its affirmance in Chrysler. Go here for the opinion, and go here for an AmLaw summary. The AmLaw summary, however, does not mention tort claimant issues.

The opinion is now on my pile for reading next week while I am on vacation.

Tax Breaks for Plaintiff's Lawyers ?

Further proving that law is just another industry, LegalNewsline has an interesting article here about legislative efforts to give plaintiff's lawyers a tax break. Instead of personal injury case expenses being treated as loans to the clients, the plaintiff's lawyers want to immediately expense the amounts spent. According to the article, the hoped-for tax break was a topic at the recent national meeting of the trade association plaintiff's personal injury bar.

Signifcant Mass Tort Bankruptcy Issues in the W.R. Grace Asbestos Chapter 11 Case

Significant mass tort bankruptcy issues are being contested as the W.R. Grace asbestos chapter 11 case moves deeper into its phased confirmation hearing. Subsequent posts will touch on some of the issues and pleadings.

Two issues are of perhaps greatest overall note. First, multiple objectors are arguing that Grace in fact is solvent, and so they argue the plan is not confirmable because the payouts called for by the plan violate, they say, various subsections of code section 1129 regarding the relative rights to payments as between creditors and equity holders. In short, they say the equity owners are being allowed to keep too much in the way of assets.


Another big picture point is that the Grace case presents an unusual and wide-ranging set of plan objectors, with most or all of the challengers having apparently uncontested standing to object to the plan. So, this chapter 11 case could end as one of the few asbestos chapter 11 cases that actually ends with rulings and judgments instead of the usual bankruptcy court deals.

As a reminder of how Grace came to this juncture, recall that on April 7, 2008, W. R. Grace announced a settlement in principle of many but not all of the asbestos injury claims related to its long-running Chapter 11 case. The settlement occurred when the case was in the midst of a hotly contested trial on "liability estimation" for personal injury claims. Grace had presented significant evidence on the flaws of the "mass screened" asbestos cases, and was slated to present further evidence intended to diminish the value of future claims. Overall, Grace was putting on evidence to prove that many or most claims against were frivolous claims. Part way through that battle, Grace and the ACC (the Asbestos Creditor's Committee) reached a deal.

The prior settlement deal is described in the excerpts set out below from this article by Alison Frankel in the online American Lawyer.

Familiar Faces Central to W.R. Grace's Settlement of Asbestos Claims
The American Lawyer
By Alison Frankel
April 09, 2008

***
Familiarity doesn't preclude disagreement, however. W.R. Grace, which was forced into Chapter 11 bankruptcy in 2001 by asbestos liability, estimates the settlement to be worth less than $2.5 billion in present day value. The plaintiffs lawyers say its present value is closer to $3 billion.
The trust that will pay out asbestos claims will be funded by a $250 million cash contribution from Grace (payable on the company's emergence from Chapter 11); an additional $1.55 billion from Grace paid over 15 years, beginning in 2019; Grace's asbestos insurance coverage, worth an estimated $600 million; warrants to purchase Grace shares; and more than $1.2 billion in previous settlements with companies accused of fraudulently purchasing Grace assets.
Unlike previous bankrupt companies that reached deals with asbestos claimants, W.R. Grace went to trial to challenge the plaintiffs lawyers' estimation of its liability for the more than 100,000 asbestos claims it faced. Claimants estimated that liability to be $3.5­ billion to $7 billion. Grace contended it owed less than $800 million, though it set asbestos reserves at $1.7 billion.
Beginning in January, Delaware federal bankruptcy court Judge Judith Fitzgerald presided over a trial to determine both the appropriate way to estimate claims and the total value of those claims. Grace had concluded its case and plaintiffs lawyers had presented their first witness when the deal was reached.


"The real driving force was not what was happening in Judge Fitzgerald's courtroom but how long it would take to reach a conclusion through litigation," says Elihu Inselbuch of Caplin & Drysdale, who was counsel to the asbestos claimants committee. "It could easily have gone on another four years, with asbestos victims getting sick and dying the whole time."