Back in law school, we all heard something about the awesome power of federal judges and probably wondered what it's like to go home at the end of the day knowing you made a real difference in the world. That power was on real display this past Monday when a  federal judge in New York expeditiously exercised some of the vast  power by issuing a momentous and massive 154 page opinion on cross-motions for summary judgment. The opinion is one that will produce a massive future cascade of events.  One hopes the judge and his staff all enjoyed a well-earned respite on Monday evening. 

What happened?  Judge Robert W. Sweet  struck down the patent  claims to the BRCA 1 and 2 genes. Those two genes, if found together,  signal a materially increased risk (over 80%) of developing breast cancer.  More broadly, the rationale of the opinion suggests the same result is proper for most if not all patent claims to gene sequences.  In a careful and thorough opinion, Judge Sweet accepted the patent invalidity claims put forward a by a well- crafted consortium of plaintiffs seeking to invalidate the patents. In short,  the patents were rejected because the patents amount to a claim of rights for simply reporting the order of  the nucleotides that make up a gene, and patents are not awarded for reporting biological facts.  

Why is this a big deal? Start with the numbers. 4,382 patents are claimed in the US for the just under 24,000 genes that comprise a typical genome. See Opinion at 70. That's about 20% of all the genes.

Most of all, this opinion matters because it is a huge win for science and the free flow of information.  Simply put, the mere existence of patents creates doubts and claims that lawyers turn into delays, negotiations and lawsuits.  I've been following this case for some time, and read the main briefs, and some of the declarations. The papers present various disagreements and claims about the future of science if gene sequence patents are invalid.  But, the indisputable facts are that gene patents create delays in research. Today, delays are adverse and matter because  because science today can move so fast if allowed to do so. And, even more to the point, people with cancer cannot wait. Today, almost 1.5 million Americans are diagnosed with cancer every year. That translates into thousands of daily decisions for mothers, fathers, children and lovers who need the best possible information to make life altering decisions on how or whether to treat a particular set of facts and risks.  Patents indisputably block the fastest possible flow of information.

Congratulations to the plaintiffs and their lawyers for such a careful and well done pursuit of a massively important lawsuit that brought together a wide range of individuals and organizations.  The individual plaintiffs included both scientists blocked from further medical researchers, and breast and ovarian cancer patients unable to pay the $ 3,000 required for one of Myriad's tests to determine if they carry the BRCA genes. Organizational plaintiffs included a wide range of highly respected associations of  doctors and scientists. Numerous amicus briefs also were submitted by well-known medical groups. The plaintiffs were represented by the American Civil Liberties Union and  the Public Patent Foundation at Cardozo Law School.                       .

Defendants? Myriad Genetics and the University of Utah. Their  lawyers are from Jones Day.

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As described in this prior post of a little less than a year ago,  a bankruptcy judge in Pennsylvania last year wrote a cogent opinion that thoroughly reviewed - and trashed -  the Skinner chapter 11 plan. Why ? Because the Skinner plan boiled down to keeping alive a corporate body that was financially dead unless someone clever could find an artificial means to cause the corporate body's  insurance policies to remain alive to generate cash for asbestos and other creditors.  The corporate death had occurred without the debtor having paid even one asbestos claim prior to filing its chapter 11 petition. But, lawyers for asbestos claimants found a way to try to work around that little problem. To incentivize all creditors to favor asbestos recoveries and vote for a chapter plan, the plan proposed that 20% of all asbestos judgments would be paid to the non-asbestos creditors that otherwise would get nothing. In short, a "win-win" that would keep the corporate body alive for the benefit of all creditors, and would hurt only the insurance companies paying the judgments. So, the court rejected the plan as not possibly being in good faith and converted the case to a chapter 7 proceeding.

Happily, a friend just sent along a March 29 opinion in which the district court has now rejected the appeal pursued by the asbestos claimants. The affirming opinion, by Chief Judge Gary Lancaster,  minces no words in explicitly affirming all the reasoning of the bankruptcy court, and rejecting the bona fides of the plan for all the reasons explained by the bankruptcy judge, including "collusion."  The court also bluntly noted that the entire affair was even worse because it had generated some $ 2 million in legal and consulting fees for the bad faith plan. Who knows - maybe there will be a spring miracle and the US Trustee's office will move to recoup the fees and costs wasted on a bad faith plan ?

Will the asbestos creditors in Skinner seek an appeal to the 3rd Circuit ? My belief is: no. Why ? Because the 3rd Circuit has under advisement an opinion in an asbestos bankruptcy case with facts not so very different.  The case is commonly known as NARCO/GIT.  The case is described in a prior post, and also in this post regarding 19 state attorney's general  opposing the plan. The facts in GIT are not exactly the same, but do involve creating far more claiming in bankruptcy than had ever happened in the real world of the tort system. IN the real world outside of bankruptcy.  less than 200 silica claims before chapter 11, but then over 4,500 were filed in the chapter 11 case. Thus,  it's easy to see some parallels, and so one doubts the plaintiffs want to help the 3rd Circuit see other examples of the unseemly goings on in too many (but not all)  of the asbestos chapter 11 cases.  To make life easier for those on hand-held devices, set out below are two points from the prior post about the issues on appeal in GIT:

__________________________________________________________ 

"Second, Hartford points out that the "silica trust" is not funded by the debtor, and instead is to be funded only by monies paid out from some $ 500 million of GIT insurance policies that contain "asbestos exclusions." The asbestos exclusions render the policies unable to pay asbestos claims. Hartford Brief at 9-10. As Hartford argues, it certainly is illogical to argue in an asbestos bankruptcy that is "necessary" to resolve silica claims to be paid from insurance policies that can not be used to pay asbestos claims.

Third, Hartford contrasts silica claiming facts before the chapter 11 petition was filed to the silica claiming facts after the petition was filed. Prior to the petition, GIT had been sued in less than 200 silica cases, GIT had not paid out any money on silica claims, and its insurers had only paid out $ 312,000 for silica claims. Hartford Brief at 8. In contrast, after the petition was filed, silica claims were soon submitted in droves (over 4,500). As Hartford points out, the sudden spate of claims was a win-win for everyone but the insurers since the spate of claims gave GIT votes needed to approve its plan under section 524(g), and payments by the trust on the claims would over time generate money for claimants and their lawyers, with the claims judged by the trust under a limp "proof" standard. Hartford Brief at 9-14. Thus, everyone would be happy except the insurers called on to pay the silica claims after approval by the trust."

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Time certainly flies. It seems just the other day I was writing this post about the grant of cert in the f-cubed securities litigation on application of US law with respect to fact patterns involving mainly overseas acts, but some US impacts and facts. The main point of that post was to suggest that the 2d Circuit opinion seemed to lack depth of knowledge of class action law outside the US. The post also expressed my hope hope that the briefs would educate our high court on class action law in other nations. (As it turns out, the briefs do include sections addressing some conflict of law issues as between national approaches to class action law. However, the sections are relatively brief and superficial, perhaps because of page limits.)

Today's post offers a few big picture observations on the issues regarding  "extraterritorial" application of laws.  The issues are being argued here in the context of securities claiming. So, the party  and amicus briefs to some large degree focus on parochial arguments about what is and is not good for the US securities industry and others who interact with that system.  One hopes the Court will look at the broader picture. On that topic,  Kevin LaCroix at the D & O Diary has a very helpful post collecting examples of the "extraterritorial" issue in certain other substantive settings that are on the short term horizon for the Court.  

And, of course,  the range of issues is not limited to the Court's short term case list. One can readily go back through prior posts on this blog to see fact patterns and "extraterritorial"  issues that will over time arise for tort, insurance and bankruptcy law.  Think about, for example, the melamine contamination cases arising from acts China, personal jurisdiction issues from product liability cases involving goods that travel the world, corporate "demergers" in Australia where decisions are driven by future tort claim possibilities, an Australian mass tort defendant that in a decade has thrice changed its global home to try to achieve perceived short-term benefits from local laws, and the billions of dollars of insurance coverage that vanish  when  insurers use UK schemes of arrangement to avoid past promises made in insurance policy contracts. All of those situations involve fact patterns with many actions overseas, and impacts in the US and throughout the world

Consider also the rule to "be careful what you wish for in litigation"   Defeating application of US law now may produce short-term happiness for some  parties,  but it's hardly the end of the story. In the f-cubed case, briefs have been filed by, for example, other governments and global investors. These are constituencies  that are not going to disappear, and so there will be litigation somewhere over the merits, it's just a question of where and when the issues will be litigated.  Moreover, litigation financing funds can and will flow globally - the capital of the US plaintiff's bar is no longer the dominant weapon it once was (but neither is the weapon gone), and so business groups need to confront the reality that they could end up litigating cases all over the world.  In a related vein, we've seen US examples of court systems competing to attract litigation. Court system competition inevitably will happen on an international level, On those possibilities, see this interesting article by Prof. Hannah Buxbaum as she explores possible competition between international legal systems.  She has written extensively on international law issues, and is guest blogging this week at the Conglomerate blog  due to the f-cubed topic. One of the Professor's articles is cited in at least one of the briefs.

One final thought. So many important issues, and so relatively little attention ill be given to them in terms of terms of oral argument and  pages of briefs. Brevity of course has value at times, but perhaps outcomes would be better with more time to hear more depth about laws and legal systems around the world?  On time and attention,  I'll mention that I happened to be in London a few year back during the week the intermediate appellate court was hearing  oral argument on pleural plaques issues. The court held oral arguments every day for a week.  I stopped by to watch and listen to part of the argument and heard extensive discussion of US "asbestos law"  and its lessons and implications.  Maybe SCOTUS  could learn something more from the "more time"   approach ? And, some day, courts in other nations also will be hearing about these issues; how will they handle the subjects?

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Courtesy of this article in Science Daily, there is word of a new article in Science that explains a trick some tumors use to avoid detection. The article abstract is here.   In short,  some tumors emit a protein that tricks the body into ignoring the tumor.  See below for a more precise explanation. The chart to the left shows the outcome. Go here for a larger version of the image.

 "The tumor tricks the body into thinking it is healthy tissue,” says lead author Melody Swartz, head of the Laboratory of Lymphatic and Cancer Bioengineering (LLCB) and EPFL professor. Swartz and her team set out to understand how immune tolerance is induced by tumors, allowing them to progress and spread. The researchers from EPFL concentrated their efforts on a certain protein that is normally present in healthy lymph nodes to attract T cells and program them to perform vital immune functions. They found that some tumors can secrete this protein to transform the outer layer of the tumor into lymphoid-like tissue. This outer layer then attracts and effectively re-programs the T cells to recognize the tumor as friend not foe, resulting in a tumor that goes undetected by the immune system.

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To my knowledge, back in the 1980s, law school professors were not talking or writing about entrepreneurial growth in court systems or  tort claiming. Now, however, they do, and it's always interesting to see how the market shares grow for different courts and claims.  For example, Delaware bankruptcy courts went from being a legal "backwater" to dominating the corporate reogrnaization practice; Proesssor Lopucki documented the court's entrepeneurial growth in a book, with various papers (e.g.  this one) later issued on many sides of the topic. 

I bring up entrepreneuiral courts and claiming because there is now  further evidence that St. Clair Coubty, Illinois is looking at a new spurt in case fiilings and that lung cancer claims (not mesothelioma claims) are coming back into vogue.  Prior posts pointed out mentioned spurts in lung cancer claims, and another post mentioned the prior spurt in St. Clair County claiming. Now the two seem to come together as a  new article from Kelly Holleran at the Record covers the latest spurt of five lung cancer cases filed in St. Clair County by the Gori & Julian firm.  Now it's time to see how the St. Clair County court system responds. Will it add more trial dates and become the equal of Madison County  as a forum for processing asbestos lawsuits ? Stay tuned !

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A new ScienceDaily article raises a question: can toxic tort lawyers learn from fruit flies ?

The lesson, it seems,  is that toxic tort lawyers will devote increasing amounts of energy to arguing the extent to which studies of animals - or even insects - are or should be admissible and persuasive for purposes of reaching conclusions regarding cause and effect in humans. Today, defendants are usually (not always) happy to argue that the only "credible science" is a double-blind epidemiological study that shows a relationship between exposure and harm at a relative risk at or above 2.0, or some variation of that theme, as illustrated by this simple but useful outline of some state law cases after Daubert. On the other hand, plaintiffs, especially early movers, are often (but not always) forced to place faith in other forms of science because it often takes years to create and execute a double-blind epidemiological study, if it can be done at all. 

The fruit fly teaches us that these debates will becoming increasingly informed by phylogenetics, a field of science that seeks to offers insights into the how and why of evolutionary genetic similarities and differences between various organisms. Go here for a Wikipedia explanation, or here for a free on-line lecture from iBio. (More examples of why the web is so incredible for spreading information).   

The fruit fly article illustrates the point in a general way. The gist of the article is that scientists have now proved that humans, animals and fruit flies all share a protein (TRPA-1, they call it), that  triggers a string reaction to noxious substances. This is not stunning news in the sense of teaching that we can learn from humble forms of life. After all, scientist for years have learned much from worms. That said, this phylogetics outcome is  important enough to have earned space in the March 18 issue of Nature, perhaps the world's most respected journal for interdisciplinary science.  So, maybe even toxic  tort lawyers can indeed learn from fruit flies. 

Key excerpts are set out below from the ScienceDaily article:  

***

"Chemical nociception, the detection of tissue-damaging pungent chemicals like those found in wasabi, tear gas and cigarette smoke, is triggered by a protein receptor known as TRPA1, which is found throughout the human body in the nose, mouth, skin, lungs, and GI tract. Studying the chemical sensors of Drosophila fruit flies, scientists discovered that flies use their ortholog of the human TRPA1 sensor for the same purpose.

Using a combination of behavior, physiology and phylogenetics, the scientists discovered that this defensive response to noxious compounds is an evolutionary stalwart cutting across immense time scales and linking humans, insects and many other animals back to their common ancestor over 500 million years ago, said lead author and biologist Paul Garrity.

 ****

Working with biochemist Doug Theobald, the team reconstructed TRPA1's family tree back some 700 million years using a variety of bioinformatic methods. "We discovered that a new branch split off the tree at least 500 million years ago, and that this new branch, the TRPA1 branch, appeared to have had all the features needed for chemical sensing even back then," said Garrity. "Since that time, it appears that most animals, including humans, have maintained this same ancient system for detecting reactive chemicals."

And therein lies some of the future promise of harnessing TRPA1. Because the receptor is so widely dispersed throughout the animal kingdom, it holds promise both as a target for therapeutics and deterrents. Understanding more about how the receptor works may help lead to important applications in medicine and industry."

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In courtrooms, we are supposed to deal in provable facts. But, outside of court,  some say perception matters far more than the facts when it comes to the messages that all sides push out to the public through mass media and social media.

This week,  one of the messages that arrived was from the U.S. Chamber’s Institute for Legal Reform (ILR). "[The ILR] released its survey ranking the states with the best and worst legal climates in the country. According to the survey, the states with the worst legal climates are California (46th), Alabama (47th), Mississippi (48th), Louisiana (49th), and West Virginia (50th). The states with the best legal climates are Delaware (1st), North Dakota (2nd), Nebraska (3rd), Indiana (4th), and Iowa (5th)." 
 

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Following up on the same kind of conference last May, RAND's Institute for Civil Justice is hosting another great looking seminar with experienced and smart people talking about litigation funding.  The agenda is here;  some excerpts are set out below. It will be interesting to see what new research RAND is going to issue, as is mentioned in the agenda (see below). The seminar is in DC (Arlington, Va) on May 20 and 21.

Some interests strongly dislike litigation financing.  Indeed, The US Chamber of Commerce previously attacked litigation financing as a bad idea - see this prior post on the topic, with a link to the Chamber's paper.  My personal view remains that litigation financing is here to stay, especially since mass tort and mass fraud litigation is now global in many cases, and other countries have squarely embraced litigation financing.  The Chamber's paper does, however, provide a nice overview of developments to date in other nations. 

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"The RAND Institute for Civil Justice recently launched a research initiative to analyze and explore the convergence of law, finance, and capital markets in the United States, including phenomena such as outside capital invested in law firms, alternative fee structures, and third party litigation funding. The Program endeavors to examine the effects of alternative litigation finance on the efficiency, fairness, and transparency of the American civil justice system through policy analysis, events, and a comprehensive Web presence at http://www.rand.org/icj/programs/law-finance/.

The 2010 Conference will bring together practitioners, policymakers, judges, and researchers to discuss and debate issues and trends related to alternative litigation finance in the United States. The extensive program will feature presentations, panels, and speakers on practice and policy topics as well as offer continuing legal education.

The conference agenda is designed for interaction and will be based on soon-to-be-released RAND research." (emphasis added)

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Sponsored research is a short-hand term for situations in which researchers also receive payments from pharma or other entities.  Lots of positions are taken on the topic, and the area is fraught with arguments about what is "good,"  "right,"  and "practical."

The topic has new grist for argument now that ScienceDaily for March 20 brings news of a study from Mayo Clinic doctors regarding the links between positive medical reviews and payments from pharma. The article certainly provides disquieting news on undisclosed conflicts of interest. The overall numbers make one stop and think, but overgeneralzing seems not wise.

"ScienceDaily (Mar. 20, 2010) — Virtually all (94%) of the scientific authors who provided positive results for the anti-diabetic drug rosiglitazone had financial relationships with pharmaceutical companies, according to research published online in the British Medical Journal. 

While the study acknowledges that financial relationships may not necessarily be the reason for positive research results, it concludes that further reform is needed to ensure trust in scientific work.

In 2007, a large scale review of rosiglitazone showed that use of the drug led to a significant increased risk of heart attacks. This in turn led to further studies and commentaries by scientists about the safety of rosiglitazone. Policies were also developed to encourage disclosure of such financial conflicts of interest.

But whether these policies have made any impact on the association between financial conflicts of interest and views expressed in scientific reports is still unknown.

So researchers at the Mayo Clinic in the USA assessed over 200 articles on rosiglitazone to explore a possible link between authors' financial conflicts of interest and their views on the safety of the drug.

They found that almost half of the study authors (45%) had financial conflicts of interest and almost a quarter of these (23%) did not disclose this information. Three studies included in the latter group published a statement declaring no conflicts of interest.

Almost all (94%) authors who had favourable views on the safety of rosiglitazone were more likely to have a financial conflict of interest with a pharmaceutical company than were authors who had unfavourable views.

The researchers conclude by saying: "Disclosure rates for financial conflicts of interest were unexpectedly low, and there was a clear and strong link between the orientation of authors' expressed views on the rosiglitazone controversy and their financial conflicts of interest with pharmaceutical companies."

"These findings, while not necessarily causal, underscore the need for further progress in reporting in order for the scientific record to be trusted," they add."

The article's citation is:

A. T Wang, C. P McCoy, M. H. Murad, V. M Montori. Association between industry affiliation and position on cardiovascular risk with rosiglitazone: cross sectional systematic review. British Medical Journal, 2010; 340 (mar18 1): c1344 DOI: 10.1136/bmj.c1344

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Madison County, Illinois gets most of the ink, but it has a sibling in St. Clair County. In year's past, when I was a baby lawyer, some considered St. Clair as bad for defendants as Madison County. Asbestos filings have ticked up there in recent weeks, and the filings may mark the start of  new strategic gambits by plaintiff's counsel. Set out below is an update from the always informative Madison- St. Clair Record.

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St. Clair County's nearly dormant asbestos docket is seeing new life.

3/18/2010 4:39 PM By Amelia Flood 

Recent asbestos lawsuit filings by several well-known asbestos attorneys -- and some new partnerships -- have sparked a revival of the little-known and infrequently used asbestos docket.

At least five new asbestos cases have been filed in St. Clair County this year.

Swansea attorney Judy Cates has teamed with the Chicago law firm of Cooney and Conway, having filed four mesothelioma-related asbestos suits on the same day this year, alleging claims against familiar asbestos defendants such AW Chesterton, Bondex and John Crane, Inc.

Cates, who has litigated a number of high profile class actions, had not filed any asbestos cases in at least six years.

Other attorneys have made recent asbestos claims in St. Clair County, including Randy Gori of Edwardsville. Gori, whose firm has brought hundreds of asbestos cases into Madison County's packed asbestos court, has filed at least one asbestos case in St. Clair County this year.

In Gori's newest St. Clair County case, clients Aubrey and Olive Roach claim Aubrey Roach developed cancer from working with asbestos products during his time as an army mechanic in the 1940s.

While Madison County's asbestos filings reach into the hundreds each year, St. Clair County stands in contrast.

From 2004 to 2007 there were just 61 asbestos cases filed in St. Clair County, compared to more than 1,200 in Madison County during the same period of time.

Of the years analyzed in St. Clair County, 2006 had the most filings at 25. There were 22 cases filed in 2005.

None were filed in 2008 and a single one was filed in 2007, according to records from the St. Clair County Circuit Clerk's Office.

St. Clair County clerk Amy Boeving said the asbestos docket is light and hardly used.

Boeving sets hearings once a month and seldom has more than one or two attorneys come through, she said.

"The last few years it's really died down," Boeving said.

St. Clair County Circuit Judge Robert LeChien handled all of the asbestos cases from 2005 to 2009. The 2010 filings have so far been assigned to St. Clair County Circuit Judge Patrick Young.

St. Louis attorney Daniel Francis, who has filed more asbestos cases in St. Clair County than any other attorney, is responsible for four of the 25 asbestos St. Clair County filed in 2006.

Of those cases, 23 named a single defendant, Illinois Central Railroad Company.

Gori has filed the second most number of St. Clair County asbestos cases.

None of the St. Clair County asbestos cases have resulted in verdicts or trials.

That differs from Madison County where juries have decided a number of cases, some having topped $200 million in jury awards.

But the most recent case to go to trial in Madison County was decided in favor of defendant Ford Motor Co.

The trial, which lasted for eight days earlier this month, was the first 2010 asbestos trial for Madison County and the first ever for Madison County Circuit Judge Barbara Crowder who presided.

Crowder is slated to become Madison County's next asbestos judge when Circuit Judge Daniel Stack retires in December. She has already begun taking over her new duties.

The Ford trial ended in a defeat for plaintiff Larry and Meta Williams of Chicago. The couple sued Ford and a number of other companies claiming that asbestos dust contained in brake products caused 58 year-old Larry Williams to develop mesothelioma.

The jury took an hour and a half to find in Ford's favor.
 

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From the WSJ, word of an upcoming  criminal fraud trial in Italy against investment bankers selling derivatives to municipalities.

Some points to consider. The Italian system allows one trial to include both criminal charges and civil claims.  And, Italian law is explicit that criminal sanctions may be lessened if restitution is paid to victims. Also, the trials often proceed in phases and relattively slowly, as shown by the Eternit trial in Italy arising from conditions at asbestos-cement manufacturing plants, and thousands of resulting injuries and hundreds of deaths.  So, one might well bet on the bankers starting trial, followed by a summer time civil settlement  and plea agreements. 

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MILAN—A Milan judge ordered UBS AG, J.P. Morgan Chase & Co., Deutsche Bank AG and Depfa Bank PLC, now a unit of Hypo Real Estate AG, to stand trial for the alleged fraudulent sale of €1.68 billion ($2.31 billion) in derivatives.

The banks are accused of having earned about €100 million in "illicit profits" from irregularities in the sale of derivatives linked to a bond issue by the City of Milan, conducted between 2005 and 2007.

"It is the first time in the world that banks have to stand trial for the sale of derivatives to municipalities," Alfredo Robledo, the prosecutor bringing the case against the banks, said in a telephone interview.

Judge Simone Luerti has ordered the banks and 13 individuals—11 current bank employees and two former city employees—to stand trial, according to a person familiar with the case. Hearings start May 6.

In April 2009, assets valued at more than €476 million were seized by Italian tax police from the banks as part of an investigation that lasted more than two years.

In separate statements, the banks denied any wrongdoing and said they would defend themselves. "We are...confident that the strength of our legal position will be demonstrated through the judicial process," J.P. Morgan said. "The J.P. Morgan employees involved in the transactions acted with the highest degree of professionalism and entirely appropriately."

UBS said it didn't commit any fraud. "No illicit profit was earned by the banks, since the intermediation costs applied were fully legitimate and were not hidden from the City," it said.

Deutsche Bank said it was confident its employees involved in the transactions acted with integrity. A spokeswoman for Depfa, which was acquired by Hypo Real Estate in October 2007, said the bank was convinced it hadn't violated any law or regulation.

—Sabrina Cohen in Milan contributed to this article.

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Do you take health insurance coverage  for granted ?

The table above lets you see the soaring numbers of annual US deaths from cancer. The data is taken from the American Cancer Society's 2009 compilation of cancer statistics.  It often costs a staggering amount of money to die peacefully of cancer.  Dying in pain is not so expensive. 

So, what are are the odd of developing cancer, and what are the consequences for obtaining health insurance ?  As to insurance, developing cancer renders you instantly uninsurable for health insurance as an individual. Want proof ? See, for example, this Blue Cross Summer 2009 application takers manual from Florida. (go to page 62 of the manual to start reading the medical underwriting guidelines that specify the over 100 diseases that bar an individual from purchasing individual  health insurance; for tumors, go to page 90).    

The odds on developing cancer ? The ACS'  detailed on line data for people in the US shows that 1 in 2 men will be diagnosed with cancer during a lifetime. The odds are  1 in 3 for women. Go here to download  ACS’s 2009 date , or go here to view an already downloaded copy; see page 19 for men, and page 20 for women. )

But those are mainly smokers, right? No, that myth is way out of date. In older populations, there are about 1/3 lung cancers, but it's a different story for new cancers. The ACS' data includes tables showing the locations for the 1.5 million new cancers in the US in 2009 (yes, really, 1. 5 million new cancers in a just a year in just the US).  Of the new cancers in 2009,   less than 15% will be lung cancers, and as any tort lawyer knows, some lung cancers are not caused by smoking.

How many people in the US are cancer survivors and are uninsurable as individuals ? Of course, we can't say for sure, but the best data indicates that between 10 and 15 million Americans are cancer survivors, as shown by the data below.  Most,  if not all of them, can never purchase individual health insurance, as shown by the Blue Cross application manual linked above.

So, those are the realities. How can a legislator in our country in good conscious choose to say "no" to making health insurance available for these 10-15 million persons who are cancer survivors?  Please, pick up the phone and ask your elected representatives to make sure that - at least - legislation is passed to stop insurers from excluding coverage for persons with pre-existing conditions. 

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E-vendors. Some are great, some are not.   Today, Blue Mountain e-cards is added to my list of "not great" e-vendors.

Why?  I've learned to live with vendors that clearly and in big letters insist you go on line, register with most of  your life history, and then we must do all the typing in order to buy services that include an "automatic renewal" term of service (a/k/a contract of adhesion). With customers having done all of that once, the vendors could then at least make it easy to cancel service ( or return goods). In fact, a few do operate in that way  But, too often,  when a customer wants to cancel a service that uses an "automatic renewal" approach,  the path to cancel service is often obscured behind multiple  layers of screens and links, and the website fails to include or offer a "cancel service" option to match the ease of  "unsubscribe" for emails. 

One such vendor is Blue Mountain e-cards. Early this morning, the firm sent  me a reminder email that our family account was about to renew for another year. My girls and I never send their cards anymore, so I decided to cancel. I then proceeded to click on the  link in the email. That took me off on a goose chase to sign in and find the information on canceling (of course it was not an easy to find subject). After wasting a couple of minutes,  I finally found the right spot. What did I see ? A message (see below) telling me that the only way to cancel is  to make a phone call. So, why weren't those instructions and phone number placed  in the  email reminder about subscription renewal ? Obviously the needed instructions were omitted due to Blue Mountain's hope of obtaining another annual fee. 

Worse yet, when I called to cancel, the process also was poor. To starty, a acouple fo minte wait, followed by an automated  voice insisting that I tell it my home phone number so that I could be helped faster. So, I complied, but  of course the call center person did not have access to the record despite my providing the number. Thus,  more wasted  time to repeat the process.

Blue Mountain of course  will never ever generate more revenue from my family. My hope is that this quick rant in some way costs Blue Mountain some revenue by reaching someone who decides not to subscribe, or by encouraging someone else to cancel. I presume some financial engineers have concluded  that revenue generated from  unwanted renewals will exceed the revenue lost from making people mad, losing them forever, and causing them to rant.  I hope their calculations are wrong -  it's a lousy way to do business, in my book.

"To request a cancellation of a subscription, please contact our membership support center by calling 1-888-254-1450, Monday through Friday from 8:00 a.m. until 8:00 p.m. EST.

Customers outside the United States and Canada should click here for further instructions

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Today is a soapbox day.  In my view, a recent jury verdict  in a car wreck case in Georgia nicely illustrates the very real tort system impacts that arise when entities such as Chrysler exit the tort system via chapter 11 without leaving behind insurance,  cash or other economic rights sufficient to pay valid underlying tort claims.  The exemplar case is identified in the caption shown to the left; see below for the full story from the Fulton County Daily Report, which includes links to the verdict form and the full pretrial order.   

In my view, as molded and shaped by a wise bankruptcy scholar, chapter 11 has many, many problems today. One is that it is badly in need of judges who actually apply existing law and do not acquiesce to deals that obviously violate due process and existing law.  In addition, critical thought is needed about what the chapter 11 statutes and common law rules should say in connection with entities using chapter 11 to escape product liability and other long-tail tort risks or obligations. The exemplar trial also exposes some aspects of the material lack of continuity and rationale economic and social policy thinking as  between chapter 11 law and state tort law.  In addition, facts not in the trial expose other problems related to the presence or absence of insurance, and thus implicate domestic and overseas law regulating insurance.  In my view,  statutes and common law rules on insurance (or the absence of insurance) also need much work to deal rationally with the chapter 11 system, as well as the insolvency laws of other nations. 

In the trial, the net result is that Chrysler's exit of the tort system left the plaintiff without full compensation as awarded by an apparently very rationale jury (see full story below), and also put a component supplier at what seems to be an unfair and unwise risk of being hit with a large verdict as indemnitor of Chrysler. As stated in the pretrial order, the facts are simple. A drunk driver's car hit another car with four occupants. Three occupants were essentially unhurt, but an 11 year old child suffered separation of her skull from her spine, and permanent injuries to her endocrine system. The child suffered the severe injuries because a car seat failed. The  plaintiff sued the drunk driver and the car seat supplier. The seat supplier's contract with Chrysler called for it to indemnify Chrysler if the component supplier had erred. 

Ultimately, the seat supplier was exonerated at trial. But, it surely was at risk that a frustrated jury might have decided to find against the seat supplier for Chrysler's failure. And, the jury might also have found against Chrysler. If that had happened, without Chrysler at trial, then Chrysler might later have sought to file new legal proceedings to invoke its indemnity rights against the component supplier, and in that new case (or arbitration) might have claimed that it was not bound by the jury verdict since Chrysler was not represented at trial.

In sum, the fact pattern illustrates some of the many flaws in the lack of a rationale interplay between chapter 11 and state tort law.  To see some of the other issues, ask yourself:  where is insurance for  the claim? Apparently there was no insurance, probably meaning Chrysler had  self-insured (or, perhaps it  had settled out all its polices through a lump sum settlement in which  the insurer paid a fee to Chrysler to terminate some or all of the old CGL policies, with Chrysler pocketing the money and using it for purposes other than tort claims.)  And, further yet, ask if it is is  wise to allow a self-insurance/no insurance approach by manufacturers when obviously cars will suffer defects and failures, causing devastating injuries to some number of unfortunate victims who were powerless to do anything to block their fate. Think also about how all that interplays with offshore manufacturers that may exit the US tort system under insolvency laws of other nations. Think too of  the offshore insurers (e.g. Lloyds) that may exit the tort system via British" schemes of arrangement" that allow insurers to almost completely avoid honoring long-tail insurance obligations.   

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 Ever wonder why asbestos plaintiff's lawyers presently are spending so much time and energy trying to limit the time allowed for depositions of asbestos plaintiffs ? Obviously plaintiff's lawyers on contingent fees prefer to spend less time in deposition than do defense lawyers being paid by the hour.  But, some say there is more to it than just the time.

Consider, for example, yesterday's post and today's images of asbestos products made by entities now in chapter 11. Think about the verdicts plaintiff's might lose  if insurers paid for and co-defendants actually were fully organized and prepared to depose a plaintiff on the extent of his use of the thousands of asbestos-containing products made by any of the over 80 entities that have exited the tort system via chapter 11.  Think also about the time that would be involved. Those are reasons why some say it's perfectly obvious that asbestos plaintiff's lawyers want to get shorter deposition time limits in place in order before the remaining co-defendants get organized and start using depositions to pose meaningful " product identification questions to plaintiff's product identification witnesses.

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For several years, it's been well known that eBay traders could make some money selling to plaintifff and defense lawyers old asbestos-containing products, including even old vehicles. Typically the products were acquired for use as trial exhibits.  Now,  this online web site  is trying a new marketing approach -  advertising old asbestos product catalogs as perfect items for claimants against  some or all of the over 80 chapter 11 trusts created by entities that have entered chapter 11 due to asbestos product sales.  I can imagine this working, especially for defendants stuck in the tort system that need to take discovery from plaintiffs regarding their use of products made by former defendants that exited the tort system via chapter 11.  Thus, the website home page urges:

"An excellent resource for help with Asbestos Trust Claims, research material, attorneys preparing litigation, abatement professionals, and anyone interested in knowing what everyday products contained asbestos."

All research material is actual manufacturer's catalogs and brochures in downloadable Color PDF format.

All catalogs can be purchased using  a Credit Card Card     for $39.95 each."

 The online images show old product catalogs from various former manufacturers of asbestos-containing products. Go here for the first page of an old Manville catalog for its industrial products, or go here for its transite board catalog. Or,  go here to relive Eagle-Picher’s wide range of fine ACM.   Or see below for the image from Pitt-Corning's catalog for Unibestos, a product that contained amosite.

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Here is the online agenda for a great new asbestos litigation conference on May 3 and 4.

Why great ? Because the conference format explicitly recognizes the importance of science to where the litigation has been, and where it will go.  Thus, virtually all of the speakers are doctors and scientists, including several who are world class in anyone's book.  The conference, sponsored by Perrin Conferences,  is titled:     A Conference on Asbestos and Mesothelioma. 

Science alone of course does not result in lawsuits. Accordingly, lawyers are involved to a degree. The conference chairs are two lawyers with reputations for knowing and enjoying the science side of litigation. They are plaintiff''s counsel Shep Hoffman, founder of The Law Offices of Shepard A. Hoffman, Dallas, and defense counsel, Robert Rich, a partner of Gordon Rees, San Francisco. 

The scientist are listed below - this is by far the best overall assembled group of doctors and scientists focused on asbestos. Part of the power of this group is that it includes speakers with diverging views. And, for anyone interested in the global spread of asbestos disease, and thus some spread of the litigation, do not miss the chance to hear from Dr. Julian Peto, who is at the forefront of those looking all the way around the world. 

It will be interesting to see the level of attendance, the manner in which this conference is conducted, and whether this approach is repeated for asbestos and replicated for other areas of mass tort litigation.  In the past, most asbestos conferences that included much science were conferences sponsored by one side or the other. Thus, for many, many years,  Al Parnell and the Defense Research Institue have held an annual Asbestos Medicine conference that usually included severals doctros and scientists. The conference usually also was attended by a few plaintiff's lawyers. And, likewise, the plaintiff's bar holds periodic meetings, but typically they do not allow defense lawyers to attend.

_____________________________________________________________________________

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In Italy, criminal prosecutions are fairly often used for situations that likely would not be treated  as criminal law issues in the US.  For example, here is a brief post  from Brian Leiter that links to an NYT article regarding criminal convictions suffered in Italy by three Google executives. The convictions arose from invasion of priviacy issues aring from a videoe posted online. Accoridng to the NYT article,

One can debate whether the uses of criminal law are or are not good policy. Judging by the article exceprts below, however, one can infer that complaints fron police attract especially quick attention at Google.

"A spokesman for Google, Bill Echikson, called the ruling “astonishing” and said the company would appeal. In its blog, Google added that the ruling “attacks the very principles of freedom on which the Internet is built.”

Prosecutors said Google waited to remove the video until after complaints to the police by Vivi Down, an Italian group representing people with Down syndrome, whose name was mentioned by the boys in the video.

Google said it removed the video within two hours of receiving a formal complaint from the Italian police, two months after the video was first posted.

The boys, all minors, were not charged by prosecutors, but were sentenced by a different judge to community service. Prosecutors named the Google executives because Italian law holds corporate executives responsible for a company’s actions."

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At a recent asbestos litigation conference, one of the speakers reminded everyone of the old maxim to  " be careful what you wish for"  in litigation. In that vein, consider the current US legislative battles about the Iqbal/Twombly pleading standard that makes it materially harder for plaintiff's to allege a complain that withstands a motion to dismiss. In this dawning age of  global litigation, choice of venue and  law issues are increasingly important due to  global financial markets.  Within that realm, consider the importance of the pleading standards as applied to, for example, the fact pattern set out in the text below from this interesting article about an investigation into an investigation by the SEC, with both investigations related to a sudden plunge in the price of a biotech stock.  

Suppose the report referred to below is made public, with or without full facts being disclosed in the report . Under the new Iqbal/Twombly pleading standards in the US, would incorporation of the report be enough for a complaint to survive a motion to dismiss ? If not, are US firms going to find themselves facing class actions in Europe, Australia or other venues where pleaidng standards are now or may be less demanding than the Iqbal/Twombly standard ? Will suits seek out countries where class action laws exits and litigation funding is far more accepted than it is in the US ? If that happens to one degree or another, will US defendants be more or less happy than they were under the old Conley v. Gibson pleading standard ?

I'm not sure how this all turns out. But I am starting to wonder if the Iqbal/Twombly standard will end up being one of those wishes that it is later regretted by US industry.  In short, it seems to me the wish for the higher pleading standard could end as  a wish that ultimately accelerates litigating tort claims outside the US, . Outside the US, defendants certainly will have work to do to try to obtain the  benefit of the  Daubert  standard so much loved by defendants.

__________________________________________________________________________

Dendreon stock mauling probed by regulators

By Matthew Goldstein

NEW YORK (Reuters) - A lightening fast sell-off of shares of biotech company Dendreon <DNDN.O> last April is drawing scrutiny from U.S. securities regulators and the independent monitor assigned to keep tabs on those regulators, said people familiar with the matter.

They said an investigation by the Securities and Exchange Commission into the still unexplained trading event, during which shares of Dendreon plunged more than 69 percent in 70 seconds, is ongoing.

It is not clear if the SEC inquiry into the incident, which some academics and investors have blamed on a combination of short-sellers and high-frequency trading programs, will lead to an enforcement action, said these same sources.

SEC spokesman John Nester declined to comment.

The SEC investigation partially overlapped with an inquiry conducted last summer by SEC Inspector General H. David Kotz to determine whether securities regulators were paying enough attention to the matter.

In December, Kotz submitted a confidential report on the results of his inquiry to SEC Enforcement Director Robert Khuzami, the sources said.

The SEC is considering a Freedom of Information request from Reuters to release the inspector general's report. But a person familiar with the situation said regulators will likely deny the request on the grounds that the report discusses an ongoing probe.

HEAD-SCRATCHING

The SEC cited a similar reason for rejecting an earlier FOIA request from Reuters, seeking information about any complaints filed by investors over the April 28 incident.

It is unusual for the SEC's inspector general to conduct an inquiry into the agency's handling of an ongoing investigation. Kotz's office initiated the investigation at the request of an investor and Sen. Charles Grassley, according to sources and the inspector general's semiannual

report.

Grassley spokeswoman Beth Levine said his office had not received a copy of Kotz's completed report.

The Iowa Republican has had a history of taking issue with the pace of SEC investigations and asking Kotz's office to review the agency's handling of enforcement matters.

A Dendreon spokeswoman declined to comment on the investigations.

Last April, the $16 plunge in shares of the Seattle-based biotech generated a good deal of head-scratching on Wall Street. That's because in little over a minute, the equivalent of an entire day's worth of trading activity in Dendreon shares took place before Nasdaq Stock Market officials halted the stock.

Stock market officials initially suspected the rapid-fire selling was sparked by a so-called fat finger trade, or a broker putting in an erroneous order to sell too many shares. But Nasdaq officials, without issuing any comment, did not void any of the trades.

STOP-LOSS ORDERS

The April 28 plunge of Dendreon shares coincided with speculation in the market that the company was going to report poor test results that afternoon for its prostate cancer drug Provenge. In fact, the opposite occurred, and the company reported generally positive test results.

Once trading was allowed to resume, the stock quickly regained all of its losses. But the freak sell-off resulted in losses for retail investors who had so-called stop-loss orders with their brokers to sell shares at a predetermined price.

When a stock plunges quickly, it can trigger a stop-loss order, a sale at a previously designated price intended to limit losses. A stop-loss order can cause an investor's shares to be sold at price lower than the one he wanted.

Reuters reported in October that many investors with stop-loss orders lost money in the sell-off and some complained to regulators and asked them to look into the matter.

There have been numerous theories for the unusual trading event.

Some investors have blamed the sell-off on a so-called bear raid by short-sellers looking to profit from a precipitous decline in a stock. Others attribute the ferociousness of the selling to computer-driven high-frequency trading programs that scan the markets looking to take advantage of trading trends.

James Angel, a professor at Georgetown University's McDonough School of Business, previously told Reuters that high-frequency trading programs may have exacerbated the plunge when the algorithms these trading firms use all glommed onto the same trend.

(Reporting by Matthew Goldstein; Editing by Steve Orlofsky)

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Kevin LaCroix at the D & O Diary blog recently provided this post highlighting two recent rulings on "feeder fund" claims arising from the Madoff fraud. Those claims are where money will be gathered, or not. 

A Florida opinion allowed the claim to survive a motion to dismiss, but a Luxemborg opinion dismissed the claim. Kevin also provides a link to his list collecting Madoff litigation citations and case numbers.

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Kevin LaCroix at the D & O Diary blog included this recent brief post mentioning class action law arriving in Hungary. The post states:

"Class Act on the Danube: Here at The D&O Diary, we scour the globe looking of interest for our readers. By way of example, we refer readers to the article that appeared in the March 8, 2010 issue of the Budapest Business Journal (here), in which it is reported that "a revision to the standing civil code will shortly introduce class action lawsuits to the Hungarian legal system and already has a number of nongovernmental interest groups revving up to start the proceedings."

The prospects for class litigation outside the U.S. apparently continue to spread. Everyone here will remain vigilant."

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Part of the llitigation industry today consists of vast amounts of media items to raise awareness of "issues."  On that subject,  Levick Communications explains:

Examples? Insurers generate news stories from websites on "insurance fraud" and  time and again issue papers and announcements about "insurance' fraud"  and  "fraud in claiming."  While there surely have been some frauds, the problems are often overblown. But constantly raising the topic creates awareness.   

On another side of the litigation industry,  the plaintiff side, much ink is devoted to keeping  "asbestos" and "health" out in front of people. A new example popped up this week, and is set out below. Note the consistent focus on raising awareness: 

ADAO Praises Senate for Introduction of Sixth Annual Resolution that Establishes “National Asbestos Awareness Week”

March 03, 2010 02:44 PM Eastern Time 

WASHINGTON–(EON: Enhanced Online News)–The Asbestos Disease Awareness Organization (ADAO), the leading organization serving as the voice of asbestos victims, today applauds Senator Max Baucus (D-MT) and cosponsors for introducing a resolution that declares the first week of April as “National Asbestos Awareness Week” and seeks to “raise public awareness about the prevalence of asbestos-related diseases and the dangers of asbestos exposure.”

Additional cosponsors and key supporters include: Senator Barbara Boxer (D-CA), Senator Richard Durbin (D-IL), Senator Dianne Feinstein (D-CA), Senator Johnny Isakson (R-GA), Senator Patrick Leahy (D-VT), Senator Patty Murray (D-WA), Senator Harry Reid (D-NV), and Senator Jon Tester (D-MT).

“We are grateful to the U.S. Senate to have the opportunity to help raise the level of public awareness about the prolific dangers of asbestos and further unite doctors, scientists, and public health advocates during National Asbestos Awareness Week for this important effort. During the past six years, ADAO has seen the progress and indeed, this confirms what Americans deserve and want, we know asbestos prevention and education will save lives and dollars,” said Linda Reinstein, Executive Director and Co-Founder of the Asbestos Disease Awareness Organization.

Asbestos is a known human carcinogen and exposure can cause asbestos-related diseases, including mesothelioma, lung cancer and asbestosis. Studies estimate that during the next decade, 100,000 workers around the world will die of an asbestos related disease – equaling 30 deaths per day.

ADAO will hold its Sixth Annual International Asbestos Conference on April 10, 2010 in Chicago, Illinois.

About Asbestos Disease Awareness Organization
Asbestos Disease Awareness Organization (ADAO) was founded by asbestos victims and their families in 2004. ADAO seeks to give asbestos victims and concerned citizens a united voice to raise public awareness about the dangers of asbestos exposure. ADAO is the largest independent organization dedicated to preventing asbestos-related diseases through education and legislation. ADAO’s mission includes supporting global advocacy and advancing asbestos awareness, prevention, early detection, treatment, and resources for asbestos-related disease. For more information visit www.asbestosdiseaseawareness.org.

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Remember that Crain's reported that the the solvent Chicago Cubs would made a  quick trip last fall  through chapter 11 for a cleansing bath and chapter 11 injunction to make the entity easier to sell,  and my former partner's query whether the Cubs would need bankruptcy court approval to put on the take sign in a key game  that could effect the value of the franchise ?  Perhaps one of  the reason was anticipation of a suit filed last week by Tribune bondholders challenging bonds sold prior to Sam Zell buying the Tribune in a massive leveraged buyout that ended in Chapter 11.  Set out below are some excerpts from an article by Randal Chase regarding the allegations.

By RANDALL CHASE (AP) – 1 day ago

"DOVER, Del. — Bondholders in the Tribune Co.'s Chapter 11 bankruptcy case are suing the banks that financed the media company's 2007 leveraged buyout, claiming they knew that the resulting debt load would leave Tribune insolvent.

The lawsuit was filed in U.S. Bankruptcy Court in Wilmington by Wilmington Trust Co., agent for holders of $1.2 billion in bonds sold by the company before real estate mogul Sam Zell led Tribune's $8.2 billion buyout.

The bondholders argue that the deal was fraudulent because it loaded up the company with too much new debt that was used to cash out Tribune stockholders. They want a bankruptcy judge overseeing Tribune's Chapter 11 case to reject the banks' secured claims, or at least have them paid only after the bondholders' unsecured claims are satisfied. Typically, secured claims get higher priority.

Defendants in the lawsuit include JPMorgan Chase, Citigroup, Bank of America and its Merrill Lynch subsidiary, the lead banks involved in the leveraged buyout, or LBO. Representatives of Tribune and the banks declined to comment Friday."

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With a hat tip to Sean Wajert at the MassTort Defense blog, for an article on the opinon, set out below  are recent, striking words from the New Jersey Supreme Court on the scope of the state's power to exercise jurisdiction over non-US companies that export goods to the United States, The Court minces no words in responding to the huge onset of imports. One assumes that both US manufacturers and plaintiff's counsel will like this ruling since it helps to preserve a level playing field for US and non US manufacturers.  As some will recall, the US Chamber of Commerce and AAJ last August agreed on efforts to broaden jurisdiction over non-US manufactrurers.  The opinion is Nicastro v. McIntyre Machinery America Ltd.,  No. A-29-08 (N.J. 2/2/10).

 "JUSTICE ALBIN delivered the opinion of the Court.

Today, all the world is a market. In our contemporary
international economy, trade knows few boundaries, and it is now
commonplace that dangerous products will find their way, through
purposeful marketing, to our nation’s shores and into our State.
The question before us is whether the jurisdictional law of this
State will reflect this new reality.

In this case, the foreign manufacturer of an allegedly
defective and dangerous industrial machine targeted the United
States economy for the sale of its product. The machine was
sold to a New Jersey business by the manufacturer’s exclusive
American distributor. An employee of that New Jersey business
lost several fingers while using the machine because the machine
allegedly lacked a safety guard. The foreign manufacturer knew
or reasonably should have known that by placing a product in the
stream of commerce through a distribution scheme that targeted a
fifty-state market the product might be purchased by a New
Jersey consumer. We must resolve whether under those
circumstances the manufacturer is subject to the jurisdiction of
our State court system in a product-liability action.
 

We affirm the Appellate Division, which found the New
Jersey Superior Court, Law Division, as the proper forum for
this action. We also reaffirm our decision in Charles Gendler &
Co. v. Telecom Equipment Corp., in which we held that “the
stream-of-commerce theory supports the exercise of jurisdiction
if the manufacturer knew or reasonably should have known of the
distribution system through which its products were being sold
in the forum state.” 102 N.J. 460, 480 (1986). The
increasingly fast-paced globalization of the world economy has
removed national borders as barriers to trade and has proven the
wisdom of Charles Gendler. Due process permits this State to
provide a judicial forum for its citizens who are injured by
dangerous and defective products placed in the stream of
commerce by a foreign manufacturer that has targeted a
geographical market that includes New Jersey. See id. at 480-
83. The exercise of jurisdiction in this case comports with
traditional notions of fair play and substantial justice."

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Disability rights and international aw are coming together in an upcoming seminar. "The Disability Rights Legal Center, along with Loyola Law School Los Angeles is hosting the International and Comparative Law Review Symposium on the significance of the United Nations Convention on the Rights of Persons with Disabilities. The event will take place from 10:00 AM - 5:00 PM, Friday, March 19, 2010 at Loyola Law School Los Angeles." Go here to register or for more details.  

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As explained before in many posts categorized under "asbestos bankruptcy,"  the situation in the US today is that we have two different compensation systems for persons suffering from asbestos-related disease. They are the tort system and the bankruptcy trust system. The two have been operating largely independently, but real change is starting to bring the two systems together. 

Specifically, two recent orders from state court "asbestos docket judges" mark meaningful and much needed progress in accounting for the billions of dollars that are being paid out annually through asbestos bankruptcy trusts. Both orders are part of "Case Management Orders" (CMOs) that are used by trial judges to streamline case management by providing one set of rules applicable to all (or most) cases on an asbestos docket in a particular county or state (Texas has a statewide asbestos MDL).

In short, both of these recent orders require disclosure of claims submitted to trusts by asbestos claimants. This is an important first step. The order from West Virginia is especially important because it goes on to include several additional terms that are much needed to create an intersection between the two now separate systems. The following provides a summary.

•       In Pennsylvania, the Court of Common Pleas of Montgomery County issued a February 22, 2010, CMO requiring plaintiffs to disclose all bankruptcy trust claims at least 120 days prior to trial. See paragraph 10.

•       In West Virginia, the Kanawha County Circuit Court, issued a March 3, 2010 CMO order that adds a lengthy new paragraph 22 to deal with asbestos trusts . Like the February 22 order in Pennsylvania, this order require plaintiffs to disclose all existing bankruptcy trust claims at least 120 days prior to trial. The West Virginia order also goes much further, and appropriately orders plaintiffs and their counsel to take several other affirmative steps to ensure that tort system defendants are fully aware of and benefit from future recoveries in the trust system. Specifically:

1.     Section 22(A)(2) requires counsel to disclose whether any claims to trusts have been submitted to a trust but deferred or delayed, This provision is pertinent because delays and deferrals are permitted by the terms of some trusts and/or their Trust Distribution Procedures (TDPs, as they are known). Defense counsel typically view such terms as having been crafted to allow gaming the two systems by allowing the plaintiff to bring and resolve state law tort claims before pursuing trust claims. Plaintiff’s counsel are of course free to argue a plausible alternative reason for allowing plaintiff’s to delay or defer submitting claims until after the tort claim is over

2.      Section 22(A)(2) requires a good faith investigation of potential claims against trusts and requires an affidivait from plaintiff or plaintiff’s counsel to affirm the good faith investigation of potential claims against trusts.

3.      Section 22(C) addresses trial use of the claim forms and ancillary documents. Among other things, Section 22(C) precludes plaintiff from arguing privilege or confidentiality to try to keep the claims out of evidence.

4.      Section 22(D) explicitly allows underlying case co-defendants to pursue discovery against asbestos trusts (subject to federal law limits, if there are any that apply in this setting), and  explicitly requires plaintiff to provide any consents or permissions that any trust may request.

5.      Section 22(E) specifies that defendants that lose a trial judgment to a plaintiff are entitled to offsets for liquidated amounts paid by  trusts, and requires related disclosure of the total amounts recovered or “reasonably expected to be recovered” from bankruptcy proceedings or settlements with tort system defendants.

7.      Section 22(E) further provides that if a plaintiff obtains a judgment against a defendant, then the plaintiff must assign to the judgment defendant the right to all future asbestos trust payments.
 

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Remember the issues regarding DES daughters and sons said to be suffering additional diseases, and a class action settlement in the Netherlands ?  More recently,  there are some new indicators that some chemicals inflict some epigentic changes that will or may cause multigenerational disease issues.  

For a 2006 nonscience article, see this Vanity Fair article on claims that Agent Orange is causing horrible deformities in third-generation descendants of persons exposed to Agent Orange. For more science, here is a new ScienceDaily article on BPA exposure during pregnancy.

"Taylor and colleagues made this discovery by exposing fetal mice to BPA during pregnancy and examining gene expression and DNA in the uteruses of female fetuses. Results showed that BPA exposure permanently affected the uterus by decreasing regulation of gene expression. These epigenetic changes caused the mice to over-respond to estrogen throughout adulthood, long after the BPA exposure. This suggests that early exposure to BPA genetically "programmed" the uterus to be hyper-responsive to estrogen. Extreme estrogen sensitivity can lead to fertility problems, advanced puberty, altered mammary development and reproductive function, as well as a variety of hormone-related cancers. BPA has been widely used in plastics and other materials. Examples include use in water bottles, baby bottles, epoxy resins used to coat food cans, and dental sealants.

"The BPA baby bottle scare may be only the tip of the iceberg." said Gerald Weissmann, M.D., Editor-in-Chief of The FASEB Journal. "Remember how diethylstilbestrol (DES) caused birth defects and cancers in young women whose mothers were given such hormones during pregnancy. We'd better watch out for BPA, which seems to carry similar epigenetic risks across the generations. "

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