Michael Goldhaber offers some insightful comments following up on a conference on the Chevron litigation arising from the toxic tort claims it demanded to move to Ecuador. "Be careful what you wish for" is one of the cogent lessons.
Michael Goldhaber and Alison Frankel offered detailed and interesting comments this past week on the Chevron/Ecuador fiasco. The bottom line seems to be that the entire situation is a black-eye for everyone involved, but there are many parts to the story.
Crowell & Moring recently published a set of predictions for 2103 on a range of areas of litigations. The publication is online and free.
The predictions of course touch on tort litigation. There, they foresee a lessening focus on "classic" tort claims. They see ahead "nascent but likely" claims involving disruption of the endocrine system. This is not really news - I pointed it out back soon after taking up blogging in earnest in 2009. The general topic of endocrine disruptors jumped to public prominence with the 1997 publication of "Our Stolen Future," which has an ongoing companion web site. The science is especially interesting because the timing of a dose is clearly critical - for example, in utero exposures may or may not produce harm depending on the extent of fetus formation at the moment of exposure.
Crowell also mentions more possible asbestos litigation. Specifically, they foresee possible additional attacks on talc for including "asbestiform" materials. They also foresee possible increases in international asbestos claiming, perhaps through global alliances among firms, and perhaps by finding ways to obtain US jurisdiction over non-US defendants. Imagine that idea - global tort (litigation).
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(Photo by Siphiwe Sibeko/Reuters, and published in the NYT)
Litigation risks are sometimes self-created, are created solely by others, or are created by a mix of circumstances. This week's awful violence in South Africa illustrates the reality that litigation risks arise in ways that cannot be controlled by any one plaintiff or defendant. Specifically, South African police shot and killed 30 or more striking South African miners. Some stories say the shootings occurred after some protestors earlier in the week had hacked two policeman to death with machetes. Videos suggest the shootings were needless slaughter. Whatever actually happened, there are new risks and issues for both sides in the increasing volumes of tort claims involving mining in South Africa - see, e.g, here and here.
It bears repeating - no one is an island, and litigation risks are sometimes volatile for reasons beyond the control of any one litigant.
The Times of Malta brings news today of new asbestos litigation related to Maltese shipyards and asbestos. Prior posts covered some older claims. The new claims are against the Maltese government and are filed in the European Court of Human Rights. The story from the Times of Malta is pasted below.
"About 20 former dockyard workers suffering from the effects of asbestos inhalation have taken their battle for compensation to the European Court of Human Rights, which has given the government four months to reply. They are joined by the family of another worker who died from cancer caused by asbestos.
More and more dialog is ongoing on settlement of global tort claims, whether in securities litigation or physical injury mass tort claims. Recent interesting blogs posts are this post at PrawfsBlog, and this post at OpinioJuris.
The Justice Roberts court typically is out to provide certainty for big business, and so it'snot surprising the Court has granted certiorari appeals in two cases presenting issues regarding the scope of corporate liability vis a vis federal law. OpinioJuris has the short story here, and SCOTUS blog's post is here. As always, SCOTUS has a great collection of links to the opinons below, and key briefs.
Continuing a policy that started in the last few years, the Defense Research Institute is once again sponsoring a cross-border seminar in tort litigation - this time in Barcelona on 17 and 18 November. The agenda is here, and the title is The Changing Landscape of International Litigation: Hot Topics.
What are the Hot Topics ? The seminar leads off with class actions, litigation funding and product liability. The panels includes EU lawyers such as Rod Freeman from Lovells (a true expert on EU product liability law) and lawyers from America's Powers & Frost, a staunch backer of all things DRI.
Global tort litigation includes numerous battles within the war. This week, Chevron is trumpeting the fact that it won a preliminary injunction ruling seeking to bar enforcement of a $ 9 billion judgment entered in Ecuador because of Chevron's trashing of various swaths of land in the nation, and alleged resulting cancers and other diseases. Alison Frankel provides analysis and links in this AmLaw Daily story.
The appeals and future battles will be interesting. Among other issues, Judge Kaplan refused to consider at this time various "unclean hands" issues raised by plaintiffs, saying in a separate order that the issue was raised too late when compared to concerns about enjoining efforts to collect on the judgment. One has to wonder if the plaintiffs were too unyielding in refusing to agree to extend deadlines. But one also has to wonder how Chevron will fair when all the issues are on the table. This war is far from over.
Human rights law continues to expand, and is an increasing part of international tort claiming. Set out below are the lead in paragraphs from a new post at a Foley Hoag blog known as Corporate Social Responsibility and the Law. The entire post is quite helpful, and includes other related links.
The U.N. Special Representative for Business and Human Rights, John Ruggie, has released the long-awaited draft of his final report, the Guiding Principles for the Implementation of the United Nations "Protect, Respect and Remedy’" Framework (.pdf). The Guiding Principles are the culmination of the Special Representative’s mandate, which began in 2005, and which will conclude when the final report is delivered to the U.N. Human Rights Council in June 2011. The draft is open for public comment until January 31, 2011.
The Guiding Principles build on the Special Representative’s previous reports and are organized around the three-pillar “Protect, Respect and Remedy” policy framework first set forth in his 2008 report (.pdf). Under this framework:
Here is the link to a brief but very helpful summary of a decade of international tort litigation against Rio Tinto. The article includes its own helpful links, and keys on and links to a recent 9th Circuit opinion ordering mediation of the claims before considering an appeal.
Note also the fascinating career path of the author, Sarah Altschuller of Foley Hoag. Set out below is the text from her page at the firm's website. It looks like a smart, determined person can create a very special career. Note also her article on corporate due diligence on human rights issues.
"Sarah Altschuller has been a member of Foley Hoag’s Corporate Social Responsibility (CSR) practice since 2003. In this role, Sarah advises a wide range of multinational companies regarding the development and implementation of CSR strategies, policies, and procedures. She provides counsel regarding corporate interactions with socially responsible investors, and advice on stakeholder engagement with local communities, host governments, and non-governmental organizations. She also conducts site-level human rights and labor rights impact assessments, as well as due diligence efforts.
Sarah’s in-depth practical experience includes post-law school studies at North South University in Dhaka, Bangladesh (2002–2003), where she conducted research on how changing international trade regulations impact the country’s garment sector. Before entering law school Sarah conducted social research on publicly-traded domestic and international companies at KLD Research & Analytics, a socially responsible investment firm, currently part of RiskMetrics Group."
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Hat tip to 'Lexology," an American Corporate Counsel which presents articles of interest by topic. Lexology included Sarah's article on the 9th Circuit's decision.
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.
A summary article from Insurance Business Review is online here, and is pasted below.
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UK Asbestos-Related Claims To Be Around £11bn For 2009 To 2050
Published:26-January-2010
By Staff Reporter
Total undiscounted cost of UK asbestos-related claims to the insurance market is expected to be around £11bn for the period 2009 to 2050, according to a research by Actuarial Profession's UK Asbestos Working Party.
The research identified that the proportion of people suffering from mesothelioma that subsequently make a claim for compensation has almost doubled between 2004 and 2008.
Of £11bn figure, 90% relates to mesothelioma and over £9bn relates to the period 2009 to 2040, compared to £4.7bn of the working party's 2004 estimate for the same period.
According to Actuarial Profession, the proportion of mesothelioma sufferers that have made a claim for compensation has increased from around one-third in 2004 to nearly two-thirds. This change, which was not expected in 2004, has become evident in recent years and explains most of the increase in total costs.
In addition, the working party has taken into account the Health and Safety Executive's statisticians' revised projections of the number of future deaths from mesothelioma in Great Britain, released in 2009, in conjunction with other projection models.
Brian Gravelsons, chairman of UK Asbestos Working Party, said: "Insurers will of course have already noticed the increased number of claims from mesothelioma sufferers, so these developments won't be a surprise to them. However, the working party's projections will provide the insurance industry with a consistent reference point to help it assess its asbestos liabilities.
"There is still considerable uncertainty surrounding the future cost of asbestos claims, as the number of people that will be diagnosed with mesothelioma many years into the future cannot be accurately predicted. The working party will continue to monitor the emerging experience and update its projections accordingly."
Here is an unexpected but interesting non-asbestos example of conflict of interest issues arising from efforts to resolve "mass torts" for various persons around the world. The example arises from the airplane crash and airplane hijacking blamed on Libyan terrorists. The article describes a recently filed lawsuit in which two victims of the crash object to the terms of the settlement with Libya. In brief, the two plaintiffs argue that the lawyers who represented the crash victims, Crowell & Moring, operated under conflicts of interest and that the agreement improperly commingles the interests of the various different categories of claimants, including US and non US claimants. The article includes a link to the complaint itself. The complaint, however, does not attach a copy of a "joint prosecution" agreement apparently signed by the plaintiffs and many others.
Here are excerpts from the article by Roger Alford:
"The facts as alleged in the complaint of Davé v. Crowell & Moring are complex. In brief, Libya has been implicated in terrorist activities on numerous occasions, most notably the hijacking of Pan Am Flight 73 in Karachi, Pakistan on September 5, 1986 and the bombing of Pan Am Flight 103 over Lockerbie, Scotland on December 21, 1988. In 2005, victims of these terrorist attacks and their heirs--including American and non-American victims--retained the law firm of Crowell & Moring--known for representing victims of terrorism--to pursue litigation against Libya. The Davés were among those who signed the Crowell & Moring retainer agreement. As part of retaining Crowell & Moring, every client was also required to sign a joint prosecution agreement ("JPA"), a provision of which provided that the proceeds recovered by any signatory to the JPA shall be shared on a sliding scale based on type of injury with all signatories to the JPA, without distinction as to nationality. Only 23% of the victims who signed the JPA were American. A Liaison Group consisting of one American and four non-Americans was established as agents for the victims in their dealings with litigation counsel. The Liaison Group was represented by Latham & Watkins. In 2008, the United States government entered into a bilateral treaty with Libya for an award of compensation for all U.S. nationals harmed by Libyan terrorism, including the victims of the Pam Am Flight 73 hijacking, which included plaintiffs Gargi and Giatri Davé. The treaty provided for distribution of these funds through the Treasury Department's Foreign Claims Settlement Commission ("FCSC"). After the Davés successfully received notice of their entitlement to millions under the FCSC process, Crowell & Moring issued a demand letter to the Davés contending that under the retainer agreement and the JPA the funds secured by the United States government pursuant to the U.S.-Libya treaty on behalf of American victims are to be shared among all of the victims of Libyan terrorism, American and non-American alike. In other words, the vast majority of the funds secured by American nationals under the U.S.-Libya treaty are--approximately 90% according to Crowell & Moring--required to be paid to non-Americans pursuant to these private agreements."
Here is the online image of Munich Re's recent, comprehensive report on asbestos litigation, Asbestos: Anatomy of a Mass Tort. The 112 page report is authored by Nicholas Roenneberg, and is Order number 302-06142. The report can be downloaded and printed from this page.
The same page, on the right hand side, allows you to order a printed copy at no charge.
The report is quite good. It begins with a review of asbestos litigation in North America. The report goes on to explain and explore various factors relevant to reinsurers such as Munich Re.
Beginning at page 58, the report addresses asbestos claiming in other nations in the context of employers' liability. The report covers the UK, Ireland, Italy, Spain, France, Czech Republic, Japan and Brazil. These country-specific reports are well worth reading to better understand the global asbestos claiming situation.
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I owe a hat tip and thanks to Christian Lahnstein of Munich Re for bringing the report to my attention this past fall, and for provding value contributions to dialog regarding mass tort claiming. Christian is a very thoughtful thinker and speaker on the subject of asbestos claiming and its consequences. Indeed, he is thoughtful enough that at a dinner before an international asbestos conference this past fall in London, a smart plaintiff's lawyer listened to Christian for a while and then commented that he was surprised to learn that Christian works in the insurance industry.
Stanford Law School and Professor Deborah Hensler offer a significant online resource with numerous papers on class action practice around the globe. The resource is titled the Global Class Action Exchange. The website is here. The text of the "About" section is pasted below because it provides an overview.
"About
The Global Class Actions Exchange is an outgrowth of an international conference on the worldwide spread of class actions, group proceedings and other forms of collective litigation that was held in Oxford, England in December 2007. The conference was co-sponsored by Stanford Law School and the Oxford Centre for Socio-Legal Studies and funded by the American Academy of Political and Social Sciences and Stanford Law School, with additional support from individuals, law firms and the business sector in the US and Europe. Participants in the conference were eager to share information about developments in their countries and to establish a network of academicians, judges and lawyers interested in class actions and group litigation to whom they and others could turn for advice on these developments. We established this Clearinghouse in response. The Clearinghouse is directed by Prof. Deborah Hensler of Stanford Law School, who co-organized the 2007 conference with Dr. Christopher Hodges of the Oxford Centre for Socio-Legal Studies.
The Global Class Actions Exchange currently includes country reports and other materials prepared for the 2007 conference; statutes, rules and important cases related to class actions and group litigation; academic and other commentary on global developments regarding class actions; contact information for legal analysts and practitioners who research or practice in the class action or group litigation area; and news of conferences and other events of interest to scholars and practitioners.
If you would like to contribute material for the Global Class Actions Exchange, please contact Deborah Hensler at dhensler@stanford.edu.
Using bankruptcy code chapters 11 and 15 to avoid litigation is not quite as easy as some might think, as illustrated by an order that is here and is described in the LAW 360 article below.
Law360, New York (December 03, 2009) -- A federal judge has ruled that a London-based fur broker that filed the equivalent of bankruptcy in the U.K. can't stay a bid-rigging suit in the U.S. without first petitioning for recognition of the U.K. insolvency proceedings under Chapter 15.
Judge Ricardo S. Martinez of the U.S. District Court for the Western District of Washington rejected Fein & Co.'s motion to stay the putative antitrust class action Wednesday, saying the fur broker hasn't shown that it can't file Chapter 15.
The fur broker had argued in a Nov. 3 motion that comity necessitated the district court to stay the antitrust suit against Fein as it would have if the company had filed for bankruptcy in the U.S.
Meanwhile, the two mink fur producers who filed the action accusing Fein and other fur brokers of bid-rigging said an entity going through insolvency proceedings outside the U.S. can obtain relief here only through Chapter 15.
Siding with the plaintiffs, Judge Martinez said Chapter 15 "has provided a specific structure for addressing cross-border insolvencies, together with appropriate remedies."
The Washington court will consider granting Fein relief if it receives Chapter 15 relief in the U.S., he added. "Until that time," he said, "the court declines to stay these proceedings."
The plaintiffs, Wanechek Mink Ranch and Smith Mink Ranch Corp., alleged that between 2000 and 2004, the defendants engaged in a bid-rigging scheme that depressed the prices the plaintiffs and other mink fur producers were paid for their furs at auctions.
In addition to Fein, some of the other fur brokers named in the case include Delta Trading Corp., Klondike International Furs Ltd. and Alaska Brokerage International Inc.
The defendants moved to dismiss the case in November 2008, but Judge Martinez refused to do so in early May.
Following the U.S. Supreme Court's landmark ruling in Iqbal v. Ashcroft in May, the brokers asked the court to dismiss the action again, this time saying it didn't meet the heightened pleading standard laid out by the high court.
The brokers noted that in the court's May 5 order declining to dismiss the case, it pointed to repeated statements in the complaint that the defendants "agreed" to a bid-rigging scheme as well-pleaded allegations.
"The Ashcroft case puts to rest any lingering notion after Twombly that such allegations are sufficient," the defendants said. "If all it takes to state an antitrust claim is to write the words 'they agreed,' no claim would fail under Rule 8."
The U.S. Department of Justice launched an investigation into anti-competitive practices among fur brokers in 2004. In 2006 Alaska Brokerage was indicted, and an individual broker pleaded guilty to a conspiracy charge. The company was fined $30,000.
Attorneys for both sides didn't immediately return calls for comment Thursday.
Plaintiffs are represented by Hagens Berman Sobol Shapiro LLP, Kohn Swift & Graf PC, Preti Flaherty Beliveau & Pachios LLP, Barrack Rodos & Bacine, Berger & Montague PC, Weinstein Kitchenoff & Asher LLC and Langer & Grogan PC.
Defendants are represented by Byrnes & Keller LLP, Wilson Smith Cochran Dickerson, Stoel Rives LLP and Yarmuth Wilsdon Calfo PLLC.
The case is Wanechek Mink Ranch and Smith Mink Ranch Corp., on behalf of themselves and all others similarly situated, v. Alaska Brokerage International Inc., case number 06-cv-00089, in the U.S. District Court for the Western District of Washington.
Mayer Brown includes Herbert Zarov and other well regarded defense lawyers focused on toxic tort claims. Mr. Zarov and his colleagues recently published this DePaul Health Care Law Review article that sets out a defense perspective on the issues regarding medical monitoring claims in Illinois.
The outcome in Illinois will matter because Illinois holds an outsized role in the world of tort litigation in the United States. Why ? Two Illinois venues - Madison County and Cook County. Madison County is especially famous/infamous for processing hundreds of asbestos trial settings per year, a process loved by the plaintiff's bar because trial dates result in outcomes and payments.
So, where and when are US tort and securities judgments binding on persons who live outside the US, and why should does it matter? Let's start with the latter question - why does it matter. Suppose, for example, a US bankrupcty court purports to enter a global injunction that bars future asbestos claims that anyone in the world might hold against particular entities? Is that injunction really enforceable if challenged in other nations or even here? Or, suppose global res judicata issues arise because of securities claims involing stocks sold around the world to persons from many nations?
As usual, the answers are going to emerge first in securities claims because the amounts at issue in any one case are enough that squadrons of lawyers are deployed to argue the issues. Answers are starting to arrive and indeed one could say the pot is boiling in the world of securities and D & O litigation as lawyers ponder and argue about various current lawsuits.
For example, some wonder and argue about whether the U. S. Supreme Court will or or should consider a discretionary appeal from a 2d Circuit ruling on jurisdictional issues in the context of alleged global securities fraud. This AmLaw article by Andrew Longstreth presents the issues and links to the Justice Department's brief invited by the Court in the Morrison case. The government urged the Court NOT to take the case (one wonders how that will view will sit at the Court when considered in the light of Chief Justice Robert's expressed interest in building the legacy of his court by reaching out to decide business cases).
The topic also is addressed on the excellent D & O Diary blog by Kevin LaCroix, in a recent guest post (here) from a Cozen & O'Connor lawyer, who, presumably, represents insurance companies. Another example arises from the ongoing more or less global Vivendi securities fraud trial, which is covered in general here by Mr. LaCroix, with many helpful links to source documents, with links to undelrying rulings on the global class action issues. The Vivendi class action opinion is here, and provides a helpful discussion on what courts in overseas countries might have to say about the res judicata nature of a US judgment on the securities law issues in the context of a purported class action.
Conclusion ? Concrete answers will take many years to evolve. But plainly some of the judgments entered to date will never be enforced because overseas claimants were not given anything close to adequate notice or representation.
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."
(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.
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 ?
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.
Here is an excerpt fron this blog post by Kevin LaCroix at The D + O Diary:
"The Latest Stanford Financial Group Lawsuit: According to a July 13, 2009 Bloomberg article (here), Stanford Group investors have filed a class actoin lawsuit in the Southern District of Texas against The Commonwealth of Antigua and Barbuda, alleging that the Caribbean nation helped the financier engineer a massive fraud. The complaint (here) , purports to be filed on behalf of all individuals and investors who were customers of Stanford International Bank as of February 16, 2009, alleges violations of and seeks to recover damages under RICO.
I have added this latest lawsuit to my running register of all Stanford Group-related litigation, which can be accessed here."
Set out below are two paragraphs from the Complaint:
"3. Antigua is sovereign, but not above the law. It became a full partner in Stanford's fraud, and reaped enormous financial benefits from the scheme. Stanford stuffed Antigua's coffers - and its officials' pockets - with money stolen from unsuspecting customers throughout the United States, Canada, Central America, South America, and elsewhere. Antigua worked tirelessly to protect and nurture Stanford's criminal enterprise and, in return, eagerly accepted its share of criminally-procured funds.
4. As described more fully below, Stanford's massive fraud would not have been possible without the active, knowing, and essential assistance of Antigua. Antigua: (i) provided a safe haven for Stanford to operate; (ii) provided essential assistance in Stanford's efforts to portray itself to Plaintiffs and other members of the Class as a legitimate provider of financial services; (iii) participated with Stanford in a variety of commercial activities in Antigua that provided a pretext for the transfer of criminal proceeds from Stanford to Antigua; (iv) provided false and fraudulent information to the Securities and Exchange Commission ("SEC") and other regulators in order to thwart the SEC's investigations into Stanford; and (v) shared in the criminal proceeds of the conspiracy, all or substantially all of which were stolen from the Plaintiffs and other members of the Class. "
Per this article from Delaware Online:
June 25, 2009
DuPont sued over asbestos in ArgentinaEx-Lycra plant workers say they were exposed
By ANDREW EDER and AARON NATHANS
The News Journal
DuPont Co. exposed workers in Argentina to asbestos until the late 1990s despite knowing the risks of the material, according to three lawsuits filed Wednesday in Delaware.
The lawsuits came from former workers at a Lycra spandex plant in Mercedes, Argentina, that was part of DuPont until the sale of its textile unit in 2004.
DuPont knew that exposure to asbestos could harm workers as early as 1964, the complaints said, but the company continued to use asbestos in the heat pipes and machinery of its Argentina facilities until the late 1990s.
The workers, Cristian Dematei, Juan Carlos Laborda and Ceferino Ramirez, are represented by the Wilmington law firm Jacobs & Crumplar. The law firm said more lawsuits would follow.
Dematei, who worked at the facility for 11 years, suffers from asbestosis, a chronic condition that causes shortness of breath and an increased risk of lung cancer, the complaint said.
Laborda worked at the plant from 1968 to 1980, according to his complaint, and suffers from asbestosis and asbestos-related lung cancer.
Ramirez worked at the facility for 32 years before retiring in 1993. He has been diagnosed with asbestos-related laryngeal cancer and asbestosis, his lawsuit said.
The lawsuits allege that workers were never warned of the dangers of asbestos exposure or given respiratory protection.
Amanda Velazquez, asbestos medical paralegal for Jacobs & Crumplar, said: "They need to break the double standard," referring to DuPont stopping using asbestos in U.S. plants earlier.
DuPont spokesman Dan Turner said, "While we have not had the opportunity to review the filing yet, and cannot comment on the specifics, we do find it puzzling that the plaintiff's attorneys have filed the compliant in Delaware rather than the country of origin. The safety and health of our employees, our neighbors and our community has and continues to be DuPont's highest priority."
Velazquez said it makes sense to sue a company in the place where it is based.
Current articles here and here follow up on a conference in Israel regarding a town there with high mesothelioma rates. Asbestos campaigners long-ago reported here that the town included an asbestos-cement plant that used the amphibole asbestos fibers known as crocidolite and amosite. A detailed report with pictures is available here at World Asbestos Report. The company operating this plant is said here to have been Eitanit, formerly known as Isabest; wit the town and factory located in Nahariya, in the Western Galilee.
According to one of the articles above:
"The choice of topic by Asbestos Consultant Andy Oberta was particularly relevant to Greece - a country in which asbestos-cement products are still being manufactured. The case study An Asbestos-Cement Plant in Israel: Contamination, Clean-up and Dismantling detailed Mr. Oberta's involvement with a project in the City of Nahariya, Northern Israel. For nearly fifty years, amosite, crocidolite and chrysotile had been used at this site during the manufacture of asbestos-cement pipes and sheet products. The factory owners distributed asbestos waste to local people for use on their driveways, paths and farms throughout western Galilee. Although the plant shut in 1997, friable and non-friable waste material was still lying on the beach and by the roads which bordered the factory site. Town councilors thought a good use for the area would be a children's amusement park and plans were developed to build this tourist attraction. A series of photographs illustrated the hazards of such a plan and Mr. Oberta explained the process by which negotiations with the Israeli Ministry of the Environment and local people resulted in the rejection of this idea."According to an old article you can find online through various paid sources:
COPYRIGHT 1991 Israel Business TodayEitanit Set to Re-enter U.S. Market The U.S. Federal Court recently canceled the ban on asbestos products initiated by the EPA in 1989. The decision opens the way for Eitanit, formerly called Isasbest, to reenter the U.S. market. The company is the only manufacturer of asbestos products in Israel and anticipates sales of $25 million in 1991. Managing Director Uri Peled says the company has invested significant sums in reducing health hazards to its 200 employees. Eitanit is owned by the Federman family.
Old manufacturing plants also have created issues'>http://www.eia-usa.org/forum/viewtopic.php?id=14">issues in the Chicago area as an old Manville plant that used amphibole fibers was located in Waukegan near an Illinois public beach and state park.
Do not miss a fascinating June 24 article in the New York Times regarding the tort litigation seeking damages from the Saudi royal family for the 9/11 attacks, and make sure to click back through the prior articles and briefs linked to in the past articles. One issue of course is sovereign immunity. Another issue is secrecy - the article quotes from documents said to help prove the claim that some members of the royal family provided financial support to groups said to be linked to terrorists. So far, the immunity defense is prevailing. There also is an ongoing battle about whether the documents can be made public since they were apparently leaked to one of the plaintiff's firms, the Motley Rice firm of asbestos and tobacco fame.
What will the global litigation industry look like in 10 years? My bet is that it will look increasingly entrepreneurial, and more like the litigation industry as it presently exists outside the US.
In Australia, a personal injury law firm known as Slater & Gordon went public back in May 2007, as it describes on its history page. That development caught the eye of the WSJ - see here.
In Europe, there is an interesting variation on that theme as corporate law firms already include groups of lawyers working on contingent fees for personal injury claimants. Thus, Field Fisher Waterhouse looks like and is a corporate law firm with offices across Europe, as you can see by visiting its home page. In addition, however, the firm also has an apparently active, successful practice representing personal injury claimants in a wide range of claims. The website page for personal injury claims is here, and describes the firm representing plaintiffs in medical malpractice litigation and in asbestos litigation.
In the US, the move to entrepreneurial litigation is today the subject of a growing number of discussions about moving away from the billable hour to flat fees and contingent fees for litigation and corporate work. Indeed, there is an already active alternative entrepreneurial approach used by boutique law firms (e.g. Bartlit Beck; Valorem Law Group; Boies Schiller ) and some large law firms (e.g. Robins Kaplan for some time, with Saul, Ewing and Kirkland & Ellis now saying they are doing the same) working for corporations on contingent fees and various forms of flat fees. And, firms such as Robins Kaplan sort of took on personal injury litigation as plaintiffs when it represented the state of Minnesota in tobacco litigation. Take a read through the websites and note the wide range of cases handled for corporate Americas as plaintiffs.
Where will this end up in the US ? Hard to say due to state by state ethics rules, but plainly the American liitigation industry will become even more entrepreneurial, as it already is around the globe. And, with more and more corporations acting as plaintiffs, some traditional positions are going to become harder to sustain. It will be, for example, harder for corporate America to complain credibly about contingent fees and "trial lawyers" when corporate America is using the same approach.
Who knew- apparently there is "libel tourism," a concept I learned about from reading Walter Olson at Pointof Law and then reading a recent Wall Street Journal article for which he provided the link. The article arises from a libel judgment entered against a science writer (Mr. Singh) who commands the respect of the WSJ. The article goes on to say that the burden of proof is essentially reversed in Britain, and that the burden is on the author to prove is on the author to prove that the article is "not libelous." This particular case apparently arose from the science writer taking issue with an article in which chiropractors asserted that they could cure are things such as colic, and the author called that claim "bogus." A 2006 article from Overlawyered indicates the House of Lords that year adopted a defense based on fair public comment. A group known as Sense About Science is complaining bitterly. Mr. Singh's credential s appear quite good; an account of his situation and appeal is posted here, and describes him as follows:
"Simon Singh completed a BSc in physics and a PhD in particle physics at Cambridge University before becoming a director and producer in the BBC science department. He worked on Tomorrow's World and Horizon and won a BAFTA for directing a documentary on the subject of Fermat's Last Theorem. After leaving the BBC, he wrote a series of bestselling popular science books, such as "Fermat's Last Theorem", "The Code Book" and "Big Bang". He has also presented several radio and TV programmes, and his educational initiatives include the Enigma Project and the Undergraduate Ambassadors Scheme. In 2003 he received an MBE for services to science education and communication."
The UK is famous for assessing costs if a case actually goes to judgment. A new look at that topic is underway and is slated to produce a final report by year end 2009. A preliminary draft report has been issued and will be the subject of meetings and comments over the summer. More specifically, a press release from the British Judiciary explains that " Lord Justice Jackson has published the preliminary report in his Review of Civil Litigation Costs.The report is a major piece of work, deriving from four months of fact-finding, research and receiving submissions, and it extends to over 650 pages with three annexes and 30 appendices. It is available" online here.
A June 1, 2009 article in Business Insurance by Sarah Vesey provides a terse summary of the report. She comments:
"In the report, Justice Jackson said several potential changes to the existing cost regime for group actions "merit consideration."
Among them are instituting a no-cost-shifting rule; allowing cost-shifting for only part of the proceedings, for example only after the stage where a class wins certification; implementing a common funds doctrine, such as that used in the United States in which successful lawyers are entitled to have their fees reimbursed from the fund awarded to the class; public interest litigation, whereby the court has power to order that no cost-shifting occur when a group representative brings an action on an issue of public interest; and using a lower-cost scale for collective actions.
Justice Jackson said his "tentative view" to do away with cost-shifting for collective actions merits serious consideration in the second phase of his review and would, among other things, promote access to justice and be fairer for defendants."
Looking for a tight but informative summary of changes around the globe with respect to (1) aggregate or class action litigation, (2) contingent fees and litigation funding, and (3) exemplary or punitive damages? If so, you should read a new article, "Global Litigation Trends." The authors are Mark Behrens, Gregory Fowler and Silvia Kim, who are all Shook Hardy lawyers. The article was published at 17 Michigan State Journal of International Law 166 (2008-09). You can download it here from the TortsProf blog.
I particularly liked the article because it packs a material amount of information into 30 pages. The first two sections provide an overview of particular developments in aggregate litigation/class actions and some nation by nation citations to articles on aggregate litigation. Those highlights are followed in section III by an incredibly handy reference tool that provides a country by country synopsis of the aggregate litigation procedures increasingly available in countries ranging from Argentina to Taiwan, followed by a brief section IV addressing EU law aggregate litigation developments. Section V addresses developments in paying for litigation. First covered are changes around the world with respect to contingency fees (they are permitted more places than you might think - for example, Italy recently passed legislation to permit contingent fees), as well as uplift fees, success fees and multipliers. The section also touches briefly on the rise of litigation funding outside the US. Global developments in punitive damages are covered in section VI. The article provides cogent cites to demonstrate that new attitudes are developing outside the US with respect to non compensatory damages.
As the name of this blog reflects, it seems plain enough to me that tort litigation is indeed going global, albeit with regional and national twists, not to to mention the intricacies of comparing civil law countries to common law countries, as well as developments in Asia where some countries have this century essentially embarked anew in their approach to courts and law because past law was feudal or otherwise outmoded. I was curious though to read the the concluding remarks of Mark and his colleagues since they (like me) are not academics and represent the defense side in most cases. Here's what they had to say:
"A growing list of countries outside the United States, including Canada, Australia, most European, and several South American countries, now recognize some form of multiclaimant litigation-- whether class actions, groups actions, or representative actions by consumer or public organizations. The trend, however, has been to reject wholesale adoption of U.S.-style class actions. What has emerged instead is a distinctly "un-American" approach that generally disfavors opt-out procedures and often allows public bodies and private consumer organizations to bring collective actions in addition to (and sometimes in place of) individuals. Foreign countries also have "not so far been inclined to change other rules that have helped make class action lawsuits practical in the United States." In particular, there have not been widespread calls to do away with the loser-pays rule. Contingent fees and punitive damages remain generally prohibited, but changes are occurring in this area and past prohibitions are softening. The stepstaken so far in these two areas, in particular, have been incremental and modest--but a wall is built one brick at a time. If collective actions become more prevalent, and the foreign plaintiffs' bar better funded and coordinated as a result, it would not be surprising to hear calls for broader and speedier reform."
A May 29, 2009 law.com article by Mark Hamblett updates on this case. The update provides some additional legal commentary and indicates jury selection was delayed this week, perhaps for settlement talks.
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A May 7, 2009 Law.com article by Mark Hamblett from the New York Law Joournal describes an upcoming trial for a fascinating "crimes against humanity" case against Shell by Nigerians. To whet your appetite, here are some exceprts from the article:
"A federal judge has cleared one of the last obstacles to a May trial for families of Nigerian environmental activists who are seeking to hold a Dutch oil company liable for violations of international law committed by the Nigerian military government.
In what will be one of the first times, if not the first time, that a corporation goes on trial for crimes against humanity, Southern District of New York Judge Kimba Wood rejected all but one motion to dismiss by Shell Petroleum, N.V. and other defendants in Wiwa v. Royal Dutch Petroleum, 96 Civ. 8386 and Wiwa v. Anderson, 01 Civ. 1909.
The claim alleges that executed Nigerian writer Ken Saro-Wiwa and other activists were the victims of a campaign of terror launched by the Nigerian government because they fought oil exploration in the Ogoni region of Nigeria. The company, the plaintiffs allege, was complicit in the 1995 hanging of Saro-Wiwa and other activists and the torture, jailing and ultimate exile of Saro-Wiwa's brother, Dr. Owens Wiwa.
Filed under the Alien Tort Statute (ATS) and the Torture Victim Protection Act, the complaints in the two cases contend that the defendants, Shell Petroleum, N.V., recruited Nigerian police and military to attack villages and crush opposition to the company's development in the region. While the plaintiffs are seeking to hold the company vicariously liable, they are attempting to hold directly liable Brian Anderson, the head of the company's Nigerian operation.
Jury selection in the case is expected to begin May 26."
This May 12, 2009 post updates a post of Wednesday, April 22, 2009 regarding pleural plaques and asbestos issues in the UK.
The UK press is now reporting that the UK government has now publicly stated that it will not make its decision on pleural plaques legislation until some time prior to Parliament's summer recess. The statement can be seen here in context, but it's brief. The statement says:
"Jack Straw (Lord Chancellor, Ministry of Justice; Blackburn, Labour)
Of course, I fully acknowledge the concern of my hon. Friend and other hon. Members on both sides of the House about that issue. Consideration of the responses, of which we have received quite a number following publication of our paper on the way forward, is taking longer than we anticipated, because of the complexity involved. However, I certainly intend that we should come to conclusions before the summer recess."
Meanwhile, union groups and their supporters have continued to agitate for legislation to once again allow claiming for pleural plaques. A "members bill" was introduced and discussed in Parliament. The discussion can be read here, and reveals that at least some of the legislators are ill-informed on the issues.
My personal opinion is that London will rue the day if it allows plaques claiming to go forward. Plaques claiming in the US was a disaster for companies and Chapter 11 trusts that were swamped by claims from persons with little or no impairment. The April 22 post links to my detailed set of reasons regarding why plaques claiming should not be reinstituted.
The James Hardie opinion/judgment is available here. The link also was added to the prior post containing links to the charges and a helpful summary of the outcomes.
Pointoflaw's Walter Olson notes here items related to an Irish article describing Lloyds of London's Chariman as griping out about the amount of tort litigation in Ireland of late. As to global tort litigation, the key quote is this:
"Tort costs are expanding around the world at twice the rate of the global economy. Added to this is the fact that US legal jurisdiction is trying to creep outwards."
'Mass accident" cases produce tough issues on applicable law and teh forum for litigation. The 11th Circuit recently issued a per curiam ruling affirming a district court order invoking forum non conveniens principles to cause 69 of 70 air crash lawsuits to be tried in Italy instead of the United States with respect to a plane crash in Milan, Italy. The district court order directed Cessna to submit to jurisdiction in Italy. The case is King v. Cessna Aircraft Co., No. 08-11033. The opinion is here.
Press reports indicate that a judgment is due out later today regarding the Australian "SEC"s criminal prosecution of directors of James Hardie regarding disclosures with respect to its asbestos-laibilities and the private trust it created to seek to resolve personal injury claims.
When is a multinational at risk for "aiding and abetting" human rights violations?
The answer is evolving. One case on the issue is Khulumani v. Barclay National Bank Ltd., 504 F.3d 254 (2d Cir. 2007). Recent developments are described in an interesting law.com article online as of today and written by Professor Georgene Vairo of Loyola Law School in Los Angeles; the article is available here
Much of the article focuses on an April 8, 2009 opinion by Judge Scheindlin that analyzes the issues in depth on a motion to dismiss in a case known as In re South African Apartheid Litigation. The opinion dismissed some claims but sustained others. The opinion by Judge Scheindlin is here, and seems well worth reading. Of note, the opinion allows American Pipe tolling of statutes of limitation in favor of the plaintiffs. That's a powerful incentive to the filing of class actions. It's also a weapon against governments - I may have been the first to apply it against the U.S. government, which we did successfully when representing businesses seeking to recoup taxes paid under an unconstitutional "Harbor Maintenance" tax. See Stone Container Corp. v. U.S., 229 F.3d 1345 (Fed. Cir. 2000).
The following excerpt from Professor Vairo's article provides a summary of some but not all of the "aiding and abetting" and conspiracy issues evaluated by Judge Scheindlin:
"On the other hand, she refused to dismiss claims that Ford Motor Co., General Motors Corp., International Business Machines Corp. and other companies aided and abetted torture and other atrocities committed by the regime, such as arbitrary denationalization by a state actor and cruel, inhumane and degrading treatment because such torts are well established in the community of nations.
Scheindlin's opinion is important because she takes a careful look at the standards for imposing liability, noting that the 2d Circuit had not left her with precise standards on a number of issues. Having established that aiding and abetting may violate the ATS does not answer the question of the type of mens rea required by nonstate actors. She rejected the defendants' argument that specific intent be required, holding instead that international law "requires that an aider and abettor know that its actions will substantially assist the perpetrator in the commission of a crime or tort in violation of the law of nations."She noted that the 2d Circuit had not addressed the question of whether conspiratorial liability was a tort cognizable under the ATS, but found that there was no consensus among nations and therefore refused to recognize conspiracy as a tort. According to Scheindlin, the defendants' political-question and international-comity arguments were largely eviscerated by her rulings on each of the classes of claims raised in the case. She noted the U.S. State Department's opposition to the litigation, as well as that of the current government of South Africa. She dismissed the State Department's arguments because they were vague, on the one hand, and irrelevant to the remaining claims. The political-question doctrine argument would have merit had the case impacted U.S. foreign policy, but she failed to see how litigating the remaining claims would have any impact on it at all."
A Swiss media article describes significant media and partisan attention focused on the first day of trial in an asbestos-related criminal prosecution of former owners and managers of Eternit businesses that for decades were global manufacturers of asbestos-cement board, among many asbestos products. Hundreds of people are said to have gathered for the first day of the prosecution that involves allegedly knowing or reckless industrial hygiene decisions said to have resulted in premature deaths and injuries to over 2,500 manufacturing plant employees and local residents. The alleged misdeeds of Eternit have been widely chronicled over the years while this prosecution effort was ongoing. Informative articles are available here and here , and an article I wrote back in 2004 provides some context for EU businesses facing asbestso litigation's expansion into Europe.
Prosecutions of this sort raise a wide-range of issues. From the American perspective, perhaps the most striking aspect is that Italian law expressly allows trial that combine criminal and civil claims, thus giving the defendants significant risks that would not exist in a civil trial in the US. Italian law also allows the judge to reduce sentences to some degree if compensation is paid to victims. This trial will not end quickly - Italian criminal trials move slowly and include a variety of procedures not directly comparable to American criminal trials.
What's the likley outcome? My assumption/prediction is that this trial ultimately will result in Eternit entities and the individual defendants offering to plead guilty subject to a proviso limiting their sentences in return for creation of a significant private fund/trust that will pay money to claimants and that will make some payments to Italian government agencies such as INAIL to offset payments that have paid medical expenses for victims. I strongly suspect the deal will not be as cushy for the defendants as was the tobacco deal cut in the United States.
About the time I finished the post below on global choice of law issues, I received an email from the American Bar Association's Mass Tort Committee inviting new ideas, and new members of course are always welcome. The group is a good one, and includes a subgroup focused in international mass tort issues. So, if you are looking for a forum to get further involved in global tort litigation, go the committee's website or follow up with the committee chairs, who are shown on the email text pasted below.
The following is the full text of the email mentioned above ______________________________________________________________
Dear Committee Members:
Strategic planning allows any group, including the Mass Torts Committee, to focus on what matters to its members and what benefits them. This is a relatively young committee and it is time to revisit what the Committee delivers to its members in terms of useful information in their practices and in terms of opportunities to participate and network.
One of the initiatives under consideration is revisiting the subcommittee structure. As you know, we have subcommittees that are directed to committee products and process (newsletters, website, programming, hot topics, young lawyers and membership). We also have subcommittees directed to specific substantive areas (international, class actions, pharmaceutical & medical device and toxic torts). Some of the substantive areas mirror the topics covered by other Section of Litigation committees and other organizations that we all belong to in one combination or another. One consideration here is revisiting subcommittee structure to put in place (along with the substantive area subcommittees) a focus on handling of mass tort litigation as a matter of process - not organized along substantive areas of law. That could include such things as case management, evidence and procedure, experts, etc.
We would like to get your feedback on that concept and your thoughts as to what particular topic areas might be appropriate for such additional subcommittees, so please e-mail your thoughts to either or both of us.
Thank you,
John Manard
manardj@phelps.com
Byron Mason
byron.mason@bakerd.com
Mass Torts Litigation Committee Co-Chairs
A prior post on this blog described some of the global choice of law issues arising from the Madoff fiasco. One set of issues will revolve around which nation's law should be applied to decide claims regarding whether investment advisers had a duty to investigate Madoff's operations, and how much investigation is required.
The facts and claims continue to expand, and choice of law will become ever more complex, subject of course to choice of law clauses and whether they can or will be enforced. Thus, even as Mr. Madoff was pleading guilty this week, the WSJ was running articles this week describing ongoing investigations into money transfers between various Madoff entities in London and New York. Meanwhile, more claims have been filed with cross-border parties.
For example. a Lawcom article describes a suit filed in the State of Washington, and goes on to say:
"[The plaintiff] Dennis, an American living in Switzerland, alleges that FutureSelect invested his money with the Rye Fund, part of a group of hedge funds owned by Rye, New York-based Tremont Group Holdings Inc., and that the Rye Fund in turn place the money with Madoff. The derivative lawsuit was filed on behalf of Dennis by Steve Berman, an attorney with the law firm Hagens Berman Sobol Shapiro in Seattle."
James Hardie is an Australian building products company that made lots of asbestos-cement products, some of which were made from the especially lethal blue asbestos fiber known as crocidolite. In years past, it was being sued frequently. It then redomesticated to the Netherlands and established a trust to pay victims, perceiving the law there as favorable towards that end. The trust turned out to be grossly underfunded (which in my opinion was obvious from the start to anyone with a brain and any meaningful experience in asbestos litigation). Ultimately 10 of the senior officers were taken to trial by Australian securities regulators for misleading statements to investors. A recent newspaper article indicates the case is moving towards the end of the becn trial, with summations having started. A decision is expected in a few months. It will be fascinating to see how the judge assesses the situation.
The march of science continues, and so does its impact on tort litigation. For example, the American Bar Association's TIPS section is hosting an April 2-4 seminar in Phoenix that includes speakers focused on claimant specific genomes as they impact disease. The agenda is here. Plainly we are moving towards a world in which individuals and subgroups will receive more attention, and generalized tort class actions will be harder to justify, but specialized clas actions may be harder to avoid. The results probably will help some plaintiffs and some defendants.
On the subject of individualized disease and mediciane, also interesting is a very recent medical article about using individual DNA to predict the amount of blood thinner needed for particular individuals. The research is descibed in a February 18 wall Street Journal article by Keith J. Winstein. To date, the dosing process for using blood thinners apparently has involved much trial and error, but now there is apparently credible evidence that the needed dose frequently can be predicted using individual DNA, at least for one of the blood thinner drugs. The research also is described a showing that some individuals do not well with the drug due to their DNA. Thus, this would seem to be yet another example of why the FDA and the US medical system are going to have learn to work with both epidemiology and molecular biology at the same time. Double blind studies are a pretty blunt instrument when compared to personalized science regarding the drugs useful for a specific person.
A prior post on this blog described the UK government issuing a Consultation paper requesting views and information on, among other things, whether it should support legisaltion to cause compensation to be payable persons diagnosed as having pleural plaques attributed to asbestos inhalation. The UK government had said it would provide its position during November 2008, but did not do so. On February 11, 2009, however, Gordon Brown publicly said the Government will "soon" announce its view.
I submitted to the UK government a detailed outline of reasons why my opinion is that payments should not be made for pleural plaques. The paper is available here.
Below is the Q and A that prompted the comments by Gordon Brown.
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http://www.theyworkforyou.com/debates/?id=2009-02-11a.1360.3
House of Commons debates
Wednesday, 11 February 2009
Oral Answers to Questions -- Prime Minister
Michael Clapham (Barnsley West & Penistone, Labour) The Prime Minister will be aware that it is almost 18 months since the Law Lords made a decision denying compensation to people suffering from pleural plaques as a result of negligent exposure to asbestos. Does he agree with me that we can restore justice and fairness only if that Law Lords' decision is overturned?
Gordon Brown (Prime Minister; Kirkcaldy & Cowdenbeath, Labour) I met my hon. Friend last week and we talked about this very issue. It is very important that we get a resolution following the court judgment on pleural plaques. The Secretary of State for Justice has been looking at this matter and talking to his colleagues right across Government about the implications of what can be done, and I can assure my hon. Friend that an announcement will be made very soon.
A continuing topic of this blog is exploration of the ways that advances in science will change tort litigation tactics and may change tort law rules. The topic will be squarely addressed next spring in a Friday March 20, 2009 session of the Defense Research Institute's annual seminar on toxic tort litigation. The speaker is the well-known and always interesting Dennis Paustenbach. The full DRI seminar agenda is here, and the session is as described as follows:
Toxicogenetics and Toxicogenomics--Science
Fiction or the Future of Toxic Torts?
The genetic revolution is here and has the potential to transform
toxic tort law as we know it. From biomarkers
to DNA microarrays to individualized genetic testing, there
are technical and scientific advances being made that have
the potential to alter the way in which toxic tort causation
is established. Dr. Paustenbach will dispel the myths and
explain the realities about genomics and toxic torts.
Dennis J. Paustenbach, Ph.D., CIH, DABT, ChemRisk Inc.,
San Francisco, California
Popular wisdom has it that that the types of tort litigation we have in the US are abhorred by the rest of the world. The reality, however, is that the world is changing, as is evidenced by today's news including an article from the Mainiachi Daily News regarding the filing of two new asbestos claims in Korea. The full text is set out below.
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Bereaved families of 2 South Koreans sue firms over asbestos deaths
SEOUL -- The bereaved families of two South Korean residents who died from mesothelioma after living near a factory producing asbestos have filed a damages suit against three parties including Nichias Corp., it has emerged.
In the suit filed at the Busan district court, plaintiffs demanded companies including Tokyo-based Nichias Corp. pay 200 million won (about 14 million yen) each in compensation.
It is the first time that local residents near an asbestos factory have filed a damages suit in South Korea. Local environmentalist groups and former residents near the factory have also joined hands in seeking relief measures.
The plant -- an asbestos spinning factory -- was run by Jeil Asbestos (present-day Jeil E&S), which was jointly established by Nippon Asbestos (forerunner of Nichias) and a South Korean company near Busan city hall in 1971. The plant continued to operate until 1992.
One of the male victims was living 900 meters away from the factory for seven years in the 1980s and subsequently died in 2006 from mesothelioma at age 44. The other victim was living 2.1 kilometers away from the factory for four years during the 1970s and died in 2002 from mesothelioma at age 62.
On Nov. 13 this year, their bereaved families sued Nippon Asbestos and Jeil E&S, as well as the South Korean government for "failing to take measures to improve the factory."
According to the complaint, the plaintiffs claim that Nichias established the joint venture while knowing the toxicity of asbestos but concealed it from the public.
"Nichias moved (its operations) to Busan after regulations against asbestos particulates were strengthened in Japan and it became difficult to produce asbestos in the country. The company now also operates plants in Indonesia and other Third World countries. We want to prevent the spread of pollution exports through the suit," said a representative of a Busan-based environmental group supporting the plaintiffs.
A representative of Nichias said, "We have not received the complaint and have not confirmed the suit. Those involved in the joint venture have already retired and we do not know the details."
In a related development in December last year, the Daegu district court in South Korea ordered Jeil E&S to pay 158 million won in compensation to a female former employee of its Busan factory who died from mesothelioma. The court case has subsequently prompted a series of damages suits against the company by its former employees.
Click here for the original Japanese story
(Mainichi Japan) November 18, 2008
How should governments and courts decide/define when persons have a condition that should warrant payment of compensation through tort claims or through government agency programs ? The question is relevant in many settings, but the issues I know best relate to asbestos litigation. The question is presently the subject of discussion in a variety of jurisdictions and contexts.
Issues of this sort are under discussion in the UK. There, asbestos-related cancers are increasing significantly, and so are lawsuits seeking damages for the cancers. Paying compensation for cancer is easy to understand in many instances. However, some groups want to go further. Thus, some constituencies are urging the UK government (Britain and Wales, for this purpose) to use legislation to change recent case law so that payments may or will be paid to persons who can be deemed to have a condition known as "pleural plaques." Plaques are marks on a lining outside the lung, and the plaques are markers of past asbestos inhalation, but do not cause any impairment except, perhaps, in unique circumstances.
These issues arise because the House of Lords issued an opinion holding that common law compensation was not payable, concluding in essene that plaques do not constitute an injury. Subsequently, the UK Ministry of Justice issued a 9 July 2008 "Consultation" paper asking for views on whether the UK government should use legislation to allow or facilitate payment of compensation to persons with pleural plaques. The UK Consultation paper is a lengthy document setting out information about the issues, and five possible alternatives for government action, with a cost estimate for each of the five proposals. The government's Consultation paper is available online at: http://www.justice.gov.uk/publications/cp1408.htm.
Many papers were submitted on both sides of the issues, and the collection will be posted here as time permits. For now, I've posted online an image of the paper I submitted in opposition to the two most extreme aspects of the proposals set out in the Consultation paper.
The UK Government is expected to submit a reply to all the papers, and the reply is expected during November 2008.
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