Why Lawyers, Risk Managers and Executives Might Care About Molecular Biology as Applied to Tort Claiming - In a Word, Milward

Over the next few weeks, some of the new posts will focus on recent papers and rulings that illustrate why this blog includes so many posts about molecular biology, new science tools, and new findings. 
In short, the pace of molecular biology has material implications for litigation.
 
In 1854, a veteran cholera researcher (John Snow)  attributed a cholera outbreak to use of water drawn from a neighborhood well in old London. Dr. Snow's  theory bucked the conventional wisdom that "bad air" caused cholera. Mr. Snow's theory was plausible when compared to the facts, but others disagreed, preferring their "bad air" views.
 
At that point in time, the investigative microscopes and other science tools  were not enough to find the exact source of the disease. So, the diligent researcher sought to further prove the cause by investigating whether cholera deaths occurred among people who had used the well. That theory bore statistical fruit, and ultimately others became convinced the risk related to the well.   Thus, epidemiology was born, and "cause" was attributed based on studies of large numbers of persons. But even then, the cause was not truly isolated - the government did not want to accept the reality that fecal matter could contaminate water and cause cholera. Thirty years later, however, new science tools were more powerful, and the responsible bacteria were found, as explained here (short version) and here (longer version). 
 
In contrast, researchers today use powerful new tools and take a molecular look at the pump handle, and/or the water in the well,  instead of depending on studies of people who may or may not have encountered the pump handle. And, today, researchers are increasingly able to find objective biomarkers that establish, for example,  past contact with water from the well. 
 
 In the recent past, defendants sought to make science their friend by challenging plaintiff’s lawyers to gather "scientific proof."  Defendants especially grew to love, argue for and rely on epidemiology, which some argued as if it were the one and only true science. Then, the Daubert decision was won, and defendants developed even more confidence in "science."   

Today, however, some defense lawyers are rightfully worried about where law and science are going. Some are particularly concerned because plaintiffs are often the litigants embracing new molecular biology findings.  For example, plaintiffs embrace Milward v. Acuity Specialty Products Group, Inc., 639 F.3d 11 (1st Cir. 2011).  Milward is not favorable for defendants as it refused to reject new, non-epidemiology evidence on the cause of a form of leukemia. 

Why focus on Milward? Because far sighted lawyers in the defense bar consider it a key case.  In over-simplified terms, molecular findings triumphed over epidemiology. That's not a happy outcome for defendants that win summary judgments by arguing that expert opinions must be excluded when they are not backed by epidemiology.  Accordingly, defense groups made every effort to have Milward reviewed and reversed by the U.S. Supreme Court, but failed. This page of Scotusblog provides links to the 1st Circuit’s opinion, and all of the U.S. Supreme Court certiorari briefs, including the defendant’s cert petition and unsuccessful amicus briefs by the Defense Research Institute, The U.S. Chamber of Commerce, and the Product Liability Advisory Counsel. But they did not succeed.

 

 
 

"Chasseurs d'ambulances" - Class Actions in Europe

Despite its tongue-in-cheek headline, this Economist article provides a useful update on class actions in France in particular, and Europe in general. The article confirms the logical is happening - as US courts push back and resist becoming the world's courts, other nations are stepping in and facilitating class actions. And, as it also mentions, other countries are more pragmatic and facilitate litigation funding, which is both needed and logical  despite the protests of the US Chamber of Commerce and its various arms and advocates.

A Duty to Mine Big Data

Tort claims and defenses involve foreseeability. Data and information can drive foreseeability.

With data and foreseeability in mind, consider a recent, great post by David Oliver on "the duty to mine big data."  The post is a look by David at a pharma case involving Fosamax. In essence, the argument was that seller was negligent for failing to use standard pharma industry software tools to look at FDA data for signs of Fosamax causing  "oversuppression of bone turnover."  According to an expert, the warning signs were sitting in the FDA data and would have been seen if the manufacturer had looked, using industry accepted software.  David's ultimate conclusion about the opinion:  

"The court thereby implicitly held, I think, that the defendant had a duty to mine the FDA's data as early as 2001-2002. In other words, the existence of powerful data mining tools capable of uncovering an early signal of a possible harm associated with defendant's product created a duty to use such a tool. Ultimately, that's a duty to discover any statistical association between your product and some harm in the FDA's (admittedly accessible) that might be causal and to thereafter warn about it; and it's a duty to mine not only your data but any data that might shed light on your product."

Assume David is right on the holding.  Now go outside pharma. Consider the implications of mining the world's knowledge when applied against current miners, users and sellers of asbestos fibers. Consider the implications for a chemical manufacturer or distributor. Also consider the vast power of today's supercomputers (such as Blue Waters at the University of Illinois at Urbana-Champaign),  and tomorrow's quantum computers, as foreseen by Nobel Prize committees.  And think about the fact that Gordon Moore gave Caltech $ 600 million to increase the pace of scientific research, and he and his wife Betty operate a foundation that endows other smart researchers.  

Stunning changes are ahead, and some are arriving today. 

 

Australia - Quinn Emanuel's Latest Move into More Product Liability and Insurance Work

Yesterday's news was litigation powerhouse Quinn Emanuel taking almost 20 product liability and insurance lawyers from Skadden Arps and Weil Gotshal. Today's news is the Quinn firm opening an office in Australia. And one of the new lawyers is a long-time Australian lawyer who focuses on insurance and product liability issues

Interesting times are ahead as companies and law firms gear up for coming waves of toxic tort litigation. One suspects that Quinn Emanuel and some of its clients are noting that cancer rates are soaring around the world, not to mention internet advertising and late night tv ads seeking claimants. As to cancer, global cancer rates are expected to double by 2020 and triple by 2030. It's also clear that some cancer (and other diseases) arise from multi-generational risks and harms created by external sources and passed down from parent to child or even grand-child - DES daughters and grand-daughters are prime examples.

Meanwhile, molecular biology is moving forward at a stunning pace.  New scientific findings and tools emerge almost daily, in many instances powered by vast computing power, which continues to increase. Researchers therefore are starting to develop some level of "fingerprints" for diseases, mutations, epigenetic changes,  and ultimately causation. Consider this example of tracking molecular changes caused by smoking. 

We lawyers have much work to do to start catching up to science, and thinking seriously about stunning changes in what's possible and knowable. SCOTUS already is wrestling with some issues regarding DNA and where that technology will be in a few years. 

Products Liability Practices - Of Growing Interest as Mass Tort Claiming Continues to Grow

Once upon a time, many law firms disdained product liability litigation. Today, not so much - more top tier firms are aggressively seeking out products liability practices. The latest example arises from Quinn Emmanuel taking on 15 products lawyers from Skadden Arps.  In other instance, some big firms like to combine products liability and insurance recovery practices. 

The Quinn acquisition appears in part client-driven. According to a LAW360 article

  • Law360, New York (May 08, 2013, 4:35 PM ET) -- More than 15 Skadden Arps Slate Meagher & Flom LLP product liability attorneys are following colleagues Sheila Birnbaum and Mark Cheffo to Quinn Emanuel Urquhart & Sullivan LLP, according to the two new leaders of the firm's products practice.
  • Former Weil Gotshal & Manges LLP product liability attorneys Michael Lyle and Eric Lyttle also recently joined Quinn Emanuel as partners. There were fewer than 20 attorneys listed on Quinn Emanuel's website as partners in the products group before the recent spate of hirings.
  • "There's been a palpable commitment from the highest levels of the firm ... not only to embracing us, but embracing us with an eye toward growth in the future," Cheffo told Law360.
  • Birnbaum and Cheffo will continue their work with Pfizer Inc., State Farm Mutual Automobile Insurance Co. and Occidental Chemical at their new firm, they said. Quinn Emanuel will represent Pfizer in multidistrict litigation over injuries allegedly caused by the antidepressant Zoloft and anti-seizure drug Neurontin, as well as lawsuits over the antidepressant Effexor.
  • Quinn Emanuel already represented Pfizer in cases over the heartburn drug Reglan and in a bellwether Neurontin trial. The firm has served as national product liability counsel forColgate-Palmolive Co., national coordinating counsel for The Scotts Co. in thousands of asbestos cases and as lead counsel for Chartis in litigation over allegedly defective Chinese drywall.
 
 
 

Admitting Text Messages as Evidence

Text messages are part of modern life. The ABA Journal includes a new article summarizing two state appellate decisions on admitting text messages as evidence. 

Changes in Law - "But the ground is shaking. There are tremors."

"But the ground is shaking. There are tremors." So said a New York federal judge (Victor Marrero) during a motion hearing in which the parties were talking about a possible change in the law related to settlements in SEC cases. 

The importance of changes in law goes beyond SEC settlements. Repeat players in litigation occasionally make decisions based on "right or wrong" or reputation risk. More often, they make decisions based on expected outcomes, or a range of expected outcomes. The most effective repeat players therefore anticipate - or cause - changes in law.

A sometimes overlooked point is that the repeat players causing changes in law sometimes are one judge, or various judges who comprise a court. Consider, for example, Delaware's Chancellors and the various venues around the world that have become magnets for various forms of litigation. Or the California Supreme Court back in the day that it frequently made new law.

Against that background, it's particularly interesting to watch the dance on Wall Street as financial houses decide whether to settle or fight claims by the SEC, and whether to admit or deny fault or wrongdoing. Likewise, prosecutors and agencies balance the other side of the issues. Meanwhile, everyone waits to see how the Second Circuit will rule on Judge Rakoff's questioning of the absence of evidence to support the request for a judicial blessing on SEC settlements. Plainly the possible changes started by Judge Rakoff are closely watched by both parties and judges, including Judge Marrero. 

Argentinian Bonds and Global Enforcement of Judgments

Plaintiffs in the litigation industry need/want global enforceability of judgments. Defendants like delays and battles between courts and legal systems. Mass torts are part of the global litigation industry. Therefore, it makes sense for mass tort lawyers to keep an eye on the Argentinian bond litigation as to enforcement of judgments. A good summary post is online at the Credit Slips blog. And then there is the view of Felix Salmon

Litigation Funding - The U.S. Chamber of Commerce Keeps Throwing Away Credibility

Litigation funding is a much needed, economically logical tool for many plaintiffs, and a fact of life. Indeed, it's a fixture in some overseas countries, such as the Uk and Australia. But, the US Chamber of Commerce keeps flogging away at litigation funding. The latest exchange is here - a letter battle with Christopher Bogart of Burford Capital.  Mr. Bogart is anything but an extreme plaintiff's lawyer - he was a litigation partner at Cravath and later the GC at AOL-Time Warner. Once again, the chamber loses credibility by taking an extreme view without relevant, supporting facts. That's too bad because there are other, bigger issues for which the loss of credibility will matter. Repeat players in litigation, such as the chamber, need credibility. 

The "Third Wave" of Litigation Regarding Executive Compensation

This post from D & O Diary collects an interesting array of specific information on litigation involving executive compensation. The big picture point is to note that the litigation industry today is sufficiently established and focused to have first, second and third waves of litigation in specific areas.  

Governments Start Suing Each Other for Assisting Sales Tax Dodgers

Tax dodging. It's big business. One part of the industry involves companies dodging sales taxes on items used in business.  The method? Establish a nominal office in an area with a lower sales, and create a paper trail saying that orders are accepted in the nominal office, instead of headquarters, where decisions actually are made.

Sales tax dodging is bringing changes in legal strategies by local government units. For example, in Illinois, the Regional Transportation Authority (RTA)  is proudly and very publicly suing other unit of government for facilitating the tax scam. Indeed, the RTA has a web page devoted to its tax-recovery lawsuits.  The complaint is online courtesy of the Chicago Daily Law Bulletin service. The Chicago Tribune also covered the story. 

Conclusion? Rules create rule dodgers. As a result, finance and legal professionals too often are focused  on "creating value" by devising tactics to try to justify dodges. Some would call it failure to act in good faith. Sadly, it appears some (not all) government units sometimes cooperate in the same low end standard of behavior, and so the race to the bottom gains new players. 

On the other side of the coin, governments too often are too slow to realize they are being gamed in a race to the bottom. But some do learn, and sometimes they even bite back. Some may even learn to draft more broadly at the start to head off dodges, and create real disincentives, such as denying government licenses or business to any entity that adopts a dodge.  Who knows, perhaps governments also will learn to use litigation funders. 

Will Cities Ever Make the Effort to Cause Employees to Make Good Decisions

In an age of budget crises, it's infuriating to read about massive verdicts and settlements paid out by cities because of absolutely inexcusable actions by city employees. When will our cities invest in smart bosses, real controls, and six sigma or other processes to actually help cause employees to make decent decisions?

This rant is brought on by reading a press release from friends at Segal McCambridge Singer & Mahoney. Most people view the firm as only a defense firm, but that's not correct. They also do civil rights work for plaintiffs, and some plaintiff's class action work. Kudos to the firm for obtaining this outcome - the money will never fix the harm, but it helps. Set out below is the firm's press release regarding a recent financial win for a woman brutalized after repeated, idiotic choices by Chicago cops. The problem for cities is not plaintiff's lawyers. The problem for cities is idiotic actions by people who can and should do better, and sometimes bad choices brought on by short-sighted budget cuts. 

Caution: reading the press release will leave you wondering how people could be so stupid. One wonders if these cops still have jobs as cops, and if so, why?  Note especially that the cops ignored the substance of  nine - that's nine - phone calls from her parents in California.

________________________________________________________________________________

 

01.17.13
Segal McCambridge Achieves Landmark $22.5M Settlement in Tragic Christina Eilman Case
CHICAGO, IL – Today, after more than six years of litigation, Segal McCambridge Singer & Mahoney obtained a landmark settlement of $22.5 million in Kathleen Paine v. City of Chicago, et al. The firm represented the Plaintiff, who filed suit on behalf of her daughter, Christina Eilman, a mentally ill 28-year-old California woman who suffered severe injuries after Chicago Police released her in one of the city’s most violent neighborhoods. The settlement is reportedly the largest amount paid to a single plaintiff by the City of Chicago in its history. A federal trial had been scheduled to begin on January 22.
Christina Eilman was catastrophically injured with traumatic brain, spine, and other injuries during a 2006 visit while suffering from a bipolar manic episode at Chicago’s Midway Airport. The young woman’s behavior was reported to Chicago Police, who arrested her instead of seeking a mental health assessment. Although Ms. Eilman continued to show aberrant behavior, police transferred Ms. Eilman from the Eighth District station near the airport to the Second District station, located in one of the city’s highest-crime neighborhoods. While in police custody, detention aides repeatedly ignored other detainees’ concerns regarding Ms. Eilman. They also disregarded nine phone calls from Ms. Eilman’s parents in California, in which they explained their daughter’s history of bipolar disorder and voiced concerns for her safety upon release. 
After spending more than 28 hours in police custody, Ms. Eilman was discharged and left to wander through the unfamiliar streets in the surrounding neighborhood. Community residents reported that Ms. Eilman continued to show signs of a severe psychiatric episode. Within hours, Ms. Eilman was abducted and sexually assaulted by a gang member in a nearby high-rise public housing project. It is believed she attempted to escape her attacker by jumping from a seventh floor window opening. She survived the fall but suffered permanent traumatic brain injury, partial paralysis, and residual injuries to her spine, pelvis, and leg. Ms. Eilman now resides with her parents in northern California and requires around-the-clock care.
The Segal McCambridge trial team, led by Shareholder Jeffrey Singer, developed evidence confirming that Ms. Eilman was suffering from an obvious psychiatric episode, and that multiple Chicago Police officers deliberately failed to provide her with needed medical attention. The team also established that the defendant Chicago Police officers increased Ms. Eilman’s exposure to danger by transferring her to the Second District, and releasing her there, knowing that the neighborhood was one of the most violent in the city and that she was particularly susceptible because she was suffering from a psychotic episode. At trial, Plaintiff’s counsel planned to argue that the Chicago Police personnel failed to provide Ms. Eilman with access to mental health care while in police custody, violating the Americans with Disabilities Act and Ms. Eilman’s constitutional rights.
The settlement assures that Ms. Eilman’s extensive medical care and living needs will be secured for the rest of her life. In announcing the resolution of the case from Segal McCambridge’s Chicago office, Singer said the family was satisfied with the settlement though devastated by what happened to their daughter.
In a statement, Ms. Eilman’s parents said: “It is a bittersweet victory since no amount of money will bring back the daughter we knew, the lovely young woman who was full of life and accepting of all people. Her life was dramatically changed after she came to Chicago and found herself in the grasp of several insensitive and uncaring police officers and detention aides who humiliated her, directed cruel and insensitive comments toward her, ignored her desperate need for help, and placed her in harm’s way.”
Singer said the case underscores the need for policy changes regarding personnel training in the Chicago Police Department. “This case illustrates the importance of training police personnel to ensure mentally ill detainees are not ignored but are provided access to care. Tragedies such as this are entirely preventable,” he said. “Police departments claim they are committed to ‘serve and protect,’ but carrying out that commitment requires police officers and detention aides to be better equipped to provide access to resources to help individuals with special needs.”
The Segal McCambridge trial team also included Shareholders William Mahoney and Gregory Rogus, Of Counsel Kimberly Kayiwa, and Associates Misty Martin and Mitchell Morinec.

 

AmLaw's January 2013 Summary of Lawsuits Against Big Law

Lawyers continue to face more and more lawsuits for aiding and abetting or otherwise taking part in improper actions. Go here for the latest AmLaw summary of suits against big law. 

Reversing Its Ground, Amazon Now Advocates for Sales Tax Collection - A Prime Example of Repeat Player Tactics in the Litigation Industry

After decades of lobbying and litigating against an obligation to collect sales tax, Amazon has reversed its tactics. Seeing that sales tax dodging is about to fail as a business strategy and is no longer accepted by the public,  Amazon now lobbies for Congress to require all online sellers to collect sales tax.

Amazon's reversal of direction on sales tax collection exemplifies a well-worn strategy in the repeat player litigation industry. Litigate for so long as reward exceeds risk, and thereby drive up current revenue. Then, when the jig is up and public opinion is a problem, reverse field and make sure to take down all your competitors at the same time to "even the playing field." 

DES Breast Cancer Claims Illustrate Global Claiming Possibilities

The recent DES breast cancer settlement paid by Eli Lilly is worth noting for reasons beyond the specifics of the case itself. The DES breast cancer claims by "DES daughters" are notable for highlighting the potential global scope of potential claims. For example, DES was created in the UK, but was used widely around the world in a variety of ways and was taken by millions of women, with multiple millions of children.  So, claiming could arise in many nations - the use of DES is not just a "U.S. problem."

Another relevant factor is global mobility. Modern immigration patterns mean that “DES children” no doubt are scattered around the world.  In fact, Aaron M. Levine, a lead trial lawyer for the Fecho sisters,  was very open about visiting the UK during February 2012, and hoping to meet “DES daughters” from the UK who might be interested in claiming. A UK article covered in some detail his visit and the DES story. 

Take away ? Globalization of sales also creates global litigation risks. One wonders how many corporate directors request and receive Caremark advice (article by Professor Bainbridge) on global claiming risks? And, are they aware that other countries are more rigorous than the US in enforcing duties of directors?
 

Financial Fraud and Insider Trading - Looking Ahead at the Litigation Industry for 2013

The litigation industry looks solid for 2013, with many thanks to Wall Street houses and uber banks. According to Peter Henning at DealBook, financial fraud and insider trading cases will remain active in 2013. The entire article provides a cogent summary - it  leads off with the following prediction, which seems inarguably correct: 

"It is not really of question of whether there will be a major white-collar crime that captures the public’s attention in 2013; it’s a question of when and how costly it will be.

If the cases of 2012 can serve as a guide, too many loopholes in the system allow fraud to go undetected.

Take for instance the onetime futures trading firm PFGBest, whose founder confessed to having committed fraud for years at the company, which has about $200 million missing from its accounts. Though futures regulators have spent months wringing their hands on how such a fraud could have gone on for so long, the fact remains that some financiers may keep one step ahead of law enforcement when it comes to white-collar crimes.

Federal prosecutors, however, are likely to remain strongly focused on the insider trading cases. The United States attorney’s office in Manhattan has already racked up an impressive record of winning convictions in every insider trading case that went to trial. They are even winning cases the old-fashioned way by relying primarily on the testimony of cooperating witnesses."

"2012 - The Year of Bank Fraud," says Felix Salmon

Felix Salmon pulled together a stunning list of the 2012 investigations and outcomes involving fraud by uber banks.  Some members of the litigation industry are very grateful. 

 

Second Circuit Revives Lawsuit Prohibiting Non-Lawyer Ownership of Law Firms

The Second Circuit has revived and paved the way for an expansion of  law suit challenging New York's statutes regulating non-lawyers and law firms. The Wall Street Journal's law blog has the full story

UK Claiming Services - Growth and Criticism

Claiming services are a growing component of the UL litigation industry. Some services are opaque about the use of lawyers (to the frustration of some lawyers) but some include solicitors. and some do extensive advertising. Some do good work and some others are not so good. The claiming services industry is garnering more attention these days because of credit insurance claiming ("PPI claiming') in the UK. This new Financial Times article covers the topic at a broad level - some excerpts are below. Other articles also cover smaller picture points, such as ways to claim without using a claiming service. The BBC provides here a broad picture of PPI claiming - some say it will result in payouts of £ 10 - 20 billion. 

Three take aways? Today, litigation is an industry all over the world, and not just in the US. Second, claiming services will continue to increase for so long as defendants do not pay agree to pay out quickly and completely through automatic payment without claims having to be filed, or through simple structures easily accessible to claimants, such as a well run and "fair" trust fund. Another take away is that it is expensive and time consuming to clean up after large scale problems. Some might think more time and attention should be paid to avoiding the problems. 

The FT excerpts are as follows, and the article include numerous links:

 
“Claims management companies are seen as pariahs and banks have somehow managed to paint themselves as worthy institutions,” says Anthony Sultan, chairman of the Claims Standards Council’s financial services group, which represents the industry. “But, if banks had played fair in the first place, then there wouldn’t be a claims management business.”
About 1,000 financial CMCs are licensed by the Ministry of Justice, which reports that the sector’s annual turnover rose by two-thirds in the year to March 2012 to £313m.
The companies have grown out of a sector that previously concentrated on personal injury claims.
One of the largest firms, Cheshire-based Gladstone Brookes – which is owned by 32-year-old Lisa O’Neill – reclaimed PPI premiums worth £118m in the first 10 months of 2012. Based on its stated fee of 25 per cent, this suggests it has made in the region of £29m this year.
And as the number of PPI mis-selling cases has grown, so have the claims firms.
Until a few months ago, Empire Claims was based on the fifth floor of Davina House, an office block in north London filled with cramped rooms and stained carpets.
The company, founded in 2007, moved to larger premises in Kent at the start of the year as its workforce expanded.
ISmart, set up in 2007 by three former employees of a cash-and-carry chain in their late 20s, has nearly tripled its workforce in the past year.
The Northampton-based business has reclaimed £160m in PPI so far, suggesting its cut is near £40m.
Paul Fakley, managing director and a former marketing chief at RBS Insurance, says the market for PPI could be worth £50bn. “If the banks write to customers who they think were mis-sold policies as they are supposed to, then current estimates could be the tip of the iceberg,” he said.
But the industry’s success has attracted criticism.
Lloyds Banking Group has contacted the Financial Ombudsman Service to ask whether CMCs should shoulder the £850 cost of each claim that turns out to be erroneous.
The bank recently announced an extra £1bn provision for PPI, taking its expected bill to £5.3bn.
However, it says that about 40 per cent of the claims it receives from CMCs – which account for half of all it receives – are either duplicates or from customers who did not have a PPI policy with the bank.
 

 

The Ratings Agency Wars Illustrate that the Landscape for Multi-Jurisdictional Litigation Can Quickly Change

The financial ratings agencies  face major lawsuits all over the world for their roles in the financial fiascos of the late 2000s. This week highlighted how quickly that world can change, and the reality that legal results in other countries are now just a part of the mix of precedent followed by courts, and the harshest jury of all, investors.

The specifics? Alison Frankel's new post at On the Case provides the big picture, and links to rulings. For purposes of this post, her opening paragraph is pasted below because it provides the factual overview to support the big picture point about global impacts and quick changes: 

"This has not been a good week for Standard & Poor's. Stock in S&P's parent company, McGraw Hill, took a dive Monday after an Australian judge ruled that S&P is liable to investors for its misleading ratings of collateralized debt obligations. On Wednesday morning in federal court in New York, rating agency nemesis Shira Scheindlin -- the U.S. district judge presiding over two institutional investor fraud cases against the agencies and Morgan Stanley -- agreed to reconsider some previous rulings in favor of the defendants. And then Wednesday afternoon, a state court judge in Chicago ruled that Illinois Attorney General Lisa Madigancan proceed with her claim that S&P engaged in deceptive business practices when it told the investing public that its ratings of complex structured finance products were objective and independent."

Dilbert, Lawyers and Product Liability

Every now and then, Dilbert lampoons lawyers and mentions product liability issues. Today is one of those occasions

Privileg Upheld for Discussions with Litigation Funders

A new post at On the Case covers a new federal court ruling sustaining privilege claims involving communications with litigation funders, and includes links to several of the underlying documents. The article also covers a couple of prior rulings that went the other way. 

The World Shrinks Even More - UK and US Supreme Court Bloggers Meet and Talk

The world truly is shrinking. The UKSC blog covers the UK Supreme Court.  This post from the UKSC blog describes their group of lawyers meeting and talking with Lyle Deniston who provides US Supreme Court coverage on SCOTUS blog. The two blogs are the most reliable and easy way to keep up with the two courts. 

What Time to Start Depositions ?

The lighter side of the litigation industry - two blog posts (here and here) on the unwritten rules on the time to start depositions, at least on the east coast. 

Mass Tort Consolidation and Venue Battles - More Parts of the Madison County and Philadelphia Stories

Venue battles are especially important for mass tort consolidations, and are always interesting to consider.

For example, Madison County is on its way to a record year of hosting asbestos cases filed on behalf of plaintiffs who live all over the nation. There are occasional forum non conveniens motions filed by defendants, but really not that many given the volume of cases with out of state plaintiffs. A conclusion one could draw is that business is getting done at amounts apparently reasonably acceptable to most of the parties onall sides, at least for now. On the other hand, the judicial hellholes web site run by the US Chamber of Commerce includes a September 24 post indicating that a "grassroots group" is trying to defeat the retention of four Madison County judges who face judicial retention elections. The targets include Chief Judge Ann Callis. Back in 2006, Judge Callis was not the target of the ICJL and other pro-defense groups (collected posts at link - word search for Callis mention in post dated Nov. 6, 2006). After the election, she even was invited to and did speak about "reforms" at a lunch hosted by the ICJL.

There is a different story in Philadelphia. That court's mass tort calendar recently has been the target of much bad press generated by the US Chamber of Commerce and related groups. There also have been some significant plaintiff's verdicts in trials over the last few years - see here ($78.5 million in medical malpractice during a Sunday birth when physician was forced to use an obsolete ultrasound machine with no technician available in the short term), and here ($ 72.5 million verdict against Pfizer in a  Prempro case involving claims that hormones caused breast cancers in three women). It is therefore not surprising that the venue is receiving defense motions aimed at limiting the docket. For example, Philadelphia is now the subject of WSJ articles and venue motions by Roche aimed at limiting the role of Philadelphia in Accutane cases.  That said, the Accutane defendants also are attacking case consolidations in other courts, including the MDL

Conclusion? It's all about the economics of claiming and defending, and comparative advantage perceptions (or reality). When there are hundreds or thousands of cases at issue, a change in the playing field can be significant. 

Jury Trial Experiments Up for Demonstration and Debate at National Symposium on the American Jury System

Should trial lawyers be allowed to make daily or weekly closing or opening comments  to a jury? Should the judge give an opening talk about the nature of the case?  What about putting expert witnesses on in a back-to-back manner?
 
Changes of the sort described above, and more, will be presented and debated  at the 2012 National Symposium on the American Jury System at Northwestern University School of Law on Oct. 4 and 5. There is no fee,  and CLE credits will be provided.  The symposium is organized by professor Shari Seidman Diamond of Northwestern's law school and N. D. Ill. Chief Judge James F. Holderman.
 
The full schedule and registration information is available at law.northwestern.edu/faculty/conferences/jury/.
 

The Undeniable Truth About Corporate Misconduct and Whistleblowers"

"The Undeniable Truth About Corporate Misconduct and Whistleblowers." That's the title of a stark new Corporate Counsel article suggesting that corporate lawyers accept the "new normals" by cleaning up behaviors, complying with laws and planning on whistleblowers when clean up does not happen.

The author (Donna Boehme) has a view/bias in the sense that she works in and makes a living from compliance. But that's not a valid excuse for ignoring a message that's plainly correct. Whistleblowers and bounties are here to stay, at least for so long as there's misconduct to report. 

The Amicus Brief Composed of Cartoon Panels

A recent amicus brief made the media and email rounds in the US because the brief consisted of well-done cartoon panels. The brief is here.

Chamber of Commerce State by State Rankings

How to create more spin and keep a theme in the air.  The U.S. Chamber  of Commerce's Institute for Legal Reform released its latest survey ranking states U.S. businesses perceive as having the most "fair and reasonable" tort liability systems. 

Despite a recent award of over $ 300 million in attorney's fees, the most loved state of course was Delaware. Next were states where there can't be too many lawsuits - Nebraska, Wyoming, Minnesota and Kansas. The not loved states at the bottom were West Virginia, Louisiana, Mississippi, California and Illinois.
 
The survey is based on perceptions of inside lawyers and executives.  The rankings are here. Perhaps some day judges, mediators and court system executives will start a ranking of the most litigious and least fair insurers and non-insurers.

NCAA Litigation

The NCAA involves vast amounts of money, most of which goes upstream instead of to the athletes and the unsung workers, such as assistant coaches. A result? Plenty of litigation, as described in this top 10 list of litigation. 

Federal Court Strikes Down Private Arbitration By Delaware Chancery Judges

Delaware's famed Chancellors are no longer available for public hire for private arbitration cases. Delaware's experiment - good or bad - was struck down by a federal district court judge as a violation of a First Amendment rights. Steven Davidoff at DealBook has the story here.  This prior post notes the filing of the lawsuit and related history regarding the private arbitrations. 

LAW360 (paywall) provides an interesting summary of statements related to a planned appeal. The gist? Private arbitration and dispute resolution is big business, with many competitors, and Delaware wants to be in the mix. 

$300 Million Attorney's Fee Award Affirmed by Delaware Supreme Court - Now is Delaware a Judicial Hellhole ?

$300 million attorney's fees awards are not common. Even in Madison County. But now the Delaware Supreme Court has approved Chancellor Strine's award of $ 300 million of fees in a contingent fee case related to a massive fraudulent conveyance case (Grupo Mexico and Southern Copper) that resulted in a $ 2 billion verdict. The opinion is here; a prior post asks if the award makes Delaware a judicial hellhole. So far, I've not heard that said, publicly.  

Judge Strine's view? According to his opinion: 

"[T]here’s an idea that when a lawyer or law firms are going to get a big payment, that there’s something somehow wrong about that, just because it’s a lawyer. I’m sorry, but investment banks have hit it big, a lot of the bigger plaintiffs’ lawyer firms have hit it big. They’ve hit it big many times. And to me, envy is not an appropriate motivation to take into account when you set an attorney fee. It’s not."
 
Supreme Court Justice Berger was not impressed by his reasoning, and so dissented.

California Readies Statute to Limit Time for Depositions

California appears ready to join the parade in limiting time for depositions. Its legislature has approved a  new statute limiting most fact depositions to 7 hours, and complex fact witness depositions (e.g. asbestos cases) to 14 hours, with both time limits subject to adjustment by court order. The statute is here - hat tip to LAW360 for the story and link to the statute. According to its article, the statute was heavily negotiated by all sides, including plaintiffs, defendants, and insurers. The repeat players apparently all want to limit time and expense. The statute still must be signed by Governor Brown. 

Key point. Asbestos defendants now face additional challenges in acquiring information needed to prove up the proportionate fault of bankrupt entities or entities such as the Navy. Time will tell how the defendants react. 

Random or Non Random Acts of Spamming Asbestos Lawyer Blogs

The Internet and social media produce odd factoids. In one blog post, a plaintiff's asbestos lawyer in Florida (Justinian Lane) pointed out that one of his blog posts was "comment spammed" by a New York plaintiff's law firm. He did not name the offending firm. 

Ralph Nader's August 2012 Letter to Plaintiff's Lawyers Regarding Tort Reform

I'm not shilling for Ralph Nader. Indeed, I still haven't forgiven Mr. Nader for indulging his ego and costing Mr. Gore the Presidency in 2000. The election of President Bush II set back science and law in some serious ways, with stem cell research one of the key victims. 

But, a recent "open letter" letter by Mr. Nader to plaintiff's lawyer is online, and provides an interesting view of the tort litigation industry. 

US State Bar Admissions - More Moves Towards Interstate Mobility - The Litigation Industry Will Benefit

Some members of the litigation industry - like some members of non-law businesses  -  prefer mobility across borders. In the US, that means rule-making, negotiating for, or litigating to obtain easier admissions to the bars of the various states. The moves are continuing and over a decade or so seem destined to provide national flexibility in perhaps all but a few states (e.g. Florida; perhaps Delaware). The moves towards interstate mobility certainly should gain some further traction because current law school graduates face such a difficult market, but popular markets may also seek to protect their franchises. For example, one might think that Delaware lawyers will be loathe to reduce their roles as gate-keepers with barriers in place to limit access to the Chancery Court.  

One of the newest moves is a federal suit challenging Arizona's reciprocity rule. Interestingly, Arizona actually does allow reciprocity, but it's limited to lawyers from states that also allow reciprocity. That aspect of the law is being challenged by lawyers from states that do not allow reciprocity. 

A pretty good summary of recent developments is a July 20, 2012 New York Law Journal article by Karen Sloan. The article reviews various developments, including the states adopting the Uniform Bar Exam. On that topic, the key quote is:  "The concept of a uniform exam has been batted about for two decades, but has gained momentum since 2010, when Missouri became the first state to sign on. Nine states have followed: Alabama, Arizona, Colorado, Idaho, Missouri and North Dakota are using the test now; Montana, Nebraska, Utah and Washington will begin using it next year. Several states are seriously considering adopting the test."

A website known as Barreciprocity.com provides a good state-by-state summary of reciprocity laws and related rules. 

 

The Apple-Samsung Wars Inside and Outside of the Courtroom

Today, courtroom events are only part of the effort to control spin and perception, factors which can matter if one expects a trial outcome to impact share price or create an impression of vulnerability to litigation. The Samsung-Apple wars are a new and prominent example of why lawyers and their clients need to plan and think in multiple dimensions. 

New York Jury Urges SEC to Continue Investigating the Finance Industry

Yesterday, a New York federal court jury issued a message urging the SEC to continue to investigate the financial industry. The statement was issued by the jury after it returned a verdict in a civil case filed by the SEC against a mid-level employee (Brian Stoker) of a mega-bank. In short, the SEC's civil claims asserted negligence by the employee in writing securities investment documents that failed to tell investors that the bank was using its own money to bet against the securities it was offering to investors. The defense argued that the defendant was being offered up as a scapegoat for the actions of his bosses. The jury accepted the defense. But the jury also went further, and took the unusual step of issuing the following statement urging the SEC to continue investigating the finance industry:  

 

“This verdict should not deter the S.E.C. from investigating the financial industry, to review current regulations and modify existing regulations as necessary." 
 
 
"The statement appeared to echo frustration felt by many Americans that Wall Street executives had not been held responsible for its questionable actions leading up to the financial crisis, and that financial industry reform had thus far been inadequate.

In his own statement, Robert Khuzami, the S.E.C.’s director of enforcement, appeared to take the jury’s message to heart.  “We respect the jury’s verdict and will continue to aggressively pursue misconduct arising out of the financial crisis,” he said.
***
As Mr. Stoker prepared for trial, his former employer agreed to pay $285 million to settle a civil complaint brought by the S.E.C. related to the same deal. But Judge Rakoff rejected that settlement. Calling the amount of money Citigroup had agreed to pay “pocket change” for the bank, he said the settlement deprived the public “of ever knowing the truth in a matter of obvious public importance.”
 
Juries are amazing. In my view, they usually get things right. Time will tell how many people listen to the advice from this jury that heard many details of the operations of the finance industry in connection with CDOs. 
 
 
 

 

Who Gets What - Ken Feinberg's New Book

Ken Feinberg has put out a new book on his work resolving claims related to actual or alleged mass torts. It's titled:  Who Gets What : Fair Compensation after Tragedy and Financial Upheaval.  It's on my list. 

Set out below are some reviews from Amazon:

Kirkus Reviews
“An insider's account of how compensation decisions are made after major disasters…An opportunity to get to know a man whose work has affected thousands.”
 
 
Washington Post
“A clearly written and emotionally contained new book”
 
About the Author
Kenneth R. Feinberg ... has been front and center in some of the most complex legal disputes of the past three decades: Agent Orange, asbestos, the closing of the Shoreham Nuclear Plant, and 9/11. He is adjunct Professor of Law at Georgetown University, the University of Pennsylvania, Columbia University, and the University of Virginia.
 

Delaware Chancellors May Kill the First to File Silliness of Derivative Class Actions

Delaware's chancery judges are continuing to push back against the idea that the first law firm to file a complaint will win the role as class counsel in derivative claim class action litigation. Instead, they are pushing for pre-suit investigation and well done claims. One could wonder why it took so long for this day to arrive. But its arrival certainly seems real. Alison Frankel has the full story here. Change is a constant in the litigation industry. 

Overseas Arbitration Panel Deemed Sufficient for Issuing Discovery in the US Under

A Mondaq article from Mayer Brown brings news that "[t]he US Court of Appeals for the Eleventh Circuit, in Consorcio Ecuatoriano de Telecomunicaciones S.A. v. JAS Forwarding (USA), Inc.,1 has held that a foreign arbitration panel is a "tribunal" within the meaning of 28 U.S.C. §1782, thereby authorizing parties to such arbitrations to seek discovery from a United States district court pursuant to that statute..... The Eleventh Circuit decision in Consorcio Ecuatoriano is the first appellate court decision to address this "tribunal" issue squarely since the Supreme Court's Intel decision" which suggested but did not require the result reached by the 11th Circuit.

 

Applying Twiqbal to LIBOR Claims - Wishing for Too Much?

Perhaps the ultimate "Twiqbal" argument is now playing out in litigation regarding LIBOR fraud by several massive banks.  Barclays and other banks are busy admitting LIBOR fraud and preparing to pay massive fines, such as Barclay's $ 450 million payment. But meanwhile other banks are moving to dismiss antitrust claims from the LIBOR fraud, claiming that the frauds are not adequately detailed in pleadings to date. As to the big picture, Alison Frankel has the more complete story - and links to pleadings -  in a new blog post. And more facts are now public about Barclay's role in LIBOR fraud. Things do not look good as even the Economist is asking if the finance industry has hit its "tobacco moment." 

The Twiqbal pleading standard has been massively helpful to business as it has knocked out many claims. But, as with other principles, one needs to keep an eye on the swinging pendulum. That is, too much Twiqbal success today may cause Twiqbal's demise tomorrow if it is applied to knock out claims that appear pretty darn true in light of the limited materials made public to date. Twiqbal motions may end up as another example of the need to be careful about wishing for too much. 

Lawsuit Challenging Dodd-Frank is Online

The litigation industry is now a major vehicle for delaying or seeking to renegotiate  legislation. Conglomerate has a brief but pointed post commenting on the intellectual poverty of the newly-filed challenge to the Dodd-Frank legislation, and a link to the complaint. 

Delaware's Chancellor Strine Speaks Out on Various Issues Regarding the Litigation Industry

Kevin LaCroix at D & O Diary has an interesting post covering public comments by Delaware Chancery judge Leo Strine. Many of the comments are focused on d & o claims, but others are broader, such as his comments on attorney's fee awards and the prospects for mischief created by state courts competing for litigation. Key excerpts follow on those topics.  

 

"In response to a question, Strine discussed the massive fee award he granted to the plaintiffs’ attorneys’ in the Southern Peru case. As discussed here, that case had resulted in an award of $1.263 billion, which with interest, approach nearly $2 billion. Strine awarded fees of $285 million, which he defended saying, the only reason the plaintiffs received the massive judgment in the case was the efforts of the plaintiffs’ lawyers. He said that he has much more trouble with cases like the disclosure-only merger objection suit settlement, where the plaintiffs’ lawyers wind up walking away with a $400,000 fee award. ...   The real problem is not a case where plaintiffs’ attorneys produce real value. If the plaintiffs has “delivered something really beneficial, they should be rewarded accordingly.” Rather, the problem is that there are too many incentives for plaintiffs’ attorneys to bring suits where the only beneficiaries are the attorneys. We have, Strine said, an “excess of litigation” that “has no meaningful societal benefit.” Strine commented that the extra costs associated with this litigation have caused the cost of capital for American companies to rise."


"Strine rejected the suggestion that the Delaware courts might be managing fee awards because of a competition from other states’ courts. Strine stressed that Delaware’s courts are not “trying to attract litigation.” Just the same, he took care to question the effort of other states to try to develop specialized business courts. You can, he said, file suits in “goofy place” and what you will wind up with is corporate law that is “junk.” The movement to form specialized business courts has been “problematic” because all too often those courts have “become places where you can forum shop.” His view is that all courts, by their own account are “overburdened.” That being the case, Strine contends, the each court should “stay in its own lane.” When something is appropriately “in someone else’s lane, then let them do it.”"

 

Asbestos Litigation Interets Focus Money and Attention on Illinois's 5th District Appellate Court Race

Plaintiff's asbestos firms are pouring money into an election for a seat on the intermediate Illinois appellate court that overseas Madison County and St. Clair County. The contributions are described in an article from the Madison County Record. Set out below are asbestos related excerpts - note especially the $10,000 contribution from Simona Farisse - she's a California lawyer who has been devoting increasing efforts to filing cases in Southern Illinois and trying to obtain trial slots in southern Illinois.  Meanwhile, attention lies ahead from the defense interests lead by Ed Murnane. 

 

"Nearly $55,000 has made its way into the 5th District Appellate Court race since April and the majority of that money landed in Democrat Judy Cates' campaign coffers with the help of about a dozen Chicago lawyers and law firms. 

Cates is a Swansea attorney and a past president of the Illinois Trial Lawyers Association. McGlynn sits behind the St. Clair County bench on appointment. Messages and emails left for both candidates were not immediately returned Thursday.

***

Records show that 13 of the 17 most recent contributions to Cates' campaign came from individuals, law firms and other groups located outside of the 5th District. 

Her biggest donation in the current reporting period - $10,000 - was made by California-based Farrise Law Firm, a trial lawyer firm that handles a variety of complex civil litigation matters, as well as asbestos and wrongful death cases.

Cates' committee also reported receiving $26,000 in separate donations from Chicago and River Forest trial lawyers at Cooney & Conway, which focuses its practice on asbestos, medical malpractice and personal injury matters. 

Cates' committee reported having nearly $19,000, which included a $10,000 contribution from Simmons Law Firm in Alton, in its coffers as of March 31. McGlynn's campaign, however, has raised much less, reporting a $7,100 balance as of March 31. 

****
Ed Murnane, president of the Illinois Civil Justice League (ICJL), said he expects more money will pour into the 5th District race as election season heats up. His group monitors judicial races throughout the state and typically provides candidate endorsements. The ICJL, which focuses its efforts on the civil justice system, was heavily involved in the campaign against Justice Thomas L. Kilbride's 2010 retention race. 

"We are paying very close attention to this race," Murnane said of the 5th District race between Cates and McGlynn. "We have not gotten actively involved yet, but we certainly intend to. July will probably be busy for us." 

The ICJL supported McGlynn when he ran against Stewart in 2006 and opposed Cates in her 2008 race against Wexstten. Although it has not formally announced its endorsements for the upcoming election, Murnane said he doesn't expect the group's position on the two candidates will change. 

"This is probably not going to be a very difficult decision for us to make," he said. "I expect we will get involved in the McGlynn campaign and raise some money for him."

Murnane said the race for the open appellate court seat could prove to be extremely important in a few years. With Supreme Court Justice Lloyd A. Karmeier's term ending in 2014 and no word on his future plans, Murnane said justices on the 5th District Appellate Court could find themselves in a perfect position to run an aggressive campaign for the state high court. "
 
 
 

The Catholic Church Joins the Litigation Industry Lobbyists

Sex abuse cases against  priests have resulted in over $ 2 bilion of settlements paid by various Catholic archdioces. So, now, the Catholic Church has joined the ranks of litigation industry lobbyists trying to influence state legislation to help reduce its litigation risks arising from sex abuse cases. The story is in the NYT in an article by Laurie Goodstein and Erik Eckholm. 

Bartlit Beck on Law Firms and Contingent Fees

There are frequent complaints that  "contingent fee" lawyers are ruining business. Is is therefore refreshing to read Fred Bartlit's writings regarding the reality that the firm's great success for clients and the firm is tied only to fees based on the outcome. Thus, the fee is contingent on the outcome, but it may not be a typical contingent fee because if the firm is representing the defendant, it may be limiting the loss instead of seeking a recovery. Mr. Bartlit's latest is this ABA Journal article.  

Big Tobacco Takes Regulatory Capture to a New Level by Paying Countries to Argue Its Positions on Plain Package Labeling

Now big tobacco is paying Ukraine and Honduras to oppose Australia's plain label rules for cigarettes. The story is at Opinio Juris. Apparently there are no limits when selling carcinogens. 

Pat Fitzgerald Retires As U.S. Attorney in Chicago After a Great 11 Years

US Attorneys are an important part of the litigation industry, and few of them can match Pat Fitzgerald, the US Attorney in Chicago for the past 11 years. Yesterday, Mr. Fitzgerald announced his imminent retirement from the job he did so very well. Set out below are excerpts from a Chicago Tribune article today - expect to see many more articles tracing an incredible 11 year run. Kudos to Mr. Fitzgerald and his strong team of Assistant US Attorneys. 

"Patrick Fitzgerald will be most remembered for taking down two Illinois governors, but the prosecution of a ruthless ex-Chicago police commander may say more about the outgoing U.S. attorney's style, boldness and willingness to risk a courtroom loss in pursuit of what he felt was right.

For decades, a parade of African-American men had accused Jon Burge of torturing them into false murder confessions that often led to long prison terms. Burge had even been fired for mistreating a suspect, but no criminal charges were ever filed and the retired cop had for years been living quietly in Florida collecting his police pension.

That is until Fitzgerald figured a way around statute-of-limitation problems that appeared to bar prosecution. A federal jury convicted Burge not of torture but of lying about it under oath during a civil lawsuit, and he was sentenced last year to 41/2 years in prison.

****

"It's sad that it took so long, but it would be horrible if it was never addressed," Fitzgerald said after the verdict.


On Wednesday, the 51-year-old Fitzgerald gathered staff in the ceremonial courtroom at the Dirksen U.S. Courthouse to tell them he was retiring from the office effective June 30, ending his nearly 11 years in the sensitive post, by far a record-long run for a U.S. attorney in the Northern District of Illinois.

A notorious workaholic, Fitzgerald said he had no job lined up and planned to take the rest of the summer off, likely the longest free stretch in his entire adult life. Fitzgerald received a standing ovation and became emotional more than once during the meeting with staff, sources said.

"He came in without having any roots here. He came here with a great reputation, but he had to earn his spurs in this community," said former U.S. Attorney Anton Valukas. "And he certainly has done that. He has served with distinction and honor."

Patrick Collins, who spent six of his 12 years as a federal prosecutor under Fitzgerald, said Fitzgerald's time in office "was like no other's."

"It was a decade of successful, high-profile prosecutions by a guy who was unanimously well-liked inside the office," Collins said. "I don't think any credible person could second-guess his motives. You could disagree with his prosecutions but not question his motives. That's the ultimate compliment for a United States attorney."

The corruption convictions of former Govs. George Ryan and Rod Blagojevich stand as the marquee cases under Fitzgerald's watch, but they were hardly the only high-profile ones: Lewis "Scooter" Libby, a top aide to then-Vice President Dick Cheney; scamming Chicago Sun-Times owner Conrad Black; murderous crime syndicate thugs such as Joey "the Clown" Lombardo; terrorism suspects; and an array of crooked political operatives including the patronage chief and streets and sanitation commissioner for former Mayor Richard Daley.

***

New Summary of Accounting-Related Securities Class Action Lawsuits

The litigation industry is an increasingly quantifiable industry with actual metrics based on observed and recorded facts, as opposed to spin and one time examples of extremes at either end of the spectrum. Thus, Cornerstone has now published a new survey of accounting-related class action securities suits. The study is linked to and commented on by Kevin LaCroix at D & O Diary.  

The post also includes a bonus link to an interesting article on the 10th Anniversary of SOX. 

Mega Risks and Law Firms

One piece of the litigation industry increasingly involves major lawsuits against law firms. For a single and massive example, consider AmLaw Daily's  recent interesting post on a $ 3 billion malpractice claim against Dewey related to an insurance disaster at Great American. For more examples of all kinds, consider this new lawsuit-palooza entry summarizing various recent large lawsuits against law firms. 

 

Attorneys General Support Legislation to Permit Failure to Warn Suits Against Generic Drug Makers

Litigation industry forces continue to evolve. This week, 41 Attorneys General signed a letter supporting legislation to overturn the U.S. Supreme Court's decision prohibiting failure to warn product liability lawsuits against generic drug manufacturers. The group includes both Republicans and Democrats. Thus, it appears both sides recognize that it is short-sighted and not desirable to let generic manufacturers escape the risks and potential liabilities that face brand name manufacturers. 

 

Opportunity to Comment on Rules for Delaware's Specialized Commercial Court

As if Delaware Chancery court is not unique enough, a special court for complex commercial litigation was created in Delaware two years ago as part of Delaware's efforts to further its economy based around serving corporate America. Now there's an opportunity to comment on or suggest rule changes for the commercial court. Specifics are in this post at the Delaware Business Litigation Blog

Lawyers Viewed as an Economic Positive - In Mediaval Germany

Alert the US Chamber of Commerce - economists can see lawyers as an economic positive, as detailed below in a post from the Conglomerate. But, no doubt the Chamber would point out that the medieval German lawyers probably were not litigators - we are just bad guys getting in the way of the various spreadsheet jockeys sometimes portrayed as masters of the universe. 

 

Lawyers as Transaction Cost Engineers in Medieval Germany
Posted by Erik Gerding

Here is a highly productive way for business law professors to procrastinate from grading exams:

The National Bureau of Economic Research just circulated a new version of a paper that provides a medieval complement to the law & finance literature and to Gilson's lawyer as transaction cost engineer idea.  The paper by Davide Cantoni and Noam Yuchtman presents evidence that the training of commercial lawyers by new universities contributed to the expansion of economic activity in medieval Germany. 

 

Litigators Crossing the Pond - UK Based Litigation Firm to Open in Delaware and New York for 'Investor Protection Litigation"

Stewart Law used to be a UK only firm focused only on litigation, Today, it's opening offices in New York and Delaware to do securities litigation for investors. That is, plaintiff's work.  The press release and an article say more about the move. The bottom line is that the litigation industry continues to globalize.  

American Bar Association Gives Up On Non-lawyer Ownership of Law Firms - More Litigation Funding to Follow

The American Bar Association has given up on pushing changes to allow non-lawyer ownership of law firms, and related activities. Currently, non-lawyer ownership is allowed in the UK, Australia and Washington, D.C. 

The ABA's decision to give up is not a surprise. The venerable ABA is useful, but not much for controversy, and this topic is controversial. The issue also gets into federal versus state issues since most states regulate lawyers, sometimes in ways intended  to support local interests (think Florida, Delaware, and South Dakota, among others). We will see how the ownership issue unfold at the state level.

One result is plain - this decision means that litigation funding will continue to grow. Why?  Because lawyers are businesspersons too, and all businesses need capital from some source. These days, investing more personal capital in law firms can be riskier than it was in the past. Today,  large law firms sometimes implode (e.g. Howrey, Dewey, to cite recent examples). And, plaintiff's firms are less stable as they increasingly practice in many states through satellite offices, and fairly frequently see  "young turks" spin out and create new firms because of issues over dividing the pie. It follows logically that litigation firms will continue to increase their demands for litigation funding.  

Collected Information on Securities Whistleblower Information

Here's an interesting post about a web site focused on SEC whistleblower information.  

 

Mesothelioma Web Site Associates with An Investigative Reporter

The uses of social media continue to evolve as related to mass tort litigation. Set out below is a web site page evidencing a new event - an investigative journalist  (a real one)  becoming associated with a "mesothelioma" web site. The reporter - Gary Cohn - already knows something about asbestos as evidenced by the fact that he and another writer won a Pulitzer Prize for writing about asbestos hazards (and others) arising from the "shipbreaking" process and industry.  It will be interesting to see the topics covered by Mr. Cohn. 

______________________________________________________________________________  

Joining the Mesothelioma Cancer Alliance in 2012 as a reporter and professional researcher, Gary Cohn is a freelance investigative journalist and writer. Gary will headline our Investigations Department, dealing with national issues concerning occupational disease, corporate whistleblowing, and the healthcare industry in addition to other timely and compelling topics.

In addition to working with the MCA, Gary currently serves as adjunct professor of journalism at the University of Southern California Annenberg School of Journalism. Outside of USC, he works closely with BailoutSleuth.com and JunketSleuth.com, non-profit journalism organizations that investigate business, the economy and the federal government.

Gary is a veteran professional journalist and brings a wealth of high-level reporting experience and international recognition to the Mesothelioma Cancer Alliance. Gary has worked with the some of the world’s preeminent news organizations, including but not limited to, The Los Angeles Times, The Baltimore Sun, the Philadelphia Inquirer, The Wall Street Journal (Miami Bureau) and Bloomberg Markets Magazine.

Gary’s interests are as wide-ranging as the subjects he has covered in the past, ranging from the CIA’s covert war in Honduras, to the challenges facing AIDS patients in accessing life-saving drugs.

Gary, in conjunction with co-author Will Englund, was awarded thePulitzer Prize for Investigative Journalism in 1998 for his three-part investigative series, The Shipbreakers. Below are some of Gary’s many professional accolades..

Notable Journalism Awards

  • Pulitzer Prize for Investigative Reporting, 1998, for the series The Shipbreakers. The series detailed the dangers to workers and the environment when old ships are dismantled.
  • Finalist, Pulitzer Prize for Public Service, 1996, for the series Battalion 316.
  • Finalist, Pulitzer Prize for National Reporting, 2002, for the series Of Patients and Profits.
  • George Polk Award for environmental reporting, 1997, for the series The Shipbreakers.
  • Selden Ring Award for the best investigative story of the year, 1998, for the series The Shipbreakers.
  • Investigative Reporters and Editors (IRE) Medal, 1997, for the series The Shipbreakers.
  • Overseas Press Club of America Award for 1997 for the series The Shipbreakers.
  • Sigma Delta Chi's first prize for investigative reporting for 1997 for the series The Shipbreakers.
  • Barlett & Steele Awards for Investigative Business Journalism, 2009, silver award, for magazine story AARP’s Stealth Fees Often Sting Seniors with Costlier Insurance.

Download “The Shipbreakers

Learn more about Gary’s Pulitzer Prize-willing investigation of the shipbreaking industry, including the asbestos and other inherent human health hazards encountered when dismantling retired vessels. We have the story available for download here.

Shipbreakers - Part 1 (PDF)
Shipbreakers - Part 2 (PDF)
Shipbreakers - Part 3 (PDF)

Stay Connected with Gary!



Read more: http://www.mesothelioma.com/blog/authors/gary/bio.htm#ixzz1rvJKaZXw

 

Former GE General Counsel Comments on Regulation of Business - It's Not so Simple

GE's former General Counsel, Ben Heineman, Jr., is a widely respected lawyer who ran legal for the massive industrial and financial giant. In an interview with Corporate Counsel, he offered the following comments on "regulation" of business. His comments  are well worth noting - the answers are NOT as simple as asserted by some on both sides.  The key quote is: 

CorpCounsel: We hear frequent complaints that businesses are subject to increasing regulations. What do you think about today’s regulatory framework? Are regulations bad for business?

Ben Heineman, Jr.: The descriptive answer is that businesses are facing more regulation everywhere in the world. There clearly has been a trend of re-regulation in the United States, after a period of de-regulation. That is obviously true in financial services, but there’s clearly increasing enforcement in the Foreign Corrupt Practices Act (FCPA) area, and strong environmental regulations, and so on. 

But if you go to Europe, the E.U. is the master of regulations. We used to laugh and call it a regulatory superpower. If you’re in Europe, whether it’s privacy laws or competition laws or any number of subjects under pan-European jurisdiction, there’s going to be regulations there. And then as you go out into the world, even in a place like China there’s been a tremendous outpouring of law and regulation in the last 10 years. Chinese labor law in its current complex form, for example, did not exist 10 years ago. Really, wherever you go in the world, there is both increasing regulation and some form of enforcement. Places like China are especially difficult, because there’s lots of regulation but very episodic or erratic enforcement, and because the Communist Party still controls a system of rule of men, not rule of law. 

Whether this is good or bad for business, you’d have to go subject matter by subject matter, and almost provision by provision. I believe deeply that regulations, number one, promote market efficiencies such as antitrust law and securities law—they basically deal with externalities that harm the social good if they’re not regulated to some degree. And regulation is necessary to create the fundamentals of societal security, order, education, and infrastructure. They come in different shapes and forms and they serve different purposes, but I don’t think there’s much question that over the last 100 years we’ve evolved to a mixed economy, where the government promotes market efficiency, social goods, and societal fundamentals. 

Update on Litigation Funding Businesses

Kevin LaCroix's  D & O Diary includes this new post providing updated news on litigation funding businesses in the US. 

Cancer Research Budgets in Crisis - Will Defendants and Insurers Invest in Young Scientists Instead of Young Lawyers ?

With cancer increasing and more cancer litigation arriving daily, one might hope for an increase in funding for cancer research in order to find cures which would reduce litigation and damages claims. But, in fact, cancer research budgets continue to stall, and thus are actually decreasing because of inflation. The facts are that the funding has been held flat for the National Institutes of Health for the past decade (that is, most of the Bush II administration and the Great Recession years). As a result, the American Association for Cancer Research opened its annual meeting in Chicago this week by declaring a funding emergency. Obviously the association has a vested interest in funding. That said, the realities of inflation make it plain that in fact research budgets are effectively being cut because they've been held flat for a decade.

Insurers and toxic tort defendants should make their own requests for support more research, and should provide research funding. Consider, for example, that life sciences researchers are in general far cheaper to hire than lawyers, and certainly less expensive than the thousands of "big law" lawyers now working on mass tort cases involving cancer. For example , consider the salaries of postdocs - researchers who have obtained a PhD, and are starting out in the professional world. According to the 2010 Life Science Salary Survey by The Scientist, as of November 2010: "Almost all professional levels in the life sciences are feeling the strain of the current financial situation, but there is one demographic group that always feels it – postdoctoral fellows. Currently, postdocs receiving federal awards make between $37,740 to $52,068 a year, depending on a fellow's level of experience." Full data from the study is online here. In contrast, as of 2010, new lawyers at AmLaw firms were starting at $145-160,000 per year.

Set out below is the text of AACR's April 1, 2012 press release - it's no joke: 

 

 
CHICAGO — Leaders from the American Association for Cancer Research, which today opened its AACR Annual Meeting 2012 here, declared that the ability of cancer researchers to bring the promise of science to improve the outcomes for cancer patients is in peril due to a decade of declining budgets at the National Institutes of Health (NIH).  
 
"For the past decade the NIH budget has remained essentially flat, and when factoring in the rate of biomedical inflation, the agency has lost approximately $6 billion in purchasing power or nearly 20 percent. As a result, the chances that a researcher will be awarded a NIH grant to uncover scientific knowledge and pursue lifesaving treatments have reached all-time lows. At the same time, the number of opportunities for turning our growing scientific knowledge against cancer has never been greater.
 
“As a practicing breast oncologist, I have personally observed the truly remarkable and explosive progress in cancer research, and the acceleration of that progress to benefit patients,” said AACR President Judy E. Garber, M.D., M.P.H., director of the Center for Cancer Genetics and Prevention at the Dana-Farber Cancer Institute and professor of medicine at Harvard Medical School. “Early in my career, I had patients die from HER2 positive breast cancer. Due to advances in cancer research, these individuals can often now be cured of their disease. This an example of the unparalleled opportunities that come from taking basic discoveries to the clinic and which are now under unprecedented threat from reduced funding for cancer research and biomedical science.”  
 
Therefore, the AACR announced this morning that it plans to redouble its efforts to engage with Congress to make research funding a higher national priority, raise public awareness of the importance of continued investment in cancer research, and call on its 34,000 members and broader advocacy community constituencies to join together to help better explain and illustrate the value of cancer research and biomedical science to the economic health and well-being of this nation.
 
“We already see the effects on our most precious resource, young investigators,” said Garber. “This is potentially disastrous, as we are relying on them to ensure the continuing pipeline of new discoveries that will have ever greater impact on the welfare of patients and the public health.”
 
***
 
About the AACR
 
Founded in 1907, the American Association for Cancer Research (AACR) is the world’s first and largest professional organization dedicated to advancing cancer research and its mission to prevent and cure cancer. AACR’s membership includes 34,000 laboratory, translational and clinical researchers; population scientists; other health care professionals; and cancer advocates residing in more than 90 countries. The AACR marshals the full spectrum of expertise of the cancer community to accelerate progress in the prevention, biology, diagnosis and treatment of cancer by annually convening more than 20 conferences and educational workshops, the largest of which is the AACR Annual Meeting with more than 18,000 attendees. In addition, the AACR publishes seven peer-reviewed scientific journals and a magazine for cancer survivors, patients and their caregivers. The AACR funds meritorious research directly as well as in cooperation with numerous cancer organizations. As the Scientific Partner of Stand Up To Cancer, the AACR provides expert peer review, grants administration and scientific oversight of individual and team science grants in cancer research that have the potential for patient benefit. The AACR actively communicates with legislators and policymakers about the value of cancer research and related biomedical science in saving lives from cancer.  
 
For more information about the AACR, visit www.AACR.org. 
 

 

Sobering But Practical Advice for Big Law and Indeed All Lawyers

 This ABA Journal article by Paul Lippe (channelling Jeff Carr) is well worth reading for all lawyers seeking to look ahead as to the future of the practice of law. In short, lawyers will be paid well for advocacy and counseling, but not so well for processing data and providing routine content. The latter two categories of work will fail to generate much revenue because others can do the work as well as and more cheaply as lawyers, and the lawyer monopoly is over as to work in those categories. 

Tort Reform Spin Wars - a New One from the American Tort Reform Association

Here's a new YouTube vide and article with spin from the American Tort Reform Association. As is typical for spin, it's full of sound bites but lacks citations and links to supposedly supporting evidence. Spin doctors usually do not like being limited to the facts. 

Note further that Louisiana's  Republican primary is on March 24. The timing is not a coincidence, and instead the message will blend well with Republican themes of bashing plaintiff's lawyers as the cause of unemployment. On the other hand, some might wonder if the BP spill and the Great Recession were factors in job loss in Louisiana.

What's Ahead for Litigation ? Consider Perrin's Emerging Issues Conference - London - April 12 and 13

  • What mass tort and damage issues lie ahead for plaintiffs, defendants and insurers? 
  • Are there emerging or foreseeable new issues specific to drugs and medical devices? 
  • What litigation changes may flow from new molecular science?
  • What's ahead for insurance and litigation financing?
     

For new thoughts and insights into the future, consider attending an April 12-13, Perrin Conference in London. The one and a half day conference is titled Emerging Risks on Dual Frontiers: Perspectives on Potential Liabilities in the New Decade.  As indicated by the title, the point of the conference is a free-wheeling look out into the future of mass litigation.

The conference is being held at The Waldorf Hilton in London. Jeffrey Baker from Alan Gray, Inc., Cindy Koehler from Liberty Mutual Group, Larry P. Schiffer from Dewey & LeBeouf LLP and Susan Stone from Sidley Austin LLP are this year’s program chairs. Registration and the agenda are here.

Perrin's strong roaster of speakers will cover a wide range of emerging issues. Specific litigation topics include hydrofracking, nanotechnology, genetically modified organisms, climate change, BPA, MtBE, phthalates, asbestos, environmental, and pharma claims.  

Yours truly will provide some insights on potential future  litigation impacts of microRNA, DNA sequencing and epigenetics, as well as examples of new litigation claims arising from new science about old products.

On the insurance side, speakers will cover the mass disasters such as the BPO oil rig disaster, and the mass disasters in the Far East. Other speakers will cover the Solvency II legislation and its impacts for insurance. 

Financing of course remains key to litigation. Therefore, one of the panels will look at the impacts of third party litigation funding (TPLF). The panel will include Selvyn Seidel, who has headed up two litigation financing businesses after having chaired international litigation for Latham - Selvyn "gets"  it all. TPLF continues to grow and is itself a game-changing factor for litigation.

I hope to see you there - it should be quite a gathering.  

 

Investing in Litigation Claims - the MF Global Example

The litigation investment industry continues to grow and expand despite the many who would like to say or think that litigation is not an industry.  This Dealbook article covers investors seeking to buy MF Global claims for 90 cents on the dollar, give or take. The bidders are from Wall Street. A key excerpt follows:

"What was once thought to be a lost cause has erupted into a bidding war among Wall Street firms: Barclays, the Royal Bank of Scotland and the Seaport Group, a little-known firm that specializes in distressed assets, are all scrambling to buy MF Global customer claims.

On Monday, Barclays Capital, the investment banking unit of the London-based bank, agreed to purchase most claims for 90 percent of face value, the people said. R.B.S has said that it will pay 91 percent for the claims of institutions (but not individuals), according to a term sheet. Seaport is hoping to top both offers and add an additional sweetener: $200,000 to help fund the group of customers responsible for negotiating the offers."

Update on Lawsuits Challenging US Restrictions on Law Firm Ownership

In the US, the Citizens United opinion recently taught us that corporations have free speech rights to pour unlimited amounts of money into elections. But woe be unto corporations or others who might want to invest in law firms. Frankly, investing in lawyers and law firms seems like a great way to invest in free speech and conduct. But, for now, the investment walls remain in place. Here's an update article from the New York Law Journal on a new opinion opinion from a New York federal judge (Kaplan) refusing to hear the claim, and also mentioning and linking to developments in other similar cases. 

"Political Litigation" - A View and Strategy

AmLaw today includes an interesting article by Michael Goldhaber on one lawyer's view of "political litigation." Reading the examples and strategies brings to mind the Chevron case, and the posturing of the repeat player constituencies in less sensational mass tort litigation. 

Big Tobacco Loses David Bernick as Inside Counsel

Corporate Counsel has a story on David Bernick resigning his position as inside counsel at Phillip Morris. The article speculates on money issues. Losing Mr. Bernick as inside counsel may or may not mean losing him as counsel - he could return to Kirkland or create his own firm or ....

One has to think this is not good for big tobacco - Mr. Bernick is a very creative lawyer and leader in mass tort litigation, as described when he joined Phillip Morris.

Race to the Bottom or a Better Court System - New York's Turn

When I was in law school back in the dark ages of 1980-1983,  no one taught a course in the litigation industry or  courts competing for cases.  Thirty years later, the industry and competition are evident. 

New York is the latest entrant into the litigation industry race to be "good to business" litigation. That could mean many things, such as faster and more efficient systems with smart judges. Or, it could mean a tilted playing field. Prof Lynn LoPucki has eloquently and convincingly proven the "race to the bottom" caused many bankruptcy cases to end up in Delaware. Either way, court fees bring revenues and courthouse jobs, not to mention lawyers. 

Set out below are excerpts from Joe Palazzolo's WSJ new article on New York's approach to doing better in the litigation industry competition: 

“We must seek to create an even more hospitable environment for business,” said Chief Judge Jonathan Lippman Tuesday in his annual address on the state of the judiciary. The judge said he wants to “set a new vision for how we in the New York State court system might better serve the needs of the business community.”

The Commercial Division, New York’s business court, was carved out of  the state Supreme Court 17 years ago, with an eye toward improving the quality and consistency of judicial decision-making in commercial litigation. Judge Lippman noted that other states had used New York’s business court as model, increasing the competition for cases.

“We must ask ourselves anew whether business leaders in New York and around the country know they can rely on our courts for the most efficient and expert resolution of business disputes,” he said.

Lippman announced the creation of a task force led by his predecessor Judith Kaye and Martin Lipton of Wachtell, Lipton, Rosen & Katz. In the next year, the task force will look at how to better control dockets, manage case flow and make more effective use of non-judicial personnel and alternative dispute resolution within the courts, the judge said.

***

Lippman said he would soon be sending a bill to the state legislature that would establish a new class of Court of Claims judges that the governor could appoint to sit on the Commercial Division.

“This would enable direct designation of seasoned commercial practitioners to supplement the court’s roster. New York has the best commercial lawyers in the world,” Lippman said. “They are a resource for our state, and it would be of great benefit if we could attract more of them to the New York Bench.”

 

Possible $ 1 Billion Settlement in Germany for Claims Related to Business Failure

In non-US claiming news from litigation in Germany, the Wall Street Journal and others are reporting a possible $ 1 billion settlement by Deutsche Bank of claims related to the bankruptcy of the Kirch Group. The reported settlement follows several years of litigation, and ancillary arguments regarding whether investigators acted improperly. Sounds rather like US litigation.    

More Big Numbers - Paul, Weiss Profits from Finance Industry Litigation and a $ 97 Million Contingency Fee

Paul, Weiss announced record profits, and litigation industry success is a key part of the story. Indeed, the firm's chair is a litigator. Here's a key quote from David Bario's AmLaw article:

"We were very fortunate in 2011 to have the highest revenues and profits in our firm's history, driven by record litigation and transactional activity" says chairman Brad Karp. 

But Karp says the raw numbers tell only part of the story of the firm's success last year. In 2010, Paul Weiss earned a whopping $97 million contingency fee stemming from an Alaska pension agency's 
$500 million negligence settlement with a Marsh & McClennan unit. Subtracting that unusual element from the 2010 results, Karp says, would give Paul Weiss an eye-popping 19 percent jump in gross revenue for 2011."

"The firm prevailed in five major jury trials and arbitrations for key clients, including its victory for Citigroup in a $7.5 billion arbitration brought by the Abu Dhabi Investment Authority."

"We are fortunate to be counsel of choice to some of the world's leading financial institutions in their most challenging litigations and regulatory matters," Karp says. 

More Big Numbers from the Litigation Industry - Quinn Emanual

AmLaw highlighted some but not all numbers from Quinn Emanual, a national (and international) firm comprised only of business litigation lawyers. Thus, it depends on the litigation industry. To start, here are numbers from the front page of the firm's  web site: 

"Quinn Emanuel Urquhart & Sullivan, LLP is a 500+ lawyer business litigation firm -- the largest in the United States devoted solely to business litigation.  Our lawyers have tried 1460 cases and won 1326, or 91%.  When we represent defendants, our trial experience gets us better settlements or defense verdicts.  When representing plaintiffs, our lawyers have won over $15 billion in judgments and settlements.  We have won five nine-figure jury verdicts in the last ten years.  We have also obtained eight nine-figure and five ten-figure settlements."

From AmLaw's summary of a press release, here are the revenue numbers, and commentary on the firm taking contingent fees and other alternative fees:

"Gross revenues rose roughly 31 percent, to just over $723 million, while profits per equity partner jumped nearly 15 percent, to $4.1 million. Revenue per lawyer at the firm was up as well, rising $14.2 percent to roughly $1.4 million.

"Obviously, we could not have achieved financial results like these simply billing by the hour," managing partner John Quinn said in a statement included in the press release announcing the firm's financial results. "A significant amount of our revenue came from contingent fee and other alternative fee arrangements, both on the plaintiffs and defense side."

 

Judge Posner and Opinions with Pictures - Including an Ostrich

You have to love Judge Richard Posner's originality, directness and intellect. His latest gem is an opinion which includes pictures of an ostrich - and a lawyer - with their heads in the sand. The opinion is about failure to cite controlling precedent.  

Hat tip to Bruce Carton at Legal Blog Watch for covering the subject, including additional examples. 

The Litigation Industry - Some Big Numbers from Big Problems, Such as Lehman, Chevron- Ecuador, and Asbestos

"Big law" - and litigation boutiques -  love large problems because they create many years of work. Indeed, the problems sometimes create far more revenue than myriad deals. Three examples popped up today, with two of them in AmLaw's Litigation Daily.

A story on Lehman's bankruptcy notes that professional fees paid by the estate (not all to lawyers) are now up to $1.5 billion. The big winner is New York and some of its law firms, such as Weil, with Lehman estate billings of $ 375 million and Milbank with Lehman estate billings at $ 133 million. 

Then there is a story on Chevron's increasingly desperate bid to avoid paying an $ 18 billion judgment for polluting Ecuador and creating cancers. Chevron filed a "privilege log" listing the lawyers and law firms it has used for for various aspects of the litigation. According to the story:

"In a recent discovery filing, Chevron disclosed that it is employing no fewer than 39 law firms in the Ecuador matter (including four law firms representing the related individual defendants, but not including non-U.S. counsel retained in connection with potential enforcement actions). By the Ecuadorian plaintiffs' count (which we did not verify), Chevron employs close to 500 outside lawyers or paralegals to counter their claims.

Among the 39 law firms listed are 15 Am Law 100 firms—Akin Gump; Ballard Spahr; Boies, Schiller, Crowell; Gibson Dunn; Holland & Knight; Jones Days; King & Spalding; Mayer Brown; Nutter McClennen; Pillsbury;  Schulte Roth; Skadden; Sonnenschein; and Steptoe—and four smaller firms that qualify for the NLJ 250."

Finally, there is a Reuters story on Western MacArthur and insurance coverage battles over its asbestos losses. The latest story is a New York appellate court opinion confirming an award of $ 420 million for Travelers and against reinsurers. The ruliing is the latest step in a journey that dates back at least as far back as Western suing Travelers for coverage - in 1993. No doubt there were negotiations before the start of the 1993 litigation. So, two decades and many lawyers and law suits to deal with just one part of an insurance portfolio for one asbestos defendant. 

Conclusion? The litigation industry will continue to expand for as long as short-term thinking continues to create large, long-term problems.  

 

 

Madison County Ties Old Record for New Case Filings

Thanks to the Madison County Record, the numbers are in and published for new asbestos case filings for 2011.  Last year ties the largest prior year at 953. The numbers once again prove - if you build it, they will come.  The 2011 trial dates will help to fill up the trial date slots previously assigned. 

 

2011 – 953

2010 - 752

2009 - 814

2008 - 639

2007 - 455

2006 - 325

2005 - 389

2004 - 477

2003 - 953

2002 - 809

2001 - 889

Product Liability Defense - Some Numbers on the Revenues and Lawyers at Shook Hardy - the Giant of Tobacco Defense

It's interesting to look at the changes in the litigation industry as to defense of product liability cases. When I was a law clerk in 1983 for the Illinois Supreme Court, the purported "liability crisis" was burgeoning.  My first job law firm job was in 1984 at a commercial law firm - Chicago's Katten Muchin. The firm had not done any product liability work until some asbestos defense opportunities arrived in 1982.  Most partners and associates wanted nothing to do with the cases. A few liked the idea of getting to court often, and so became involved. I joined their ranks when I arrived. For years, the work remained subject to some disdain, but it produced money, so it was tolerated. Two other large commercial firms also did a significant amount of defense - Schiff Hardin and Seyfarth Shaw. A couple of others dabbled occasionally. That was about it.  

Today, in contrast, many major law firms love product liability work, and most have some cases. Some have many, many cases. The vast scale of the work at Shook Hardy is illustrated by an AmLaw Daily article naming Shook  as the 2011 litigation department of the year for product liability defense work.

Shook Hardy's tobacco background is immense.  David Hardy is widely viewed as a primary architect of the tobacco defense strategy of creating doubt, and trying cases tied to that theme. That work has been roundly criticized for many years in books and articles too numerous to collect, and some shave suggested that some of the firm's past lawyers should have been sued for fraud (some examples herehere, here, here and here). Some of the accusations also are laid out in court papers and related tobacco industry memos (e.g.  here and here.) Today, however, the work goes on, even as some Shook Hardy lawyers changed firms to Hughes, Hubbard in order to accomodate tobacco defense needs as the tobacco makers seek to assert separateness from each other.  

How big is the product liability defense business for Shook Hardy ? Consider these numbers from the AmLaw article:

"The firm has been able to deliver in part because of the sheer size of its product liability practice, which comprises the bulk of its attorneys. Shook counts 303 product liability attorneys, who make up 71 percent of the firm's total head count. In 2010, 78 percent of Shook's $337 million revenue came from product liability work."

 

Bounced from U.S. Courts Under Morrison, Securities Plaintiffs Sue Porsche in Germany

Securities plaintiffs previously sued Porsche in the US for alleged fraud related to the merger with VW. Their claims were bounced out of the US on jurisdictional grounds under the Morrison decision. Plaintiffs have now sued Porsche in Germany - the suit is described in this press release and in an AmLaw article by Nate Raymond. Meanwhile, the merger has been delayed because of litigation risks. Plaintiffs are represented by a German law firm known as the BROICH Partnership. 

One wonders if it will even take a decade to see the creation of a global plaintiff's bar in securities claims, and then a listing of  "international judicial hellholes."

Economists - Code of Ethics Needed ?

Intersections between disciplines are increasingly important. Law is very much about economics, as is often demonstrated by the University of Chicago Law School.  Scientific research is shaped by economics. So, how to better understand the intersections and reach good decisions?  One hopes we can turn to economists for help and indeed many excellent economists offer much sage advice.  But in evaluating arguments, it is useful to bear in mind the lack of  a code of ethics for economists. The absence of an ethical code for economists is drawing more attention. Indeed, 2011 started off with a significant book arguing that economists should have a code of ethics. The Economist's Oath: On the Need for and Content of Professional Economic Ethics, by George F. DeMartino.

Published by Oxford University Press, the book’s promotional page explains the issues in terms that are useful to keep in mind as an overview:

"Economics is today among the most influential of all professions. Economists alter the course of economic affairs and deeply affect the lives of current and future generations. Yet, virtually alone among the major professions, economics lacks a body of professional ethics to guide its practitioners. Over the past century the profession consistently has refused to adopt or even explore professional economic ethics. As a consequence, economists are largely unprepared for the ethical challenges they face in their work.

The Economist's Oath challenges the economic orthodoxy. It builds the case for professional economic ethics step by step-first by rebutting economists' arguments against and then by building an escalating positive case for professional economic ethics. The book surveys what economists do and demonstrates that their work is ethically fraught. It explores the principles, questions, and debates that inform professional ethics in other fields, and identifies the lessons that economics can take from the best established bodies of professional ethics. George DeMartino demonstrates that in the absence of professional ethics, well-meaning economists have committed basic, preventable ethical errors that have caused severe harm for societies across the globe. The book investigates the reforms in economic education that would be necessary to recognize professional ethical obligations, and concludes with the Economist's Oath, drawing on the book's central insights and highlighting the virtues that are required of the "ethical economist."

The Economist's Oath seeks to initiate a serious conversation among economists about the ethical content of their work. It examines the ethical entailments of the immense influence over the lives of others that the economics profession now enjoys, and proposes a framework for the new field of professional economic ethics."

 

Bankruptcy Court and Wall Street - Home to Conflicts of Interest and Claim Trading

Current events provide yet another reminder that it is wrong to pretend that law and civil litigation are still (if they ever were) a noble calling where obligations to clients are trumped by economic self-interest. The pretenders include various bar associations on all sides of issues.

The pretenders' postures cannot be reconciled with bankruptcy court. There, conflicts of interest are rife, proceedings are settled based only on economics, and litigation claims are traded almost as freely as futures contracts offered on the MERC. The most recent example is provided by a bankruptcy court approving the power to trade in claims against the now-infamous MF Global. Indeed, the court went further and approved banks to use "ethical walls" to create a way to trade claims related to MF Global even though they owe conflicting duties to other members of the creditors' committee the banks sit on because they also are creditors. Meanwhile, on Wall Street, hedge funds are trading MG Global claims to make money. The University of Chicago Law School has it right - law is about economics

Bloomberg has part of the story - key excerpts are below:

 

Dec. 20 (Bloomberg) -- JPMorgan Chase & Co., a lender to bankrupt MF Global Holdings Ltd., asked a judge if it can trade claims on the company, including its bank loans and 6.25 percent bonds.

The biggest U.S. bank asked U.S. Bankruptcy Judge Martin Glenn, who is handling the bankruptcy, to create a so-called safe harbor so that its trading isn't deemed to violate its duty as a member of MF Global's creditors committee, and its claims aren't disallowed.

Like fellow committee members Bank of America Corp. and Elliott Management Corp. who sought permission to trade MF Global claims, JPMorgan said it would have “ethical walls” to ensure that knowledge it gains from being on the committee doesn't reach its traders, it said in a court filing today.

“Although JPMorgan owes fiduciary duties to the unsecured claimholders of these estates, it also has fiduciary duties to maximize returns to its respective clients,” including pension funds and high-net-worth individuals whose money it manages, the bank said.

Glenn gave his approval in an order issued today to Bank of America for its trades in MF Global claims, saying he would “take action” if there were any violations.

Such requests are common among banks and hedge funds that have loans and investments in bankrupt companies along with separate trading desks. Elliott sought and got permission to trade claims in the Lehman Brothers Holdings Inc. case, where it also is a member of the creditors' committee.

MF Global's $325 million of 6.25 percent notes traded at 33 cents on the dollar on Dec. 19, according to Trace, the bond price reporting system of the Financial Industry Regulatory Authority. The debt, issued at par in August, has declined from 50 cents on the dollar since the company's Oct. 31 bankruptcy filing. The bonds have declined from 35 cents at the end of November.

 

 

Delaware Chancery Judge Awards $ 300 Million for Attorneys' Fees - Is Delaware Now a Judicial Hellhole?

The Southern Copper/Grupo Mexico case has been quite the drama with its $1 billion + damages award for a corporate deal that was deemed not fair to shareholders other than the controlling shareholder. Now, Delaware Chancellor Strine has awarded attorneys' fees of$ 300 million+. Professor Bainbridge covers the award, and more, as to the litigation industry in Delaware. See also this paper cited and linked by Professor Bainbridge - it addresses the market share for the Delaware courts. 

The American Tort Reform Foundation and the US Chamber of Commerce routinely complain about awards of attorneys' fees to "trial lawyers," and disparage as "judicial hellholes" the courts where plaintiffs do well.  So, one can now wonder if the US Chamber of Commerce will attach the hellhole label to Delaware's famed Chancery Court.  Somehow that seems not likely but one never knows. 

REACH - A Growing Topic for American Lawyers - Webinar

Europe's REACH regulations are significantly ahead of US regulations on "toxic" substances, and will be important in toxic tort litigation over the next decades. The ongoing REACH processes include various 2012 deadlines. A Keller & Heckman webinar offers a way to learn a fair amount in a convenient way. One of the firm's email ads is pasted below.   

 

You’re invited to a webinar focusing on

REACH and the Biocidal Products Directive
for U.S. Companies

January 23, 2012

9:00 a.m. -11:30 a.m. EST

 

Click here to register. 

 

2012 is the year that U.S. Companies will need to re-engage in order to meet the fast moving regulatory challenges in the European Union (EU).  The attorneys and scientists of Keller and Heckman LLP’s Washington, D.C. andBrussels offices are pleased to offer a series of webinars this year designed to help U.S. companies that do business in the EU.

 

Register today for the first webinar in this series which will focus on REACH and the Biocidal Products Directive for U.S. Companies.

 

Webinar agenda:

  • Getting Ready for the mid-2013 Registration Deadline -- negotiating the best price for a 2013 Letter of Access and taking advantage of data dispute options
  • Expanded safety data sheets -- helping EU customers deal with new regulatory obligations
  • The new Biocidal Products Regulation and its impact on treated articles and food contact materials
  • Plus an extended question and answer session

 

Webinar Details

 

Webinar title:

Selected Topics on REACH and the Biocidal Products Directive for U.S. Companies

 

Date/Time:

Monday, January 23, 2012 from 9:00 am – 11:30 am (EST)

 

Registration fee: $125 per web connection. Through a single web connection you can provide important, timely information to a group of employees or colleagues in an office, conference room, or auditorium.

 

Location: Your office! This is the advantage of a webinar, absolutely no travel.

 

What you need to participate: All you need is a computer with an internet connection and a phone line.

 

Once you register for the webinar the materials will arrive in your email account 1-2 days prior to the webinar. Please note the “from” line of the email will be “Seminar Materials.”

 

For additional information or if you are receiving this email from a third-party and would like to be added to our mailing list please contact Alison Maier at maier@khlaw.com.

 

Keller and Heckman LLP will help you to navigate REACH and the Biocidal Products Directive as they relate to U.S. companies doing business in the EU.

 

 

Big Banks Opposing FINRA Arbitrations

The litigation industry includes many inconsistencies. For examples, big business has tended to work hard to force arbitration on customers. But not always. Today, big banks are opposed to and are trying to stop FINRA arbitrations involving claims of financial fraud. The issues and some history are nicely summarized in a December 1, 2011 AmLaw article by  Nate Raymond. Set out below is a list of FINRA awards taken from the article - one can see why banks do not like FINRA arbitrations. 

 

Top Five Securities Arbitration Awards 
Sanchez et al. v. Enrique Perusquia $429.5M
STMicroelectronics N.V. v. Credit Suisse Securities (USA) LLC 406.6M
Kajeet Inc. v. UBS Financial Services Inc. 80.8M
212 Investment Corp. et al. v. Myron Kaplan 74.8M
Rosen Capital Partners LPv. Merrill Lynch Professional Clearing Corp. 63.7M

 

Madison County Trial Date Tango Ends With Judge Crowder Being Removed as the Asbestos Judge - An Example of the Problems of Electing State Court Judges

During my clerkship for a Justice of the Illinois Supreme Court, I learned (from being assigned to do the research) that most of the world builds its judiciary  through a professional career path aimed at judging, and/or some form of "merit selection."  In contrast,  judges are chosen via political elections in some of the United States, including, for example, Illinois, Texas and West Virginia. The system of electing judges by popular vote is fraught with problems, including raising campaign funds. Fund raising usually involves an election committee for a judge asking for contributions from lawyers or committees. When lawyers or groups contribute any meaningful amount of money, questions arise regarding influence and/or an appearance of impropriety. But we keep using this process, and both defense and plaintiff groups keep giving money, sometimes stunningly large amounts. 

This contribution process - and bad appearances - recently played itself out in Madison County, Illinois,   after the conclusion of the process of awarding valuable trial dates for asbestos trials for 2013. Specifically, Judge Crowder is the current  "asbestos judge" responsible for all of the hundreds of mesothelioma cases that are filed in Madison County each year. Cases are filed there for many reasons, including the vast and firm supply of trial dates which are the catalysts for resolving cases, especially when insurers are involved.  As described in prior posts (here and here), there is process for awarding trial dates in Madison County, and it was unfolding over the last 30 days. Then, last week, Judge Crowder last week issued an order granting 485 trial dates for 2013, with 82% of the trial dates being awarded to plaintiff's firms with offices in the Madison County area. 

As it turns out, Judge Crowder's campaign also was out asking for campaign contributions, which appears to be legal but very ill-timed. The Madison County Record reported the facts in a story by Ann Maher. According to others, contributions were being sought from a range of lawyers, including both defense and plaintiff firms. And, the contributions were duly reported to the Illinois State Board of Elections. As it turns out,  contributions were made and amounted to $ 30,000, with $ 10,000 being contributed by various members of each of three plaintiff's firms. Each of the three plaintiff's firms received a large number of trial dates through the recent order.  

After the contributions became public, Madison County's  Chief Judge, Ann Callis, issued an order removing  Judge Crowder from her role of managing the asbestos docket. It has been said that the decision to remove Judge Crowder was made after a vote of all the circuit court judges - I do not know if that's true. Judge Clarence Harrison was appointed to replace Judge Crowder on the asbestos docket. 

Obviously the timing and facts smell bad regardless of what infers or does not infer. Remember, every contributor knew the contributions should be and presumably would be publicly reported. Similar bad smells and issues arise too often, based on contributions from both defense and plaintiff groups. Indeed, two years ago, the U.S. Supreme Court confronted the Caperton case, which raised due process issues arising from a West Virginia Supreme Court decision that favored a company with ties to massive campaign contributions to one of the justices of the West Virginia Supreme Court. Voting 5-4, the Court held that the West Virginia Justice was required to recuse himself. Set out below are key quotes from the opinion, as taken from this post on the great blog maintained by the Brennan Center for Justice at the New York University School of Law.  The fractured views illustrate at least part of why the judicial election process is so fraught with issues. We really ought to be able to find a better way to build our state court judiciaries.

Here's a later article confirming that Judge Callis consulted with the other judges before removing Judge Crowder. Yet a later article highlights that the contributions were sought and made after the trial dates were awarded, and that little had changed from last year. Thus, the activity showed poor judgment and timing, but was not a quid pro quo.  And, Judge Crowder is planning to return the money

 

"Justice Kennedy, writing for the majority:

"We conclude that there is a serious risk of actual bias - based on objective and reasonable perceptions - when a person with a personal stake in a particular case had a significant and disproportionate influence in placing the judge on the case by raising funds or directing the judge's election campaign when the case was pending or imminent.  The inquiry centers on the contribution's relative size in comparison to the total amount of money contributed to the campaign, the total amount spent in the election, and the apparent effect such contribution had on the outcome of the election." 

"Justice Benjamin did undertake an extensive search for actual bias.  But, as we have indicated, that is just one step in the judicial process; objective standards may also require recusal whether or not actual bias exists or can be proved...The failure to consider objective standards requiring recusal is not consistent with the imperatives of due process."

"Our decision today addresses an extraordinary situation where the Constitution requires recusal."

Justice Roberts, dissenting:

"...a ‘probability of bias' cannot be defined in any limited way. The Court's new "rule" provides no guidance to judges and litigants about when recusal will be constitutionally required. This will inevitably lead to an increase in allegations that judges are biased, however groundless those charges may be."

Justice Scalia, dissenting:

"The Court today continues its quixotic quest to right all wrongs and repair all imperfections through the Constitution.  Alas, the quest cannot succeed - which is why some wrongs and imperfections have been called nonjusticiable."  

 

 

 

 

Madison County, Illinois - Trial Date Tango - Local Plaintiff's Lawyers Dance By Far the Most

Out of town lawyers would like to lock up trial date slots in ever ready Madison County, but did not have much luck for 2013 trial dates. See this prior post for the background.  Set out below is a Madison County Record article providing the results of the latest dance over trial dates. The bottom line is that local law firms took dwon 82% of the trial slots. Out of town lawyer received very little certainty in the way of trial dates, but there are some possibilities for dates if they have clients who are alive but likely to die quickly. The dance can be macabre. 

Crowder sets 2013 asbestos docket; Three local firms get 82 percent of trial slots 
12/8/2011 3:46 PM By Steve Korris 

Madison County Circuit Judge Barbara Crowder has provided Simmons Browder law firm of East Alton with 185 valuable trial slots in her asbestos court for 2013.

She granted Simmons Browder nine weeks with 19 exclusive slots each week, plus 14 slots on a tenth day, in a preliminary order on Dec. 1.

Simmons Browder captured more than 38 percent of 485 slots she granted.

She provided 128 slots, more than 26 percent, to Gori Julian of Edwardsville; and she provided 84 slots, more than 17 percent, to Goldenberg Heller of Edwardsville.

Together, the three firms captured 82 percent of the slots.

She granted all three the number of weeks they requested.

She provided 24 slots each to O'Brien Law Office and Maune Raichle, both of St. Louis, in three weeks they will share with other firms.

Maune Raichle had asked for four weeks.

She provided 16 slots each to Saville and Flint, of Alton, and Shrader Law Office of Houston, Texas, in two weeks they will share with others.

Shrader had asked for four weeks.

She provided slots only for the seven firms, but designated eight slots in two weeks for a "cause docket" available to anyone else.

She set three other weeks of cause dockets showing no specific numbers.

"The court intends to avoid having one defendant in trial in more than one courtroom on any docket absent exigent circumstances," Crowder wrote at the end of the order.

"Counsel must also be aware that a living plaintiff who may be seriously ill takes priority.

"The court will make every effort to fairly accommodate all parties in the event of conflicts and retains the authority to make exceptions to this order."

The deepest disappointment among plaintiffs fell on Michael Bilbrey of Edwardsville, the only lawyer with slots in 2012 who won't receive any in 2013.

The deepest disappointment among defendants fell on those who proposed to curb Madison County's reputation as an open jurisdiction.

Robert Shultz of Edwardsville offered the proposal for Union Carbide in November, and dozens of defendants joined it.

Shultz wrote that reserving slots in excess of local need opens Madison County to litigation with no connection to the county.

He wrote that nine firms requested dates without representing that they had local clients to fill the dates.

He wrote that awarding dates without need "has transformed the right to trial into a popular commodity in Madison County."

He wrote that only three of 43 cases set on next year's trial docket have any connection to the county.

These defendants joined Union Carbide's proposal to curb Madison County's reputation as an open jurisdiction:

ALCOA
Allied Glove
Aurora Pump
Breeding Insulation
BW/IP Inc.
CBS Corporation
Clark Equipment
Conoco Phillips
Cummins Inc.
DeZurik
Duriron Company
Flowserve Corporation
Foster Wheeler Energy
Grobet USA
H.M. Royal Inc.
Hamilton Sundstrand
Hopeman Brothers
IMO Industries
J.H. France Refractories
Kentile Floors
Kinney Vacuum
Leeds and Northrup
Lighnin/Mixing Equipment
Lindberg
M&O Insulation
New York Air Brake
Rexnord Corporation
Reynolds Metal
Riley Stoker
Seco/Warwick
Sunbeam Products
Swindell Dressler International
Taco Inc.
Timpte Industries
Utility Trailer Manufacturing
Viking Pumps
W.S. Darley & Co.
Warren Pumps 

Madison County, Illinois - Trial Date Tango - Local Plaintiff's Lawyers Dance By Far the Most

Out of town lawyers would like to lock up trial date slots in ever ready Madison County, but did not have much luck for 2013 trial dates. See this prior post for the background.  Set out below is a Madison County Record article providing the results of the latest dance over trial dates. The bottom line is that local law firms took dwon 82% of the trial slots. Out of town lawyer received very little certainty in the way of trial dates, but there are some possibilities for dates if they have clients who are alive but likely to die quickly. The dance can be macabre. 

Crowder sets 2013 asbestos docket; Three local firms get 82 percent of trial slots 
12/8/2011 3:46 PM By Steve Korris 

Madison County Circuit Judge Barbara Crowder has provided Simmons Browder law firm of East Alton with 185 valuable trial slots in her asbestos court for 2013.

She granted Simmons Browder nine weeks with 19 exclusive slots each week, plus 14 slots on a tenth day, in a preliminary order on Dec. 1.

Simmons Browder captured more than 38 percent of 485 slots she granted.

She provided 128 slots, more than 26 percent, to Gori Julian of Edwardsville; and she provided 84 slots, more than 17 percent, to Goldenberg Heller of Edwardsville.

Together, the three firms captured 82 percent of the slots.

She granted all three the number of weeks they requested.

She provided 24 slots each to O'Brien Law Office and Maune Raichle, both of St. Louis, in three weeks they will share with other firms.

Maune Raichle had asked for four weeks.

She provided 16 slots each to Saville and Flint, of Alton, and Shrader Law Office of Houston, Texas, in two weeks they will share with others.

Shrader had asked for four weeks.

She provided slots only for the seven firms, but designated eight slots in two weeks for a "cause docket" available to anyone else.

She set three other weeks of cause dockets showing no specific numbers.

"The court intends to avoid having one defendant in trial in more than one courtroom on any docket absent exigent circumstances," Crowder wrote at the end of the order.

"Counsel must also be aware that a living plaintiff who may be seriously ill takes priority.

"The court will make every effort to fairly accommodate all parties in the event of conflicts and retains the authority to make exceptions to this order."

The deepest disappointment among plaintiffs fell on Michael Bilbrey of Edwardsville, the only lawyer with slots in 2012 who won't receive any in 2013.

The deepest disappointment among defendants fell on those who proposed to curb Madison County's reputation as an open jurisdiction.

Robert Shultz of Edwardsville offered the proposal for Union Carbide in November, and dozens of defendants joined it.

Shultz wrote that reserving slots in excess of local need opens Madison County to litigation with no connection to the county.

He wrote that nine firms requested dates without representing that they had local clients to fill the dates.

He wrote that awarding dates without need "has transformed the right to trial into a popular commodity in Madison County."

He wrote that only three of 43 cases set on next year's trial docket have any connection to the county.

These defendants joined Union Carbide's proposal to curb Madison County's reputation as an open jurisdiction:

ALCOA
Allied Glove
Aurora Pump
Breeding Insulation
BW/IP Inc.
CBS Corporation
Clark Equipment
Conoco Phillips
Cummins Inc.
DeZurik
Duriron Company
Flowserve Corporation
Foster Wheeler Energy
Grobet USA
H.M. Royal Inc.
Hamilton Sundstrand
Hopeman Brothers
IMO Industries
J.H. France Refractories
Kentile Floors
Kinney Vacuum
Leeds and Northrup
Lighnin/Mixing Equipment
Lindberg
M&O Insulation
New York Air Brake
Rexnord Corporation
Reynolds Metal
Riley Stoker
Seco/Warwick
Sunbeam Products
Swindell Dressler International
Taco Inc.
Timpte Industries
Utility Trailer Manufacturing
Viking Pumps
W.S. Darley & Co.
Warren Pumps 

American Bar Association Panel Moves Somewhat Towards Non-Lawyer Ownership of Law Firms

An ABA panel is recommending that the ABA allow non-lawyer owners of law firms if they work for the firm. The panel is not recommending allowing straight outside investment, as is now done in the UK and Australia. AmLaw Daily has more color to the story , with links to this new paper and this older paper related to the recommendation. 

Change arrives slowly in law.  For now, the ABA's stance may slow the demise of the local general practice firm that handles will and real estate matters. But law schools, prospective lawyers and colleges all need to adjust  - within a decade, there will no longer be much of a  place for lawyers handling rote tasks. Instead, technicians will handle standard transactions and issues. 

On a more frightening level, consider the beasts that insurers will create to "defend" clients and refuse to pay claims. Some of today's captive law firms already make precious little use of real legal skills. When outside workers can own much of the law firm, claims adjusters seem sure to move in, willing to work for less than lawyers. There is a reason the insurance industry has been a big part of commoditizing law, as it did with medicine.  

 

Madison County's Trial Date Dance for Asbestos Cases - Hundreds of Annual Trial Dates Secure Its Role as The Home for More Than 1/3 of all Mesothelioma Cases Filed Annually in the US

Trial date tango. It's a dance unique to litigation. It's also a unique dance because it takes at least three to dance - a judge, a plaintiff's firm and a defense firm. For asbestos cases, there's a mosh pit of dancers because so many defendants are named in most cases. And at least one defendant (John Crane) dances so often that most say it's dirty dancing, but that's a story for another day.   

For plaintiff's lawyers, the trial date dance is about certainty and market power - they want pretty much all the dances they can obtain, and sooner is usually (but not always) better than later. For defendants, less is usually more, but some trial dates are inevitable, so it's about balancing. Trial dates stop defense expenses, and for the vast majority of insurance companies, it's only about the total spend. 

Trial date tango is an important annual ritual in the Circuit Court of Madison County.  It's important because the Madison County court is the venue for over 1/3 of all mesothelioma cases filed each year in the entire US. If one assumes that's about 600 cases per year at $ 1.5 million each to settle, then the Madison County litigation industry is an over  $1 billion operation located in Edwardsville, Illinois, a town of about 25,000 people.  The industry value also may well be higher, depending on what one assumes about average settlement values.

Why is Madison County so busy? That's a story that dates back for decades, and is too much for this post. But, one of the keys today is the certainty produced by the predictable outcome of the annual trial date tango.  Even though cases should settle earlier, they usually don't, for many reasons, and so trial dates are the catalysts to resolving cases. Madison County's "asbestos judges" understand that reality. Each year they slot hundreds of trial dates, and allocate the trial dates between the plaintiff's firms. With dozens of trial dates in hand, the Madison County plaintiff's firms then use the trial dates as part of their pitch to obtain cases from other plaintiff's firms around the country. For the most part, the residence of the plaintiff simply does not matter in Madison County (although that could change one of these days.)

Madison County's  annual trial date ritual was performed this week as about sixty lawyers showed up to talk with Judge Crowder about trial dates for 2013 (2012 is already set with 28 trial weeks with 19 cases per trial setting).  The Madison County Record has the story here by Steve Korris and Christina Stueve, told mainly from the defense perspective that is inherent because the Record is owned by the US Chamber of Commerce. That said, it's great that the public domain includes more information rather than less. 

Note a few things about this year's dance. The big dogs in the plaintiff's bar sat quietly. Some new plaintiff's firms asked to join the dance. Some plaintiff's firms want to bring new dates - 40 or so lung cancer cases, on top of mesothelioma cases.   Only a few defendants had anything to say, and only one was willing to buck conventional wisdom, thus illustrating once again the power of  the herd mentality in mass tort litigation. Some defendants opposed giving trial dates to new plaintiff's firms. Now all wait to hear from Judge Crowder about the dance card specifics, but the dance inevitably will go on, in a big way.

Some key quotes from the article are set out below: 

"EDWARDSVILLE - In America's asbestos court, where procedure and reality seem to run in opposite directions, lawyers debated politely for 45 minutes on Wednesday about how many hundred trials to schedule for the year after next.

No one at the hearing before Circuit Judge Barbara Crowder expected more than a trial or two to actually occur in 2013, but only one lawyer proposed not to pretend.

Union Carbide lawyer Kent Plotner, of Heyl Royster, told Crowder she should set cases for trial as needed without pre-slotting.

He said Crowder could determine where to slot them when they come in.

"When a case comes in and the merits of the case stand alone, your honor can set that case," Plotner said. 

He said it didn't make sense to have slots for cases that don't exist.

***


In 2010, there were 752 asbestos cases filed in Madison County. This year's figures are on pace to exceed last year's total. 

Defendants have argued that Madison County's advance calendar setting encourages plaintiff lawyers to go out and market the asbestos docket.

And they claim that during any given trial week (there are 28 this year) - where 19 individual cases are set for trial - defendants don't know on Monday morning of that trial week which plaintiff among 19 will go to trial.

After Plotner spoke, no defense lawyer seconded his motion.

Crowder took under advisement a proposal from plaintiffs to set 27 trial weeks with 19 trials a week, a total of 513 for the year 2013.

The firm that files the most Madison County asbestos cases, Simmons of Alton, has requested 10 trial dockets for 2013. In 2011 and 2012, the firm was assigned nine settings.

And the second most prodigious asbestos firm, Gori and Julian of Edwardsville, has requested seven trial dockets for 2013, up from six the firm was assigned in 2011 and 2012. 

***
Crowder is full time asbestos

Chief Judge Ann Callis appointed Crowder as Madison County's first full time asbestos judge last year, transferring all her pending cases to other judges.

Crowder succeeded retired Circuit Judge Daniel Stack, who managed the asbestos docket for five years while presiding over other civil suits.

While Crowder said she does not know how many cases she currently presides over, the ones that are moving are ones with more serious claims.

"The only cases on this docket are people with a terminal diagnosis," she said. "They're dying or already dead."

***

At the hearing

For Crowder's hearing on the 2013 trial calendar, about 60 lawyers showed up.

After Plotner pitched his plan, defense lawyer Brenda Baum of Hepler Broom said the plaintiff proposal sets up many conflicts among plaintiff firms.

She said five firms asked for slots on June 17, 2013, for instance. And, two to four firms asked for slots on other days, she said.

The total shouldn't exceed 475 slots, with no more than two firms on any date, she said.

Baum proposed a minimum number of filings for a firm to qualify for the docket.

Defense attorney Ray Fournie, of Armstrong Teasdale, said multiple firms on one docket made it hard to anticipate the time and effort of preparation.

He said that with one firm, defendants can negotiate properly.

He said the number of firms with standing on Madison County's docket went from eight to 10 since last year.

He said there was a potential increase in the number of firms with no connection to Madison County. He also said Crowder can't prevent outside firms from filing.

He said he recognized the predicament their constitutional right creates.

Most plaintiff lawyers in the room kept quiet. 

No one from the Simmons or Gori firms spoke. 

Five commented briefly, one so softly that people 10 feet away couldn't hear.

Only Elzabeth Heller, of Mark Goldenberg's firm in Edwardsville, scored points on the plaintiff side.

She said defendants changed their theme from, "If you build it they will come," to, "Madison County, the last open jurisdiction." 

"The sky is not falling," she said. "The system is working."

She said cases without merit are being dismissed or transferred.

She said the Goldenberg firm filed 86 cases this year, 59 of them mesothelioma cases. Her firm will file in excess of 100 before the end of the year, she said. 

"We represent more than 3,000 Madison County residents with non-malignant cases on the deferred docket," Heller said. 

She said they track those cases to see if clients develop lung cancer.

"We have a backlog of 40 ready to be set," she said. 

Crowder said she would get an order out quickly.

After the hearing, Fournie said a trial docket with 513 slots was a challenge for the court and more so for defendants.

"We are here all the time," he said.

"Trying to juggle that without a huge financial drain on our clients is tricky," he said.

He said he represents General Electric, Hercules, Chicago Bridge and Iron, and others.

He said a central forum simplifies litigation because, "A lot of people worked at a lot of different places."

He said he didn't know how many asbestos suits he currently defends.

"If there are 500 slots, one of my clients is going to be in 490 of them," Fournie said."

 

 

An Example of Global Plaintiff Alliances and Fee Splitting

Lawyers around the world are increasingly forming cross-border alliances to bring claims for plaintiff. A recent example is set out in this opinion linked from this article in the NLJ, and arises in the context of a sued filed by the Russian customs authority. 

Global Asbestos Claiming - Meetings in India for Victim's Rights Groups - New Posts to YouTube and Websites

The global asbestos claiming industry remains hard at work. Here and here are recent promotion posts from the Asbestos Disease Awareness Organization. The pieces include YouTube videos about victim's rights conferences in India. 

Valuing Litigation Risks - Remember Arbitrations - An Example from CITI and FINRA Arbitrations

A good question these days is how one should value a massive financial house,  such as CITI. One part of the answer lies in assessing its litigation industry risks from the various claims against it arising from alleged frauds and alleged breaches of other duties. One part of answering the litigation risk question is to monitor arbitrations, as well as litigation. That's not easy to do, but information can be obtained. One source is known as the Securities Arbitration Commentator, an informal reporter of FINRA issues on a paid subscription basis. 

As to impacts from arbitrations, consider, for example, this online Bloomberg article by Donal Griffin. The article details papers from a FINRA arbitration claim against CITI for $ 383 million. Set out below are some key excerpts from the article:

"Saudi businessman Ghazi Abbar, who claims in an affidavit he lost $383 million of his family’s fortune on investments with Citigroup Inc., was sold one of the transactions even though the bank questioned his ability to properly manage them, according to an internal memo.

The memo, an exhibit in arbitration proceedings with the Financial Industry Regulatory Authority, warned that Abbar didn’t have the risk-management capability of the large hedge funds that were typical clients of the bank’s “hybrid” desk, which in 2006 was trying to persuade him to move his family’s money into complex derivative securities.

Soured deals struck with wealthy clients are haunting Citigroup Chief Executive Officer Vikram Pandit. Finra awarded $54 million in April to customers of the New York-based bank’s municipal-bond hedge funds, and in February, Brazilian investor Bernardo Valentini sued the bank, claiming he lost more than $24 million on derivatives Citigroup told him had “no risk of loss.”

“The case is a setback in Pandit’s vision of delivering financial services with a higher sense of responsibility to customers,” said David Knutson, a credit analyst with Legal & General Investment Management in Chicago. “As each issue bubbles up, analysts or providers of capital to the firm have to say, ‘OK, what other tape bombs are lying in the dusty lines of Citi’s balance sheet?’”

 

 

 

Bravo - Class Action Seeks to Require Automatic Refunds When Service Providers Fail - Comcast is the Target

One of the frustrations of modern life is that service providers fail to provide automatic refunds or credits when they fail to provide service. Instead, bandits such as Comcast  provide refunds only if a customers spends their valuable time wading through layers of voice prompts or websites to submit a request for a refund. By that approach, entities such as Comcast:

1) externalize to customers the costs of Comcast's failure to plan for or provide actually working service, and 2) Comcast keeps money it has not earned because it knows that most customers will not take the time to demand a refund because the the transaction cost  of time is so high. 

This gaming of the process is a prime example of the negative aspects of financial engineering. That is, businesses and their lawyers look for and then engineer in structural impediments to having to pay the full cost of their failures. This same gaming of the system also illustrates the failure of regulation - if we had decent regulation of broadcast services for internet access or tv access, Comcast and other entities would long ago have been forced to end this unfair business practice. 

So, bravo to the filers of a recent class action seeking to require Comcast to issue automatic refunds to customers who lost service due to a storm. The complaint is here, with a hat tip to LAW360 for flagging the case. One hopes the complaint is successful, and that similar class actions follow on every outage. Maybe then Comcast and the power companies will finally invest in service lines that are made pretty much 100%  weather proof.

Investment in weather-proof service would spark howls because it will result in rate increases, but it seems far better to pay the costs now and avoid the future failures.  Moreover, with laborers and others needing work these days, now would be an ideal time for utilities and broadcasters to make the investment. Perhaps the utilities and Comcast could be "nudged" by rules which deprive them of favorable tax rates or TIFF deals if they fail to invest in weather-proof service. The financial engineers will do that math in a hurry.  But until we have effective nudges or required regulations, it's up to the plaintiff's class action bar, and I wish them great success.

Plaintiff's counsel - Jeffrey S. Morneau - is online here.

 

Continue Reading...

How Things Really Work In Delaware Chancery Court - Insights from the Inside - The Delaware Chancery's Unusual Relationship with Academia

Courts work in different ways, and lawyers need to know the actual workings of courts where they are lawyering. That rule applies even more powerfully for specialized courts, such as the Delaware Chancery Court. The Conglomerate blog has been running a series of posts as tribute to Chancellor Chandler. This post provides some special insights into the practices at the court. One key link and quote is excerpted below; note especially the underlined text, 

 

"David Marcus from the Deal Magazine has a terrific interview with Chancellor Chandler upon his stepping down from the Chancery.  I found this exchange to be reflective of the chancellor's views on legal scholarship:

[Q:] It was clear in reading the [Airgas] opinion that you had thought very deeply about that question, but except for your decision in Unitrin, you hadn't had the chance to write about it until Airgas.

I got the views of all of my colleagues on the court on both the pill question, which was Airgas II, and on the bylaw question, which was Airgas I. They were very helpful to me in writing it and getting it out in a timely way. If the question is, "Would I have written this as long or in the same way?" probably not, because back when I wrote Unitrin in the mid-1990s, there hadn't been as much ink spilled by academics. You saw a lot of academic references in the opinion, and that probably resulted in a slightly different approach to how to write it, because I was writing it for the parties but also acknowledging the views of various academics on this question from professor [Lucian] Bebchuk to others. (emphasis added by GlobalTort). 

New Lawsuit Filed to Block State Law Limits on Practicing Law in the US

Advocacy groups continue to attack barriers to multi-state law practices in the US. I'm sympathetic. Last year I almost applied for admission to practice in Florida. The requirements are absurd, and plainly are anti-competitive rules aimed at discouraging lawyers from practicing in Florida. The requirements also include personal intrusions, such as demanding my fingerprints.

Its' hard to imagine how bar examiners justify giving first  year lawyer quizzes (bar examinations) to accomplished lawyers. How on earth is it relevant if I know the rules on doing a will or a trust in Florida - that's why some of us are estate planning lawyers and some of us think about mass torts. 

To end the rant and get to the news, the latest lawsuit is in California. The complaint is here on the website of the advocacy group. The group describes itself as follows:

 

"The NAAMJP is a public benefit corporation founded by attorneys for the benefit of attorneys seeking to obtain bar admission in another State or U.S. District Court without taking another bar exam.   The ABA MJP Commission has concluded that one bar exam is more than enough almost 10 years ago.  We are actively petitioning for the equivalent of a driver’s license for lawyers.  We seek the same rights to interstate travel that lawyers in the EU and Canada already possess." 


 

 

What Value to Law Professor Amicus Briefs - Are There Too Many ?

Adam Liptak's NYT article provides views from two law professors on the burgeoning number of amicus briefs from law professors. The gist? Too many are being filed. 

Medical Device Maker Suing Plaintiff's Firms for False Advertising in Litigation Recruiting Materials

The litigation industry keeps evolving. Thus, LAW 360 reports here (subscription required) on litigation industry tactics being used by a medical device manufacturer. The company, Zimmer, is a defendant in various medical device cases. Zimmer is now expanding its tactic of suing plaintiff's firms for false advertising by claiming that the law firm ads and websites are not accurate.  One such complaint is here.

Set out below are excerpts from the LAW 360 article: 

"Zimmer has faced a wave of product liability litigation over NexGen, and in August, the U.S. Judicial Panel on Multidistrict Litigation centralized 28 suits claiming NexGen components prematurely loosened and caused pain and loss of movement.


However, Elk & Elk and other members of the plaintiffs bar have engaged in misleading tactics in order to secure clients for product liability litigation, the current suit argues.
In a TV ad, Elk & Elk asserted that the U.S. 
Food and Drug Administration had issued a recall of components for the NexGen knee replacement because it caused pain in the knees and joints and difficulty standing and walking, Zimmer says.

Elk & Elk is not only plaintiffs firm to make misleading statements about NexGen to win clients, either, according to Zimmer. In February, the device maker filed a suit over an Internet advertising campaign tied to NexGen from Michigan plaintiffs firms Kresch Oliver PLLC and Kresch Legal Services PLC.

That suit also challenged a television advertising campaign related to the knee system from Texas plaintiffs firm Pulaski & Middleman LLC and a letter-writing campaign from fellow Texas plaintiffs firm Weller Green Toups & Terrell LLP.

While Zimmer claims Elk & Elk’s description of an FDA recall are inaccurate, the device maker apparently did recall components of NexGen in September 2010. Zimmer issued a class II recall because a component of its knee replacement system loosened and necessitated additional surgery, according to an FDA notice.


Elk & Elk is represented by Michael Marrero of 
Ulmer & Berne LLP and Lyle Hardman of Hunt Suedhoff Kalamaros LLP.
Zimmer is represented by Gregory Lockhart and Victoria Nilles of 
Taft Stettinius & Hollister LLP."

Judicial Salary Tracker for State Court Judges

From this story in the Chicago Daily Law Bulletin, here's a story of an easy new way to track state court judicial salaries in the US. The easy answer is found in this new service from the National Center for State Courts. The article includes the following excerpts:

     

"With a few clicks of the mouse, users of a new National Center for State Courts (NCSC) tool can learn exactly how much Illinois judges earn in comparison to their counterparts in other states.

The Judicial Salary Tracker, which has been available for about two weeks, utilizes interactive maps and charts to let users view judicial salaries in each state over the past decade and to make comparisons between states, even accounting for cost of living adjustments.

***

Putting aside the issue of judicial salaries, Hurley, the analyst with the NCSC, said his group will continue to improve its new tracker, as well as the other tools available on its website.

"This is Version 1," Hurley said. "There will definitely be a Version 2 and Version 3 down the line."

Hurley also said while he is not sure it is logistically possible, the NCSC would like to be able to compare salaries of judges with other professionals, like law school professors, at some point.

Elections of U.S. State Court Judges - The Money Trail Through the Litigation Industry

In the U.S., electing state court judges is now big business and involves big money from very partisan groups. Electing state court judges creates many issues, and is part of why state laws flip-flop in sometimes arbitrary fashion. An important new report on the funding has been published by a relatively non-partisan group with many member partners from all sides. Happily, the group also is making underlying data available in an Excel spreadsheet

The press release is online, and pasted below. Note the spending and the resulting lack of confidence from citizens: 

 

Interest Groups Dominate Spending in Judicial Elections, New Report Shows
Nearly 40 Percent of All Campaign Cash in 2009-10 Came From 10 Organizations

OCT. 27, 2011 - Non-candidate spending in state high court elections nearly doubled as a share of total costs in 2009-10, compared to the previous off-year election, a new report shows.

This spending fueled a flood of non-candidate TV advertising, making this the costliest non-presidential election cycle ever for TV spending in judicial elections. 

Among the report’s key findings:

  • Nearly one-third of all funds spent on state high court elections came from non-candidate groups ($11.5 million out of $38 million in 2009-10).  
  • Nearly 40 percent of all funds spent on state high court races came from just 10 groups, including national special interest groups and political parties.   
  • Though outside groups paid for only 40 percent of total ads, they were responsible for 3 in 4 attack ads.

“The New Politics of Judicial Elections 2009-10,”  by the Justice at Stake Campaign, the Brennan Center for Justice at NYU School of Law, and the National Institute on Money in State Politics, is released as the presidential race is heating up -- with millions in hidden outside spending pouring in through Super PACs and other outside groups -- and shows that million-dollar judicial races are increasingly the norm across the country. The report is available atwww.newpoliticsreport.org.

”Too many judges owe their jobs to campaign money hidden from public view,” said Bert Brandenburg, executive director of Justice at Stake. “Americans expect courts to be fair and impartial. They don’t want campaign cash to influence courtroom decisions.”

“The rise in spending by non-candidate groups means that many judicial candidates have become bystanders in their own campaigns, watching the action from the sidelines,” said report co-author Adam Skaggs, of the Brennan Center for Justice. “We expect judges to be impartial and fair. Now with campaign laws weakening, citizens understandably worry that justice is for sale.” 

new poll released today underscored widespread public concern that special-interest money may be undermining the impartiality of elected courts. In a poll of 1,000 voters, 83 percent said that campaign contributions have a “great deal” or “some” influence on a judge’s decisions; 93 percent believe judges should not hear cases involving major financial supporters; and 84 percent believe that all contributions to a judicial candidate should be “quickly disclosed and posted to a web site.”

The New Politics reports have monitored soaring election spending and other threats to the impartiality of state courts since 2000, showing that spending on state high court elections has more than doubled, from $83.3 million in 1990-1999 to $206.9 million in 2000-2009.

The latest report noted that spending in retention elections for judges exploded in 2010, representing 12.7 percent of overall spending, compared to only 1 percent over the entire previous decade. In Iowa’s retention election, three state Supreme Court justices were swept out of office over the court’s same-sex marriage decision.  Due to Iowa’s disclosure laws, voters could track the nearly $1 million spent to unseat the justices, but this is not the case in many states. In Wisconsin’s 2011 Supreme Court race, for example, outside groups spent a record amount on TV ads. This surge in secret spending has fundamentally transformed state Supreme Court elections.

The report also concluded that the 2010 elections were followed by dual threats to state courts. These included a “ferocious” attack in legislatures around the country against reforms designed to protect courts from special interests, and a widespread fiscal crisis in many states. The attacks included challenges to merit selection systems, assaults on public financing of judicial elections, and an unprecedented number of legislative threats to impeach state judges.

“As the second decade of the twenty-first century begins, state judiciaries are caught in a vise, squeezed on one hand by interest groups waging an unrelenting war to impose partisan political agendas on the bench and on the other by devastating fiscal pressures,” the report said. 

                                                                                 # # #

The Justice at Stake Campaign is a nonpartisan, nonprofit campaign working to keep America’s courts fair and impartial. Justice at Stake and its 50-plus state and national partners educate the public, and work for reforms to keep politics and special interests out of the courtroom—so judges can protect our Constitution, our rights and the Rule of law. For more about Justice at Stake, go to www.justiceatstake.org, or www.gavelgrab.org.

The Brennan Center for Justice at New York University School of Law is a nonpartisan public policy and law institute that focuses on fundamental issues of democracy and justice. The Center works on issues including judicial independence, voting rights, campaign finance reform, racial justice in criminal law to Constitutional protection in the fight against terrorism. Part think tank, part public interest law firm, part advocacy group, the Brennan Center combines scholarship, legislative and legal advocacy, and communications to win meaningful, measurable change in the public sector. For more information, visitwww.brennancenter.org.

The National Institute on Money in State Politics collects, publishes, and analyzes data on campaign money in state elections. The database dates back to the 1990 election cycle for some states and is comprehensive for all 50 states since the 1999–2000 election cycle. The Institute has compiled a 50-state summary of state supreme court contribution data from 1989 through the present, as well as complete, detailed databases of campaign contributions for all state high-court judicial races beginning with the 2000 elections.

 

For More Information:

Contact:  Charles Hall, Justice at Stake, chall@justiceatstake.org, 202-588-9454;
Jeanine Plant-Chirlin, Brennan Center for Justice, 
jeanine.plant-chirlin@nyu.edu, 646-292-8322;
Erik Opsal, Brennan Center for Justice, 
erik.opsal@nyu.edu646-292-8356

 

One Way Lawsuits Get Started - Newspaper Account of Erin Brokovich and Attorneys Meeting with 300 Potential Clients

The litigation industry today magnet stars. Erin Brokovich is one - she attracts calls from angry, scared people, and she has relationships with law firms. This newspaper article describes a recent meeting between Ms. Brokovich, plaintiff's lawyers and potential clients. The topic is litigation regarding groundwater allegedly polluted by chemicals made by Shell Oil. According to the article, 300 people attended, and 75 or more  took packets of paper about hiring counsel.

Good, bad or otherwise, these meetings are one way that lawsuits are started.  

Secret Arbitrations in Delaware Chancery - Good Idea, A Race to the Bottom or ....

"Secret arbitrations."  Good, bad or otherwise, Delaware's famed Chancery Court last year adopted rules permitting secret arbitrations conducted by the chancery judges, for significant fees. Now, an NGO has filed suit challenging the rules and demanding public disclosure of the records of the proceedings. The original AP article with the story is here, and is by Randall Chase. AmLaw Daily followed up this morning in this post by David Bario, with links to the Delaware rules and the lawsuit. 

Some will say this is a non-event because private ADR groups make it a business to conduct secret arbitrations, and so why not involve courts. Some will say this more of a race to the bottom by Delaware - a prior post is here on Delaware tax policy, and here is a post on Professor Lynn LoPucki's 2005 book, Courting Failure: How Competition for Big Cases is Corrupting the Bankruptcy Courts.  Some will say this is another way to generate business for the state, the Chancery Court, and for Delaware lawyers who are part of its litigation industry. Indeed, perhaps that's been said already in this quote of a statement attributed to Chancellor Leo Strine, Jr., as published in the article by Randall Chase:

 

"Attorney General Beau Biden's office, which represents state agencies in lawsuits, declined to comment. It instead issued a statement that it attributed to Chancellor Leo Strine Jr., head of the Court of Chancery.

Strine said that the law establishing the secret proceedings was designed to ensure that Delaware remains "the most attractive domicile in the world for the formation of business entities."

"Throughout American history, it has long been recognized that not all aspects of the judicial process are subject to public access and the courts of this state regularly mediate disputes among citizens, including businesses, and can only do so effectively if the confidentiality of the process is respected," Strine said.

Strine noted that public access to the courts has been historically limited in cases dealing with family matters such as child custody and guardianships. He also noted that state lawmakers approved similar secret arbitration for business disputes in Superior Court last year.

The bills, which passed both chambers of the General Assembly unanimously and were signed by Gov. Jack Markell, were intended "to advance compelling public policy interests related to the our state's economic vitality," Strine said.

The Chancery Court charges a fee of $12,000 for filing an arbitration petition and a daily fee of $6,000 for each day after the first day that a judge is engaged in arbitration.

Markell spokesman Brian Selander had little comment on the lawsuit, other than to note that the legislation passed unanimously."

 

 

Erionite in the News in the US as a Carcinogen

Erionite is an asbestos-like mineral, and has caused devastating mesothelioma clusters in three towns in Turkey. Now the mineral is popping up more often online as a danger in the US, as in this article. It's perhaps the fifth article I've seen in a month, and one is part of a "mesothelioma awareness" website.  One wonders if a litigation industry effort is underway. 

Trial Testimony by Streaming Video Authorized By Illinois Supreme Court Rule for Unusual Situations

Now we have trial by video, sometimes.  The Illinois Supreme Court does not allow television in trial courts, but has now explicitly enacted a rule that will sometimes allow use of witness testimony shown by streaming feed from a remote location. Set out below are key excerpts from an article by Patrick Yeagle in the Chicago Daily Law Bulletin. 

     

By Patrick Yeagle

Law Bulletin staff writer

SPRINGFIELD — A new Illinois Supreme Court rule now allows live video testimony in civil cases.

On Tuesday, the court announced this rule and another new rule to keep Social Security numbers out of future court documents.

Effective immediately, Illinois courts may allow video streaming of live witness testimony in civil cases under the newly-enacted Rule 241.

The rule stipulates video testimony may be allowed "for good cause shown in compelling circumstances and upon appropriate safeguards."

Attorney Robert A. Clifford, president of The Chicago Bar Association, said courts still prefer in-person testimony, but video testimony can provide input from witnesses who may otherwise not be able to testify.

"You can have an expert sitting in Manhattan or Los Angeles and present them live on a screen," Clifford said.

Video testimony has been used before in Illinois courts, Clifford said, but there was no rule specifically allowing it until now.

"To the extent that it's been done in the past, it was at the agreement of the parties," Clifford said. "Modern trials are going to change and you're going to see more and more of this as time goes on."

Anne M. Oldenburg, president of the Illinois Association of Defense Trial Counsel, said the new rule may make it difficult for juries to determine the credibility of a witness.

"I think there's something more you can gain by seeing a witness; see them walk into a courtroom, see them interact with attorneys," Oldenburg said. "That might give you more of an ability to assess credibility."

She said video conferencing is already used extensively in discovery for civil trials, as well as in civil cases in other states.

"They supposedly have statistics documenting that this will decrease costs and decrease time of trial, so from that perspective, it's a good thing," she said. "But I think it needs to be used carefully. I think the discretion of the judge will be key."

Jerry A. Latherow, president of the Illinois Trial Lawyers Association, said witness credibility shouldn't be a concern.

"We judge the credibility of people we see on the news all the time, so I don't see that as being a problem," Latherow said. "This gives the trier of fact better evidence and puts them in a better position to decide the case."

______________________________________________________________________

The new rule is posted online here. The same text is pasted below:

Rule 241. Use of Video Conference Technology in Civil Cases 
 
The court may, for good cause shown in compelling circumstances and upon appropriate  safeguards,  permit  presentation  of  testimony in  open  court  by contemporaneous transmission from a different location.
 
Adopted October 4, 2011, effective immediately. 
 
Committee Comments
 
The presentation of live testimony in court remains of utmost importance.  As such, showings of good cause and compelling circumstances are likely to arise when a witness is unable to attend trial for unexpected reasons, such as accident or illness, but is able to testify from a remote location. Advance notice should be given to all parties of foreseeable circumstances that may lead the proponent to offer testimony by contemporaneous transmission.
 
Good cause and compelling circumstances may be established if all parties agree that testimony should be presented by contemporaneous transmission; however, the court is not bound by a stipulation and can insist on live testimony.
 
Adequate safeguards are necessary to ensure accurate identification of the witness and  protect against  influences  by persons  present  with  the  witness. Accurate transmission must also be assured 

 

Litigation Funding in the News - New Funds and a Juridica Deal That Went South

The WSJ includes two new articles on litigation funding, with both by Vanessa O'Connell. The first article covers new, private entrants into the litigation funding market. They are Fulbrook Capital, BlackRobe Capital, and Bentham Capital. The latter two seem to each include a focus on certain types of litigation.

The article also includes an interesting twist. Thus, it mentions that DuPont embraces litigation funding on some occasions, but the US Chamber of Commerce remains opposed to free enterprise having a role in litigation. 

The second article describes a Juridica litigation that went south. The loan recipient tried to avoid arbitration by claiming that litigation funding changes the interests in litigation, which of course seems obvious. 

Auction Rate Securities Litigation - Is a Specialized Forum Better for Plaintiffs ?

The litigation industry includes myriad lawsuits regarding alleged misdealing by various financial houses with respect to the issuance of auction rate securities. This article from AmLaw Litigation Daily includes quotes indicating that plaintiff's counsel prefer FInancial Industry  Regulatory Authority arbitrations over lawsuits because in the arbitrations, evidence is quickly put on the table and motions to dismiss are not the endgame. Specifically, the article states:

"WVUH's lead lawyer, Jim Swanson of Fishman Haygood Phelps Walmsley Willis & Swanson, has been involved in ARS cases against JPMorgan Securities and Merrill Lynch, and he said that both of those institutions also tried to avoid FINRA arbitration (his side prevailed in Manhattan federal district court against JPMorgan, but didn't fare so well against Merrill Lynch). Swanson said arbitration is advantageous for issuers because it forces the parties to put their evidence on the table quickly. "You don't resolve arbitration on motions to dismiss," said Swanson. "From my perspective, when you get the entire context of what was going on in this market, it makes for a compelling case from the municipality side. They were really badly injured by this product."

The  comment highlights the reality that numerous lawsuits have stalled or failed because federal courts moved away from the usual pleading rule of Conley v. Gibson (allegations are assumed to be true) and moved instead to the heightened pleading standard set out in Iqbal and Twombly. Go here for a scholarly but brief discussion of the changes and their consequences. 

 

 

Future Waves of Litigation, Mesothelioma Litigation Marketing, and Anti-Litigation Marketing - Examples from Just One Day - Imagine What Lies Ahead

Good, bad, or otherwise, it's a fact of life that there is significant business in marketing views on both sides of the litigation industry.

Today, for example, Google popped up a new example mesothelioma litigation for victims. It's a  recent example of Internet-based marketing tied to people trying to make their way into outdoor camera range for the "Today Show" in conjunction with "Mesothelioma Awareness Day."  

Then, on the other side, Google also popped up this article on a "pro-business" group paying $ 70k for ads in Louisiana to tout imposing unstated limits on civil lawsuits. 

For many years, plaintiff's lawyer Joe Rice has astutely and dryly commented on the reality that asbestos litigation always become a popular topic during time periods prior to elections.  As he spoints out time and again, asbestos litigation may well be the best ever source for "evergreen" campaign contributions. And that arises today because of something around 2,000 - 3,000 annual mesothelioma deaths  in the US, depending on the numbers used.

Imagine what happens when toxic tort litigation really takes hold as to some of the other 497,000 cancer deaths that occur each year in the US. Some might think that the "asbestos litigation" controversies are really more about future waves of cancer litigation for various other cancers, as predicted by the American Conference Institute. Consider, for example,  the blood and lymph cancers that some tie to exposure to various chemicals. The numbers are stunning - every ten minutes, someone in the US dies of a blood cancer, and the incidence rate for some cancer types has been increasing about 2% per year for each and every year since 1974.  

$ 2 Billion Dollars of US Bankruptcy Claims Traded in August 2011

The September 22, 2011 New York Times includes this interesting article on the aggregate value of bankruptcy claim trading. The numbers provide at least a small insight into the litigation industry specific to chapter 11 cases in the US.  The key section is pasted below. 

 

September 21, 2011
 

Bankruptcy Claims Trading Slows in August

(Reuters) - U.S. bankruptcy claims trading dropped sharply in August from the previous month due to a decline of activity involving the Lehman Brothers Holding Inc bankruptcy, according to a private report.

The number of claims traded fell to 891 in August from 1,352 in July. The value of claims traded fell to $2.22 billion from $3.55 billion in July, which was the high point for this year, according to SecondMarket, which runs a claims trading platform.

Creditors such as landlords and trucking companies can trade or sell their claims against bankrupt companies. The seller gets immediate cash, while the buyer, often a hedge fund investor, hopes to make a handsome return by betting on the timing and ultimate payout in the bankruptcy.

The number of Lehman claims traded fell to 205 from 782 in July. The face value of the Lehman claims that traded fell to $2.1 billion from $3.4 billion in July.

Lehman Brothers, the largest bankruptcy in U.S. history, hopes to be out of bankruptcy and to begin repaying creditors early next year.

Other actively traded cases included restaurant chain Perkins & Marie Callender, college bookstore operator Nebraska Book Co, liquidating telecoms maker Nortel Networks Inc and chemical company W.R. Grace Co.

Several single claims were traded that had a large face value, although the actual price paid was not disclosed. Single claims worth more than $20 million that traded included those against Bear Island Paper Co, Lehman Brothers Inc and CMR Mortgage Fund II LLC.

(Reporting by Tom Hals, editing by Matthew Lewis)

 

 

Second Update on 9/11 Lawsuits Against Saudi Entities - Developments Include The Insurance Industry Seeking Claim-Specific Legislation to Try to Obtain Money from Backers of Terrorism

Update to Post of September 11, 2011:

Insurers have now dismissed - without prejudice - their new lawsuit involving 9/11. AmLaw has the story here. Counsel for the insurers declined to explain the dismissal, so the story is not much of a story. The prior post also is pasted below. 

__________________________________________________________________________________

 

The September 11 attacks and resulting deaths are remembered today in many human ways far more important than money. But for the insurance industry, any disaster also is about the money.  New articles and lawsuits illustrate the money side of the September 11 attacks, and the roles of smart trial lawyers representing insurance industry plaintiffs and human victims. One especially interesting aspect is the insurance industry renewing ist efforts at obtaining claim-specific legislation. 

On the human side, Motley Rice has been after terrorists sponsors for much of the decade, and has won some issues and lost some issues. This prior post from 2009 links to other articles on fascinating information and discovery-related battles. A partial update on the litigation is found in Michael Goldhaber's September 9, 2011 article in AmLaw's Litigation Daily.

Mr. Goldhaber's article focuses mainly on the insurance industry side of the September 11 litigation, and provides a fine reminder that the insurance industry side of the litigation industry is a multi-headed creature. One head puts out daily, perhaps hourly, messages to paint a picture of a horrible litigation industry purportedly controlled by "greedy trial lawyers"  who make money, they say, just by representing sympathetic plaintiffs. But another head of the insurance industry creature is very different. That head portrays insurance industry giants as sympathetic, financial naifs bamboozled and defrauded by Wall Street financial houses, and acts as plaintiff seeking to recoup investment losses. Thus, Allstate this summer filed multiple lawsuits against Wall Street entities to recover investment losses. The complaints embraced the plaintiff-side tactic of including in the complaint allegations vilifying the defendants as bad actors; thus: 

"In truth, and as Allstate and the world would only later discover, the originators whose loans collateralized the Morgan Stanley [residential mortgage-backed securities] purchased by Allstate were among the worst of the worst culprits in the subprime lending industry," the complaint says. "These originators have since folded up their operations, filed for bankruptcy or been shut down by regulators, and are the subject of numerous governmental investigations and private lawsuits alleging misconduct arising out of pervasive illegal and improper mortgage lending practices and other violations of law."

Now, because of its massive payouts from the September 11 attacks, the insurance industry plaintiffs are embracing several tactics. One is to continue litigation, including filing this new complaint against the Saudi government, various princes and various financial entities.  On that front, Mr Goldhaber asserts that the insurance industry is bringing in Carter Phillips to serve as plaintiff's counsel. ("The plaintiffs have brought in Sidley Austin appellate star Carter Phillips to argue before the Second Circuit ...") Mr. Carter is indeed a star, and its ironic to see him as plaintiff's counsel seeking money for insurer plaintiffs because he usually  is counsel relentlessly defending corporate America against supposedly bad plaintiff lawyers. Thus, in asbestos litigation defense, Mr. Phillips said, for example:

 "Plaintiff's lawyers stoke the passions of jurors with arguments regarding [an exposed worker's] risk of deadly cancers," says Carter Phillips in his brief to the court on behalf of Norfolk and Western. "The common results are massive verdicts for relatively healthy plaintiffs."

With the motivation provided by the massive September 11 financial losses, the insurance industry creature has grown another head. That head is now embracing the plaintiff side tactic of seeking claim-specific legislation to assist the insurance industry in recovering its financial losses from Saudis and others. Thus, according to Mr. Goldhaber's article, the insurance industry's as plaintiff is lobbying to obtain a leg up through a hoped-for new state statute in Pennsylvania to be sponsored by Sen. Charles Schumer.  

"Second, Cozen [counsel for the insurers] said that Sen. Charles Schumer will soon reintroduce a bill, known as the Justice Against Sponsors of Terrorism Act, that would effectively overrule the Second Circuit's obstructive rulings on sovereign immunity and personal jurisdiction and allow a new action to be filed against Saudi Arabia. Cozen O'Connor's lobbying materials make clear that its preferred endgame is to force Saudi Arabia into a massive executive agreement, on the model of Libya's 2008 settlement of terror claims."

Conclusion? Litigation is an industry, and it's mainly about money, not justice.

More evidence for the conclusion? During my legal youth, I spent 1983-1984 as a law clerk forHoward C. Ryan,  a smart and respected conservative to middle of the road justice of the Supreme Court of Illinois.  Judge Ryan was a trial lawyer and then trial judge before moving to the intermediate appellate court and then to the supreme court. As of my clerkship in 1983-1984,  the "liability crisis" of the 1980s was said to be beginning, and the court received myriad defense side briefs arguing that the sky was about to fall in because of plaintiff's lawyers and Madison County was starting to attract attention as a plaintiff friendly jurisdiction. Meanwhile, amicus briefs and ordinary briefs also flowed in for cases from plaintiff's lawyers railing against evil insurers and companies said to be concerned only about money. Important opinions were being issued and drafted. As an impressionable baby lawyer fresh out of school and an editorial position on a law review, I tended to ask Judge Ryan a lot of questions. Some questions flowed from uncritically accepting as true various unsupported factual assertions set out in law reviews and other "scholarly writing."  Judge Ryan's advice was great:

"You will learn not to believe it all, and during your career, you will over time learn which lawyers you can trust. That's part of why we decide one case at a time, based on a record of facts, and why trials and trial judges are so important. Most everyone in litigation has a financial interest, and those interests are not really about justice." 

 

South African Miners Sue Anglo-American in London

The BBC has the story on new dust and lung injury litigation filed in London on behalf of South African miners. The suit is the latest in a string of suits brought by Leigh Day for persons living in Africa. The key excerpts are as follows:

_______________________________________________________________________________________

 

"Dust levels were high and they suffered massive rates of silicosis, a known hazard of gold mining for the last century."

Leigh Day & Co said the workers faced the health risks up to 1998 - four years after white minority rule ended.

"Black miners known to have contracted silicosis were allowed to continue working in underground dusty conditions," it said.

The law firm alleged that workers from South Africa's Eastern Cape province and neighbouring countries, including Lesotho and Botswana, had fallen ill.

"Communities in areas of Eastern Cape and Lesotho have been decimated by what one leading South African medical expert has referred to as a river of disease flowing out of South African gold mines," it said.

The firm said the case was similar to the one South African asbestos miners brought about a decade ago against UK multinational, Cape Plc

 

DuPont Wants Punitive Damages - What Would the U.S. Chamber of Commerce Say ?

The US Chamber of Commerce and others frequently advocate to limit or abolish punitive damages evidence and awards. An example is this amicus brief in Eden Electrical v.  Amana Company.  (But if punitive damages are awarded, the Chamber wants the award  to be deductible as ordinary business expenses, as stated here by the Chamber.)

Oft used phrases that come quickly to mind are "jackpot justice" and "litigation lotteries."  So, it's interesting to note this AmLaw story that  DuPont is seeking $ 52 million in punitive damages plus attorney's fees on top of a $ 920 million compensatory damages award for theft of trade secrets. The facts of the case described in the article do indeed seem egregious, and so one understands why DuPont is after punitive damages from a Korean competitor that apparently blatantly acted badly an destroyed evidence. The good news for the Chamber is that the requested punitive damages fit within the oft-cited 10X ratio between compensatory damages and punitive damages.  

Here's the key excerpt from the article as to DuPont's hopes:

"Kolon and its lawyers have promised to appeal the verdict, which DuPont is still seeking to augment with more than $52 million in punitive damages and more than $30 million in attorney fees. (A hearing on punitive damages is scheduled for November.) DuPont's lawyers will also get a chance to play defense next March, when a trial is set on antitrust counterclaims brought by Kolon accusing DuPont of monopolizing the market for para-aramid fibers." 

Jamie Dimon of JPMorgan Sees 3-10 Years of Litigation Ahead for Uber Banks

The Financial Times today includes an article focusing on Basel and capital requirements for uber banks.  Written by Tom Braithwaite in New York and Patrick Jenkins in London, the article closes with Jamie Dimon commenting on perhaps 3-10 years of litigation for banks and other financial houses:


 

"US banks are struggling to deal with new regulations and litigation, both stemming from the financial crisis. Mr Dimon said it could be “three to 10 years” before the industry emerged from lawsuits brought by investors looking for compensation for the losses incurred on structured products underpinned by bad mortgages.


He said he was ready to agree a settlement over lax servicing and foreclosure standards that is expected to see the industry pay $20bn in penalties. But he said banks could not be placed in “double jeopardy” and needed an appropriate release from legal liability."

 

Reuters and Others Writing About a Litigation Trust for Bank of America

Reuters' Unstructured Finance blog  has now published thoughts/a fairly detailed article on using the asbestos trust solution for the toxic torts of the banks and other financial houses. See Bank of Asbestos. The publication is written by Matthew Goldstein, Jennifer Ablan, Daniel Wilchins, and Kristina Cooke.  They trace their writing back to the zerohedge blog and it's similar post here. Zerohedge also was paying attention back when GM used chapter 11 and issues were raised about the constitutionality of the trust.  

 The thought has made it at least as far as to the China Post; the article is here; the introduction to that article is pasted below. 

 

"BofA may need litigation trust for lawsuits

Monday, September 12, 2011
Reuters


NEW YORK -- It worked for asbestos, so why not for toxic mortgages?

When some analysts look at all of the litigation arising from Bank of America's (BofA) big role in the U.S. mortgage mess, they start thinking of asbestos and how thousands of lawsuits arising from that cancer-causing product brought down many manufacturers more than a decade ago.

The solution back then to dealing with claims filed by more than 750,000 workers exposed to asbestos was the creation of dozens of “asbestos settlement trusts,” which have paid out tens of billions dollars in damages. Some of them are still going strong today.

The asbestos trusts were seen as an innovative approach to deal with seemingly endless litigation and provide a measure of compensation to sick workers and their families. The system for dealing with claims also allowed some of the hobbled manufacturers to emerge from bankruptcy largely free of the crushing weight of lawsuits.

Now some investors in soured mortgage-backed bonds sold by BofA and advocates for struggling homeowners are wondering whether a similar strategy can be used to deal with litigation claims that Wall Street analysts estimate could cost the nation's biggest bank more than US$50 billion." 

 

Mesothelioma Marketing - in the Tehran Times

Apparently we've now thoroughly Americanized Iran. The Tehran Times newspaper now includes mesothelioma marketing. Click here to view it. 

Update on 9/11 Lawsuits Against Saudi Entities - Developments Include The Insurance Industry Seeking Claim-Specific Legislation to Try to Obtain Money from Backers of Terrorism

The September 11 attacks and resulting deaths are remembered today in many human ways far more important than money. But for the insurance industry, any disaster also is about the money.  New articles and lawsuits illustrate the money side of the September 11 attacks, and the roles of smart trial lawyers representing insurance industry plaintiffs and human victims. One especially interesting aspect is the insurance industry renewing ist efforts at obtaining claim-specific legislation. 

On the human side, Motley Rice has been after terrorists sponsors for much of the decade, and has won some issues and lost some issues. This prior post from 2009 links to other articles on fascinating information and discovery-related battles. A partial update on the litigation is found in Michael Goldhaber's September 9, 2011 article in AmLaw's Litigation Daily.

Mr. Goldhaber's article focuses mainly on the insurance industry side of the September 11 litigation, and provides a fine reminder that the insurance industry side of the litigation industry is a multi-headed creature. One head puts out daily, perhaps hourly, messages to paint a picture of a horrible litigation industry purportedly controlled by "greedy trial lawyers"  who make money, they say, just by representing sympathetic plaintiffs. But another head of the insurance industry creature is very different. That head portrays insurance industry giants as sympathetic, financial naifs bamboozled and defrauded by Wall Street financial houses, and acts as plaintiff seeking to recoup investment losses. Thus, Allstate this summer filed multiple lawsuits against Wall Street entities to recover investment losses. The complaints embraced the plaintiff-side tactic of including in the complaint allegations vilifying the defendants as bad actors; thus: 

"In truth, and as Allstate and the world would only later discover, the originators whose loans collateralized the Morgan Stanley [residential mortgage-backed securities] purchased by Allstate were among the worst of the worst culprits in the subprime lending industry," the complaint says. "These originators have since folded up their operations, filed for bankruptcy or been shut down by regulators, and are the subject of numerous governmental investigations and private lawsuits alleging misconduct arising out of pervasive illegal and improper mortgage lending practices and other violations of law."

Now, because of its massive payouts from the September 11 attacks, the insurance industry plaintiffs are embracing several tactics. One is to continue litigation, including filing this new complaint against the Saudi government, various princes and various financial entities.  On that front, Mr Goldhaber asserts that the insurance industry is bringing in Carter Phillips to serve as plaintiff's counsel. ("The plaintiffs have brought in Sidley Austin appellate star Carter Phillips to argue before the Second Circuit ...") Mr. Carter is indeed a star, and its ironic to see him as plaintiff's counsel seeking money for insurer plaintiffs because he usually  is counsel relentlessly defending corporate America against supposedly bad plaintiff lawyers. Thus, in asbestos litigation defense, Mr. Phillips said, for example:

 "Plaintiff's lawyers stoke the passions of jurors with arguments regarding [an exposed worker's] risk of deadly cancers," says Carter Phillips in his brief to the court on behalf of Norfolk and Western. "The common results are massive verdicts for relatively healthy plaintiffs."

With the motivation provided by the massive September 11 financial losses, the insurance industry creature has grown another head. That head is now embracing the plaintiff side tactic of seeking claim-specific legislation to assist the insurance industry in recovering its financial losses from Saudis and others. Thus, according to Mr. Goldhaber's article, the insurance industry's as plaintiff is lobbying to obtain a leg up through a hoped-for new state statute in Pennsylvania to be sponsored by Sen. Charles Schumer.  

"Second, Cozen [counsel for the insurers] said that Sen. Charles Schumer will soon reintroduce a bill, known as the Justice Against Sponsors of Terrorism Act, that would effectively overrule the Second Circuit's obstructive rulings on sovereign immunity and personal jurisdiction and allow a new action to be filed against Saudi Arabia. Cozen O'Connor's lobbying materials make clear that its preferred endgame is to force Saudi Arabia into a massive executive agreement, on the model of Libya's 2008 settlement of terror claims."

Conclusion? Litigation is an industry, and it's mainly about money, not justice.

More evidence for the conclusion? During my legal youth, I spent 1983-1984 as a law clerk for Howard C. Ryan,  a smart and respected conservative to middle of the road justice of the Supreme Court of Illinois.  Judge Ryan was a trial lawyer and then trial judge before moving to the intermediate appellate court and then to the supreme court. As of my clerkship in 1983-1984,  the "liability crisis" of the 1980s was said to be beginning, and the court received myriad defense side briefs arguing that the sky was about to fall in because of plaintiff's lawyers and Madison County was starting to attract attention as a plaintiff friendly jurisdiction. Meanwhile, amicus briefs and ordinary briefs also flowed in for cases from plaintiff's lawyers railing against evil insurers and companies said to be concerned only about money. Important opinions were being issued and drafted. As an impressionable baby lawyer fresh out of school and an editorial position on a law review, I tended to ask Judge Ryan a lot of questions. Some questions flowed from uncritically accepting as true various unsupported factual assertions set out in law reviews and other "scholarly writing."  Judge Ryan's advice was great:

"You will learn not to believe it all, and during your career, you will over time learn which lawyers you can trust. That's part of why we decide one case at a time, based on a record of facts, and why trials and trial judges are so important. Most everyone in litigation has a financial interest, and those interests are not really about justice." 

 

Causing Change Through Litigation

Critics of the litigation industry often complain that lawsuits are used to create change instead of leaving all issues to other branches  of government. Consider that thought in the context of this recent article on the US using litigation to slow down the use of Switzerland in its race to the bottom laws which make it a "tax haven." Instead of using that euphemism, some would say that the Swiss government aids and abets criminal acts. Swiss banks are not happy at losing that status

Litigation Industry Tactics - An Example - Slowing or Blocking the Dodd-Frank Act

If at first you don't succeed, try try try again. That old proverb is relevant to understanding the world of change through legislative lobbying and litigation. The basic point is simple for any interest group:

get what you can by lobbying, and then use litigation to block or delay laws you oppose. 

An example of this part of the litigation industry is presented in this NYT article by Ben Protess. The article explains part of the process for  "big business" entities working through the US Chamber of Commerce to bring suits seeking to block portions of the Dodd-Frank Act. This type of litigation is big business, and one of its top advocates is Eugene Scalia from Gibson Dunn, son of Justice Scalia. Set out below are key excerpts - the entire article is well-worth reading for anyone naive seeking examples of using litigation to block legislation. 

 

"In recent weeks, lawyers and Wall Street trade groups have gathered in Washington to ponder the next big case. Lawyers branded one meeting, held by the United States Chamber of Commerce, as “Dodd-Frank Excesses,” according to two people who were notified of the meeting.

Until now, Wall Street relied largely on an army of lobbyists to chisel away at 300 new rules flowing from the S.E.C. and the Commodity Futures Trading Commission, among other agencies. But while lobbying might yield the occasional loophole, judicial rulings can halt new rules altogether.

 

“I would hope the agencies are taking to heart the potential consequences for Dodd-Frank rules,” said Eugene Scalia, the lawyer who won the proxy case on behalf of the Chamber of Commerce.

Hal S. Scott, a professor at Harvard Law School and a director of the Committee on Capital Markets Regulation, a research group that has been a critic of Dodd-Frank, said, “I do see lots of challenges coming down the pike.”

Regulators, reluctant to give in to industry pressure, are rushing to safeguard their rules from legal action. The commodity commission, having already delayed several Dodd-Frank rules for six months, is now studying the proxy case and considering adjustments to some proposed regulations, according to a person close to the agency. Earlier this month, the agency dispatched several staff members to meet with S.E.C. officials about the recent court decision."

 

 

SEC's WhistleBlower Office is Now Open for Business Seeking Tips on Securities Law Violations

The SEC's new online whistleblower office is open for tips on securities law violations. Good - let's hope they ferret out more fraudsters before we get another Bernie Madoff, and the many others who've been missed.  

DealBook's entry on the subject describes fervent opposition from the US Chamber of Commerce.  The Chamber  tie its opposition to the supposed evils of fees being earned by  lawyers who represent plaintiffs in lawsuits. The Chamber's argument cannot be squared with the reality that lawyers representing plaintiffs include legions of lawyers who represent corporations against insurance companies, myriad legions more insurance company lawyers who bring lawsuits and cross-claims pursuant to subrogation rights, and, for example, AIG (here), Allstate (here), states (here) and others filing fraud lawsuits against financial houses in the US. There's also the burgeoning collection of lawsuits against indisputable frauds in securities offerings related to Chinese entities. 

The plaintiff's bar also includes an increasing number of inside lawyers working for corporate America. The trend to "revenue-enhancing litigation"  has been obvious for quite some time, and is described in this May 13, 2011 WSJ article . Some key quotes are below but the entire article merits a read: 


 

Companies are warming to a new way of generating revenue: suing for it.

Ford Motor Co., Tyco International Ltd. and Michelin SCA, among others, say their lawyers are devoting more time and effort to bringing in extra cash by thinking like plaintiffs.

 

Following in the footsteps of several big drug and technology companies, which have aggressively pursued alleged patent infringers, companies in a range of industries have stepped up legal action, not only in the patent arena but also against suppliers, insurers and even utilities they think have done them wrong or owe them money.

The sums they win from these "plaintiff recovery" lawsuits usually aren't big enough to be singled out in earnings statements. Nor do individual cases typically have a material impact on the bottom line. But, taken together, they can produce hundreds of millions of dollars in added revenue for a company in a single year, potentially turning its legal department into a profit maker.

"It adds up to real money over time," says Tom Sager, general counsel at chemical makerDuPont Co. In one case, DuPont won roughly $92 million in a settlement with its insurers, which it had sued in Texas seeking reimbursement of asbestos claims against the company."

 

 

Lawsuits are a fact of modern life, which is why we have a litigation industry. One could argue the Chamber would be more credible if it acknowledged the realities of the litigation industry, and  welcomed the use of the free enterprise model. To do so, it could say something accurate, such as: 

"Our members are collectively hurt when corporate fraud diminishes trust and confidence in our nation's corporations. So long as the SEC exercises care in screening tips and decision-making, we applaud and welcome the new whistleblower office."   

 

Litigation Industry Dynamics for Health-Care Fraud Whistleblower Claims, and Judges as a Catalyst for Pushing Cases Forward

Sheri Qualters authored this interesting article in the National Law Journal on changing dynamics in a specific portion of today's litigation industry. The article focuses on the large number of health fraud whistleblower cases pending in Boston and other venues, and apparent judicial decisions to unseal cases earlier as a means for addressing long delays and pushing cases forward. In short, judges appear to lifting seals on the cases to force the parties to move forward, one way or the other. The apparent judicial tactic highlights the reality that litigation is indeed an industry, and the judiciary can and does influence how the industry unfolds. Ms. Qualters article goes on to cover various aspects of the larger issues and some case specific issues. The following touches on some points raised in the article, and some broader points about the litigation industry. 

The article includes some useful data to provide some perspective on the significance of the healthcare fraud subpart of the litigation industry, and whistleblowers as a force within that subpart:

"Justice Department data show a steady climb in recent years of whistleblower fraud cases in which the U.S. Department of Health and Human Services is the primary client agency, from 202 new matters filed in fiscal year 2007 to 383 in fiscal year 2010. The District of Massa­chusetts has unsealed three of 25 pending False Claims Act cases before the government decided whether to jump in. One was unsealed more than two years ago, but the government has yet to make an intervention decision. The government declined to intervene in the two other cases shortly after they were unsealed. Of the remaining cases, the government has declined to intervene in a dozen, intervened in five and not made an intervention decision in five others."

Health care industry lawyers can view earlier unsealing as a positive or a negative. Earlier unsealing may give them a better chance at winning a Twombly/Iqbal pleading motion based on a lack of "enough" detail if it can be launched and won before government intervention adds an imprimatur and perhaps fact investigation. On the other hand, for a liable/guilty company, early unsealing may make it harder to control the dynamics of settlement and related media spin and attention, thus increasing reputation risk and financial risk. Other variables of course also exist. 

For private plaintiffs, earlier unsealing can be a negative in raising the effort level but that may be offset be creating settlement leverage for a case. For government lawyers, the delays highlight the need for NOT cutting budgets, and for creating specialist lawyers who can quickly analyze evidence and law, as is done in private litigation boutiques on both sides of issues. One might argue the feds should embrace a model of creating national specialists who could "parachute in" to a case in any district and avoid concentration of cases in specific courts. On the other hand, some would argue that having specialist courts is desirable, and inevitable because of physical concentration of industry businesses. 

Taxpayers also have a stake. Some might say that long time frames for sealing are not a good idea, and that the public should know the issues immediately, especially as the health care debate continues and costs increase, with fraud playing some part in the gaming of the system, in some instances. On the other hand, sealing may discourage cranks wrongly seeking to punish a company (there probably are some cranks), and at least for some amount of time, sealing may encourage taking a case forward to the point that guilty/liable defendants will settle quickly if they can avoid a long string of bad press and efficiently clean up a problem. Ms. Qualters' article includes some insightful quotes from some judges. 

Overall, the litigation industry dances highlight the need for smart, savvy, and experienced judges who can find the right line between dictating outcomes and pushing cases forward. Hopefully the judges can help the parties focus on key issues, and produce outcomes which approximate something that most of us perceive as "justice" in general and in a specific case. 

 

BP Oil Rig Deposition Excerpts Now Appearing on YouTube and Other Media - What Will and/or Should be Done ?

Video-taped depositions create interesting media situations related to mass tort claims.  For example, BP's former CEO was deposed in June, 201,  and excerpts are now online on YouTube (multiple videos will show up from a search for "Tony Hayward"). Apparently, however, there is a pretrial order purporting to preclude dissemination of excerpts from the depositions. The developments are described here by  The Society of Environmental Journalists, which is the host for  a website for environmental reporters, and in this related story by The Reporters Committee for Freedom of the Press.   This Court  order purports to require the return of the videos. 

The litigants, the lawyers and the Court now face interesting dilemmas. Shall they stir up possible adverse publicity issues by actually forcing YouTube and others to return the videos? Also, should the order be continued or should it be withdrawn as ill-advised, and/or unconstitutional? After all, the public's right to know is usually viewed as compelling in both legal and moral terms.

My bet? No one will force the return of the already leaked excerpts. There will, however, be various kinds of pressure applied behind the scenes to block other "leaks." 

Mass tort litigation never was simple. It's becoming even more complex thanks to the Internet and videos. 

 

Service of Process Through Facebook and Twitter - A Logical Extension of Old Law

Who knew ? An appellate court in Australia apparently blazed a trail by approving use of  Facebook for service of process in a case where the defendants could not be located for traditional service of process. And, yes, that tactic apparently was suggested by young lawyers. Good for them - it is a logical extension of publication notice, and/or nailing a summons and complaint to the front door of a home.  

For the specifics, see this article from the February 2009 Louisiana Bar Journal (Volume  56, No. 5) by Eric M. Liddick, a Louisiana lawyer. I learned of that article through a DRI publication that just came out this week.  Also note that this online article says that a different Australian court refused to approve using Facebook to serve process. 

And, there's more. According to this Herbert Smith article, a New Zealand court also approved using Facebook for service of proces. The same article also says that  a UK court approved using Twitter for service of process. 

 

 

 

Cy Pres Awards - Jones Day Provides an Online Summary of US State Law Rules for Cy Pres Awards

Who gets the money - that's an important issue for tort lawyers and is not always a simple subject.     For example, mass tort claims  and/or class actions often are settled through the creation of trust funds or claiming funds. Sometimes the claims do not use up all the money in the fund or the trust. When that happens, where does the money go? 

The leftover funds sometimes are the subject of "cy pres" awards.   Cy pres awards are court-approved awards intended to disburse the money in a manner reasonably close  to the original intent of the creator of the fund or trust. The awards are often made to public interest litigation groups, if the money is not required to revert to the creator do the fund.

Some states regulate the standards for cy pres awards. This online summary from Jones Day provides a very useful summary of existing state statutes on cy pres awards, and some discussion of the applicable standards.  The article is by  Emily C. Baker and Lynsey Morris Barron.  

Hat tip to Lexology for circulating news of the article. 

 

 

A Segment of the Litigation Industry Targets Ace Insurance (Run By Hank Greenberg's Son)

Here's an example of the litigation industry at work. The example is this free website known as the Ace Insurance Litigation Watch.

What's the point of the website? To gather and organize information on lawsuits against Ace Insurance and its many affiliates.  Among other things, the website presents a still-growing collection of information on 237 coverage lawsuits filed against Ace. For many if not all of the lawsuits, the website includes free access to complaints and other key litigation documents.

Who is Ace Insurance?  It's a massive, international  insurance company  with many affiliates - annual premiums exceed $ 19 billion. It's also run by Evan Greenberg, son of Hank Greenberg of AIG fame.  Both Ace and AIG entities have reputations for not paying claims. Among other stories covered by the website, one focuses on ACE having been sued in this RICO suit arising from failure to pay claims related to the BP oil rig disaster.

How do the website's sponsors explain their mission ?  

"Our goal is to help policyholders help themselves. Companies and individuals who unfortunately find themselves up against the ACE litigation machine understand the long and expensive effort required to gain justice against an adversary with ACE's vast resources. Furthermore, individual litigants are normally isolated from each other even though they are often looking for the same information and asking the same questions. This gives ACE a significant advantage in the courtroom while the company acts through lawyers who excel at litigation by attrition.

 Some of the index and other portions of the Ace Litigation Watch website are freely available to public visitors. However, other sections of the database are reserved for members of ACE Litigation Watch. Membership is reserved for ACE policy holders or other parties and their counsel who are either actively engaged in or eminently anticipating litigation against a member of the ACE Limited Insurance Group. The only price of admission is a pledge to participate in the growth of the index.

As for the FOIA project, the press release describes an aggresive effort to compile information on Ace. Thus, the press release states:

June 10, 2011 - ACE Insurance Litigation Watch, the online repository for lawsuits and other claims against the ACE Ltd. insurance company (NYSE: ACE) and its ACE Group subsidiaries, today announced that it is archiving up-to-date insurance regulatory documents from all fifty states and the federal government for free and easy public access.

The ACE Litigation Watch website aims to provide a secure and convenient platform through which policyholders and litigants can collaborate. By adding the information accumulated as a result of comprehensive FOIA requests to the ACE Litigation Watch databases, there will be a substantial expansion in the scope of information ACE Litigation Watch is able to make public.

The information that is being compiled from—among other places—State insurance regulators, the SEC, IRS, DOJ, and FTC, although technically considered public information, is often difficult and costly for the public to access. The process of taking that information and making it available to the public in a user-friendly format, whether the user is a financial analyst, a litigant, or a prospective policy-holder, should be a major step forward in achieving corporate transparency and accountability with respect to the Swiss insurance giant ACE Ltd.

ACE has a very extensive litigation history that spans across all U.S. jurisdictions. An analysis conducted by ACE Litigation Watch of available court records revealed more that 16,000 cases involving ACE Group companies. Many of those cases involve policyholders who contend that ACE claims specialists have improperly delayed, denied, or diminished the benefits owed under policies issued by ACE Group companies. For example, in the past year, lawsuits have involved such prominent companies as Pepsi (NYSE: PEP), Masco (NYSE:MAS), and NRG Energy (NYSE: NRG). Furthermore, ACE has recently been involved in litigation for failure to cover policyholders in the BP Oil Spill litigation, FEMA Toxic Trailer Cases, and numerous state Workers Compensation cases.

The ACE Group’s North American insurance operations are overseen by executive John Lupica. ACE Limited (NYSE:ACE), which is included in the S&P 500 index, is the ultimate parent of U.S. insurance companies ACE American Insurance Company, ACE American Lloyds Insurance Company, ACE American Reinsurance Company, ACE Capital Title Reinsurance Company, ACE Commercial Risk Services, ACE Employers Insurance Company, ACE Fire Underwriters Insurance Company, ACE Indemnity Insurance Company, ACE Insurance Company of Illinois, ACE Insurance Company of Ohio, ACE Insurance Company of Texas, ACE Insurance Company of the Midwest, ACE Property and Casualty Insurance Company, ACE Tempest Reinsurance USA, ACE USA, ACE Westchester, Allied Insurance Company, Atlantic Employers Insurance Company, Bankers Standard Fire and Marine Company, Bankers Standard Insurance Company, Century Indemnity Company, Century Reinsurance Company, Combined Insurance, Combined Life Insurance Company of North America, ESIS, Inc., Illinois Union Insurance Company, INA Surplus Insurance Company, Indemnity Insurance Company of North America, Insurance Company of North America, Pacific Employers Insurance Company, Rain and Hail Agricultural Insurance, Westchester Fire Insurance Company, and Westchester Surplus Lines Insurance Company.

May 25 Litigation Funding Conference in London Gathers Industry and Legal Leaders

A May 25, 2011 conference in London will bring together true industry leaders and legal thought leaders, including Justice Jackson. The agenda and registration are here for Maximising Opportunities in Litigation Funding.

Justice Jackson authored the leading report for the UK on litigation costs and funding. Background materials are here, as are links to the paper. Panel members will include Selvyn Seidel, a leader in this field.

The conference agenda is pasted below.  

09:20 - 09:25 Chair’s opening remarks
Michael Napier CBE QC, Senior Partner, Irwin Mitchell LLP


09:25 - 10:00 Access to justice and third party funding

Lord Justice Jackson


10:00 - 10:45 Third party funding in practice

Susan Dunn, Head of Litigation Funding, Harbour Litigation Funding Limited


10:45 - 11:00 Coffee

 


11:00 - 11:45 Finding the right cases for funding

Click on cross to view speakers


11:45 - 12:30 Conditional fee agreements

Paul Shenton, Managing Director, Just Costs Solicitors


12:30 - 13:30 Lunch

 


13:30 - 14:10 After-the-event insurance

Ashley Netherclift, Head of Underwriting, LawAssist


14:10 - 14:40 Contingency fees

Hardeep Nahal, Partner, Herbert Smith LLP


14:40 - 15:20 Funding arbitration

Lord Daniel Brennan QC, Matrix Chambers


15:20 - 15:35 Afternoon Tea

 


15:35 - 16:15 Developments in European litigation funding

Click on cross to view speakers
  • Litigation funding and forum selection in Europe
  • The Dutch model
  • The German model
  • Future trends in Europe

Rob Murray, Partner, Crowell & Moring LLP

Pierre Bos, Partner, BarentsKrans

Till Schreiber, Legal Counsel, Cartel Damage Claims


16:15 - 17:00 Panel Session: The future of third party funding and after-the-event insurance

Click on cross to view speakers
  • How is the market going forward?
  • What are the investment opportunities?
  • Can third party funding be extended to the high-street?

Ross Clark, Underwriting Director, Firstassist Legal Expenses Insurance Limited

Selvyn Seidel, Chairman and Co-Founder, FULBROOK MANAGEMENT LLC


17:00 - 17:10 Chair’s closing remarks

 

Contingent Liabilty Segregation and Estimation - FASB Dithers While Bank of America Seeks to Take Charges and Move On

Saying other things are more important, FASB continues to dither on estimating contingent liabilities - see here and this brief but biting story with some great quotes at the end about FASB's delays. The low priority assigned to contingent liabilities is especially hard to understand in this age of massive corporate bankruptcies by companies which failed to reserve for future liabilities (e.g. car companies), not to mention massive frauds and/or miserable business practices. 

The topic of coping with contingent liabilities continues to crystallize for Bank of America. This week it moved forward by pushing bad mortgages into a "different" business unit (but not entity), and by selling its forced place insurance business (Balboa) to QBE, an Australian insurer. The stories are everywhere, but good ones are here and here at the NYT. These steps follow massive December and January billion dollar settlements with Fannie Mae and Freddie Mac for, in essence, fraud by Countrywide in its mortgage business. Meanwhile, lots of others are lining up and suing  the banks for selling bad mortgages, including Allstate.

Morals to the story ?

  • Contingent liabilities matter, and should be fully disclosed. FASB's delays are disappointing, at best.
  • Segregating liabilities and claims is perceived as desirable to take the stock market's eye off of liabilities and problems.
  • Too many masters of the universe create giant messes for millions of people, but then want to take an accounting  charge and walk way.

One more note. Insurance companies, such as Allstate, constantly complain there is too much litigation by plaintiffs. But when their money is stake, Allstate is happy to be a plaintiff, as evidence by its suit against Bank of America. Actions speak louder than words.

 

 

Bank of America Preparing for WikiLeaks ? - Blogs and Trial by Media

This WSJ Deal Blog article provides an insightful account of Bank of America buying up predictable web site names that could be used to vilify various officers and senior executives. One assumes this recent flurry of activity implicitly confirms that Wikileaks will indeed be releasing  Bank of America documents which may further expose various misdeeds at the bank. 

The names being purchased are not hard to imagine.  For example:

[boardmembername]sucks.com

The point ? Bad press matters. Winning litigation wars requires significant attention to media.    And, there are many consultants who can help any side win the war.

 

Big Law Now Marketing Defense of Global Tort Litigation, and Adopting the Insurance Industry Tactic of Marketing a Theme of Fraud

Big law now sees global  tort litigation as a big deal. For example, Gibson Dunn just issued a press release touting its global tort work for Dole and Enron.  In a similar vein, Shook Hardy has been working and marketing in that space for some time by leveraging its US-based tobacco defense work into global work defendant tobacco litigation.  Orrick likewise is marketing its global mass tort defense skills. Hat tip to Law.com for the  this article  highlighting Gibson Dunn's press release.  

Gibson Dunn's press release is set out below, and is notable for its effort to create an impression of widespread fraud in claiming. This approach mirrors the insurance industry's efforts to create an impression that fraud dominates claiming.  Certainly there has been fraud in claiming, and it should be blocked. But, focusing on fraud also is part of a macro insurance industry effort  to avoid paying meritorious claims, and to reduce claim payment amounts, as is detailed in a great book, Delay, Deny, Defend.  And, now, the Gibson Dunn press release highlights some repeat defendants adopting a similar macro strategy of creating an impression of widespread fraud.

 It's fascinating to watch the evolution of the global litigation industry.   

Gibson Dunn Launches Transnational Litigation and Foreign Judgments Practice Group 

 
December 15, 2010

 

Gibson, Dunn & Crutcher LLP is pleased to announce the formation of its new Transnational Litigation and Foreign Judgments Practice Group, which focuses on defending multinational corporations against torts and other related claims originating from or involving non-U.S. jurisdictions.  The multidisciplinary group will draw upon Gibson Dunn's extensive experience in foreign judgment recognition and enforcement, toxic tort, appellate, media, and international arbitration. 

The Transnational Litigation and Foreign Judgments Practice Group will be led by Los Angeles partner
Theodore J. Boutrous, Jr., Century City partner Scott Edelman, Orange County partner Andrea Neuman and Los Angeles partner William Thomson.  The practice group includes 27 lawyers located in offices throughout the firm.

"We formed this new Transnational Litigation and Foreign Judgments Practice Group to help our clients respond to the increasing threat to corporations posed by lawsuits filed in jurisdictions around the world," said Ken Doran, Chair and Managing Partner of Gibson Dunn.  "The firm has recently been involved in a number of high-profile matters filed in or emanating from foreign jurisdictions.  We created the group in order to better communicate our capability in this area and to formally bring together the skill sets these complex matters require." 

"Whether the claims are tried initially in U.S. courts or in non-U.S. jurisdictions, the new group brings a uniquely skilled, creative, and experienced team to bear on cases posing enormous and complex risks for transnational corporations," Boutrous said.  "These cases are often massive and multifaceted assaults that may involve fundamentally unfair, abusive or corrupt claims.   We work with our clients to develop not just defensive tactics, but rather an affirmative strategy to ultimately end the litigation."

The Transnational Litigation and Foreign Judgments Practice Group has succeeded in assisting clients in a number high-profile matters brought by foreign plaintiffs in courts around the world and is widely seen as one of the preeminent leaders in this field. 

 The group currently represents Dole Food Company, Inc. and Chevron Corp. in numerous high-profile actions brought by foreign plaintiffs in courts throughout the United States and around the world.  Gibson Dunn represents Chevron in its defense of environmental litigation concerning Ecuador, in which the plaintiffs seek billions of dollars in damages.  Discovery proceedings conducted by Gibson Dunn have exposed extensive fraud and collusion by representatives of the plaintiffs and foreign government officials.  In addition, Gibson Dunn transformed a high-risk toxic tort litigation against Dole into a headline-making victory when it took over the defense of a series of cases filed against Dole alleging that its use of the pesticide DBCP in Nicaragua in the 1970s caused sterility in alleged former farm workers.  A Los Angeles Superior Court Judge threw out three high profile cases against Dole after Gibson Dunn lawyers established that the claims were the product of a conspiracy to defraud the court and were based on manufactured evidence from plaintiffs who had been trained to lie by their lawyers.

 

Madoff - Aiding and Abetting Litigation - Going Global

The expansion of the Madoff litigation is big news these days. Go here for an AmLaw summary, and here for the NYT's coverage of the biggest claim yet; $ 19.6 billion against an Austrian who allegedly aided and abetted the ponzi scheme.   No doubt the news will become even louder when complaints are, hopefully, unsealed. One hopes the claims go well, and discourage future aiders and abetters who decide to look the other way.  

Some might say the litigation is a product of litigation funding. Why ? The litigation is being paid for by government funds and fee requests are overseen by the bankruptcy court.  The funding source is the Securities Investor Protection Corporation.

Updated - Madison County, Illinois - Mesothelioma Claims Processor to the Nation a/k/a The Field of Dreams - One Example of the Subject of Outlier Laws and Jurisdictions

Updated with link and opening comments in bold

Click here to read James Stengel's great paper, described below:  Litigating in the Field of Dreams: Asbestos Cases in Madison County, Illinois.

Jim's paper is a " must read" for any lawyer or expert  interested in the actual working of the mass tort system. The paper is especially valuable for highlighting the pervasive power of one outlier jurisdiction when its judges choose to operate outside existing legal rules.  For a strikingly similar example of the problem of extreme outlier jurisdictions and judges who went out of control, consider the awful results which have flowed from the Delaware bankruptcy courts creating their own field of dreams for Wall Street and Delaware businesses and lawyers. For the short story, see this prior post, but the much better course is to invest the time to read   Professor Lynn LoPucki's  2005 book:  Courting Failure: How Competition for Big Cases is Corrupting the Bankruptcy Courts. 

Now that I've seen the full paper, I want to note that Jim's full article explicitly notes that the reality of Madison County going out of control was aided and abetted by  "short-sighted" thinking on the defense side.  That's a subject I covered below when I'd not yet seen the entire paper, and so could write only as to press excerpts. 

___________________________________________________________________________

Madison County courts are back in the news in litigation industry media as the national forum of choice for processing mesothelioma cancer claims. The numbers make it plain that Madison County is indeed the national claims processing venue of choice for mesothelioma claims.

Why is Madison County so popular ? The first answer is:  trial dates. 400 or 500 hundred every year. Enough trial dates to resolve 1/6 to 1/4 of the national number of mesothelioma claims brought each year.

A  second answer as to why Madison  County is so busy is that many defendants and insurers fail to actively oust claims that have absolutely no basis for venue in Illinois, much less Madison County. The implicit message ? The defendants and/or their insurers  are, apparently, at least roughly satisfied with Madison County as a nation forum for processing mesothelioma claims.   

The numbers ?  According to this article quoting Madison County's Chief Judge, Ann Callis, the numbers are as follows. Note especially the abundance of 520  trial dates. Trial dates are the key factor in causing cases to resolve. 

"Last year there were 814 asbestos cases filed in Madison County. In 2008, there were 639; in 2007 there were 455 and in 2006 there were 325. In 2003, cases peaked at 953.

The number of asbestos trial slots have also have been increasing. In 2009, there were 424 trial slots scheduled; in 2010, 490; and in 2011, there are 520 scheduled.

Callis said that as of Oct. 27, there have been 650 asbestos cases filed year to date in Madison County.

"This number is a significant trend downward from last year," she said.

Callis pointed out that there are approximately 100,000 cases filed in Madison County per year.
A  defense view of these numbers?  One view was presented at a US Chamber of Commerce gathering. The view was articulated by an excellent and experienced corporate-side trial lawyer, Jim Stengel of Orrick. His paper is titled: "Litigating in the Field of Dreams: Asbestos Cases in Madison County, Ill."   Jim's presentation was covered here by media  indirectly owned in part by the Chamber of Commerce. Some key quotes are as follows: 

"They [the numbers] speak volumes as to how tort litigation is conducted these days," Stengel said.

At the beginning of the century, a series of jury awards helped Madison County become a favorite target for plaintiffs lawyers, Stengel said. In 2000, a single plaintiff was awarded $34.1 million, and a husband and wife were awarded $16 million in 2001.

Two years later, a single plaintiff who alleged he was exposed to asbestos while working in Indiana was awarded $250 million, including $200 million in punitives.

"Judges in Madison County are elected, and the plaintiffs' trial bar was a reliable source of contributions for favored trial judges," Stengel wrote.

"There was obvious economic interest on the part of the plaintiffs bar which would derive a substantial benefit from locating this litigation in Madison County."

Even defense attorneys benefited from the increased amount of lawsuits, which provided a steady stream of work, Stengel says.

The Madison County Circuit Court adopted procedures to process asbestos claims faster than other jurisdictions, and the court presides over one-sixth of the mesothelioma deaths in America.

Stengel says the number of lawsuits being filed is increasing after a dip in the middle of the decade. There were 424 trial slots scheduled for 2009, 490 scheduled in 2010 and 520 scheduled for next year.

Out-of-state law firms can collect clients, then pass them on to local counsel and earn a referral fee or participate in a fee-splitting agreement, Stengel said. He called it a "hybrid structure as to who harvests these claims."

"After a false dawn in the mid-2000s, the county has continued along the path of a magnet or clearinghouse jurisdiction, adopting and maintaining procedural, and in some cases substantive, rules which attract large numbers of cases to the jurisdiction to the benefit of select local plaintiffs counsel and to the detriment of fairness and the due process right of defendants forced to litigate there," Stengel wrote.

Mr. Stengel's comments are right on the money in terms of  the modern litigation industry practices regarding how claims are harvested and how fees are shared between plaintiff's firms. The quotes, however,  miss my  point. That point is that  some insurers and defendants are complicit in allowing Madison County to take on the role it holds today. Why are they complicit ?  They failed  to push back fast enough or effectively enough when Madison County started attracting many mesothelioma claims.  

Why did insurers and defendants  fail to push back quickly or effectively? Three big causes are lack of a big picture view, lack of a long term view, and wishful thinking (" we are only a peripheral defendant - someone else will take care of that problem"). Other causes include laziness and aversion to creative thinking and risk taking. Defendants and insurers also were driven by short term budget constraints,  and fears that "rocking the boat" would cause of short term reprisals from plaintiff's firms, which can and have targeted  particular defendants when they  caused too many waves. (The answer for defendants of course was to be ready for being targeted, to stay the course, and to win, but all of that takes ample amounts of money, creativity, and courage).  All of the factors are still at work today as new generations of asbestos defendants and insurers move into becoming players.   

The overall result ? There was enough time and money to create and use the the field of dreams.  

 

 

The Battle for Information Control on Matters of Public Interest - Greenpeace Uses RICO to Sue Dow, Sasol and Public Relations Firms Which Stole Information from Greenpeace

A  new lawsuit filed by Greenpeace provides the latest example of the extreme and illegal measures used by some (but far from all) companies which are trying  to control media, spin and public attitudes on  matters  of public interest. For a prior example, recall Hewlett-Packard's widely reported illegal spying activities.  The subject also has spawned recent books. See Broker, Trader, Lawyer, Spy: The Secret World of Corporate Espionage, by Eamon Javers.  I've not read it, but it received this supportive review from John Fialka, a former Wall Street Journal reporter who wrote his own  1997 book on economic espionage. Consider also this professional science journal article by Ruth Malone on the tactics used by the tobacco industry to monitor public health groups. Much of the tobacco information came to light through the tobacco lawsuits, as described here in a story on a faux science writer created by the tobacco industry.

The latest example arises from media arguments and litigation related to sale and use of "toxic" chemicals. The story is in the news because Greenpeace this week filed a RICO complaint in federal court alleging that its offices, dumpsters, cell phones and computers were invaded by human and digital spies. The spies?  According to the complaint, they were investigators hired by public relations firms working for and paid by chemical giant Dow, and a vinyl chloride maker, Sasol.  The "Green" blog from the NYT covers the  Greenpeace story in a detailed post by John Collins Rudolf.  The post includes links to various helpful resources, including the complaint filed by Greenpeace and a prior story from Mother Jones on the skullduggery against Greenpeace

HP settled with the New York Times and various individuals without litigation. My bet is that Greenpeace will not settle lightly since the lawsuit itself provides a means to investigate the scope of the activities Dow directed against Greenpeace, and apparently other groups.

South African Miner Claims - Anglo American a Target

This on-line  article from South Africa provides an update on the efforts of  Leigh Day & Co. and the Legal Resources Center of South Africa as to  litigation on behalf of South African miners. Current claims include claims for gold miners, with the claims against Anglo-American dating back to 2004, as described here by Leigh Day. 

Prior claims for miners were prosecuted against Cape Industries because of its appalling treatment of asbestos miners. Click here to see one of several on-line editions of pictures "from  the collection of pathologist Dr J C Wagner showing a woman at a Cape Blue mine in Swaziland, southern Africa. She is sealing numbered bags of blue asbestos rocks (crocidolite) for export. Wagner's research, and that of his colleagues, led to the identification of the causal link between exposure to blue asbestos and the lung cancer mesothelioma."

Richard Meeran has been an active force in both cases, as described here.

Private Litigation Funders Keep Growing - Burford More than Doubles to Become the World's Largest

Private litigation funder Burford Capital has just raised another $ 175 million to become the world's largest private investor in litigation. Prior funds were raised through an IPO on AIM, as described here. The new round of funding is described here.  A successful prior Burford investment is described here.

The world of public and private litigation is fascinating. Any bets on how long will it be before we see IPOs for litigation funds raised to target specific companies or specific industries ?  By 2020 seems like a good bet to me, and that may well be longer than it actually takes.

Great Looking Upcoming Conference - 4th International Conference on the Globalization of Collective Litigation, with a Focus on Latin America

There’s an upcoming, great looking conference December 10, 2010 conference on the globalization of collective litigation.  The conference is at FIU in Miami.

The conference scope is broad, and includes sessions focused on Latin America and litigation financing. Details are set out below.  The Latin American focus includes a strong contingent of lawyers. Panel 3 on litigation funding is unusual because of its focus on both public and private litigation funding, and other forms of targeted litigation. That’s a broader form of thinking about litigation funding, and obviously make sense. After all, consider the great results obtained by the ACLU’s beautifully planned and executed attack on gene patents that simply describe the layout of a gene. That success has now been followed by the US Department of Justice  taking the same position, thus reversing years of prior thinking. Specifics on the entire conference are set out below; set out first is a description of  panel 3 on litigation funding: 

 “The general theme is to illuminate different ways of funding mass claims, and identify the big problems and issues, and what is coming up in the future. As funding is a developing topic, we want to capture the trends and discuss different options, from the public financing of litigation to the use of legal aid board schemes, consumer associations and NGOs with reference to specific cases such as Dexia, law firm funding and also capture the general insurance perspective.”

4th International Conference on the Globalization of Collective Litigation

Florida International University College of Law

Miami, Friday, December 10th, 2010

About the conference:

This conference, co-organized by professors Manuel A. Gomez (Florida International University College of Law) and Deborah R. Hensler (Stanford Law School), is the fourth in the series of international conferences on the global spread of collective litigation begun in 2007 at Oxford University. It will bring together academicians, policy analysts and legal practitioners to systematically review the status of collective litigation around the world with special focus on Latin America, a region signaled by a growing interest in protecting collective rights, the passage of legislation that provides for class actions and similar mechanisms, and the increased participation of domestic courts in deciding cases that involve large-scale accidents, environmental harms, exposure to toxic materials, defective products and financial injuries.

The conference will address issues of critical importance including financing, coordination and enforcement. It will also serve as a vehicle to exchange information about how the collective litigation rules work in practice, who is availing themselves of these procedures and for what ends, and what the economic and social consequences are for individuals, business, and the public interest.

The full agenda and registration information is available here. :

The conference will consist of four sessions. The two morning sessions will be devoted to Latin America. The two afternoon sessions will be devoted to funding issues (session 3) and general trans-national issues (session 4). Set out below is a brief description of each panel:

Panel 1: The protection of collective rights in Latin America

The general theme is to highlight how the protection of collective actions has evolved in the region, from the writ of Amparo and other court-devised mechanisms (e.g. estado de cosas inconstitucionales inColombia) to the enactment of special legislation geared to protect collective rights (consumer protection statutes, recent reform of the Ley de Reforma del Tribunal Supremo de Justicia de Venezuela, etc). Panelists will also address briefly the policy orientations in specific jurisdictions and what is coming up in the future.

Panel 2: Obstacles and incentives to collective litigation in Latin America

The general theme is to highlight different incentives and identify the big problems and issues affecting the development of collective actions in the region, and to discuss possible trends in light of the different reform efforts in different jurisdictions.

Panel 3: Funding Issues: Public versus Private Financing

The general theme is to illuminate different ways of funding mass claims, and identify the big problems and issues, and what is coming up in the future. As funding is a developing topic, we want to capture the trends and discuss different options, from the public financing of litigation to the use of legal aid board schemes, consumer associations and NGOs with reference to specific cases such as Dexia, law firm funding and also capture the general insurance perspective.

Panel 4: Trans-jurisdictional litigation, coordination and enforcement issues

This panel will focus on:

(1) What happens when class actions and other forms of group litigation procedures are thrown into the mix;

(2) How the growth of trans-national networks of private lawyers is affecting forum selection; and

(3) How the growth of trans-national litigation and especially collective litigation is affecting international commercial/investor arbitration practices and other forms of private "ADR."

 

 

.  

The Ultimate Litigation Funding - Private Equity Buying Law Firms - Now AmLaw Really Sees It Ahead

Everyone is starting to see the obvious. The cover story of the current issue of American Lawyer dramatizes a private equity firm making a  2020 purchase of a major law firm.  The issue also includes this article which notes that outside investment in law firms takes hold next year in the UK. 

The article includes predictions  that American law firms will be the subject of outside investment by non-lawyers within 15-20 years. It may well take that long because some of our states are mired in the past, and are driven by parochial local interests.  If it takes that long, US lawyers will have ceded much to the rest of the world. The move to a fully entrepreneurial model for law has been obvious since Slater & Gordon went public back in 2007, and as contingent fees have taken off around the world.  

When private equity will soon be able to buy law firms, one wonders why the US Chamber of Commerce keeps fussing about  litigation funding. After all, buying law firms is the ultimate form of litigation funding. But, delaying the inevitable no doubt suits the short-term goals of too many.

SEC Official Urges Support for Greater Disclosure of Contingent Litigation Risks

At a financial executives meetng which included  a talk by the acting FASB chief on FAS 5,  an SEC official publicly stated that the SEC expects broader corporate disclosure of litigation risks. The original article is here.  AmLaw's Alison Frankel covers the story here. Her story includes a link to and  praise for  a prior article by Susan Beck in which Ms. Beck took strong issue with the corporations that seek to avoid disclosure of litigation risks.

Update - Big Tobacco Loses Big - Examples of the Variance in Mass Tort Trial Outcomes: Tobacco Companies Lost Most of the First Nine Trials, But More Recently Win A String of Engle Trials

Update on November 1 post

Big tobacco's winning streak  came to an abrupt end, as predicted below.  As described in this Law.com article by David Bario, the end arrived with a plaintiff's verdict for  $ 80 million, which includes a punitive damages component at less than the  much-argued 10:1 ratio.   According to the article:

"Before the recent defense hegemony, plaintiffs lawyers at Searcy Denney Scarola Barnhart & Shipley had taken three Engle progeny cases to trial and won them all, including the last plaintiffs verdict before Big Tobacco began winning. Earlier this month, David Sales and James Gustafson went to trial with the firm's fourth Engle case. And on Monday, state court jurors in Bronson, Fla., delivered their client a verdict that breaks the defense winning streak in a big way.

The jury hit R.J. Reynolds with $72 million in punitive damages and $8 million in compensatory damages, finding that the tobacco company was 90 percent responsible for the death of James Horner, who died of lung cancer after smoking for 60 years. Here's the amended complaint Searcy Denney filed on behalf of Horner's daughter, Diane Webb; and here are the verdict forms the jury returned on compensatory and punitive damages.
 

November 1 Post ___________________________________________________________________________

In mass tort litigation involving repeated trials of similar issues, the outcomes can go back and forth as the parties shift strategies and tactics. Thus, Law.com reports that the cigarette companies recently have won six straight Engle trials in Florida. Plaintiff's counsel say they will keep trying cases, and estimate that the defendants are spending   $ 5 million per trial.  The defense string no doubt is encouraging for the defendants. 

But, the defense win streak follows an even larger number of wins for plaintiffs at the start of the series of trials, as described here. Defendants also lost their 11th Circuit effort to avoid the series of trials. So, now it's up to plaintiffs to look afresh at their tactics and see if the trial approach needs freshening or improvement.

Perhaps the David Bernick factor is now at work in the Engle trials. In any event, the Engle trials are just one part of part of global tobacco litigation, as described here and here. And then there are media efforts too.

Social Media Discovery - Many Forums and Rulings - Some Examples and a Law Review


Discovery of social media information is an interesting phenomenon, and very much in the news.   It seems to some that it's about the same thing as asking to see a person's scrapbook or photo album. Others say the on-line nature of the compilations makes this all much different.

Some recent case law is covered here by AmLaw's Alison Frankel. The topic also is receiving scholarly attention in an area where personal actions and statements are especially likely to be relevant – workers’ compensation claiming. Law professor Gregory M. Duhl and practicing lawyer Jaclyn Millner recently posted a draft of an article (to be published in the Pace Law Review) on the use of social networking evidence in insurance and workers' compensation litigation. The draft is available here on SSRN.  The article, Social Networking and Workers’ Compensation Law at the Crossroads, provides a broad and useful summary of the issues,  including some case law from outside the context of workers’ compensation. .

 

Social media issues of course are not confined to the US. Here’s an article addressing EU legislation on social media and privacy. It appears Europe is once again ahead of us when it comes to privacy.  

Social media discovery also may apply to corporations. Communications consultants routinely urge businesses to use and manage social media when involved in major litigation, or maintaining corporate image. One can expect plaintiff’s lawyers to start asking far more questions about what corporations are doing behind the front pages of social media.  

 

 

 

Evolution of the Mortgage Litigation Industry

The mortgage litigation industry is evolving in the US.  This article from the NYT describes a litigation industry response to banks mishandling mortgage documents and creating paper nightmares through the various ways they securitized mortgages and/or transferred rights to service mortgages. The response? Lawyers defending mortgage foreclosure cases for contingent fees, instead of hourly fees.

No doubt there will be complaints from Wall Street based lawyer bashers who dislike contingent fees. But the actions of the lawyers are examples of free market capitalism and entrepreneurial behavior, which are usally trumpeted as virtues by the  same critics.  Apparently lawyers are not allowed to be entrepreneurial. When the lawyer critics emerge, one way to avoid taking them too seriously is to spend a few minutes reading blog posts by the Epircurean Dealmaker, a Wall Street denizen who candidly rips his own kind in wonderful posts. Here's a classic example of the writing.

Meanwhile, in other developments, this NLJ article by Sheri Qualters describes the growing number of class actions spawned by banks which implemented "robo-signers" as  an illegal and immoral fix for sloppy (or worse) internal procedures.  Some might say that's also a classic example of entrepreneurial behavior.  

Here is a summary article by Alison Frankel on strategies that bondholders may use.

 

Trade Specific Marketing to Potential Asbestos Claimants

Amazing the things that Google drags up everyday. One is this U.S. law firm website page targeted at carpenters as mesothelioma claimants. 

The web page would be more apt for a UK law firm web page because UK carpenters actually face high risks because so many amphibole fiber products were so widely used in the UK. 

Product Defects, Economic Loss Doctrine, and National Class Actions - The Toyota Example

AmLaw's Alison Frankel has provided this great primer on product defect claims, the economic loss doctrine, and national class actions. The primer arises from the litigation against Toyota for "sudden acceleration claims."   The primer is embodied in her post providing links to the key briefs on the issues. Great reading for anyone looking for a broad education on significant important issues.

A comment. The economic loss doctrine once made sense when most harms arose from smash, bang accidents with visible physical injuries. Today, however, the rule makes far less sense because sentient human beings today  know that injuries arise in many ways, including cellular level (subclinical personal injuries), and that risks of injury can and do create financial losses and costs. The common law needs to evolve to recognize modern science, modern risks, and modern financial losses. Or, courts need to make it very plain that they will not provide any remedies, thus leaving the choices narrowed down to something on the order of: 1) increasing regulation, 2) companies doing a far better job in designing and testing to avoid failure risks, or 3) consumers taking  the hit for design and testing failures.

A caveat and/or disclaimer. I own one of the defective Lexus cars. It never crashed, but I'm confident  I experienced numerous short, occasional accelerations caused by the car acting on its own. I took the car in for the recall work.  The sudden accelerations have not reappeared since the recall work.

The Illusion of Justice and the Cancer of Secret Contributions - An Example from an Ongoing Illinois Supreme Court Election

For readers outside of Illinois, the following may offer some insights into the insanity of our  judicial elections, and the growing cancer of undisclosed campaign contributions.

Start here with a New York Times article chronicling donations to the US Chamber of Commerce, and it's subsequent and grossly unfair attacks on a sitting Illinois Supreme Court judge who faces the electorate this year.  Or, go here to the National Public Radio view. 

Are those two views skewed by "liberalism" ?  Judge for yourself. But know that  even the conservative Chicago Tribune is appalled, as explained here. Consider also  these comments from Fox News, generally known for arch conservatism.

Close with a look at comments from Crain's Chicago Business. As it's name suggests, Crain's is all about business. It's leading voice is Greg Hinz . He offered  some well stated editorial commentary on the election and the actions of the US Chamber of Commerce. Here are key excerpts:

"For anyone who doubts that the state's method of electing judges has as much to do with deception and politics as justice, take a look at the mud-filled battle over whether Thomas Kilbride should be retained on Nov. 2 as a member of the Illinois Supreme Court.

***

The Illinois Civil Justice League sees it differently. The group has been very active in tort-reform issues of late, and it has jumped into the Kilbride retention race, helped by a $100,000 donation just the other day from the American Justice Partnership, with another $150,000 on the way from the U.S. Chamber of Commerce.

In an ad and on its website, the league has focused not on med-mal but on felons, blasting Justice Kilbride for allegedly being too weak on crime.

What does the latter have to do with the former? “At election time, we focus on what's going to move the voters,” league head Ed Murnane candidly concedes. Med-mal and tort reform are “not the kind of things voters typically pay attention to.”

Beyond that, a league radio spot on crime had to be revised after stations refused to run it on factual grounds. Justice Kilbride and some outside reviewers say the attacks are unfair, citing, for instance, a technical dissent on one sexual assault case because he wanted to issue a supervisory order rather than a writ of mandamus.

Mr. Murnane replies that the judge didn't do what prosecutors wanted him to do, and that's all that counts. Justice Kilbride responds with a long list of endorsements, including one from former Gov. Jim Thompson, an ex-prosecutor.

***

Judge for yourself, folks. But cases like this make my skin crawl. Judges need to worry about the law—not about offending, or pleasing, someone with a big wad of cash. There has to be a better way."

Continue Reading...

Chevron Battles Goes on - Plaintiff's Counsel to Be Deposed

This AmLaw article provides a helpful account of  a ruling allowing Chevron to depose plaintiff's counsel. The opinion is here, and is worth reading. The deposition arises because of statements in outtakes from a film regarding Chevron and environmental harm. Litigation and media surely are common companions these days. 

Will Scholars Write More About Claim Payments Trusts as an Answer for Major Litigation and Environmental Claims

Times surely change in the litigation industry. Once upon a time (that is,  the late 1980s), the Johns-Manville asbestos claim trust was considered a novel and creative approach for resolving massive amounts of  litigation arising from asbestos products. Today, twenty years later, consultants increasingly market chapter 11 "liquidating trusts" as the means to resolve claims and achieve a clean break from the past. Thus, Huron Consulting recently sent out an enewsletter promoting the use of liquidating trusts to resolve claims. The same information is on Huron's website, at this page, and part of its message is set out below the line. Meanwhile,  the BP Fund continues to provide a high profile example of using a trust to resolve claims outside of chapter 11.

Unfortunately, Huron and others are not addressing whether the the use of  trusts is being done well, and whether it is producing sound outcomes that are consistent with sound legal or social policy. One hopes that bankruptcy, due process, tort law and insurance scholars will spend more time thinking and writing about those issue.

____________________________________________________________________________

"A liquidating trust can be a valuable tool for resolving Chapter 11 cases in which:

  • consensus cannot be achieved among the stakeholders.
  • major litigation or environmental concerns are lingering and preventing the timely confirmation of a plan of reorganization or liquidation (a "Plan").
  • the company is looking for a clean break and cost-effective vehicle to wind down the estate.

A liquidating trust is a separate legal entity that contains all or selected assets and stakeholder interests and becomes a successor in interest to the debtor. It allows for concluding a bankruptcy case with less bankruptcy court oversight and creditor involvement than exists prior to confirming a Plan, while allowing for redress to the bankruptcy court and when necessary to accomplish the goals of the Plan and corresponding trust agreement.

In some situations, multiple trusts will be created in order to represent the interests of different stakeholders. For example, certain hard assets may be transferred into a trust for the benefit of secured creditors, while a separate trust is created for unsecured creditors. Claims such as avoidance actions may be transferred to the second trust in order to allow for a recovery to those unsecured creditors. "

Plaintiff's Committee Appointed for BP Oil Rig MDL Litigation

The plaintiff's committee has been appointed for the BP MDL litigation.  This article lists the lawyers, each appointed for one year.  The group includes an interesting mix of lawyers from a wide variety of firms. It will be interesting to watch how the litigation intersects with the BP Fund.

Litigation in Australia - If Your Opponent Doesn't Settle on Time in Mass Tort Claims, Is A Press Release an Effective Tactic ?

Here is a recent press release issued by Slater & Gordon, an Australian plaintiff's firm in asbestos litigation.  The release focuses on CSR taking double the usual amount of time  to settle a mesothelioma claim.

Interesting tactic. One wonders if it will produce more speed in the future.  

Trans Union Hit With 9x Puntive Damages for Repeated Violations of Law

This September 23, 2010 district court opinion in Dixon-Rollins v. Experian Information (E.D. Pa.) illustrates why punitive damages awards and other sanctions are needed to deter repeated violations of law. In this instance, credit reporting company Trans Union repeatedly violated federal credit laws despite explicit rulings against it by the 3rd Circuit and district courts. Ultimately, the district court (Savage, J.) awarded punitive damages at a 9x ratio in order to provide the “strong medicine” apparently needed to cause Trans Union to follow the law instead of saving money by using cursory, automated procedures. 

The next time someone complains about too many lawsuits,  send them the link to the opinion.

Chemicals, Mass Torts and Global Litigation: Upcoming ABA Mass Tort Committee

The ABA Litigation Section is putting on a regional workshop meeting on mass torts. The meeting is October 8 at ExxonMobile in Houston. The brochure for the meeting is here. The meeting is titled: Chemical Products and Toxic Torts: From Crisis to Mass Litigation: Starting Smart and Finishing Strong.

The meeting includes an international panel described as follows:

 

Leading attorneys involved in international and cross-border litigation will discuss the legal, social and political landscape as it relates to litigating claims in the United States and abroad. Recognized for their trailblazing work, these panelists will offer their perspectives on determining where to file claims that can properly be brought in the U.S. or a foreign jurisdiction and whether to move to dismiss based on forum non-conveniens. The discussion will include the impact of current world views on U.S.-based litigants in foreign jurisdictions, legislative efforts in foreign jurisdictions that attempt to make courts more accessible to tort and mass tort plaintiffs, and systemic corruption as it relates to outcomes in foreign litigation and how it impacts enforceability.

 

 

MDL Proceedings - Good, Bad or Otherwise - The View Varies

Federal MDL proceedings are often but not always used in "mass tort " cases.  The Wall Street Journal covers the topic today in the context of BP, and presents varying views. In general, plaintiffs tend to oppose MDL proceedings. The article is here.

Tags:

Copyright "Trolls" Start Down the Path Created by Patent "Trolls"

The litigation industry apparently includes a new specialty:  copyright enforcement by copyright "trolls"  that make a business of suing people for copyright infringement.  The ABA Journal includes this on line story  describing a business that receives the rights and then sues infringers.

Some debate whether trolls are "good" or "bad."  Labeling is not very useful, however.  And presumably some are "fair," and some are not. Good, bad, or otherwise, the existence of trolls exemplifies the age of specialization we've entered, and the value of information.

State Law Applied to Determine Successor Liability Rule for Enforcement of Judgement Against Korean Entities

Companies sued in other nations sometimes allow the entry of default judgments, apparently sometimes concluding that successor entities will be able to avoid enforcement of a judgment. That strategy may not always work, at least in the US, as is illustrated by this NLJ article by Sheri Qualters. The article  highlights a recent 3rd Circuit ruling that applied state law to decide when to enforce a jugdment against a successor entity. In doing so, the 3rd Circuit rejected applying Korean law said to block successor liability. 

The opinion arises in a patent case, but the reasoning is general and should be applicable in most any type of case. The opinion is here.

"Tells" for Executive Lies During Investor Calls ?

This story from The Economist  explains an academic effort to formally look for "tells" on when executives were lying during investor conference calls. Key "tells" are said to be use of extreme adjectives, a lack of ums and ahs, and swearing. Some might think the same principles also could be applied to testimony of persons involved in the litigation industry.

More on Delaware Rulings Regarding Access to Information that May Assist in Bringing Litigation

Last week's posts included this post on two recent Delaware Supreme Court rulings that may expand access to information useful to facilitate litigation. Here is an on line advisory from Willkie Farr that provides specific thoughts on the ruling involving access to information regarding directors. Hat tip to Lexology for identifying the advisory.

Disputes Regarding FASB Proposal on Disclosures Regarding Contingent Liability Risks

FASB continues to work on Topic 450, a short-hand term accounting and disclosure issues for contingent liabilities, such as risks from tort litigation. Click here to go to the detailed FASB website page on Topic 450.

Topic 450 is the successor to prior proposals in this area. The topics continue to produce disputes. Groups and newspapers opposed to the disclosure proposals characterize them  as providing breadcrumbs to plaintiff's lawyers seeking grist for lawsuits, as illustrated by this Wall Street Journal editorial. On the other hand, as the WSJ acknowledged:

 "FASB says it is only undertaking this effort after receiving "strong and extensive input" from "investors who want greater transparency." But as the U.S. Chamber of Commerce has pointed out in a letter to FASB, the accounting board has declined to reveal "which investors—or even which categories of investors—were consulted." The likely sources are union pension funds that have since the derivative lawsuit reform of the 1990s become major abettors of lawsuits against business."  

The current staus of the process is summarized in this article from CFO.com.  Set out below are  two key paragraphs from the August 17  article by Marie Leone:

"Most of the controversy centers on the detailed table information that is required to explain any contingencies arising from potential and ongoing lawsuits. The thinking is that revealing this kind of information would make it difficult for companies to defend themselves, infringe on attorney-client privilege, and require companies to disclose nonpublic information that could be used by plaintiffs' lawyers to file additional lawsuits.

For example, the draft rule requires that companies disclose details about insurance coverage bought to protect them against losing a lawsuit, as well as the ordinarily confidential estimates of "average settlement amounts" related to suits. The proposal also requires companies to disclose any reputable scientific studies that indicate a potential significant hazard related to a company's product or operation. This disclosure, says the Chamber, essentially advertises a company's "potential vulnerability to an entire category of lawsuits, none of which have yet been asserted.""

 

 

Delaware Supreme Court Rulings on Access to Information That May Facilitate Bringing Litigation

Two recent opinions from the Delaware Supreme Court provide rules for access to information that may facilitate litigation, depending on the application to a particular set of facts.

The  Delaware Corporate and Commercial Litigation blog summary is here, and includes links to the opinions. A National Law Journal article by Sheri Qualters is here, and includes more "color commentary" on the significance of one of the two rulings as a vehicle for making litigation more feasible in some instances.

The Continuing Proliferation of Lawsuits Naming Lawyers as Defendants for their Roles in Transactions and Litigation

One conseqence of the litigation industry is that lawyers are increasingly named as defendants by their adversaries in transactions or litigation. Here's a recent example from the National Law Journal.  Many of the cases are based on "aiding and abetting" claims. Jenner & Block several years ago was unable to defeat claims of this sort on a motion to dismiss under Illinois law.; go here for the opinion.

The story line as follows for this latest lawsuit: 

"Hunton & Williams has been hit with a $150 million lawsuit in Wisconsin claiming that the law firm maliciously squeezed a broker out of a contract and should pay up for the company's losses.

The lawsuit alleges that Hunton & Williams and client Insight Equity Holdings LLC ousted plaintiff Minerals Development & Supply Co. from a supply chain agreement in which Minerals Development was the middle man. Filed in Monroe County, Wis., Circuit Court, on July 30, the lawsuit seeks punitive damages for what Minerals Development asserts was the law firm's intentional and malicious conduct.

The Richmond, Va.-based law firm issued a statement through a spokeswoman in response to the action. "This suit was filed by an adversary of one of our clients," it said. "These allegations have no merit, and we plan to vigorously defend against them."

 

Litigation Arising from Allegedly Unfair Use of Social Media to Disseminate Information Regarding an Industry

Global growth in the litigation industry seems assured by increasing use of “social media” to publish information regarding participants in a particular industry, and the broad spread of the information.  Thus, litigation may arise when disseminated information is allegedly misleading or false. Claims also may arise when information is being disseminated by a source that is crafted to appear independent, but in fact is sponsored or controlled by another industry participant.

This AmLaw article by Charlie Mead provides a concise example of both types of claims. The story sets out the basic facts alleged in this recent complaint which initiated litigation between participants in the cranberry industry. The opening paragraphs of the complaint illustrate the issues, and are pasted below:  

 

"SUMMARY OF CLAIMS

 

1. This complaint is based upon an unlawful and malicious campaign orchestrated

by Decas Cranberry, the John Doe Handlers and the John Doe Growers against Ocean Spray.

This campaign falsely accuses Ocean Spray of harming the cranberry industry that Ocean Spray has been an integral part of for more than 80 years. The campaign is designed to damage Ocean Spray’s reputation, to frustrate Ocean Spray’s relationships with its customers, and to undermine Ocean Spray’s dealings with its grower-owners and with other cranberry growers across the industry.

 

2. Decas Cranberry launched this campaign against Ocean Spray, its direct

competitor, in or about 2009, and has used a variety of tactics and media for its campaign,

including widely distributed letters and emails, internet blogs and websites, Facebook accounts, YouTube videos and Twitter postings.

 

3. Recently, as part of this campaign, Decas Cranberry, the John Doe Handlers and

the John Doe Growers have solicited cranberry growers (including Ocean Spray’s growerowners) not to work with Ocean Spray, and to join a lawsuit against Ocean Spray by falsely claiming that Ocean Spray is violating the law, including the federal antitrust laws. This conduct violates the Agricultural Fair Practices Act, 7 U.S.C. §§ 2301 et seq., which is designed to protect growers from precisely this type of conduct.

 

4. Decas Cranberry also recently attacked Ocean Spray in a marketing campaign

called Scamberry.org that Decas Cranberry misleadingly suggested emanated from an

independent consumer advocacy group, instead of from Decas Cranberry itself.

 

5. Each false and deceptive act of the campaign has been designed for the same

purpose, to smear Ocean Spray and to harm its relationships with growers, customers, and

consumers, all with the hope of increasing Decas Cranberry’s profits at Ocean Spray’s expense. These activities therefore also violate the Lanham Act, 15 U.S.C. § 1125(a), and the

Massachusetts Unfair and Deceptive Trade Practices Act, Mass. Gen. Laws ch. 93A."

Success for a Litigation Funding Firm - Burford Capital

Burford Capital, a litigation funding business, is back in the news, with success. Here is an AmLaw Daily article by Andrew Longstreth regarding the firm's apparent 40% share of a $ 110 million verdict. Here is Burford's latest press release with general data on it's overall portfolio results since it went public last fall on the AIM market. The company's shares trade as  BUR.

Note that the successes of the client and Burford are in part a function of being embraced by Wall Street law firms in general, and by a lawyer who often represents the insurance industry. Thus, a major New York law firm, Simpson Thacher,  was the law firm that introduced its client to Burford. Second, the AmLaw article attributes the introduction to one of Simpson Thacher 's senior partners, Barry Ostrager. Mr. Ostrager is very well known as a lead lawyer for the insurance industry.  According to the website at the firm:

"Mr. Ostrager has been prominently involved in supervising the firm's major insurance and reinsurance practices in both its New York and Los Angeles offices.  He has been lead trial counsel in more than a dozen major insurance coverage cases, including Shell Oil Co. v. Winterthur Swiss Insurance Company, a multi-billion dollar environmental insurance coverage dispute in which the jury returned a verdict for the insurers after a sixteen-month trial."

 

 

Dole Banana Worker Cases Illustrate the Conflicts Between "Good" Plaintiffs and "Bad" Plaintiffs

Here is an article reporting on  Los Angeles Superior Court Judge Victoria Chaney ruling on the contentious issues regarding a jury verdict involving six people who claimed to have suffered personal injuries from having worked at a Dole banana plantation in Nicaragua.  Judge Chaney overturned a jury verdict, and said she would issue a written opinion soon. The opinion probably will make for interesting reading.

The Dole situation illustrates the ways in which merits issues for "good" plaintiffs can be corrupted by the actions of "bad" plaintiffs.  The ongoing saga also illustrates the amount of spin that is endemic to major mass tort cases, and why detailed coverage and questions would help readers make better judgments. For example, in prior chapters in this saga, Dole sued a filmmaker in Europe for defamation, but  then dismissed the lawsuit after complaints by consumers and others.

The lawsuits arise from a situation that Dole created by using overseas a pesticide that was the subject of great concern in the US, and indeed was later banned in the US before Dole stopped using it in Nicarauga.  Dole defends use of the pesticide on the grounds that doing so was still "legal" in Nicaragua. Decisions that are "legal" may still constitute bad decisions that may result in liability for negligent or willful conduct, and so Dole appears to be hardly an innocent. The following excerpts from a prior post  link to an August 19, 2009 Wall Street Journal article by Steve Stecklow that provides an overview of why the issues exist at all. The facts reported by the WSJ do not paint a pretty picture of Dole, to say the least. But, a current reader about the "bad" plaintiffs might never know of those realities because the current article does not revisit the general factual setting. As per the WSJ:

" DBCP, short for dibromochloropropane, was widely used around the world in the 1960s and 1970s to control microscopic worms called nematodes that attack roots and destroy crops. "The first year after we used" the pesticide, "the bananas were huge," says Isaias Paz, who worked for years as a foreman on a Dole-operated banana plantation outside Chinandega.
In 1977, California health officials discovered that workers at a DBCP manufacturing plant there had become sterile. Another manufacturer,
Dow Chemical Co., one of Dole's suppliers for Central America, stopped production and announced a recall.

Dole, which began using the pesticide in Nicaragua in 1973, had a contract to purchase DBCP for another two years. It threatened Dow with breach of contract for stopping deliveries, stating there was no evidence that plantation workers who apply DBCP had been rendered sterile, according to records in a lawsuit later filed by Dow against a Dole unit in Michigan circuit court. In 1978, Dow agreed to sell Dole some of its remaining stocks only after the fruit company agreed to hold Dow harmless from any injury claims.

In 1979, the U.S. Environmental Protection Agency banned DBCP in the U.S. for nearly all uses, including bananas, stating that "farm workers, pesticide applicators and the public at large...run varying degrees of risk of cancer, gene and chromosomal damage" and male infertility. Dole stopped using the pesticide in Nicaragua in 1980, according to Scott A. Edelman, a Dole attorney. The company's "use of the remaining stocks" of DBCP from 1978 to 1980 "was legal," he says."

Looks Inside the Litigation Industry Through Documents Coillected in Discovery - Tobacco Industry Documents and Some Scruggs Documents Collected and Posted On-line

The litigation industry is full of spin and efforts to create headlines that influence outcomes. Many of the stories make it to press without much context or detail. So, it's interesting to see the inside documents behind the headlines.  To that end:

This link is to about 4 million  collected on-line documents regarding the tobacco industry.

This link is to an Overlawyered blog post that includes links to some of the documents related to Dickie Scruggs' conviction.

 

Influencing Legal Developments Outside the US - When Is It OK to Seek to Influence the Development of Non US Legal Systems ?

Perspective certainly matters when it comes to influencing the development of legal systems around the globe.

On one side, consider some of the arguments from "big oil."  Thus, In its blog and other writings attacking tort litigation and justice in Ecuador, Exxon Mobile has complained bitterly about efforts by plaintiff's lawyers to influence how tort law developed in that country.  Is that a legitimate complaint?

Some would say no. Why? All around us are efforts to influence how law develops in other countries and in the US. Consider, for example, today's NLJ article about "big business" testimony asking Congress to try to influence what China does with its nascent antitrust law. Thus, the article  states:

"But, they said, the U.S. government should act to influence how Chinese agencies implement the law. They suggested creating a high-level task force of U.S. antitrust officials and trying to help train Chinese regulators who are new to antitrust law. They also emphasized transparency, so that U.S. companies know why Chinese officials made their decisions."

One has to wonder what the record would show if plaintiff's lawyers were allowed to take full discovery on all of ExxonMobile's efforts to influence the development of laws around the world.

 

Can't Tell the Players Without a Scorecard - NLJ Charts the BP Oil Disaster Claims to Date

When mass disasters strike, litigation starts quickly, in many forums. For a great example in a helpful chart format, go here to see a chart from the NLJ. A related articleis here.

Issues To Be Managed Broaden for BP and Other Repeat Players in Mass Disaster Litigation

A Law.com article from this morning provides an interesting view of the reality that BP and some other  corporate entities are repeat defendants in the world of mass disaster  litigation. Likewise, some of the plaintiff's lawyers also are repeat players against the same entities.  Note especially three points as to how repeat player status may impact strategies and issues across a range of topics.

Note first that the plaintiff's bar already is posturing to argue that BP's past and current acts are part of pattern of over-risky corporate behavior, and that the oil well disaster should be considered in a broader context of corporate acts. Claims of that sort could lead to wide-ranging discovery. Second, those claims and the discovery could impact D & O claims. Third, note that BP is now starting to face claims of withholding information.  These points raise the stakes for and scope of issues to be managed when dealing with a mass disaster. The point are illustrated by the following quote:

What he witnessed then, [plaintiff's lawyer Brent} Coon said, is no different than what he's seeing now: BP in 2005 said it was being transparent and that it would take responsibility for the accident, he said, yet it kept many documents sealed. Fast forward five years, BP again is claiming to be responsible, Coon said, yet it's refusing to disclose certain information, including the complete video images of what's occurring on the ocean floor.

"They get into PR and damage control, tell everyone you're sorry, and in the meantime spin this to blame other people," Coon said, noting that he recently asked a federal court to revoke the probation and plea agreement reached in the 2005 explosion. Under the agreement, BP was supposed to improve safety conditions at its facilities. "Their behavior has not improved," Coon said, adding the Gulf disaster is yet another reason to revoke probation."

 

Upcoming US Courts Civil Litigation Conference at Duke Looks Quite Good But Lacks Science

An upcoming conference on federal civil litigation at Duke Law School  is being advertised by the US Courts  as a major conference that will shape the future of civil litigation. The agenda is indeed impressive as to rules and procedures, and the proceedings will be broadcast online.  The agenda includes  many judicial and non-judicial speakers with decades of experience (e.g.  J. Rosenthal, Cabraser, Galanter, Willging, RAND/Pace, Eisenberg, Hensler, Miller, J. Newman, Hazard, Birnbaum, Susman, Resnik, J. Scheindlin, Nagareda, Levi, J. Scirica, J. Higginbotham).

It's disappointing to see, however, that the agenda does not include any sessions focused on how mass torts and/or the science will evolve.  With so much attention focused on "mass torts" and science, one would think we lawyers looking to the future might ask to hear from some well-regarded scientists about where they see science going over the years ahead, and the potential consequences for litigaton.

Set out below is the publicity from the US Court's website linked to above.

April 12, 2010 —Access, fairness, cost, and delay in civil litigation in federal court will be the focus of a Conference, May 10-11, 2010, sponsored by the Judicial Conference Advisory Committee on Civil Rules. The 2010 Civil Litigation Conference at the Duke University School of Law will present new data from several empirical studies on current litigation practice and proposals for improving civil litigation in the federal trial courts. In particular, data on actual litigation costs incurred by law firms and major corporations will be available for careful analysis. The Conference agenda is available here. The Conference will be streamed live over the Judiciary's Newsroom website at http://www.uscourts.gov/news.cfm.

"This Conference hopes to build on the legacy of the 1976 Roscoe Pound Conference and all it contributed to the reform of the administration and delivery of justice in the federal system, as well as on the 1997 Boston College of Law Conference on Discovery" said Judge Mark Kravitz, chair of the Advisory Committee on Civil Rules. According to Judge Kravitz the cost of civil litigation will be among the topics to be discussed, and how recent Supreme Court decisions in Twombly and Iqbal have focused attention on pleading standards and discovery.

"Much of the data to be presented at the Conference has not been available before," said Judge John G. Koeltl, a Civil Rules Committee member and Conference organizer. "This will be important new information on what is actually happening in different practice areas."

Nearly 200 nationally recognized federal judges, lawyers and professors and others with expertise in civil litigation are expected to attend. Duke University School of Law will host the Conference, which will take place in Room 3041 of the Duke Law School.

 

 

Entrepreneurial Claiming and Entrepreneurial Courts - From Delaware to St. Clair County, Illinois

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 !

 

 

US Chamber Shoots the Latest Round in the Media Battles Over Litigation

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)." 
 

 

 

Asbestos Product Catalogs For Sale Online - The Perfect Item For Claimants Against Chapter 11 Trusts

                                        

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.

 

Media and the Litigation Industry - Examples

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

"Central to any comprehensive litigation strategy is a communications plan deployed early in the process. Thus, fact-gathering, amicus briefs, media statements, regulatory outreach, employee messaging, and even jury arguments are skillfully planned and orchestrated for maximum public impact and effectiveness.
 
Plaintiffs and prosecutors have long used mass media to tell their side to the public. But their increased strategic use of digital and social media, as well as Search Engine Optimization, Internet blogs, and social networking sites has raised the stakes – intensifying their power to influence journalists, juries, regulators, analysts, lawmakers, potential litigants, and even judges. In today’s environment, ensuring effective management of the Court of Public Opinion has become a critical component of any litigation strategy."

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.

CDG Wins For the Third Straight Time Against One Recalcitrant Insurer

A brief self-promotional note for Childress Duffy Goldblatt. Yesterday my partner Mike Duffy and his trial team won a first party insurance property damage verdict for $2.85 million after allowing for the deductible. This is the third recent seven-figure trial verdict against the same recalcitrant insurer that refuses to pay fair values to its insureds. You may recall this prior post regarding that situation; the following is the key excerpt from an interview of my partner Mike Childress.

"We tried a seven-figure case last year after the insurance lawyer said that, if he could not win that particular trial, he should just return the rest of the files involving claims against that insurer. We have twelve cases against that same insurer, all of which involve the same type of loss. Our client won full damages at trial, but the insurer is still refusing to settle the remaining cases. In fact, it is the second case we have tried against this insurer and won. So, we will try the rest of the cases."

Even Newer Uses of Social Media as a Marketing Tool for Law Firms Seeking Mesothelioma Clients

By now I trust everyone is used to many of he marketing approaches to reach mesothelioma victims. Here's a new one for me -  some members of the asbestos plainiff's bar are now  marketing themselve using social media and a "cause"  to ask other people to go out and ceate videos to promote asbestos awareness. Go here to see the online version of the press release pasted below. 

Continue Reading...

Cross Claiming Among Asbestos Defendants and Asbestos Trusts - A $ 2 Million (AU) Mesothelioma Settlement; CSR and James Hardie Provide Examples for Consideration

Pasted below are key excerpts from a February 18 Wall Street Journal Australia article by Miland Rout which provides news of a $ 2 million (AU) asbestos mesothelioma settlement for the death of a young father. The amount is news in itself.

From my vantage point, however,  the even more interesting part of the story is the assertion - assumed to be true for present purposes - that asbestos defendants CSR and James Hardie will now proceed against each other to resolve which entity should pay how much of the settlement. According to the articles's description of statements by plaintiff's counsel from Slater & Gordon, the companies apparently are no longer observing some sort of understanding or agreement on how much each should contribute.

So, what does one say about intercompany allocation battles? My personal view is that we will see more cross-claiming ahead because some companies need to transfer fault and expense to others in order to survive. In a related vein, more of the cross-claiming I think will involve claims by current tort sytem defendants against "asbestos trusts"  or foundations established by entities that have used chapter 11 (rightly or wrongly) to exit the tort system.

Why cross-claim? One reason  is that the asbestos tort system today is farcical in the sense that the most culpable defendants exited the tort system early and did so far, far too cheaply. Simply put, Manville, Unarco, Raymark, and various insulation and boiler makers (e.g. Eagle-Picher, Babcock & Wilcox), and some other "early movers," paid far too little to exit the tort system. The result? Some (not all) victims are undercompensated and many (not all) remaining tort defendants are now paying far too large a share for asbestos claims.

Continue Reading...

Asbestos Litigation Risks - Some Companies Seek Unique Legislative Answers for Unique Risks

As described in this article, Crown Cork and Seal continues its efforts to obtain legislative solutions for its unique asbestos litigation risks. Key excerpts are below from an article about action by the legislature in Virginia:

A closely divided House of Delegates voted Monday to shield a company from liability to asbestos-related health claims.


"Del. Terry Kilgore's bill, HB 629, doesn't mention any company by name. But the way it is drafted, it applies to only one: Crown Cork & Seal, a Philadelphia-based manufacturer of cans and bottle caps. It has plants in Suffolk and Winchester.


Crown Cork & Seal has never manufactured any products containing asbestos. But in 1963 it purchased the stock of Mundet Cork Co., which had an insulation division that it sold 90 days later. Under existing law, Crown is liable to lawsuits resulting from the presence of asbestos in Mundet's insulation products.


Kilgore's bill. which won preliminary House approval, limits Crown's asbestos-related liability to the value of Mundet's assets at the time it was purchased.


Kilgore, R-Lee County, characterized the measure as a "jobs bill," saying it would protect a Virginia employer from potentially crippling litigation. Dozens of asbestos companies have been driven into bankruptcy by billions of dollars in lawsuits brought by workers who contracted deadly lung diseases from handling the material."

The Litigation Industry - Insurance Industry Behavior and Trials

A bit of shameless self-promotion today for my new law firm. One of my new partners, Mike Childress, had an interesting interview this past week with Larry Smith on the BulletProof Blog. The blog is written by the Levick Strategic Communications firm that focuses on crisis management issues, usually for corporations. As part of the work, the principals of Levick continually reach out to and ask questions of firms that do significant amounts of  plaintiff's work. CDG fits that model because we represent so many corporation and associations in battles with insurers.  Mike has spent 30 years suing insurers in a variety of cases, so he brings tremendous experience and insight to the topic.

The interview is online here, and provides Mike's insights on some of the current behavior of insurers. Here's my favorite part of the interview:

"We tried a seven-figure case last year after the insurance lawyer said that, if he could not win that particular trial, he should just return the rest of the files involving claims against that insurer. We have twelve cases against that same insurer, all of which involve the same type of loss. Our client won full damages at trial, but the insurer is still refusing to settle the remaining cases. In fact, it is the second case we have tried against this insurer and won. So, we will try the rest of the cases."

Drs. Frank and Lemen Part of Global Plaintiff's Advocacy Session for April 10 Asbestos Disease Awareness Conference in Chicago

Here is the entire press release (which includes links)  regarding an April 10, 2010 asbestos disease awareness conference set for April 10 in beautiful Chicago. The conference is organized by, among others, the Asbestos Disease Awareness Organization and Laurie Kazan-Allen, who is the sister of American plaintiff's lawyer, Steve Kazan. Through an entity commonly known as IBAS, Ms. Kazan-Allen has devoted well more than 15 years trying to ban the use of asbestos around the globe, and has achieved some signficant success.

Unlike many current and future defendants/corporations/makers/users, and their lawyers, the advocacy groups for victims/plaintiffs are thinking globally. Indeed, well-known plaintiff's experts are part of the advocacy effort. Thus, during the conference,  Dr Arthur Frank and Dr. Richard Lemen are part of a panel session on global advocacy, as is set out below from the conference agenda. Also set out below is a summary of all speakers, except the keynote speaker, who is to be designated later. 

______________________________________________________________________________
Session IV Global Advocacy and the Continuing Crisis - Chairperson: Arthur L. Frank, MD, PhD




3:15 - 3:35 Latin America's Asbestos Struggle!, Fernanda Giannasi, Brazil


3:35 - 3:50 Canadian Asbestos: A Global Concern, Canadian Member of Parliament, Pat Martin


3:50 - 4:05 Governmental Agencies Role in Protecting Public Health, Richard Lemen, PhD, MSPH


4:05 - 4:20 Progress Update: The Americas, Barry Castleman, ScD


4:20 - 4:35 A Victims' Call to Action!, Laurie Kazan-Allen, International Ban Asbestos Secretariat (IBAS)


4:35 - 4:45 Panel Q & A, Moderator Arthur: L. Frank, MD, PhD


"ADAO's 6th Annual International Asbestos Awareness Conference


REDONDO BEACH, Calif.--(BUSINESS WIRE)--The Asbestos Disease Awareness Organization (ADAO) will host its 6th Annual International Asbestos Awareness Conference in Chicago, IL, on Saturday, April 10, 2010, with activities throughout the weekend. The international conference will provide education and outreach to families, employers/employees, and scientists throughout the world as part of ADAO's continuing effort to educate the public about the dangers of asbestos, ban its use, and encourage research efforts to improve treatment options. Prominent physicians, scientists, and safety and health care professionals who are experts in the area of asbestos representing the United States, Canada, England, Brazil, and Germany will present current information regarding the status and impact of asbestos in the United States and globally. Discussion will include facts on exposure, asbestos-related diseases and how to prevent them, and where to turn for help. The international conference is made possible by ADAO, the Barbara Ann Karmanos Cancer Institute, and the International Ban Asbestos Secretariat.

WHERE:  Marriott Renaissance Hotel

1 Wacker Drive , Chicago, Illinois

WHY:     To share information and provide support to those affected by asbestos-related diseases, including survivors, families, and physicians. Prominent physicians, scientists, safety and health directors, and survivors will present current and up-to-date information regarding the status of asbestos in the United States and worldwide.

WHO:     Brad Black, M.D., medical director, Center for Asbestos Related Disease; Barry Castleman, ScD, environmental consultant; Jeff Camplin, CSP, CPEA; Sean Fitzgerald, PG; Arthur Frank, M.D., Ph.D., chair, Department of Environmental and Occupational Medicine, Drexel University's School of Public Health; Patrick Gerkin, Ph.D., assistant professor, Grand Valley State University; Fernanda Giannasi, ABREA; Michael Harbut, M.D., MPH, FCCP, co-director, National Center for Vermiculite and Asbestos-Related Cancers, Karmanos Cancer Institute; Tanis Hernandez, LCSW, Center of Asbestos Related Disease; Laurie Kazan-Allen, founder and coordinator, IBAS; Hedy Lee Kindler, M.D., University of Chicago, and president, International Mesothelioma Interest Group; Richard Lemen, Ph.D., MSPH, former Assistant Surgeon General; Terry Lynch, International Vice President, Insulators Union; The Honorable Patrick Martin, member, Canadian Parliament; Linda Reinstein, executive director and co-founder, ADAO; Kimberly Rowse, RN, Center for Asbestos Related Disease; Jordan Summer, musician; James Webber, Ph.D., research scientist, Wadsworth Center; Jordan Zevon, ADAO national spokesman and musician."

UK Asbestos Working Party More Than Doubles Estimate to 11 Billion Euros

A summary article from Insurance Business Review is online here, and is pasted below.
____________________________________________________________________________

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."

Major Bankers and Financiers, Litigation and "Litigation Reform"

 With today being a holiday in the US for Dr. King's birthday, I decided to take a holiday on the usual torts in favor of a little excursis on bankers, litigation and "litigation reform." The main point? Recent events exemplify why some but not all of the "litigation crises" in the financial sector may be laid squarely at the door of major bankers and financiers.Therefore, one might well conclude that it's wise to think critically before drinking too much Kool-aid poured from the pitcher full of "litigation reform." It also seems wise to drink - carefully - from the pitcher full of real regulatory reform.

Today, the focus is on litigation and crises in the financial sector. A stunning body of evidence continues to mount to prove that litigation in the financial sector keeps growing because too many highly placed business persons consider litigation just natural fallout from money making activities. They see litigation and crises as just a part of the process, and really don't give a damn because the reality is they are making money from present deals, and don't care what happens in five years because by then they will have made a huge pile of cash, and may have exited the scene.

Proof ? Start with Paul Krugman's January 15  "Clueless Bankers" column in the NYT that dissects as follows some of last week's Congressional testimony from various leading luminaries on the Street:

"There were two moments in Wednesday's hearing that stood out. One was when Jamie Dimon of JPMorgan Chase declared that a financial crisis is something that "happens every five to seven years. We shouldn't be surprised." In short, stuff happens, and that's just part of life.

***

As an aside, it was also startling to hear Mr. Dimon admit that his bank never even considered the possibility of a large decline in home prices, despite widespread warnings that we were in the midst of a monstrous housing bubble.

Still, Mr. Dimon's cluelessness paled beside that of Goldman Sachs's Lloyd Blankfein, who compared the financial crisis to a hurricane nobody could have predicted. Phil Angelides, the commission's chairman, was not amused: The financial crisis, he declared, wasn't an act of God; it resulted from "acts of men and women."

Was Mr. Blankfein just inarticulate? No. He used the same metaphor in his prepared testimony in which he urged Congress not to push too hard for financial reform: "We should resist a response ... that is solely designed around protecting us from the 100-year storm." So this giant financial crisis was just a rare accident, a freak of nature, and we shouldn't overreact."

To quote Colonel Potter: it is "horse hockey" to suggest the causes are not known and were not foreseeable. Numerous books and articles have documented the realities - I like best Judge Posner's book - A Failure of Capitalism. It seems pretty plain we need to listen when a University of Chicago "free markets" guru is telling us that the markets failed us and we need meaningful reforms. To Judge Posner and others, it's quite plain that the financial fiasco was predicted by some (who made a lot of money from doing so), it did arise from bankers and lawyers severing risk from responsibility via CDOs and various derivatives, it did arise from rating agencies issuing groundless ratings, and it did arise from AIG and other entities buying and selling purported contracts without regard for whether the parties could honor the obligations. And, all of that does not even address the outright frauds and intentional cheating exemplified by Parmalat, Madoff, Galleon, Enron, and so many others, not to mention the subprime scandals from the various banks that knew they were selling real junk.

I'll also cite a good friend who is probably one of the smartest people in the world when it comes to understanding and managing risks. He spent some 20 years in incredibly senior positions in banking and finance where he put to use his stunning grasp of math, combined with common sense and humble roots. His view? Much of the Street is rotten to the core (especially AIG) and it was eminently obvious to anyone smart who bothered to look (at the time, he was looking at g AIG's 2008 SEC filings and finding them completely inscrutable). He also says the financial system will melt down again "soon" unless derivatives and other like contracts are forced onto regulated exchanges.


A final piece of proof ?  Go to the Epicurean Dealmaker's latest priceless and candid post. The theme ? He largely accepts Mr. Krugman's rant about super giant financial entities taking society back towards future a financial fiasco, but then draws a line that only makes things worse  According to the Dealmaker, the global bankers are far from clueless. Instead, he says, most investment bankers simply don't give a damn,  and will work hard to find a way around the milk toast reforms presently on the table, as is set out in the following excerpts from the post:


"Wednesday, January 13, 2010

I'm Dancing as Fast as I Can

"Good morning, class.

* * *

I recalled this quote to mind today when I read Paul Krugman's latest broadside against all things--and people--financial in The New York Times. In his jeremiad, "Bankers Without a Clue," Mr. Krugman picks apart the recent testimony by four Wall Street CEOs at the Financial Crisis Inquiry Commission and asks the rhetorical question

Do the bankers really not understand what happened, or are they just talking their self-interest?

He concludes that it does not matter, and answers his own question thusly:

Wall Street executives will tell you that the financial-reform bill the House passed last month would cripple the economy with overregulation (it's actually quite mild). They'll insist that the tax on bank debt just proposed by the Obama administration is a crude concession to foolish populism. They'll warn that action to tax or otherwise rein in financial-industry compensation is destructive and unjustified.

But what do they know? The answer, as far as I can tell, is: not much.

By happy coincidence, I enjoyed a quiet morning in the office this past Wednesday free of client obligations. I took advantage of my liberty to view a good chunk of the televised testimony of Messrs. Blankfein, Dimon, Mack, and What's-his-name on C-SPAN. I have to admit that I too was underwhelmed by the bankers' grasp of and ability to explain the recent crisis. At one point, for example, Commissioner Johnson asked Jamie Dimon why the financial industry had attracted so many bright and talented individuals away from other, presumably more productive pursuits. The lackadaisical and uninformative reply Mr. Dimon returned revealed in stark detail a critical fact: he neither knew nor cared to know the answer.

And this example cuts to the heart of the matter: it's not his job to know such things.

* * *

Let there be no mistake: Mr. Dimon, Mr. Mack, and Mr. Blankfein are not stupid or uninformed. (The jury is still out on What's-his-name.) They are damn smart; scary smart, in fact. You don't get to the top of the greasy ladder of a major global investment bank's executive suite by being dull, incurious, or lethargic. People like that get sliced to ribbons and thrown into the chum bucket in my industry before they reach Managing Director, if they ever get inside in the first place. These guys got game, people. Serious game. You would be foolish to doubt it.

But they also have absolutely no interest whatsoever in the whys and wherefores of the financial crisis, the proper size and role of banks and investment banks in the domestic economy, or the moral imperatives inherent in stewarding the financial plumbing undergirding the daily lives and livelihoods of six billion people. For one thing, they don't have time to worry about such things. Most of a senior bank executive's time is consumed competing against other scary-smart investment bankers and executives at other firms, who are hell-bent on grinding his bones into dust beneath their bloody heels, while trying to prevent his own firm from flying apart under the internal stresses generated by thousands of egotistical prima donnas all scrapping for more than their fair share of the pie. There is too much going on, and unrelenting change comes too fast and furious to allow quiet contemplation of the order of things.

Most thoughtful people would agree: it's not wise to try to classify boreal flora and fauna when you have a tiger by the tail, much less think about how you would like to turn the forest into a time share resort.

For another thing--and because the volatile, high velocity nature of the business attracts such people--the people who go into the industry are not really interested in thinking deeply about why things are the way they are. You will almost never find an investment banker "sicklied o'er with the pale cast of thought." It's just not in their genetic makeup to be reflective, introspective, or speculative in an intellectual sense. Investment bankers have almost no interest in why things are the way they are. Rather, they spend all their considerable intellectual and psychological resources on understanding how they can take advantage of the way things are.

***

This explains not only their obvious lack of intellectual curiosity about the sources of the crisis--nothing remotely unconventional or even interesting on that topic left the mouths of any of the CEOs present at the hearing--but also their resistance to any major change in the way the industry or the markets are regulated. Why should they support change? It's hard enough just trying to keep ahead of the buzz saw of unbridled competition and unrelenting demands for profitability from lenders, shareholders, and employees without having to cope with changes in the rules as well. Of course they want to preserve their current profitability and size. Who wouldn't? But they do not assume--and neither, Dear Reader, should we--that changing regulations will necessarily make the industry less profitable. Investment bankers have well-justified confidence in their ability to turn new regulations to their advantage. It's just that, being in an industry that is constantly creating, reinventing, and destroying itself, investment bankers have a very healthy respect for change. You might even say we fear it.

So yes, Mr. Krugman, you are basically right. Don't look to investment bankers for answers on how we got here. We don't know and we don't care. We take the world as we find it and try to make money."

_____________________________________________________________________________

So, tell me again:  why it is our nation offers the financial sector the protections of  Iqbal/Twombly, CAFA and other "reforms?

Global Asbestos Claiming - Report on Asbestos Litigation in Nine Nations - Munich Re's Major Compilation of Information

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.

_____________________________________________________________

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.

Propensity to Claim - By the Government - What's Ahead ?

Lawyers thinking about mass tort policy and legal issues inevitably end up thinking and talking about private claimants and their propensity to claim. A growing topic today is the federal government's propensity to claim.

During the Bush II years, much of corporate America had little fear regarding civil or criminal claims from the US government. Now, however, that is changing, and one might well wonder about the larger implications for tort and other claims. Look for example at the federal government's activities this week, and consider the implications for future civil claims.


On Monday, the SEC continued its assault on the business methods of subprime mortgage lenders. It charged "three former top officers of New Century Financial Corporation with securities fraud for misleading investors as New Century's subprime mortgage business was collapsing in 2006. At the time of the fraud, New Century was one of the largest subprime lenders in the nation." The SEC's press release and teh charges are here.


On Tuesday, as reported here by Ben Hallman from AmLAw, the goverment made plain that it has problem with the business model for "a lot of hedge funds." Specifically, a securities litigation conference included the following comments by David Rosenfeld, the associate regional director of the SEC's New York office:

Rosenfeld said that insider trading, after a downturn over the past two decades, "has come back in force." Rosenfeld described what his agency was seeing as more than one-off, opportunistic activity, but a "determined business" based upon collecting information from corporate insiders. He said his agency is "aggressively pursuing" these bad actors, and he specifically singled out hedge funds. "A lot of hedge funds have been making huge returns because they were cheating," he said. (emphasis added)


How many future civil suits will result from these charges and investigations? I'm sure I don't know. I'm also sure that I would be looking afresh at my litigation and regulatory risks if I were a general counsel working in those industries.

Watch on Monday for A. M. Best Findings and Projections on Asbestos and Environmental Losses

This article from Business Insurance overviews points from an A.M. Best study to be released on Monday with data and projections on losses from asbestos and pollution claims. Here are some excerpts from the Business Insurance advance article:

"Best estimates the industry's ultimate asbestos and environmental losses will reach $117 billion, down from a previous estimate of $121 billion. Asbestos exposures, however, are projected to reach $75 billion, up $10 billion from a previous estimate; environmental exposures are projected to drop to $42 billion from a previously estimated $55 billion. (emphasis added)

"The increase in asbestos estimates reflects ongoing, elevated levels of annual incurred losses, as well as a subtle shift of losses away from product liability claims to more costly nonproducts claims against more peripheral defendants," according to the report. "Also affecting asbestos losses is a growing proportion of settlements in more serious cases, principally related to mesothelioma, which is increasing the average values of such claims.

Whocanisue.com Founder Provides a Comment/Information on its Structure

When reading other blogs, I tend to miss comments on the posts, so te purposed of this post is to highlight a "comment" provided yesterday by Mr. Wolfe, of whocanisue.com. See the comment below yesterday's post or the full text is pasted below:

Curtis Wolfe said...

I'm the founder of whocanisue.com. I want to clarify something, lawyers do not pay referral fees on wcis, they pay to advertise (like the Google model) to wcis users. Most importantly, wcis does not decide which counsel is recommended for a particular case, the user decides. The site supplies the users as much information as possible so that the user can make an educated decision on which counsel is best for them. The user can contact one or more lawyers or firms to ask case specific questions, and then decide if and when the user wants to hire a firm. There is no other site that allows the users to control the entire process like whocanisue.com. In fact, our site has technology that would allow the user to chat with someone from each firm before making a decision. Unfortunately, the law firms are not quite ready to use this technology, so it is disabled until some future date when we hope the firms will be ready to use all of the site's functionality.

Curtis Wolfe

Whocanisue.com.com - Another Step in Tort Claim Marketing

The Internet is an amazing thing for marketing related to actual or potential legal claims. Here is a Madison County Record article that educated me to the existence of Whocanisue.com. It is in essence a referral source for plaintiffs, but also includes a button to hire defense counsel. The site seems to be limited to claims in the US.

It would be fascinating to know the pricing and structure for referral fees and the criteria that determine which counsel is recommended for a particular, serious case.

Readers - does anyone know of a similar website outside of the US?

Consumer Arbitration and Financial Houses - Going, Going Gone ?

This post by Ashby Jones at the WSJ law blog updates on another big financial house moving away from imposing arbitration clauses. Some would say this is good news and others would say it is bad news. Plainly it does mean that there will be more changes in the litigation industry as new models evolve for dispute resolution.

The Business of Patent Claim Litigation - 40% Contingent Fee Held Reasonable and Patent Malpractice Claims Should Be In Federal Court

Here (but subscription required) is a Chicago Daily Law Bulletin article regarding an interesting ruling on two aspects of entrepreneurial claiming. The opinion holds that a 40% contingent fee is a reasonable fee for contingent patent fee claims. The case also holds that since patent law claims arise under federal law, the federal courts also are the proper place for legal malpratice claims involving patent law.

The article also is pasted below, in part:


By Pat Milhizer
Law Bulletin staff writer


When law firms are hit with legal-malpractice claims involving patent disputes, those claims should be handled in federal courtrooms -- instead of state courts -- since that's where the underlying patent dispute began, the 1st District Appellate Court has held in a ruling that's the first of its kind in Illinois.

In the same opinion issued this week, the appellate justices also said that a law firm that prosecuted several patent claims for one client on the condition that the attorneys would get 40 percent of all of the potential settlements and verdicts was being reasonable and didn't violate any rules of professional conduct.

*****

When they were hired, the attorneys inked a contingency fee agreement with Premier that they would bill for reasonable and necessary expenses. In addition, the contract stated that the lawyers would get 40 percent of any payments that the company received as a result of licenses, settlements, judgments and other related court decisions through the life of the patents.

The deal included a termination clause for either party, and if that happened, the lawyers would be eligible for quantum meruit pay, meaning a judge or jury would decide how much they would be paid for unfinished work.

The lawyers secured several settlements and millions of dollars for Premier, according to an attorney who represented the firm on appeal in the malpractice claim.

In one of the cases, the company hired the lawyers to prosecute a patent claim against Lucent Technologies regarding a system that amplifies telephone signals.

But that lawsuit got shot down.

A federal judge granted summary judgment to Lucent, and the decision was affirmed by a federal appeals panel in an unpublished opinion.

Premier then sued the law firm for legal-malpractice, saying that the lawyers failed to use scientific evidence that it was provided with to rebut a claim made by Lucent. Premier said that if the lawyers had used the information, it would have won the federal lawsuit.

The law firm filed a motion to dismiss the malpractice suit with prejudice due to a failure to state a cause of action, and Cook County Circuit Judge Kathy M. Flanagan did dismiss it -- but on the basis that she lacked jurisdiction.

Flanagan also found that the contingent fee was valid and enforceable.

Both sides filed appeals, and in a 12-page opinion released Tuesday, an appellate panel affirmed the circuit court decisions. The decision was written by Appellate Justice Joy V. Cunningham; Justices Thomas E. Hoffman and Themis N. Karnezis concurred.

Premier alleged that the contingent fee deal with the law firm violated the Illinois Rules of Professional Conduct, which requires that attorney fees be reasonable. The appellate justices also read Premier's complaint to say that the law firm violated the conduct rules by entering into a business transaction with the company.

The justices held that there was no business transaction and that the agreed-upon fee wasn't unreasonable.

"The facts of the underlying case suggest the need for highly skilled legal representation in a very technically narrow area of patent practice," Cunningham wrote. "Premier obviously had confidence in Stadheim's ability to represent its interests in this narrow, technical area of patent law."

The panel then addressed the question of whether legal-malpractice actions must yield to federal jurisdiction when the malpractice action requires a resolution of patent law issues.

The court relied on three cases in other states to reach its conclusion, ruling that "because the federal court has exclusive jurisdiction over patent cases, this jurisdiction also extends to cases in which the plaintiff's right to relief necessarily depends upon the resolution of a substantial question of patent law."

The case is Premier Networks Inc. v. Stadheim and Grear Ltd., et al., No. 1-08-1133.

Update on Toyota's Efforts to Use the MDL to Control the Situation as to Inside Counsel and Documents

Here is a Corporate Counsel that provides an update on and links to documents regarding Toyota's issues with its former inside counsel who claims that documents were wrongfully destroyed regarding alleged defects in cars.

Korea to Open Law Firms to Outside Investment and Ownership, and Allow MDP Entities

Here is an interesting AmLaw post on the Korean government seeking to deregulate legal services and end restrictions on nonlawyers investing in and providing legal services. The key excerpts say:

"The Korean government is planning a major deregulation of the nation's legal and other professional services markets, the Korea Herald reports.

At a government meeting Tuesday, Finance Minister Yoon Jeung-hyun explained the move as a way to boost employment in the high-value services sector.

"The government will lower entry barriers to the professional service market to spur competition and to boost the size of the market," Yoon said.

A number of measures aimed at reducing regulation have been recommended to the government by the Korean Development Institute, a think tank. Perhaps most controversially, the KDI has proposed that non-lawyers and conglomerates be permitted to own stakes in law firms. The institute has also recommended an end to restrictions on lawyers, patent agents and certified public accountants practicing together."

More from Spain on Contingent Fees, Plus Word on a Spanish Law Website and Blog Regarding Spanish Law Issues

You may recall this prior post regarding Spain's high court striking down a statute prohibiting contingent fees. A friend and Spanish law school instructor, Albert Azagra, was kind enough to to provide the following additional specifics on the ruling. I posed the questions and Albert provided the answers, with a caveat that he is not an expert on the issues and I edited a word here and there:

(1) Was the source of the restriction based on what American lawyers
would call legal ethics rules?

Yes. Section 16 of the Code of Professional Responsibility of the Spanish
Bar Association expressly banned contingency fees as the sole form of
compensation. It only allowed a fraction of the compensation to be linked
to the results and, in any event, the client had to pay at least the costs
of rendering the service. Note further that the rule prohibiting
contingency fees was also included in a national regulation governing
lawyers - albeit not an Act of Parliament- that had been upheld by the
Supreme Court some years ago. This makes the November decision even more
important.

(2) Did the court strike down the rule based on some "constitutional"
grounds or based on EU or Spanish laws on restrictions on competition.

The Court struck down the rule mainly on the grounds of Spanish competition
law.

(3) How wide an impact might we expect from this decision. (eg is this a precedent for all EU countries) and whether the outcome can be changed by, for example, an amendment to existing legislation?

Spanish statutes and case law are generally not very influential in other European countries. Actually, traditionally we copy the French and, to a lesser extent, the German, and the Italian. German and US law are becoming more and more influential.

Also, generally speaking, in the Civil Law tradition decisions by the courts of other Civil Law countries do not constitute precedent. Of course, EU courts and the European Court of Human Rights decisions are a different story.

Spanish Law Review and Blog

Albert also sent word this weekend about a website and blog that cover tort law issues in Spain, with the website including a section in English for some but not all of the papers. Here's what he explained, and the links:

"My research group is now launching a blog. It publishes brief analytical comments on bills, judgments, legal education and other topics. The blog is called Abogares (http://www.abogares.com/) and it is the blog of InDret (http://www.indret.com), our SSRN-listed electronic law review with more than 3,000 subscribers from around 30 countries. The law review has published 77 of its 708 articles entirely in English, and we expect the blog to have posts in English, too."


Albert is a great person and quite learned - you can find him on LinkedIn.

Delaware Catholic Diocese to Use Chapter 11 to Manage Tort Cases Regarding Priests

Law360 and various news services had articles over the last two days regarding the Delaware Catholic Diocese filing for chapter 11 due to pending tort claims arising from priests molesting children. The Diocese is represented by Wilmington's Young Conaway law firm, which has been involved in many of the asbestos chapter 11 cases as counsel for futures reps. Will we see a trust fund or just tort claim resolution ? Either way, this presents just the latest example of how chapter 11 is being used as just another to to resolve tort claims. Here are two key quotes from the Law360 article.


"Filing for Chapter 11 offers the best opportunity, given finite resources, to provide the fairest possible treatment of all victims of sexual abuse by priests of our diocese," Bishop W. Francis Malooly of the Wilmington diocese said in a statement.

"Our hope is that Chapter 11 proceedings will enable us to fairly compensate all victims through a single process established by the bankruptcy court," Malooly said.

Structured Settlements versus Lump Sum Settlements - What are the Facts ?

Thanks to the Empirical Legal Studies blog post here, here is the link for a student paper asserting that there no facts to back up the practice of promoting structured settlements instead of lump sum settlements.

Massachusetts High Court Ruling Approves a New Medical Monitoring Claim Involving Smokers, Low Dose CT Scans and Cellular Changes

Today was not a good day for the tobacco industry or certain other "mass tort" defendants and/or insurers involved with cancer claiming. Why? Despite opposition briefs from almost every major defense group in the US (see n.4), the Massachusetts Supreme Court today issued a unanimous opinion approving a tort claim to obtain medical monitoring using low dose CT scans to seek to find lung cancer very early for a class of people at meaningful risk of cancer due to many pack years of prior or current smoking of Marlboro cigarettes. See below for the elements of the claim.

The opinion also is noteworthy for two other reasons. First, it includes a ruling on when and how a defendant can win a statute of limitations defense. It will not be easy for the defense since the opinion to a large degree suggests a focus on what a physician has told the plaintiff. The opinion also includes a ruling to protect plaintiffs against splitting a cause of action. The latter ruling is that if cancer does manifest itself, the plaintiff can bring a new claim even if he or she already made a claim for medical monitoring. The opinion is is Donovan v. Philip Morris USA, Inc., --- N.E.2d ----, 455 Mass. 215 (2009). Go here for my prior post predicting this type of outcome and providing data and facts on cancer that help to explain why this ruling will, over time, become quite important.

The elements of the approved medical monitoring claim are:

"In conclusion, each plaintiff must prove the following:

(1) The defendant's negligence (2) caused (3) the plaintiff to become exposed to a hazardous substance that produced, at least, subcellular changes that substantially increased the risk of serious disease, illness, or injury (4) for which an effective medical test for reliable early detection exists, (5) and early detection, combined with prompt and effective treatment, will significantly decrease the risk of death or the severity of the disease, illness or injury, and (6) such diagnostic medical examinations are reasonably (and periodically) necessary, conformably with the standard of care, and (7) the present value of the reasonable cost of such tests and care, as of the date of the filing of the complaint."

Here are key excerpts from the opinion as to the Court's rationale:

"Modern living has exposed people to a variety of toxic substances. Illness and disease from exposure to these substances are often latent, not manifesting themselves for years or even decades after the exposure. Some people so exposed may never develop an illness or disease, but some will. Subcellular or other physiological changes may occur which, in themselves, are not symptoms of any illness or disease, but are warning signs to a trained physician that the patient has developed a condition that indicates a substantial increase in risk of contracting a serious illness or disease and thus the patient will require periodic monitoring. Not all cases will involve physiological change manifesting a known illness, but such cases should be allowed to proceed when a plaintiff's reasonable medical expenses have increased (or are likely to increase, in the exercise of due care) as a result of these physiological changes. We leave for another day consideration of cases that involve exposure to levels of chemicals or radiation known to cause cancer, for which immediate medical monitoring may be medically necessary although no symptoms or subclinical changes have occurred. Here, the physiological changes with the attendant substantial increase in risk of cancer, and the medical necessity of monitoring with its attendant cost, may adequately establish the elements of injury and damages.

Our tort law developed in the late Nineteenth and early Twentieth centuries, when the vast majority of tortious injuries were caused by blunt trauma and mechanical forces. We must adapt to the growing recognition that exposure to toxic substances and radiation may cause substantial injury which should be compensable even if the full effects are not immediately apparent. See Hansen v. Mountain Fuel Supply Co., 858 P.2d 970, 977 (Utah 1993). When competent medical testimony establishes that medical monitoring is necessary to detect the potential onset of a serious illness or disease due to physiological changes indicating a substantial increase in risk of harm from exposure to a known hazardous substance, the element of injury and damage will have been satisfied and the cost of that monitoring is recoverable in tort. No particular level or quantification of increase in risk of harm is necessary, so long as it is substantial and so long as there has been at least a corresponding subcellular change. Id. at 979-980. This should address any concern over false claims, see Payton v. Abbott Labs, supra at 552-555, yet permit a genuinely injured person to recover legitimate expenses without having to overcome insurmountable problems of proof in this difficult and complex area. In this respect, medical expenses are recoverable not only for direct treatment and diagnosis of a present injury or an injury likely to occur, but for diagnostic tests needed to monitor medically a person who has been substantially exposed to a toxic substance that has created physiological changes indicating a substantial increase in risk that the person will contract a serious illness or disease. The expense of medical monitoring is thus a form of future medical expense and should be treated as such."

Report on Civil Justice in Scotland Calls for Class Actions and More Work on Litigation Funding and Contingency Fees

Lord Gill's report on civil justice in Scotland was issued on 30 September. The full report and the synopsis are available here. See below for some key excerpts from the synopsis.


"Multi‐party actions (Chapter 13)

The Report recommends that there should be a special procedure for dealing with multiple claims which give rise to common or similar issues of fact or law, for example, litigation arising out of a mass disaster or liability for defective products. Detailed recommendations are made regarding the features that such a procedure would have, including special funding arrangements for multi‐party actions to be administered by the Scottish Legal Aid Board (see paragraphs 64‐119).

The cost and funding of litigation (Chapter 14)
Detailed recommendations are made on the recovery of expenses. The cost of litigation should form part of the remit of the proposed Civil Justice Council for Scotland (see below); pending which the Scottish Government should set up a Working Group to look at the issue of expenses (paragraphs 50‐67).

While no recommendations are made on speculative fee arrangements pending the outcome of a review in England and Wales, it is recommended that this issue should urgently be addressed by the proposed Working Group on Judicial Expenses (see paragraphs 125‐127).

The Scottish Government should explore with insurance providers the scope for improving public awareness and increasing voluntary uptake of legal expenses insurance (see paragraph 140)."

Burford Fund Goes Public in Britain - $ 130 Million Raised for Litigation Funding

Regardless of what some may think, investors apparently like the idea of litigation as an investment vehicle. The proof ? Burford Capital this week succeeded in raising $ 130 million in its IPO.

Here is an Am Law article by Alison Frankel in which she declares: "It's time to declare litigation financing a bona fide investment class."

Here is the link to a Bloomberg story on Burford's IPO.

Tort Wars - The Next Step in the Toyota Saga Regarding Alleged Document Destruction

Here is a different example of how mass tort litigation ends up becoming a media story. In this instance, the media consists of the latest story on Toyota's battles regarding alleged destruction of internal documents in order to avoid the information becoming evidence in rollover cases.

The short version is that after suing Toyota for wrongful discharge, a former inside lawyer has turned over to a federal judge four boxes of documents that are said to support his claim that documents were wrongfully destroyed by Toyota. The judge has ordered the documents to be secured, scanned and coded, and will give Toyota a chance to claim privilege regarding the documents. No doubt plaintiff's lawyers will then assert the crime-fraud exception applies to any otherwise privileged documents. The judge's ruling presumably will be widely reported.

How would you like to be the General Counsel dealing with this situation ? What would you want to know and then what would you decide to do when no one will give you the answers you need ? Much wisdom on the subject of crisis management has been spelled out before by business consultants. See, e.g,, Stop The Presses: The Crisis and Litigation PR Desk Reference. Written by Richard Levick and Larry Smith of Levick Strategic Communications, the book addresses crisis management in general, and its chapters 7 and 8 deal with strategies for dealing with blog stories and other issues that were more or less immaterial as little as 5 years ago. Also potentially relevant is its chapter 9 on the impacts of media related to prosecutorial activity.


Mass Torts, Media, and the Dole Chemical Exposure Cases

Here is a story regarding yet another aspect of the "mass tort" litigation industry - movies and other media drivers of public opinion. Remember - this situation is not unique. Indeed, other movies about "mass torts" were far bigger, such as Erin Brokovich and A Civil Action. Today, the mass tort wars are fought on many fronts and there are many forums for the battle over public opinion and perception, all of which can effect corporate reputation and the corporate stock price.

Recall also that there are two sides two every story, and that Dole's actions were portrayed as less than laudable in this August 19, 2009 Wall Street Journal article by Steve Stecklow. Set out below are 1) the AP article and 2) key excerpts from the WSJ article.

________________________________________________________________

Dole withdraws lawsuit against Swedish filmmaker

By MALIN RISING (AP) - 4 hours ago

STOCKHOLM -- Dole Foods is withdrawing a defamation lawsuit against a Swedish filmmaker after complaints in Sweden that it was trying to limit free speech, the company said Thursday.
Dole had sued filmmaker Fredrik Gertten for showing his controversial documentary "Bananas!" despite a court ruling that said it was based on a fraud.
The move sparked protests in Sweden, critics said the food company was trying to interfere with the freedom of speech.
In a statement, Dole said it decided to withdraw the lawsuit "in light of the free speech concerns being expressed in Sweden, although it continues to believe in the merits of its case."
"While the filmmakers continue to show a film that is fundamentally flawed and contains many false statements we look forward to an open discussion with the filmmakers regarding the content of the film," Dole's Executive Vice President and General Counsel, C. Michael Carter said.

The documentary shows the alleged plight of Nicaraguan workers who say they were made sterile by a pesticide used at Dole banana plantations in the 1970s. It was completed before a fraud was uncovered showing that the workers were recruited by a lawyer to lie. That ruling has been appealed.

Earlier this week Swedish food chain ICA -- a Dole customer -- held a meeting with the company saying it felt the filmmaker had the right to express his side of the story.
"We met their European division and ... put forward our view on the matter," ICA's fruit and vegetables chief Lars Astrom told The Associated Press. "We said we thought they should withdraw the lawsuit and asked them to get back to us, and now they have done that."
The film's producer, Margarete Jangard, welcomed Dole's decision.
"It feels fantastic that we have been able to make a difference, without an
y money, only with the help of all the people who have supported us," she told the AP.

The film was shown twice in June with a lengthy written disclaimer by Los Angeles Film Festival organizers who said it did not present a fair and accurate account but was worth showing as "a case study" of what happens when a story changes after a documentary is completed.
Copyright © 2009 The Associated Press. All rights reserved.


______________________________________________________________
Excerpts from WSJ:

" DBCP, short for dibromochloropropane, was widely used around the world in the 1960s and 1970s to control microscopic worms called nematodes that attack roots and destroy crops. "The first year after we used" the pesticide, "the bananas were huge," says Isaias Paz, who worked for years as a foreman on a Dole-operated banana plantation outside Chinandega.
In 1977, California health officials discovered that workers at a DBCP manufacturing plant there had become sterile. Another manufacturer, Dow Chemical Co., one of Dole's suppliers for Central America, stopped production and announced a recall.
Dole, which began using the pesticide in Nicaragua in 1973, had a contract to purchase DBCP for another two years. It threatened Dow with breach of contract for stopping deliveries, stating there was no evidence that plantation workers who apply DBCP had been rendered sterile, according to records in a lawsuit later filed by Dow against a Dole unit in Michigan circuit court. In 1978, Dow agreed to sell Dole some of its remaining stocks only after the fruit company agreed to hold Dow harmless from any injury claims.
In 1979, the U.S. Environmental Protection Agency banned DBCP in the U.S. for nearly all uses, including bananas, stating that "farm workers, pesticide applicators and the public at large...run varying degrees of risk of cancer, gene and chromosomal damage" and male infertility. Dole stopped using the pesticide in Nicaragua in 1980, according to Scott A. Edelman, a Dole attorney. The company's "use of the remaining stocks" of DBCP from 1978 to 1980 "was legal," he says."

Another US Plaintiff's Firm Moves into Europe

Mark Lanier's plaintiff's firm is expanding operations into London. As described in the media, the firm is establishing an arbitration practice. Here is the firm's press release and here is a law.com article.

The press release does not say this but one can envision that this effort has larger goals than simply handling some commerical cases. Instead, one can see this move as following a model set by others. That is, branch out to a new market using a product that will pay for itself more quickly than does tort litigation. That is, business litigation for hourly and/or contingent fees usually follows a time line that is shorter than the timeline for tort litigation. At the same time, that business litigation platform provides a basis for developing local skills and contacts that will be exploitable as the market for tort litigation evolves and expands over time.

Proposal for National Juries for Mass Tort Cases

Here is a late September post presenting a condensed version of a law review article proposing "national juries" for mass tort litigation. The proposal is from Professor Laura Gaston Dooley, a professor at the Valparaiso University Law School. Looking quickly through her CV at the school website, it appears Prof. Dooley clerked for two years for federal judges and then joined academia. Her work also includes being a part of the "Members Consultative Group, Project on Aggregate Litigation. American Law Institute," which is a group identified here.

Set out below are some excerpts from the condensed version. The proposal makes some interesting points. I've not read the full law review article. The condensed version does not hone in on two topics that seem key to me: state-by state variations in the applicable legal rules, and the manner in which a jury would cope with the applicable and evolving science in a mass tort "toxic tort" case.

See below for the excerpts that most caught my eye.
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"The reexamination problem reflects tension between competing values in complex litigation: Consolidated cases may lead to unconstitutional reexamination of overlapping issues, yet trying individual cases presents problems of efficiency loss and forum manipulation. We must therefore choose between the evil of bifurcation and the evil of inefficient relitigation of the same issue, with the concomitant risk of inconsistent results. A third option--treating a single litigation as a national unit--vests too much power in one local jury to unleash national consequences.

Is there a fourth option? Empanelling a national jur