The article is here. Note also that the article says the legislation would provide money for an early detection program for cancers. One wonders exactly what is contemplated.
Note further that the article is part of a stream of asbestos information pouting forth every day from various social media. The plaintiff's bar is doing very well at using social media to make people very conscious of asbestos.
I'm setting aside James Hardie and Australia for a few days. News on Friday provides a great springboard for some comments in the same general area of what's new in mass tort resolution thinking, and some points related to corporate actions to cope with/avoid/limit the corporate damage from mass tort claims.
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How does big tobacco admit it faces massive global tort warfare ahead ? By hiring David Bernick away from Kirkland & Ellis, as was announced Friday - see article at the bottom.
Why is hiring Mr. Bernick so telling ? Look at what he has done. K & E teams headed up by Mr. Bernick have often (but not always) won some of the most difficult battles in mass tort litigation, and have included various creative and massive efforts to buy time and/or survival for corporate defendants. For example, his team successfully defended Grace executives in a criminal trial involving asbestos regulations and "tremolite contamination" in mined products; that trial would have been easy to lose due to asbestos hysteria. The team also was winning the W. R. Grace asbestos bankruptcy trial by thoroughly discrediting the seamy side of asbestos claiming by the not sick, and so they capitalized by reaching a fantastic mid-trial settlement in the bankruptcy. Bernick and others also did a business-saving (albeit unconstitutional) deal in chapter 11 to free Asea Brown (ABB ) from its Combustion Engineering asbestos liabilities, and obtained that result despite the stench from ABB's $ 20 million payment to plaintiff's counsel. Mr. Bernick and others also undertook an ill-fated but brilliant effort on behalf of car companies to use the Federal-Mogul bankruptcy to convene one massive Daubert hearing in federal court regarding whether brake linings with asbestos actually cause cancers. Even though the latter effort did not succeed on the merits; it bought much needed time for car companies at a time when asbestos litigation was at one of its most frenzied points.
One cannot help but wonder the price. If Mr. Bernick can do for PM what he has done for other entities, the financial dividend for PM shareholders will be huge. Indeed, Mr. Bernick actually will add real value to the bottom line with actual creative thinking and hard work. That said, perpetuating smoking is anything but the work of angels.
What issues are out there to keep Mr. Bernick busy and challenged ? A recent example arises from the disastrous $294 million verdict entered last fall in one of the thousands of pending post-Engle tobacco cases that are being set for trials in Florida. If one took that verdict into bankruptcy court and handed it to the "liability estimators," they could generate a future liability range of numbers that probably would include numbers in the trillions of dollars. Those numbers also could be offered in bankruptcy court to support fraudulent conveyance claims involving various corporate moves by tobacco companies. Recall, for example, that Asarco was hit this past year with a $ 6 billion dollar bankruptcy court judgment based on fraudulent conveyance claims tied to corporate activities undertaken in anticipation of tort and environmental claims.
That said, the bankruptcy liability estimation process is not even close to scientific, as Mr. Bernick well knows. Indeed, the Grace bankruptcy included one of the strongest indictments issued to date regarding the lack science and due process in bankruptcy proceedings, That indictment is set out in the testimony of Professor Heckman, a University of Chicago economist and Nobel prize winner, as described in item 4 of this prior post.
Meanwhile, there is global cigarette litigation. In Nigeria, the tobacco companies are the subject of $ 45 billion government cost recovery claims, as described, for example, here and here. And, as noted on Saturday, there have even been tobacco claims in Japan, which are not noteworthy for any success but are note worthy for the statistics regarding the continuing smoking patterns in Asia.
Perhaps most significantly, the tobacco industry recently suffered a resounding loss as the Massachusetts Supreme Court endorsed in sweeping terms a medical monitoring class action case against tobacco companies. Due to Congressional hearings and the tobacco settlements, it's very plain that the cigarette manufacturing industry very closely follows science, and so its senior executives undoubtedly are aware of the indicators that their companies soon enough will face a wave of expensive medical monitoring and therapy claims arising from new scientific discoveries. Soon enough, it will be routine to provide effective screening examinations to find cancers when they are still microscopic. Incredible new devices and techniques will be used to create innovative therapies that will be developed to "cure" or manage the tumors, all at some significant amount of expense. See generally the many papers of Professor Gary Marchant, most of which are collected on his law school's website at the page which is here. Those developments will make it practical for plaintiff's lawyers to bring claims on behalf of persons in developing countries for which the opportunity for expensive life-saving treatment will create enough economic value to incentivize litigating cases that will have significant emotional appeal to any judge or jury.
My bet? Mr. Bernick's will architect and oversee an effective defense across the broad range of pending cases, all while planning for future efforts to obtain absurdly favorable settlements that promote continuing tobacco use by sharing revenues with governments and lawyers, not to mention, litigation funders, to produce securitized cash flows. The settlement also produced ancillary litigation over access to information from state attorney's general on why and how they settled. Certainly Mr. Bernick is well suited by experience to lead PM through the issues ahead.
Mr. Bernick will have plenty of new challenges because more and more commentators are speaking out on the myriad problems with the handling of mass tort claims. Indeed, new commentators are emerging. Commentators include Prof. Erichson on "The Trouble With All or Nothing Settlements" and others who last year spoke on whether more mass tort claims need to be litigated instead of settled. Prof. Burch wrote a post this past Friday on Prof. Redish's new book arguing that many mass tort class action procedures are unconstitutional (an issue I've been litigating and arguing since the late 1980s.) She also links to a summary of contra papers by Prof. Issacharoff, who also is a paid partisan and advocate in asbestos litigation, including (among others) the THAN bankruptcy (click by the first screen and then you should land at the page for In re T H Agriculture & Nutrition, L.L.C., Case No. 08-14692 (REG). The THAN case is the asbestos bankruptcy that produced a declaration from an asbestos plaintiff's lawyer regarding his understandings from chapter 11 plan negotiations regarding his firm's clients being paid an average of over 700k per claimant for future claims against the THAN trust.
Challenges also will arise due to commentary and new thoughts from overseas. Prof. Burch wrote this recent cogent post summarizing a new report from the UK on tort claiming. To tease you to go read more, here are two key excerpts from the post summary:
"Of additional import, the final report recommends that solicitors and barristers should be allowed to enter into contingency fee arrangements, which are currently prohibited. Before entering into such an arrangement, the report recommends that claimants receive independent advice. It also suggests capping the fees at 25%.
Finally, the report recommends making third-party funding available to personal injury claimants (including those involved in collective actions). It defines third party funding as "The funding of litigation by a party who has no pre-existing interest in the litigation, usually on the basis that (i) the funder will be paid out of the proceeds of any amounts recovered as a consequence of the litigation, often as a percentage of the recovery sum; and (ii) the funder is not entitled to payment should the claim fail." (Final Report at p. 17). Very interesting."
UK corporate and insurance company lawyers issued a January 19 report she links to; here's their bottom line:
"If Jackson LJ's recommendations are passed into law, it seems safe to predict that they will lead to an increase in the number of collective actions seeking damages for personal injury. In particular, group claims against the manufacturers of allegedly defective products, which are no longer routinely funded by legal aid as they were in the 1980s and 1990s, are likely to become more common. Claimants with an arguable claim of this type would generally be able to proceed under a contingency fee, CFA or third-party funding arrangement without the spectre of possibly having to pay, out of their own pockets, either their own lawyers' fees or the costs of their opponent.
Costs shifting would remain in place for most types of collective action, such as those involving claims for anti-competitive behaviour or consumers' claims for economic loss. In these cases, the loser-pays rule would remain a significant disincentive to claimants considering a group action and would protect defendants against frivolous or speculative lawsuits.
The big question now is whether these reforms will be implemented. Jackson LJ appears to hold the view that his recommendations, which he describes as "a coherent package of interlocking reforms", should not be viewed individually but as a comprehensive set of proposals. Some of these proposals could be introduced relatively easily by amendment to the Civil Procedure Rules, such as the introduction of a qualified one-way costs shifting regime, but for the most part primary legislation would be required in order to give effect to other recommendations, such as abolishing the recoverability of success fees from defendants. With the general election taking place this year, civil justice reform is unlikely to be high on the Government's agenda. The likely delay will provide a window of opportunity for those who have concerns about particular aspects of these recommendations to make them known before the reforms are finally implemented."
We surely are living in interesting times for mass tort claiming.
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Here is the article from the Chicago Tribune regarding Mr. Bernick; the text is pasted below.
Friday, January 22, 2010
Top litigator at Kirkland leaving for Philip Morris
David Bernick, a star litigator at Kirkland & Ellis, is leaving the firm to become general counsel at Phillip Morris International.
Bernick has been with Kirkland for 31 years and has been involved in nearly every type of complex litigation imaginable, from defending companies with asbestos liability to representing breast-implant manufacturers.
"I have spent my entire career at Kirkland & Ellis and I am proud to have contributed to the growth and success of one of the top law firms," said Bernick in a statement provided by the firm. "I will remain close to my many friends and colleagues at the firm, but I look forward to pursuing new challenges during the next phase of my career with Philip Morris International."
Kirkland's incoming chairman, Jeffrey Hammes, said: "David has been an integral part of our premier litigation practice, and his achievements during his 31 years at Kirkland are truly remarkable. We thank him for his varied and long-standing service to the Firm and we wish him success in his new role.
Bernick will join Philip Morris on March 1. As part of the move, he will relocate to Switzerland from New York.
Tip of the hat to Above the Law for breaking the news.
More great new science at the observable cellular level. As described below, scientists used tools to observe cellular level shapes, and then figured out a way to "staple" some proteins to better take on the needed shape to fit cellular receptors. How cool and important is this discovery? Very - the science is so good it was published in Nature this month. Go here to Science Daily for the broader whole story; excerpts are below.
Why does this relate to law? As these techniques are used to actually implement ways to "turn off" cancer, they will become the remedies sought by persons facing cancer allegedly or actually caused by particular substances.
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"ScienceDaily (Nov. 12, 2009) -- Scientists have devised an innovative way to disarm a key protein considered to be "undruggable," meaning that all previous efforts to develop a drug against it have failed. Their discovery, published in the November 12 issue of Nature, lays the foundation for a new kind of therapy aimed directly at a critical human protein -- one of a few thousand so-called transcription factors -- that could someday be used to treat a variety of diseases, especially multiple types of cancer.
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Based on his work as an oncologist, Bradner became deeply interested in a human protein called NOTCH. The gene encoding this protein is often damaged, or mutated, in patients with a form of blood cancer, known as T-ALL or T-cell acute lymphoblastic leukemia.
Abnormal NOTCH genes found in cancer patients remain in a state of constant activity, switched on all the time, which helps to drive the uncontrolled cell growth that fuels tumors. Similar abnormalities in NOTCH also underlie a variety of other cancers, including lung, ovarian, pancreatic and gastrointestinal cancers.
Even with this deep scientific knowledge, drugs against NOTCH -- or any other transcription factor -- have traditionally been extremely difficult, if not impossible, to develop. Most current drugs take the form of small chemicals (known as "small molecules") or larger-sized proteins, both of which have proven impractical to date for disabling transcription factors.
A few years ago, Bradner and his colleagues hatched a different idea about how to tame the runaway NOTCH protein. Looking closely at its structure as well as the structures of its partner proteins, they noticed a key protein-to-protein junction that featured a helical shape.
"We figured if we could generate a set of tiny little helices we might be able to find one that would hit the sweet spot and shut down NOTCH function," said Bradner.
Creating and testing these helices involved a team of interdisciplinary researchers, including Greg Verdine, Erving Professor of Chemistry at Harvard University and director of the Chemical Biology Initiative at Dana-Farber Cancer Institute, as well as scientists at Brigham and Women's Hospital and the Broad Institute's Chemical Biology Program, which is directed by Stuart Schreiber.
Verdine invented a drug discovery technology that uses chemical braces or "staples" to hold the shapes of different protein snippets. Without these braces, the snippets (called "peptides") would flop around, losing their three-dimensional structure and thus their biological activity. Importantly, cells can readily absorb stapled peptides, which are significantly smaller than proteins. That means the peptides can get to the right locations inside cells to alter gene regulation."
Mayer Brown includes Herbert Zarov and other well regarded defense lawyers focused on toxic tort claims. Mr. Zarov and his colleagues recently published this DePaul Health Care Law Review article that sets out a defense perspective on the issues regarding medical monitoring claims in Illinois.
The outcome in Illinois will matter because Illinois holds an outsized role in the world of tort litigation in the United States. Why ? Two Illinois venues - Madison County and Cook County. Madison County is especially famous/infamous for processing hundreds of asbestos trial settings per year, a process loved by the plaintiff's bar because trial dates result in outcomes and payments.
Today was not a good day for the tobacco industry or certain other "mass tort" defendants and/or insurer 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 available online here from the Court, and also is available on Westlaw. It is Donovan v. Philip Morris USA, Inc., --- N.E.2d ----, 2009 WL 3321445 (Mass.)
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. Go here for NAM's opposition brief.
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."
This August 27 press release from Abbott and Pfizer exemplifies another way science is changing and will over time create new legal issues as to remedies for tort claims. The pertinent part of the press release is quoted below; the gist is that the two are undertaking a joint effort to create a diagnostic test to find persons with a specific genetic defect so that a clinical trial can be then undertaken only with patients with that particular genetic defect. Soon enough, plaintiffs will be able to have good science behind requests asking courts to order a risk -creator to pay for much more than just a traditional annual check-up.
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Des Plaines, Illinois and New York -- Abbott (NYSE: ABT) announced today that it has entered into an agreement with Pfizer Inc to develop a molecular diagnostic test intended to screen non-small cell lung cancer (NSCLC) tumors for the presence of gene rearrangements. Pfizer has developed a novel investigational agent that selectively targets cancer-causing genes implicated in the progress of many cancers. To be eligible to receive Pfizer's oral therapy, a particular genetic translocation (rearrangement) known to be found in NSCLC tumors and a wide variety of other cancers, but not in normal cells, must be present.
Under terms of the agreement, Abbott will develop a companion diagnostic test that will determine a patient's genetic status and will be used in patient selection for future clinical trials of PF-02341066.
"We are very pleased to partner with Abbott to develop a companion diagnostic test for non-small cell lung cancer and ensure its global availability for patients and physicians who need this information to make the best treatment decisions," said Garry Nicholson, General Manager, Pfizer Oncology Business Unit. "This test will allow us to focus on the patient population most likely to benefit from our NSCLC candidate. Working in close partnership with the experienced Abbott team, we are confident that we will deliver yet another application of personalized medicine to address a currently unmet medical need in NSCLC."
"Pfizer's novel compound for treating non-small cell lung cancer appears to be ideally suited to individualized therapy," said Stafford O'Kelly, head of Abbott's molecular diagnostics business. "Abbott is a leader in the development and commercialization of companion diagnostics and we're delighted to collaborate with Pfizer, a leader in cancer therapeutics, on the development of a test to identify patients who might benefit from this important compound."
Today, more on science, cancer and law. Why do I think these topics are worth writing about for tort lawyers and perhaps some policy-makers around the world? Because science brings us a fast arriving future, as is detailed below. And, if the US actually achieves health care reform and more sophisticated rules at the FDA, cures will arrive even sooner. The results for lawyers, cancer victims and persons at risk ? Over the next few years, we will see more highly specific lawsuits seeking specific kinds of medical monitoring (tests for proteins, specific types of scans) and specific leading-edge clinical treatments. You can read here a summary of the cases Phillip Morris is fighting and note that two (in New York and Massachusetts ) are medical monitoring cases seeking CT scans for certain groups of smokers. More such suits are sure to come as science moves ahead. And, damages claims are going to increase around the world as even the poorest persons from any nation seek what they will argue is the fundamental human right to funds for and access to a meaningful chance for a cure for cancer. Thus, the financial and human stakes will continue to rise for parties to litigation and national policy-makers.
To start with, consider some numbers regarding cancer. About 2,4oo hundred or so annual mesothelioma cancer deaths in the US have caused the payment of hundreds of billions of dollars in settlement payments and legal fees. The mesothelioma rate is exploding over seas, especially in Australia and Europe where amphibole use was rampant and continued far longer than it did in the US. Meanwhile, many nations are increasing the use of asbestos, including some use of chrysotile that contains amphiboles.
Now look outside asbestos and see how small mesothelioma is in the grand scheme. Per statistics from the American Cancer Society, over 1.4 million new cancers will be diagnosed this year just in the US and 4% of Americans are cancer survivors. Every two days, more people in the US die of cancer than died on 9/11/01. Mesothelioma is a modest problem in that scale (a statement which is not to minimize the horrible and almost always fatal nature of mesothelioma.)
Now, think about another form of cancer, such as non-Hodgkin's lymphoma. The annual rate used to be over 50,000 per year (in just the US) but now has climbed to well over 60,000 diagnoses per year. Please see this prior post for links to the American Cancer Society data and for Gina Kolata's prior article summarizing the slow pace of generating cures.
In view of those numbers, consider where science is on research. Ms. Kolata last week published this important new article detailing the moribund pace and utility of clinical trials for new cancer drugs. It's depressing reading as she details multiple problems, including lack of volunteers for the trials, and design flaws that require too many participants. Yet another problem - highly relevant today - is that most existing insurance reimbursement plans financially and practically discourage doctors from helping patients find and join appropriate clinical trials. So, for policy-makers and voters, here is proof that our present system is exactly backwards as it discourages clinical trials needed to find and prove cures for cancer. Thus, we now have further objective proof that our existing health care insurance system is built to generate revenues instead of cures, and so is deeply flawed for persons with serious diseases, which of course is the group that most needs health care and insurance. Hopefully a revised system will include some clever economic choice Nudges from the conservative and creative new regulatory czar, Cass Sunstein ( go here for the blog tied to the recent and wonderful book Nudge by Messrs. Sunstein and Thaler).
But, despite those flaws, is science now at a point to make real progress and actually put in place cures for at least several cancers? Some say yes. Who says so? Nobel Prize winner Dr. James Watson, one of the two leaders of the team that explained DNA's double-helix. Go here for his powerful article explaining that mapping the genome and other advances mean that science has made enough progress so that there is now a scientific tool kit that can actually work for some people with some cancers and can be applied to an increasingly wide range of cancers. Here's the opening paragraph of his article:
"THE National Cancer Institute, which has overseen American efforts on researching and combating cancers since 1971, should take on an ambitious new goal for the next decade: the development of new drugs that will provide lifelong cures for many, if not all, major cancers. Beating cancer now is a realistic ambition because, at long last, we largely know its true genetic and chemical characteristics." (emphasis added).
Go here for Dr. Wendy Harpham's full post on Dr. Watson's article, but here is Dr. Harpham's summary of his recommendations:
"Watson believes :
The new signal-blocking drugs (e.g., Herceptin) will lead only to improved lengths of survival.
Most anticancer drugs can reach their full potential only if given in combination with other drugs.
We must change F.D.A. regulations to allow testing in combination new drugs that, when given alone, have proved ineffective.
The NCI should provide funds to smaller biotech companies doing innovative work and to major research-oriented cancer centers doing low probability-high payoff projects."
Do clinical trials and science actually translate into lives saved even while science is ongoing? Yes, sometimes. Want proof ? Go to this blog (On Healthy Survivorship) to read Dr. Harpham's personal success story. She is a physic an who was forced to give up her patient treatment practice back in the early 1990s due to repeated onsets of non-Hodgkins lymphoma. Thwarted, she refocused to writing a great series of books and a blog about cancer and healthy survivorship. Today, she is a healthy survivor because of clinical trials and monoclonal antibodies, and healthy, realistic hope, as she describes in this post in particular and her blog and books in general.
Conclusion ? I'd say defense lawyers and corporations face future waves of claims based on new science and new lawsuits seeking new remedies. Specific causation and other defenses of course will continue to exist, but when the plaintiffs can invoke names of credible scientists such as Dr. Watson, the defense side will start to see one aspect of the whittling back of science as major weapon against tort claims.
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