As of later today or tomorrow, GlobalTort is moving to a new Internet home with LexBlog. A new home is needed because this platform lacks a reliable spell checker and various other "back end" utilities that make writing easier. I'm also told some browsers could not reliably hit the site.
Your browser should make the change without you having to do anything, but if you have a problem, please let me know at email@example.com. The subscription options also will be broader.
As of later today or tomorrow, GlobalTort is moving to a new Internet home with LexBlog. A new home is needed because this platform lacks a reliable spell checker and various other "back end" utilities that make writing easier. I'm also told some browsers could not reliably hit the site.
So, after I finished up my first post this morning, Mike sent around this link to a blog post about a new
$ 37 million bad faith verdict against an insurer that uses "post-claim underwriting" as one of its business methods. Plaintiff's counsel suggested $ 7 million in damages - the jury awarded $ 37 million.
Is this a reasonable verdict ? The more I see, the more I have to say: yes, it is a reasonable and logical verdict very precisely intended to deter bad corporate behavior. I say that after spending 25 years as a commerical litigator who has seen plenty of corporate behavior, most of it quite good and well intended, but sometimes there are in fact good faith misunderstandings and disputes. But, as to insurers, I keep seeing simply inexcusable behavior from some of them. For example, one corporate client has been battling insurers for 27 years (really !) to obtain coverage for asbestos claims that plainly are covered. In other situations, insurers appoint defense counsel who may be fabulous trial lawyers but cannot effectively represent my clients because they labor under conflicts of interest created by too many clients, with some of the clients having conflicting defense strategies. For example, most asbestos products contain white (chrysotile) asbestos fibers. Some experts say pure chrysotile cannot cause cancer because it breaks down quickly in the lungs. Whether or not one accept that defense completely, any decent defense lawyer for a seller of a chrysotile produce always looks for and wants to blame a particular plaintiff's disease on inhalation of amphibole asbestos fibers, which include but are not limited to the blue (crocidolite) and brown (amosite) asbestos fibers, not to mention tremolite and other asbestoform minerals and man made substances. Why blame the amphiboles ? Because amphibole fibers are FAR, FAR more toxic than are chrystotile fibers. Numerically, that means perhaps a 500 - 1 potency ratio when comparing crocidolite to chrysotile. Indeed, even hard core plaintiff's expert Dr. Richard Lemen acknowledges that amphibole fibers are incredibly potent; he simply will not exonerate chrsyotile fibers, especially when they include tremolite or other amphibole contamints (go here to see an article on this topic by Dr. Lemen and others).
To return to the point that started this post, some insurers should indeed see a message in the $37 million verdict. Here are some key excerpts from the article:
"Longmont teacher Jennifer Latham and her husband Frank both suffered broken bones, internal injuries and brain injuries from the crash. But Time Insurance, also known as Fortis and Assurant Health, rescinded a health insurance policy Jennifer had recently taken out, claiming that she'd failed to disclose a complete and accurate health history on its application form--leaving her with more than $180,000 in medical bills.
Time is notorious in the health insurance industry for its "post-claim underwriting"--going back to the application after a claim is made to determine if misrepresentations were made that would warrant revoking the policy, even if the medical conditions involved have nothing to do with the claim. A similar case in South Carolina, in which the company rejected coverage for a teenager who discovered through a blood donation that he had AIDS, resulted in a $10 million punitive judgment. That verdict was upheld last fall by the state's supreme court.
In closing arguments of the two-week Boulder trial, Latham attorney Marc Levy asked for $2 million in economic damages and roughly $5 million in punitive damages. "You are the final stop," he told the Boulder County jury of four women and two men. "You are the conscience of the community. Is this the way we want health insurance companies to act?"
Time attorney Walter Wilson maintained that Latham had failed to disclose certain medical information on the application, including one trip to an emergency room for "shortness of breath" that Latham maintains was a panic attack. He argued that evidence of her "alleged emotional distress" from cancellation of her health insurance "is scant at best and nonexistent in reality."
Testimony from Time officials indicated that the company only rescinds half of one percent of its policies--but that resulted in more than 8000 rescissions over a five-year period, saving the company $150 million in unpaid claims.
The Latham case and the practice of rescission in the health insurance industry is the subject of an upcoming Westword feature. Stay tuned."
Here is an update on the Toyota situation. The claims of the former inside counsel have been sent to arbitration, and RICO claims were dismissed.
US Chapter 11 Filing Opens the Door To Discovery of Otherwise Unavailable Records - Mass Tort Implications ?
A US bankruptcy court in Delaware ruled that an overseas company that files for chapter 11 in the US will be subject to discovery regardless of the law of its home country. This ruling could be big in some particular mass tort situations since it might make available myriad corporate records that would not otherwise be available.
Here is a Mayer Brown article on the ruling. The key excerpts from the article are as follows:
"In a decision that highlights the uncertain terrain faced by US litigants involved in overseas discovery, the United States Bankruptcy Court for the District of Delaware held on October 28 that the Federal Rules of Civil Procedure trump a French "Blocking Statute" that restricts discovery. The Blocking Statute, French Penal Code Law No. 80-538, imposes criminal penalties on any French national or corporation that engages in discovery under a foreign judicial system without using the procedures of the Hague Evidence Convention--letters rogatory or letters of commission. In In re Global Power Equipment Group, Inc., No. 06-11045, 2009 WL 3464212 (Bankr. D. Del. Oct. 28, 2009), the court ordered a claimant in the Global Power bankruptcy proceeding, Maasvlakte Energie B.V., to produce documents and personnel for depositions from its French affiliate. It ordered production even though Maasvlakte had claimed, belatedly, that this discovery would violate the French Blocking Statute and expose its affiliate to prosecution in France.
In response to the bankruptcy plan administrator's discovery requests, Maasvlakte initially agreed to produce documents and witnesses, and identified its affiliate's French documents as likely to be relevant, without mentioning the Blocking Statute. Maasvlakte first raised the French Blocking Statute only three days before it was scheduled to produce documents, arguing that the statute required the administrator to follow Hague Convention procedures to obtain discovery in France. After the administrator moved to compel Maasvlakte to produce the documents and deponents, the court rejected Maasvlakte's position. It held that the Blocking Statute did not prevent it from applying the Federal Rules, and it ordered Maasvlakte to produce the documents and witnesses.
The court emphasized the fact that when Maasvlakte filed its bankruptcy claim it had submitted to the court's jurisdiction, and that using the Hague Evidence Convention procedures would slow resolution of the claim. The court held that considerations of comity established by the Supreme Court in Société Nationale Industrielle Aérospatiale v. United States Dist. Court for S.D. Iowa, 482 U.S. 522 (1987), weighed in favor of application of the Federal Rules, particularly in light of the fact that the subject matter of the disputed claim was centered in the Netherlands, rather than in France."
"Legal Reform Summit" - Views of the US Chamber of Commerce and Academics On Litigation Funding and Other Tort Related Topics
So, what do academics and the US Chamber of Commerce think about litigation funding? I'm not sure, but if you want to know, then plan to attend an October 28 seminar in DC. The front page for the seminar is pasted below, in pertinent part. Here is the link for online registration.
Note also that there are various other tort topics, including the last panel - predicting the agenda for the plaintiff's bar.
OCTOBER 28, 2009 - U.S. CHAMBER OF COMMERCE -- WASHINGTON, DC
Please join the U.S. Chamber Institute for Legal Reform for our 10th Annual Legal Reform Summit on Wednesday, October 28, 2009, featuring:
Legislative Keynote Morning Address
by U.S. Senator Jeff Sessions, Ranking Member of the U.S. Senate Judiciary Committee
"Leading in a Climate of Change"Keynote Luncheon Address
by Jeb Bush, former governor of Florida.
In addition, Tom Donohue, President and CEO, U.S. Chamber of Commerce, will provide special remarks. The Summit will also feature distinguished panelists exploring a variety of timely legal topics, including:
Courting New Money: Third Party Financing of Litigation and its Consequences. Should Outside Investors Have a Stake? Academics will release new research and discuss and debate the growing trend of third parties financing lawsuits.
Climate Change Litigation: The New Mass Tort for the 21st Century? Panelists will speak to the legal theories and trends in climate change litigation as well as regulatory and legislative developments and their impact on the business community.
Judicial Selection: Best Practices in Nomination States. ILR will release a "best practices" guide to judicial selection in nomination states.
It's Economics Stupid: Exploring the Relationship Between Lawsuits and Rising Healthcare Costs. Jeb Bush will facilitate a panel discussion on the economic impact of lawsuits on the practice of medicine and rising healthcare costs.
Trial Lawyer Crystal Ball: Predictions and Prognostications on the Road Ahead. We will host a discussion on the trial bar's priorities.
Here is an interesting paper from Davies Ward Phillips & Vineberg on a Canadian trial court decision certifying an antitrust class action for indirect purchasers of hydrogen peroxide products. The commentators view the decision as a potentially significant expansion of Canadian law if the decision withstands appeals. A key excerpt is as follows:
"In Irving Paper, Justice Rady relied on two more recent decisions of the Ontario Court of
Appeal - Markson v. MBNA Canada Bank and Cassano v. The Toronto Dominion Bank - to
frame her analysis of the issue. In her view, these two decisions have overtaken Chadha
and signal a relaxation of the evidentiary threshold prescribed by Chadha. Among other
things, Her Honour interpreted Markson as establishing "that not every class member need
have suffered a loss and so it is not necessary to show damages on a class-wide basis".
Justice Rady also relied on the Ontario Superior Court's 2004 decision in Hague v. Liberty
Mutual Insurance Co. and the Ontario Court of Appeal's decision in Cloud v. Canada
(Attorney General) as authority for the proposition that she was not required to reconcile the
conflicting expert opinions before her regarding the existence of a workable class-wide
means to prove liability.
Vice Chancellor Strine's Comments on Corporate Decision Making and Risk Taking, Including Conflicts of Interest Between Constituencies
One reality of modern life is that large scale corporate actions and decisions can and do profoundly effect the financial and physical lives of innumerable people. To name but a few, consider the financial impacts of the ongoing financial fiasco and large-scale scams exemplified by Mr. Madoff, and consider the physical impacts of now-banned chemicals and asbestos. Accordingly, the subject of corporate decision-making is important to many currently ongoing policy debates that involve both national and international laws.
On the topic of corporate decision-making and regulation, I commend for thought the following words by Vice Chancellor Leo Strine, an experienced and respected Delaware Chancery judge. Note especially his comments about conflicts of interest between corporate constituencies. In that vein, consider also the Parmalat ruling discussed here last week on the in pari delicto defense and its elements.
My view? Mr. Strine's observations are correct. Unfotunately, most judges, legislators and academics do not have the benefit of Mr. Strine's experiences and and so many but not all of our legislatures, agencies and common law courts are making far less than optimal decisions because they do not understand or acknowledge the complexities and conflicts of interest present in much of modern corporate behavior and in many cases presently in litigation. One result is that efforts to legislate or regulate are increasingly ineffectual. Another result is that corporate mistakes and/or fraud are followed by explosions of litigation, and soon all sides are more or less accurately complaining that litigation is too slow and too expensive. And, some times, the lawsuits produce only woefully tiny sanctions for those who were part of or turned a blind eye to grossly illegal behavior. Moreover, because we are human and grow tired of the past, there is a lessening of the attention paid to white papers and committee reports any particular problem, and so attention turns to the next debacle.
Will societies ever break out of this cycle? I hope so, and suggest that doing so requires the arduous but necessary step of making better decisions at the start by hearing from more conflicting constituencies at earlier points in various decision-making processes.
(As a preface for those readers who may not know, Vice Chancellor Strine sits in the Delaware Chancery court that each year is the venue for a large percentage of the major corporate litigation in the US. The judges of that court each year see and resolve myriad legal issues involving corporate decision making at board room levels. The judges often decide cases based on extensive testimony from senior players in the business and m & a world, and the judges also see many of the writings of the decision-makers, some genuine and spontaneous emails and others comprised of legal word smithing designed to provide evidence to support a later defense that the actions were not illegal. These experiences offer the chancery judges some unique windows to look inside corporations to see how decisions in fact are made.)
The comments by Vice Chancellor Shrine are online here, and also are pasted in below in full text. Vice Chancellor Shrine's comments are part the NYT Dealbook pages presenting an online dialogue last week regarding the roots and causes of the financial fiasco. Most of the entries are worth reading. Hat tip to the Conglomerate blog for drawing my attention to the fact that Mr. Strine was a participant.
" Why Excessive Risk-Taking Is Not Unexpected
October 5, 2009, 1:30 pm
Whatever the possible causes of the recent financial debacle, it seems clear that there is one cause that can be ruled out: that the directors and managers of the failed firms were unresponsive to investor demands to take measures to raise profits and increase stock prices.
Rather, to the extent that the crisis is related to the relationship between stockholders and boards, the real concern seems to be that boards were warmly receptive to investor calls for them to pursue high returns through activities involving great risk and high leverage. Indeed, the recent financial industry debacle is perhaps most surprising for its predictability in light of mundane realities accepted by social scientists of the center left and right.
It is well known that businesses aggressively seeking profit will tend to push right up against, and too often blow right through, the rules of the game as established by positive law. The more pressure business leaders are under to deliver high returns, the greater the danger that they will violate the law and shift costs to society generally, in the form of externalities. In that circumstance, if the rules of the game themselves are too loosely drawn to protect society adequately, businesses are free to engage in behavior that is socially costly without violating any legal obligations.
Moreover, the ability of any particular firm to resist imitating the overly risky, but law-compliant behavior of competitors will be compromised to the extent that managers face criticism or even removal for not keeping up with so-called industry leaders whose high, short-term returns have pleased a stock market filled with short-term investors looking for alpha.
Similarly, when power and influence over corporate activities is exerted by those whose primary interest is immediate gain and who have little or no intention to stay invested until the full costs of risky activity are borne -- e.g., certain institutional investors who invest the money of others -- corporate managers will have an incentive to be responsive to their demands.
When the marketplace presents opportunities for corporations to generate immediate gains through transactions structured so the profits are taken up front and the risks are perceived as minimal, corporations seeking to please a short-term-focused market are likely to seize them. Risks might be sold immediately to others, or theoretically contracted away through arrangements that look like insurance but don't involve counterparties meeting the standards that apply to insurance companies. Or perhaps the risk is structured to kick in several years down the road.
Likewise, when institutional investors with strong voting clout encourage corporations to increase leverage in order to engage in stock buybacks, increase dividends or reap higher trading gains, responsive corporate boards may leave their corporations without adequate capital to weather tough times, times when many of the proponents of leverage are likely not to be around as stockholders anymore.
If an industry senses that the United States Treasury has its back in the event that risky activity threatens the industry's health, its leaders may respond even more freely to these market incentives, because they view the industry as having a form of insurance from the taxpayers. When the industry and its leaders have also designed compensation systems that reward managers for generating short-term profits through risky activity -- systems often implemented with the encouragement of investors desiring to give managers a strong incentive to pump up stock prices -- managers who might otherwise be more focused on the long-term health of their employers are encouraged to go hellbent for leather for immediate gain, too.
During the last 30 years, it is indisputable that: (1) regulatory standards have been greatly relaxed, giving the financial industry free rein to leverage itself to the hilt and to engage in a wide range of speculative and increasingly opaque, complex activities, often without rigorous safeguards; (2) the power of stockholders to influence the composition of corporate boards and the direction of corporate strategy has been markedly enhanced; (3) institutional investors who hold stocks, on average, for a very brief period of time and are highly focused on short-term movements in stock prices have become far more influential and prevalent; and (4) "pay for performance" compensation systems were implemented to align the interests of managers with stockholders by giving managers incentives to pump up corporate profits in a manner that will increase the corporation's profits and stock price immediately, rather then durably.
Distilled down, what is most critical is that robust prudential regulation protecting society from risky corporate activity abated, precisely when corporations faced increasingly strong pressures to engage in much riskier endeavors in order to generate short-term results. In the financial sector, this potent cocktail was chased by several governmental interventions to rescue the industry when its "innovative" activities threatened its health, a course of conduct that suggested that the financial industry could take risks other industries could not, because it had a de facto form of federal insurance.
There is, of course, much that is simplified about this description. But, it is in the main true. And it suggests that policy makers need to be mindful of the relationship between the power of the stock market to influence corporate policies and the strength of prudential regulation. Because even diversified long-term stockholders are likely to have an appetite for risk that exceeds what is socially prudent, there will always need to be strong rules of the game to govern industries whose failure poses socially unacceptable risks.
There is no escape from the fact that although corporations are sometimes seen as owned by those who own their equity and elect their boards, the actions of corporations affect a broader range of constituencies, including workers, creditors, consumers and society more generally; no sensible regulatory system can ignore that fact.
The difficulty is compounded when those who directly influence public corporations are not primarily end user investors focused on the long term and keenly worried about excessive risk -- think workers who must invest in mutual funds for retirement -- but far more likely to be financial intermediaries whose investment horizons are often less than a year.
Strong regulatory standards are indispensable, not simply for society, but also for end-user long-term investors themselves, who bear the long-term costs of corporate idiocy.
Therefore, if the correct policy balance is to be struck regarding regulation of the financial industry and other industries that pose large systemic and societal externality risks, policy makers cannot continue to avoid the obvious alignment problem that now vexes our corporate governance system.
Most Americans invest with a rational time horizon consistent with sound corporate planning. They invest with the hope of putting a child through college or providing for themselves in retirement. But individual Americans don't wield control over who sits on the boards of public companies. The financial intermediaries who invest their capital do. These intermediaries have powerful incentives -- in important instances, not of their own making -- to push corporate boards to engage in risky activities that may be adverse to the interest of long-term investors and society. That is, there is now a separation of "ownership from ownership" that creates conflicts of its own that are analogous to those of the paradigmatic, but increasingly outdated, Berle-Means model for separation of ownership from control.
Unless these incentives and conflicts are addressed, it should be expected that corporate boards will continue to face strong pressures to manage their enterprises in a manner that emphasizes the short term over the long term, and that involves greater risk than is socially optimal. As a result, more stringent than optimal prudential regulation will have to be in place to bar the financial sector from taking risks that endanger society as a whole, rather than simply the capital of their investors and the employment of their employees.
There is nothing new about the insight that the more incentives businesses have to generate short-term profits, the more likely it is that they will engage in excessively risky activity, especially if they believe that the risks will be borne by others if they come to fruition. We simply have another hard-learned lesson to point to about the costs of ignoring these realities.
In shaping the future, policy makers might therefore focus on two key objectives: re-instituting sound prudential regulation over financial institutions critical to the overall well-being of our capital markets and economy, and implementing policies that focus stockholders and boards on the objective of having corporations produce wealth in both sound, durable fashion.
Ideally, we want a system where corporate boards are highly accountable and responsive to their stockholders for the generation of sustainable profits. But for that policy objective to be achieved, stockholders themselves must act like genuine investors, who are interested in the creation and preservation of long-term wealth, not short-term movements in stock prices. So long as many of the most influential and active investors continue to think short term, it is unrealistic to expect the corporate boards they elect to strike the proper balance between the pursuit of profits through risky endeavors and the prudent preservation of value.
Leo E. Strine Jr., vice chancellor of the Delaware Court of Chancery, is also the Austin Wakeman lecturer in law of Harvard Law School, an adjunct professor of law at the University of Pennsylvania and Vanderbilt law schools, and a Crown Fellow with the Aspen Institute."
Here is an interesting new article that highlights science continuing to evolve as to cancer risks. The conclusion is that the risk of contracting lung cancer is much, much higher for smokers with certain specific genetic variations. The following is the full text of the article:
"Researchers Cough Up New Evidence for Genetic Basis of Lung Cancer Risk in Smokers
GEN News Highlights
Scientists have uncovered new evidence supporting the hypothesis that the genetic background plays a role in determining how likely it is that a smoker will develop lung cancer and what type of cancer it will be. Genome-wide association studies by Cancer Research UK-funded scientists at the Institute of Cancer Research implicated DNA variants within regions on chromosomes 5, 6, and 15.
The work is published in Cancer Research in a paper titled "Deciphering the impact of common genetic variation on lung cancer risk."
The latest ICR work suggests there are two independent sites on chromosome 15 involved in determining lung cancer risk. They calculated that current or former smokers carrying one copy of each of the chromosome 15 variant were at a 28% higher risk of developing lung cancer than smokers without the variants. The relative risk jumped to 80% for either former or current smokers who were homozygous for both chromosome 15 variants. The increased risk of lung cancer was not evident in carriers of the polymorphisms who had never smoked.
Additionally, the sequences on chromosomes 5 and 6 were found to influence the type of lung cancer smokers developed. Individuals who carried the chromosome 5 variation were more likely to develop adenocarcinoma, a type of non-small-cell lung cancer (NSCLC) that represents the most common form of the disease, the ICR researchers point out. The chromosome 6 variant also appeared to influence whether the carrier developed the adenocarcinoma or the squamous cell carcinoma form of NSCLC."
Update: Chinese Drywall Litigation - More Signs of Interest - What Does It All Mean and Where May It Go ?
Update: The drywall litigation industry apparently is booming. A friend told me that prior seminars were attended by lots and lots of lawyers, and that the insurance coverage seminar for drywall was especially popular. I'm also getting emails telling me that only 9 seats are left for a June seminar in New Orleans on the topic by the HB Litigation Conferences Group.
Tort litigation is probably one of the few industries that tends to increase when there are tough economic times.
Media stories abound regarding the purported hazards of "Chinese drywall," and some websites provide links to some of underlying class action complaints.
Now my email inbox is filling up with other signs of the litigation picking up speed.
For one, a conference on the topic is being organized by Harris-Martin, which is a firm that publishes specialized litigation reporters and puts on specialty litigation conferences.
For another, industrial hygiene companies are touting their skills in this area and providing links to various online sources of information on the topic.
So, how far will this all go and what does it mean? I'm sure I do not know all the answers. What I can say with confidence is that the plaintiff's bar will use this situation to expand their knowledge of and precedents regarding suits against Chinese manufacturers and their distributors here in the US. I'm less sure of what the American distributors will do, but one suspects that they will want to minimize their risk of being the target defendants by working to help bring the actual manufacturers into court in the United States.
Expanded - Chrysler Bankruptcy - Asbestos and Other Tort Claimants and the Official Committee for Unsecured Creditors - Asbestos Claimants
Expansion: An ad hoc group of non-asbestos tort claimants sought a place on the official committee for unsecured creditors but did not receive a formal seat on the committee. The committee is represented by Schnader Harrison, and is comprised of persons who have filed personal injury lawsuits against Chrysler. The claims are said to worth over $ 600 million. The papers are available at the unofficial online website (link below) as docket items 287 and 273.
Note also that asbestos plaintiffs' firm SimmonsCooper filed an appearance on April 30. The papers are docket items 25, 17 and 13 or are collected here.
Prior: In the Chrysler bankruptcy, the US Trustee's office filed today papers designating the Official Commmittee of Unsecured Creditors. The papers designate a committee member who apparently will represent asbestos claimants because she, Patricia Pascale, is listed through the Brayton Purcell plaintiff's firm in California that handles asbestos claims, among others. The designation states:
c/o Brayton Purcell LLP
222 Rush Landing Rd.
Novato, CA 94948
ATTN: Alan R. Brayton, Esq.
Telephone No. (415) 898-1555
Fax No. (415) 898-1247
An image of the US Trustee's designation paper is available through Chrysler's online copy of the court docket at docket number 366, or here.
Pointoflaw collected several asbestos events links, some of which come back here.
Of particular note is Mark Behren's new Review of Litigation article: What's New In Asbestos Litigation.
For those who do not know Mark, he is with Shook Hardy in DC and has a great command of asbestos issues. Mark has been active in asbestos issues for a long time, especially legislation. Mark however goes far beyond legislative work to write several material articles. Mark also has given expert testimony in asbestos bankruptcies as to how and why the bankruptcy trust funds are defying state law. Mark is absolutely correct on that point, and that's why asbestos bankruptcy trusts are so much loved by the lawyers for non-impaired claimants. Simply put, they are using the chapter 11 trusts to avoid state law tort reform statutes, and are thereby continuing to collect massive amounts of money for persons who do not have any impairment of their daily activities.
You can obtain the full text of several of Mark's articles at his page on Shook Hardy's website.
W.R. Grace Judge Lashes Prosecutors Who Admit They 'Dropped the Ball" - Judge Dismisses Some Charges and Ponders a Mistrial
The New York Times continues to describe the events in the W.R. Grace trial, with the most recent article being one by Kirk Johnson that is located here. The opening two paragraphs are set out below to whet your appetite for more facts - the entire article should be read.
April 28, 2009
Judge in Asbestos Case Angrily Lectures Prosecutors
By KIRK JOHNSON
MISSOULA, Mont. -- A chastened team of prosecutors stood here on Monday before a clearly angry federal judge in the criminal trial over asbestos contamination in the small town of Libby, Mont., and in soft voices, trying to salvage their threatened case, said they were sorry.
"The truth of the matter is that we just dropped the ball," said Tim Racicot, an assistant United States attorney, standing before Judge Donald W. Molloy at a hearing in Federal District Court in the trial of W. R. Grace, the big chemical products company, and five of its executives, who are charged with multiple felonies in connection with their operation of a vermiculite mine in Libby.
Lawyers for Grace asked last week for the charges to be thrown out after two months of testimony. They accused prosecutors of repeatedly violating court orders to turn over evidence favorable to the defense and of putting on the stand a star witness whose credibility, they said, has since been shattered by information about his character, motivation and relationship with the prosecutors that the jury never heard about.
Caveat/Disclaimer: In the mid-to-late 1990s, I was part of a team of lawyers who represented W.R. Grace in asbestos litigation. My personal opinion is that the prosecution always has been a travesty because it ignored the facts and science regarding the Libby, Montana zonolite mining facility purchased by Grace after the facility had been in operation for many years.
I owe responses to some commenters. I'm now back from spring break and will get to those as soon as I can.
A prior post on this blog provides background on potential UK legislation regarding whether there should be payments for pleural plaques.
A new article In the Scottish press indicates that Scotland will move ahead this week to enact legislation that would reauthorize lawsuits to recover compensation for pleural plaques. The same article indicates that insurers are readying a legal challenge.
I won't try to predict the outcome of the litigation. I will, however, predict that the Scots are materially underestimating the number of plaques claims that will be filed and paid.
I've previously posted here a detailed 34 page outline previously submitted by me to London as to why it is bad policy to pay compensation for pleural plaques and other conditions that do not involve impaired or measurable risk. Simply put, there are too many such conditions to pay them all, and many more will soon be recognized as science moves ahead. The better policy, in my view, is to invest in science to understand, manage and some day cure or delay diseases that actually cause impairment or death.
As Kirk said below, "the march of science continues, and so does its impact on tort litigation" ... this time with respect to a possible link between TCE exposure and Parkinson's disease.
In January The New York Times reported on a University of Kentucky study which examined links between Parkinson's disease and exposure to TCE. While the study found that "trichloroethylene, used extensively in industry and the military and a common environmental contaminant, joins other mitochondrial neurotoxins, MPTP (1-methyl-4-phenyl-1,2,3,6-tetrahydropyridine) and some pesticides, as a risk factor for parkinsonism" apparently the researchers would not provide enough of a link for the workers with Parkinson's to pursue compensation. The lead researcher, Dr. Gash, was quoted in the NYT:
Of course plaintiff attorneys have been pursuing a link between Parkinson's and Parkinson's-like conditions and manganese fumes from welding rods for several years now. Given that the pool of potential plaintiffs relating to TCE exposure is probably at least as large as the pool of potential welding plaintiffs, I suspect plaintiff attorneys will be watching this research closely.
"Was it the trichloroethylene?" Dr. Gash asked. "It could have been. But it could have been other things, too," including a genetic predisposition to the disease.
Implicating TCE requires ruling out other potential causes, he said -- something that could take years.
This may be a long year for Altria/Phillip Morris. Today the comnpany was hit for $ 8 million by a Florida jury hearing one of the thousands of claims left from the Florida class action litigation that was decertified. In these cases, Altria is more or less limited to contesting causation and arguing contributort fault because it is bound by some parts of the prior decisions in the prior class action litigation. However, according to Bloomberg, plaintiff's counsel had asked the jury for over $ 100 million, so perhaps Altria "won" in a way.
Last year, Altria restructured to spin Phillip Morris off to shareholders, as decsribed on its website.
My personal life and work took some unexpected turns over the last several weeks, but now it's back to blogging.
Global Litigation Complicated by Various Jurisdictions Having Unique Evidence and Discovery Rules - Illinois'"Wacky" Rules on Depositions
As tort litigation becomes increasingly global, there is a need to know at least something about rules around the globe for collecting evidence and testimony. Many rules are more or less the same, but unique rules in particular jurisdictions present both pitfalls and opportunties. A goal is to identity some of the rules as an occasional topic for this blog.
To start, here's a link to a wonderful August 25, 2008 National Law Journal article on Illinois' "wacky rules" for depositions. The basic wackiness is that Illinois law specifies two flavors for depositions - evidence and discovery, with the latter seldom useable at trial. The substantive and humourous article is by Jerry Solovy and Bob Byman, two of Jenner & Block's many excellent trial lawyers. The article is found in full text on Jenner & Block's website.
Federal Judge Bars Corporate Defendant from Using Paid Google Link Related to Online Search for Information on Events Related to Ongoing Trial
The battles to shape public and others opinions related to litiagtion now include battles waged on the Internet using blogs, paid links and other teqchniques described by Richard Levick in his 2008 book on communcations strategies, as mentioned in a prior post of this blog on October 8. 2008. Now, there's a new and concrete example of this battle, including a judicial ruling on a litigant (Chevron) which used a paid Google link to direct information to persons who turn to a Google search as the means to searcg the Internet for information about the Chevron litigation.
The example arises from Chevron's ongoing trial invovling tort claims arising from its actions in Nigeria. The judge who issued the opinion is a well-regarded federal judge who once represented plaintiffs while in private practice, but who also has unhesitatingly ruled for defendants in "mass tort" cases. So, the ruling may carry a bit more than the usual clout for a trial court ruling. The full text of the Law.com article is pasted below.
Judge: Chevron Must Remove Paid Google Link Tied to Search of Plaintiff's NameDan Levine10-28-2008
A widely watched trial over Chevron's Nigerian operations featured a new online frontier Monday in the battle to influence the hearts and minds of potential jurors.
While imposing a general gag order, Northern District of California Judge Susan Illston ordered Chevron to take down a paid Google link sponsored by the company. Plaintiffs objected to the link, which directed Internet surfers to a Chevron-created Web site that provided information about the incident at issue in trial.
The company placed the link to appear when anyone Googled the name of the lead plaintiff, Larry Bowoto, plaintiffs argued. "This new advertising strategy was launched just after the jury pool learned the names of the parties," wrote lead plaintiff attorney Dan Stormer of Hadsell Stormer Keeny Richardson & Renick.
In court Monday, defense attorney Robert Mittelstaedt of Jones Day defended the sponsorship, pointing out that nine of the first 10 Google search results for the lead plaintiff's name produced Web pages friendly to Bowoto.
"Are they sponsored links?" Illston asked.
Mittelstaedt said he didn't think so, and the judge indicated that that's what concerned her.
"To me, that's as sure a thing as giving a statement to the press," Illston said. When Mittelstaedt responded that Chevron was "way behind," the judge cut him off.
"Way behind in fighting the case in the press? We're not going to fight the case in the press," she said, adding that plaintiffs would be forbidden from participating in rallies or protests surrounding the case.
A group of Nigerian plaintiffs assert wrongful death and torture, among other claims, against Chevron for events that took place in May 1998. According to the plaintiffs, a group of villagers took over a Chevron oil platform in order to peacefully protest the company's operations in the country. The oil giant called Nigerian military forces, which shot multiple people.
However, the San Ramon, Calif.-based company argues the protest was actually a violent hostage taking. The company should not be liable for calling in the authorities to deal with an act of lawlessness, its lawyers argue.
The gag order dispute occurred immediately prior to jury selection in the case. Plaintiffs asked for the entire jury pool to be dismissed, but Illston rejected that remedy. In general, corporations have a First Amendment right to participate in public debates, said Robert Varian, an Orrick, Herrington & Sutcliffe partner who is not involved in the case. While some commercial speech -- like product pricing -- is held to a lower First Amendment standard, Varian said broader statements enjoy greater protection. "The interesting question is, when a company like Chevron -- particularly in litigation -- is being criticized, and it responds, how do you deal with that?" he said.
Plaintiffs had criticized Chevron over its broader, image-related marketing practices, including banner ads in the San Francisco Chronicle and billboards. Illston refused to prohibit those practices. She did gag all attorneys and parties from making any statements to the press for the duration of trial.
Stormer questioned jurors about Chevron's ads during voir dire, and he received varying responses. One man said that in his mind, Chevron would start a little bit ahead because of the ads. Another woman stated that the ads merely demonstrated Chevron had a lot of money to buy ads. Neither made it onto the jury.
Opening statements are slated to start today before the seven-man, two-woman panel.
Illinois Supreme Court Finally Adopts the Risk Utility Test for Design Defect Product Liability Cases
Finally, it has happened. The following article says it all:
By Stephanie Potter Law Bulletin staff writer
The Illinois Supreme Court on Friday set new ground rules for the method of proof in design-defect cases, and in so ruling granted a new trial to two car companies that were hit with a $27 million verdict to the family of a man killed in a high-speed, rear-end collision.
At issue in the case was the relationship between the two tests that can be used by plaintiffs to prove their case in strict-liability design-defect cases: the consumer-expectations test and the risk-utility test.
The consumer-expectations test asks whether the product failed to perform as safely as an ordinary consumer would expect when used in its intended manner. The risk-utility test asks whether the harm could have been avoided by the adoption of a reasonable alternative design and incorporates a number of factors, including the consumer's expectations.
Writing for the court in a 42-page opinion, Justice Rita B. Garman said both tests can be used by plaintiffs in strict-liability design-defect cases in order to prove a product is unreasonably dangerous. However, if the defendant presents evidence under the risk-utility test, that test is determinative because the consumer-expectations test is incorporated into it. In this case, Garman wrote, defendants Ford Motor Co. and Mazda Motor Corp. are entitled to a new trial because they presented evidence of risk-utility and requested a jury instruction on it, but were refused by Cook County Circuit Judge James P. Flannery Jr.
''In sum, we hold that both the consumer-expectation test and risk-utility test continue to have their place in our law of strict product liability based on design defect,'' Garman wrote. ''Each party is entitled to choose its own method of proof, to present relevant evidence, and to request a corresponding jury instruction. If the evidence is sufficient to implicate the risk-utility test, the broader test, which incorporates the factor of consumer expectations, is to be applied by the trier of fact.''
In so ruling, the high court rejected a request by attorneys for the defendants to adopt the risk-utility test as the sole method of proof in strict-liability design-defect cases involving complex products.
Justice Thomas L. Kilbride did not participate in the ruling. Chief Justice Thomas R. Fitzgerald dissented in part, saying he believed the defendants' proposed non-pattern jury instructions were flawed and that Flannery did not abuse his discretion in declining to give them to the jury.
Plaintiff Connie Mikolajczyk sued the car companies after her husband, James, suffered fatal head injuries when his Ford Escort was struck from behind by a drunk-driver. James Mikolajczyk was stopped at a red-light when the driver, William Timberlake, plowed into him at 60 mph, the opinion said. The Mikolajczyks' then 10-year-old daughter also was injured in the February 2000 wreck.
The suit alleged that James Mikolajczyk died because of the driver's side seat collapsed when the car was rear-ended, causing him to be propelled backward and strike his head on the backseat of the car. The seat was designed by Mazda, the opinion said.
At trial, the car companies argued the ''yielding'' seat used in the Escort would be safer than a rigid seat during certain types of accidents. They contend that jurors presented with an instruction on the risk-utility test could have weighed the evidence of risks, benefits and alternative designs and found in favor of the car companies, the opinion said.
However, Garman wrote in summarizing the defense argument, being presented only with the consumer-expectation test in a case involving a fatal accident raised the risk that the jury might have ''done 'rough-justice' based on their sympathy for the tragic death of a young husband and father, without considering, for example, the evidence that 99.6 percent of the cars on the road at that time were equipped with yielding seats.''
Because of its ruling ordering a new trial, it also did not take up a key issue in the 1st District Appellate Court's ruling affirming the verdict finding the defendants liable.
The appeals court had upheld the $2 million award to Connie Mikolajczyk for loss of money, goods and services, but found the $25 million loss of society award was excessive.
Plaintiff attorney Bruce R. Pfaff of Pfaff & Gill Ltd. was disappointed in the ruling and planned to seek rehearing. Pfaff maintains that the ruling wrongly strips plaintiffs of control over their theory of the case. He said Flannery could not have predicted the high court's change in the law when trial was held more than three years ago.
Nevertheless, he said he would try the case again if necessary, and expected to prevail.
''I received the kindest e-mail from my clients expressing their faith in us and our work and telling us to keep on, and naturally we will,'' Pfaff said.
Pfaff tried the case with Michael T. Gill.
Attorneys for the defendants also were confident they would prevail at a new trial.
''We think the improper jury instructions were a substantial contributing factor to the verdict against Ford in the case,'' said Scott P. Glauberman of Winston & Strawn LLP.
Also representing the defendants were Bruce R. Braun and a number of other attorneys from Winston & Strawn LLP, as well as Karen Kies DeGrand and Mark H. Boyle, both of Donohue, Brown, Mathewson & Smyth LLC.
Amici briefs were filed for the defendants by the Products Liability Advisory Council Inc., the Illinois Manufacturers' Association, the National Association of Manufacturers, the Illinois Association of Defense Trial Counsel, and the Alliance of of Automobile Manufacturers, Inc. The Illinois Trial Lawyers Association filed a brief in support of the plaintiff's position.
Connie Mikolajczyk etc. v. Ford Motor Co., et al., No. 104893. In other decisions issued Friday, the Supreme Court:
Litigation is rising in the UK as litigation becomes a truly global industry. An October 8, 2008 online story from Global Reinsurance advises that the current fiscal fiasco of course will spawn lots of litigation, and then states the following specifics regarding increased litigation in the UK :
"UK Government figures for 2007 saw the highest number of actions being commenced in the Queens Bench Division for five years and statistics released by the Ministry of Justice last week also show that the number of defended claims is on the increase with a 16% rise on 2006."
There is renewed interest in and attention to the changes being wrought around the globe by entrepreneurial litigation claiming. I say that for many reasons, one of which is that it was a lively topic of discussion at meetings I attended the last few days in Europe with lawyers from around the world who belong to the International Business Law Consortium, commonly known as the IBLC. (Disclaimer/caveat - my law firm belongs to the group. The group's website is http://www.iblc.com/, which is here. )The topic also is currently in the news because of some $ 800 million of attorneys' fees awarded in Enron litigation, as is further described below.
The bottom line, in my view, is that entrepreneurial claiming is clearly growing all around the world and will continue to cause many changes. An interesting summer 2008 article from SJ Berwin LLP (an EU law firm with offices in several cities) explains the latest, claimant friendly ruling on UK "uplift" fees, and notes that Allianz has announced plans to raise a fund to commercial litigation cases. Also educational is a 2002 article by Professor Herbert Kritzer on myths related to contingent fees. In fact, contingent fees are permitted in many countries outside the US (including Luxembourg), as Prof. Kritzer describes in his detailed article, which is online in full text at this link.
Global litigation plainly is being fueled by claim buying, contingent fees and other entrepreneurial activities of trial lawyers. My partner, Karen Borg, and I described some of these developments in a recent article available here. The third and fourth sections include citations to find a German entity which buys antitrust claims, and describes an Illinois law firm which is pursuing tobacco litigation in Nigeria with the Nigerian government.How well can it pay? This week news is out on attorneys' fees awards for the lawyers who helped to obtain the over $ 7 billion of recoveries from 3 major banks. A Law.com article by Amanda Bronstad states that the awards include "$688 million in attorney fees to San Diego's Coughlin, Stoia, Geller, Rudman & Robbins, lead counsel in the case. "The Court finds that in the face of extraordinary obstacles, the skills, expertise, commitment, and tenacity of Lead Counsel in this litigation cannot be overstated," wrote U.S. District Judge Melinda Harman, for the Southern District of Houston, who, in her ruling on Monday, referred to Coughlin Stoia as "a lion" in the securities bar. "Not to be overlooked are the unparalleled results, $7.2 billion in settlement funds, which demonstrate counsel's clearly superlative litigating and negotiating skills." The award gives Coughlin Stoia, which represents the lead plaintiff, the Regents of the University of California, its requested amount, which is about 9.52% of the net recovery of the settlement, the largest ever in a single class action. The firm stated that its lawyers and co-counsel, 13 firms, had spent nearly 290,000 hours on the litigation at a blended rate of $456 per hour. Coughlin Stoia was responsible for more than 85% of the time expended."
This award is hardly unique. A prior post here reviewed some other recent large awards in contingent fee litigation.
Where will it all end? I am sure I do not know, but plainly there is much more to come in this area.
I took about 3 weeks off to enjoy the out of doors when not in the office - some golf and a week on a lake with our 11 and 13 year old daughters who love to wakeboard, tube and swim. Now, however, it's almost back to school for them, and I'm getting back into blogging mode. So, new stuff ahead !
There's lots of room for debate about whether and how confidentiality orders can and should be used in tort and other litigation. That debate now includes an interesting opinion from the Northern District of Illinois by our well-respected Judge Milton I. Shadur. In the opinion, Judge Shadur dismisses a lawsuit as a sanction for apparently unquestionable leaking to Wikileaks.org of material that was subject to a confidentiality order, with that problem emerging after many deadlines were missed. The posted doceument is a "guarantee services agreement," a contract with Sallie Mae.
The opinion is summarized below in an article from the Chicago Daily Law Bulletin. The text of the article is set out below as a fair use. I've posted the opinion here.
Judge slams lawyer for leaks, dismisses suit
By Patricia Manson Law Bulletin staff writerCiting the need to protect the integrity of the justice system, a federal judge has thrown out a lawsuit as a sanction for the leak of confidential documents obtained during discovery.
U.S. District Judge Milton I. Shadur on Monday dismissed with prejudice a suit that Rhonda Salmeron filed under the False Claims Act against certain players in the student loan industry.
Shadur said an attorney for Salmeron, Jorge Sanchez of Depres, Schwartz & Geoghegan in Chicago, admitted that he provided to unauthorized individuals documents produced on a limited-disclosure basis.
Those individuals included Salmeron and a reporter for The Chronicle of Higher Education, Shadur said.
Shadur blamed Sanchez for the appearance of one of the documents -- complete with identifying numbers that Shadur said ''unequivocally'' demonstrated its source -- on the Web site Wikileaks.org.
That document was a 51-page contract between Sallie Mae Inc. and United States Aid Funds Inc., Shadur said.
He said a link to the Wikileaks article and the documents later was posted on Yahoo's finance message board.
The disclosure of the documents came after Sanchez had engaged in ''a virtually unbroken pattern of dilatory and irresponsible conduct'' during the course of the litigation, Shadur said.
He said the conduct included repeatedly missing deadlines, skipping status conferences and breaking promises to file documents in a more timely manner.
And the lawyer's argument at a hearing last month on defense motions to dismiss ''plainly evidenced his failure to appreciate the seriousness of his actions,'' Shadur said.
Shadur did note that the lead attorney for Salmeron, John Thomas Moran Jr. of Moran Law Group in Chicago, had appeared in court in her case occasionally.
And Shadur said he had not listened to tape recordings of proceedings on the dates set for hearings in the case to determine ''if any of those dates involved Moran's presence and Sanchez' absence.''
But Shadur added, ''[T]here is not the slightest question that virtually all (if not all) of the appearances that involved claimed explanations of and excuses for delayed filings were by Sanchez.''
Shadur conceded that dismissing a suit on the basis of a lawyer's behavior without deciding the merits of the case is an extreme step.
But Shadur said he did not need to decide whether the attorney's ''persistent flouting of court deadlines, coupled with periodic no-shows at scheduled status dates'' warranted throwing out Salmeron's suit.
Instead, Shadur said, Sanchez' release of confidential documents was enough by itself to support dismissal of the action.
''It is truly inexcusable, no real explanation has been offered, and its damaging effect cannot be quantified in the same way that looking at defense counsel's time charges and compelling Salmeron to pay them might provide a remedy for the earlier procedural violations,'' Shadur wrote in a 23-page opinion.
Shadur said the U.S. Supreme Court's ruling in National Hockey League v. Metropolitan Hockey Club Inc., 427 U.S. 639 (1976), left no question that he had the authority ''to order the ultimate sanction of dismissal in the face of such egregious conduct.''
And in Wade v. Soo Line Railroad Corp., 500 F.3d 559 (7th Cir. 2007), the 7th U.S. Circuit Court of Appeals affirmed ''the propriety of visiting a lawyer's sins upon the client,'' Shadur said.
The case is U.S. ex rel. Rhonda Salmeron v. Enterprise Recovery Systems Inc., et al., No. 05 C 4453.
Sanchez and Moran could not be reached for comment.
But in a filing opposing motions to dismiss, attorneys for Salmeron argued that throwing out the suit would be ''disproportionate'' to the alleged wrongdoing.
Salmeron's attorneys also contended that the defendants had not demonstrated that the contract posted on Wikileaks was confidential or would have been covered by a protective order.
And the attorneys argued that the protective order that was in place related only to defendant Enterprise Recovery Systems Inc.
''To dismiss a case for publication of a document that was not under a protective order nor even marked 'confidential' would be unprecedented,'' the attorneys said.
The "medical malpractice" crisis has received much press. Over the last few years, more data has started to emerge that allows some testing of the arguments.
Two recent articles are interesting and suggest that some of the draconion "tort reform" efforts may be too much. One is a a Suffolk University article on May 13, 2008 that reports a study on malpractice cases in Massachusetts. It suggest that the "medical malpractice crisis" is overblown. Another is a May 18, 2008 New York Times article by Kevin Sack that reports favorable results for hospitals and doctors who disclose errors and offer to settle, at reasonable numbers.
Japanese Asbestos Litigation Ramps Up - Suit by 178 Plaintiffs Names 46 Companies and Government as Defendants
Asbestos litigation is ramping up in Japan. The English language version of a Japanese newspaper article reports that a lawsuit was filed in Japan late last week on behalf of 178 contruction workers (or their heirs) against 46 building products companies and agencies of the Japanese government. The article does not identify the defendants, or the lawyers. The articel also says that "About 40 construction workers from Kanagawa Prefecture will also file a similar suit at the Yokohama District Court in June."A parallel article on Wikinews adds some quotes from workers, but not much more.Surprisingly, the website of the International Ban Asbestos Secretariat does not yet include an article on the topic. That may well change.
An online article published April 10, 2008 in ScienceNOW provides an overview of detailed research published in Science indicating that asbestos fibers stimulate production of a form of interleukin (IL-1β), which promotes inflammation. I've not yet read the article and so cannot say whether the article addresses asbestos fibers in the generic sense or if it distingushes between fiber types.
The article and commenters quoted in it suggest there will be future efforts to determine whether anti-inflammatory drugs can limit the biologic processes (disease, one might say), and that it may in the future become possible to test for increased levels of the implicated form of interleukin. (Wikipedia offers a nice article on interleukin, including striking color illustrations.)
So, how is this article relevant to asbestos litgation in particular and tort litigation in general? For asbestos litigation, the relevance is that scientific discoveries of this sort may lead to new tests that asbestos claimants could use to try to recover for increased future risk of contracting "disease," or for the defense side to try to use to show that a particular person person is not at "meaningful" risk of suffering from a "disease" deemed appropriate for compensation.
The research also may make its way into the factual proofs that have historically been part of the legal rationales for the "triple trigger" rationale for defining the "injuries" that courts decide are sufficient to "trigger" traditional CGL insurance coverage that was often but not always purchased by manufacturing firms prior to the advent of the so-called "asbestos exclusion" that became fairly common around 1985. The U.S. law on insurance coverage for asbestos claims is quite developed, but insurance coverage remains a wide open topic in many countries where asbestos litigation is just starting to take shape. And, depending on the scope and results of this and future research, it may add new grist for arguments about the "chrysotile defense" and/or whether a "low dose" exposure actually plays a legally meaningful role in the onset of what we define as "disease."
For tort litigation in general, this is an illustration of the type of issues that courts and lawyers will have to confront as science pushes forward at ever increasing speed. Over the coming years, it seems inevitable that courts and lawyers will spend increasing amounts of time thinking about how "disease" occurs on a biologic basis, and what can be done to prevent a biologic process from resulting in a tumor that actually causes "physical impairment." The answers may have a profound impact on the scope of new and old legal rationales for tort law claims (e.g. fear of cancer claims), and on the scope of recoverable damages.
Legislative and regulatory bodies also will have opportunties to consider and apply new science, and might even come to sensible conclusions to avoid the "wastes" inherent in litigation. But we've gone for decades without much sensible action from federal U.S. legislators, and the states have taken various approaches, mainly but not always after the federal legislators failed to act. It remains to be seen how legislators and regulators will respond in other nations. Legislative and regulatory actions related to asbestos are picking up speed outside the US, but that topic must wait for another day.
Set out below is an excerpt from the ScienceNOW article as to the biologic process investigated:
"Tschopp and colleagues exposed to asbestos human and mouse immune cells that lurk in the lungs. They found that the material stimulated an inflammasome called Nalp3 to release interleukin-1β (IL-1β), a chemical that incites inflammation. But the real proof came from mice that were bred to lack Nalp3. When these mice were exposed to asbestos for 9 days, they produced lower levels of IL-1β and less lung inflammation than did mice with Nalp3, confirming that the inflammasome is key to triggering at least some of the negative effects of the fiber, the researchers report online today in Science. Tschopp speculates that because asbestos fibers lodge in the body, prolonged exposure causes chronic inflammation that over time could result in lung scarring and cancer. The details still need to be worked out, but the researchers note that IL-1β has been linked to other cancers."
Why GlobalTort? From the lawyer's perspective, the name was chosen for multiple reasons.
One reason for the name GlobalTort is that it succinctly identifies the reality of most of today's mass tort litigation. Due to the globalization of manufacturing supply and distribution chains, and the information sharing power created by the Internet, "mass tort" litigation is rapidly evolving into a truly global industry that will expand and prosper until societies find new, consensus ways to reasonably balance the competing interests inherent in tort litigation. Globalization also means that plaintiff and defense firms are now starting to act in a truly global fashion, with offices and affiliates around the world. "Mass tort" claims also are now being drawn from and/or filed in a wide range of nations.
The GlobalTort name also was chosen because each group of so-called "mass tort" cases almost invariably raises addtional issues that cross a variety of lines. For example, all or most of the cases within a particular group of cases likely will include issues that plaintiff's lawyers like to say are "global" issues (e.g. when did "the ____ industry know ____.") In addtion, the underlying cases should not be looked at in a vacuum, and instead they raise a wide range of issues that include disclosure obligations, financial accounting rules, issues regarding indemnification rights and obligations, and insurance coverage issues, including issues regarding "shared insurance," meaning historic insurance available to multiple members of corporate families.
The name also was chosen because our three founders practice in divergent substantive areas, and so we hope to identify and offer comments on a wider than usual range of the of the private and public issues related to tort litigtion. In addition, we intend to go beyond just the cases and to comment on notable legislation, regulation and policy issues. And, finally, we hope the blog will over time evolve to the point that it includes comments from other nations and other professionals, thus furthering a global view of tort litigation.
MBIA and Ambac apparently made underwriting mistakes in the process of backing various structured debt obligations (such as mortgage pools, SIVs, CDOs, etc.) that now are at risk of default. These insurers now face massive potential underwriting losses.
Rather than talking about increasing reserves, changes in underwriting practices, or, heaven forbid, insolvency - supervision - liquidation, the dialogue has turned to "bail out." See here and here.
It seems an ideal time to be an underwriter, as risks may be taken freely knowing that regulators are there to enforce non-market solutions when the losses mount.
Catching up posts from the winter holiday break...a nice piece on risk management in air travel
From the end of the article, which basically bemoans the state of airport security...
"How we got to this point is an interesting study in reactionary politics, fear-mongering and a disconcerting willingness of the American public to accept almost anything in the name of "security." Conned and frightened, our nation demands not actual security, but security spectacle. And although a reasonable percentage of passengers, along with most security experts, would concur such theater serves no useful purpose, there has been surprisingly little outrage. In that regard, maybe we've gotten exactly the system we deserve."
The same could be said for financial services regulation in the 1980s or environmental regulation in the 1970s.
We've moved to blogspot...welcome back!