GlobalTort

GlobalTort

The Intersection Among Torts, Science, Corporate Law, Insurance & Bankruptcy

“Appointing Extremists”

By Kirk Hartley on Posted in Judges

“Appointing Extremists”

Michael A. Bailey Matthew Spitzer
American Law and Economics Review, Volume 20, Issue 1, 1 April 2018, Pages 105–137, https://doi.org/10.1093/aler/ahx020

Published: 02 November 2017

“Given their long tenure and broad powers, Supreme Court justices are among the most powerful actors in American politics. In this paper, we present a model of the nomination process that highlights the how uncertainty about a potential justice’s preferences can lead a president to prefer a nominee with extreme preferences. In certain cases, Senators may also prefer extreme nominees, leading to the nomination and confirmation of justices whose preferences seem to diverge from those of elected officials. While our focus in this paper is on the Supreme Court, the analysis extends in many ways to other multimember appointed bodies as well.”

“Product Liability in Markets for Vertically Differentiated Products”

By Kirk Hartley on Posted in Litigation Industry, Product Liability

Academic exploration of product liability as to product safety levels:

American Law and Economics Review, Volume 20, Issue 1, 1 April 2018, Pages 46–81, https://doi.org/10.1093/aler/ahx013

Published:   14 July 2017

The abstract explains:

“This article shows that shifting losses from consumers with heterogeneous harm levels to vertically differentiated duopolists increases product safety levels, while narrowing the degree of product differentiation. Our setup features observable (but possibly nonverifiable) product safety levels and firms subject to strict liability according to a parametric liability specification. Firms’ expected liability payments depend on both product safety and price levels which critically influences the repercussions of shifting losses to firms. From a social standpoint, shifting some losses to firms is always beneficial.”

The Seamy Side of Vaginal Mesh Litigation: “How Profiteers Lure Women Into Often-Unneeded Surgery”

By Kirk Hartley on Posted in Litigation Industry, Mass Tort Issues

Part of the seamy side of vaginal mesh litigation was reported in an April 14, 2018 article in the NYT. The article, “How Profiteers Lure Women Into Often-Unneeded Surgery,” describes some of the financing companies that operate alongside the mass tort claims involving vaginal mesh. There are some very real problems with vaginal mesh in some settings, but this article highlights instance where the financiers and doctors worsened a situation for profit.

The article is yet another example of why all courts hearing mass tort cases should force transparency on all sides, including insurers. Protective orders and secrecy may be convenient, but sunshine remains the best disinfectant, in my opinion.

“Hanged After a Trial He Couldn’t Understand, and Pardoned 136 Years Later”

By Kirk Hartley on Posted in Comparative Law, Uncategorized

“When Maolra Seoighe entered a Dublin courtroom to be tried for murder, his name was recorded as Myles Joyce.

The change was a translation from his native Irish, or Gaelic, into English — a language Mr. Joyce did not speak. So he couldn’t understand the words of the defense lawyer, the judge or the jury members who decided he was guilty in November 1882, and he was hanged the next month.

But evidence soon emerged suggesting that Mr. Joyce was innocent, just as he had been saying in Irish all along. Now, 136 years after his death, he has been officially pardoned.”

Quite the story, and there also is a book. See this April 6, 2018 NYT article for more specifics after the quote above.

“Delaware’s Retreat: Exploring Developing Fissures and Tectonic Shifts in Delaware Corporate Law”

By Kirk Hartley on Posted in Comparative Law, Corporate Law Relevant to Litigation, Delaware Law

For business lawyers, it’s helpful to keep in mind the big picture view of changes in Delaware corporate law. With that in mind, this post highlights a new article with a view of that sort. It’s available online at SSRN, as described and linked below. The article is related to a talk reviewing Delaware law.   News of the article arrived via a March 5, 2018 post by Francis Pileggi at his Delaware Corporate and Commercial Litigation Blog.

Delaware’s Retreat: Exploring Developing Fissures and Tectonic Shifts in Delaware Corporate Law
Vanderbilt Law Research Paper No. 18-17

65 Pages Posted: 22 Feb 2018 Last revised: 27 Feb 2018
James D. Cox
Duke University School of Law

Randall S. Thomas
Vanderbilt University – Law School; European Corporate Governance Institute (ECGI)

Date Written: December 1, 2017

 

Delaware Supreme Court Holds that Determination that an Adequate Alternative Forum Exists is Not Required for Dismissal on Forum Non Conveniens Grounds

By Kirk Hartley on Posted in Constitutional Law/Mass Tort Law, Global Tort Litigation, Jurisdiction, Litigation Industry, Mass Tort Issues

Once upon a time, it seemed the 1980 ruling in  World-Wide Volkswagen would control forever, and that jurisdictional jurisdictional issues were well-settled in the US  for tort claim cases.  Today, the world is not so simple, as illustrated by (among others) prior posts here, here and here,  and innumerable articles around the internet.

Last year, in a September 17, 2017 post, I noted  jurisdiction arguments going up the Delaware Supreme Court on global jurisdiction issues in tort cases. Now, there’s been a ruling, and it’s interesting, with implications that illustrate another of the many double-edged swords extant within the litigation industry. Happily, insight on the ruling is available from Delaware lawyers who really understand tort law and commercial law.  Accordingly, the following is a guest post from Paul Bradley, a named partner at  Maron Marvel Bradley Anderson & Tardy LLC. As usual, the analysis is cogent and very much appreciated.

“Delaware Supreme Court Holds that Determination that an Adequate Alternative Forum Exists is Not Required for Dismissal on Forum Non Conveniens Grounds

The Delaware Supreme Court this week has definitively joined the minority of courts holding that the availability of an alternative forum, while a factor in a forum non conveniens analysis, is not a threshold requirement. Aranda, et al. v. Philip Morris USA Inc., Consolidated Nos. 525, 526, 527, 528, 529, 530, 2016 (Del. Supr. March 22, 2018).

“[T]reating the issue as a factor to be considered, rather than as a requirement, gives the issue the weight it deserves in the forum non conveniens analysis,” the Court stated. Taking into consideration the complexity of transnational litigation, and the strain such litigation places on judicial resources, the Court wrote: “Delaware has no real connection to the dispute except for the defendants’ place of incorporation. It is not unfair to suggest that rather than requiring cases to proceed in Delaware in the absence of an alternative forum, the Superior Court should consider, on a case-by-case basis, whether the court’s resources should be deployed to resolve cases with little connection to Delaware – as the court did here.” The Court also addressed the concerns of international comity. “The approach we adopt here might encourage foreign jurisdictions to rethink laws and rules shifting to the U.S. course disputes that are more clearly connected to their own countries and citizens.” Further, the Court said it was not ignoring the concern that foreign plaintiffs injured by Delaware corporations might not be allowed to sue those corporations in Delaware. “The availability of an alternative forum in transnational cases is treated as a factor in the forum non conveniens analysis,” and “[t]he degree of the Delaware corporate defendant’s connection to the alleged wrong will still be considered.”

The Court upheld a Superior Court ruling by Judge Vivian L. Medinilla that denied a motion for reargument of her ruling granting the defendants motion to dismiss based on forum non conveniens. The action that was dismissed was by Argentine tobacco farmers and their children against tobacco cultivators (TCs) and an herbicide manufacturer (HM), arising from birth defects allegedly caused by the TCs’ use of the herbicide, dismissal on the grounds of forum non conveniens was warranted as to the TCs because they would be subject to overwhelming hardship if required to litigate in Delaware based on evaluation of the Cryo-Maid factors, including that all discovery would have to be conducted in Argentina and Argentine law applied to at least a majority of the issues. Judge Medinilla held that dismissal under Del. Super. Ct. R. Civ. P. 9(b) was proper as to the HM because the complaint failed to adequately identify the alleged tortfeasor, and it did not plead with specificity which HM caused the alleged harm, what products caused the harm, how the harm occurred, and when that harm occurred.

In granting the motion to dismiss on forum non conveniens grounds, the Delaware Superior Court did not ensure that the Philip Morris Defendants could be sued in an alternative forum. In its appeal, the Plaintiffs/Appellants sought to have the Delaware Supreme Court require the Philip Morris Defendants waive any objection to jurisdiction in Argentina, and to waive any limitations defenses based on time passed since the case was originally filed.

For questions, contact Paul A. Bradley, 302-472-1792, pab@maronmarvel.com.

Maron Marvel Bradley Anderson & Tardy LLC

Maron Marvel was founded in 1996 in Wilmington, Delaware by experienced trial and litigation management attorneys who came out of the traditional law firm with a desire to build a better model to serve clients. Over the past twenty years, Maron Marvel grew from a boutique toxic tort practice to a national powerhouse. With attorneys licensed to practice in twenty-one states and with twelve offices in ten states — Delaware, Pennsylvania, Illinois, Louisiana, Mississippi, Missouri, New Jersey, New York, South Carolina, and Texas — we have assembled a diverse and inclusive team of lawyers and other professionals with extensive experience and specialized skills to offer our clients the best representation possible.

Maron Marvel provides litigation services to companies in the areas of business and commercial litigation, products liability, bankruptcy and creditors’ rights, environmental regulation and personal injury. The firm also acts as national trial counsel and provides national coordinating services and risk management for clients in the areas of mass toxic tort, products liability, personal injury, environmental regulation and litigation.”

Plaintiff Firms Attack Each Other Regarding Strategic Tactics in Claims Related to M & A Deals:

By Kirk Hartley on Posted in Class Actions, Litigation Industry

It remains fascinating to think about due process, res judicata, and the topic of strategic settlements in class actions. One set of deals prompted rancor between both plaintiff firms and defendants, as is described in  “This is weird: Securities class action defendant wants to block lead counsel appointment”as is described in a February 28 2018 article by Alison Frankel. There, Robbins Geller attacked other plaintiff firms for making sweetheart settlement deals. aAs explained by Ms. Frankel, “according to Robbins Geller, the deal benefits only the company and plaintiffs’ lawyers – exactly the sort of settlement the 7th U.S. Circuit Court of Appeals decried as “no better than a racket” in its 2016 ruling in In re Walgreen(832 F.3d 718).”

State Law Property Rights – What are They?

By Kirk Hartley on Posted in Asbestos Bankruptcy, Bankruptcy, Policy Issues

What are property interests; how do we know them when we think we see them? That’s a fascinating question that’s been animating due process and takings case law for many decades. Board of Regents v. Roth, 408 US 564 (1972),  was one of the key cases in the area when I was a young lawyer, and remains important today.

With the definitional questions in mind, it was interesting to read  about definitions of state law property rights in a recent California Supreme Court opinion which rejected a fraudulent conveyance claim because the transfer at issue was deemed not to transfer property rights, and so there was no transfer to attack. The opinion arose out of the 9th Circuit certifying a question of law to the court from the Heller Ehrman chapter 11 case; the opinion was issued March 5, 2018. The opinion and backstory is told in general in a March 5, 2018 article at the ABA Journal.

The entire opinion should be read for the discussion of property rights, including its citation to Roth and to the law school maxims that property rights are like of a bundle of sticks.  For present, shorter effort purposes, consider the following quotes from the ABA article:

“In its unanimous opinion, the California Supreme Court said the Heller estate was claiming an interest “for work that someone else now must undertake.” Any expectation of compensation for future work is speculative, given the client’s right to terminate representation at any time, according to the opinion by Justice Mariano-Florentino Cuéllar. Those expectations don’t amount to a property interest, he said.

“What we hold is that under California law, a dissolved law firm has no property interest in legal matters handled on an hourly basis, and therefore, no property interest in the profits generated by its former partners’ work on hourly fee matters pending at the time of the firm’s dissolution,” Cuéllar said.

“The partnership has no more than an expectation that it may continue to work on such matters, and that expectation may be dashed at any time by a client’s choice to remove its business. As such, the firm’s expectation—a mere possibility of unearned, prospective fees—cannot constitute a property interest.”

Perhaps “American Pipe” Will Survive, After All?

By Kirk Hartley on Posted in Class Actions, Statutes of Limitation, Uncategorized

Judging by oral argument questions at SCOTUS, one legal analyst suggests the American Pipe tolling doctrine seems likely to live on to toll statutes of limitation, as opposed to statutes of repose. See Ronald Mann, Argument analysis: Justices dubious about limiting precedent that tolls statutes of limitations to permit “stacked” class actions, SCOTUSblog (Mar. 27, 2018, 10:52 AM), http://www.scotusblog.com/2018/03/argument-analysis-justices-dubious-limiting-precedent-tolls-statutes-limitations-permit-stacked-class-actions/

Easier to Succeed on Alter Ego Claims When Enforcing a Judgment

By Kirk Hartley on Posted in Fraudulent Conveyance

Asset shuffling between corporations has time and again produced issues regarding fraudulent conveyances, alter egos and veil-piercing the like. A recent Illinois appellate ruling holds that a post-judgment alter ego claim to collect on a judgment requires less proof than would have been needed to prevail at trial on the merits of a breach of contract claim. That is, it is easier to collect on a judgment when moving for post-judgment relief, as contrasted against proving up alter ego as part of a contract claim.   A.L. Dougherty Real Estate Management Co. v. Tsai, 2017 IL App (1st) 161949 (Dec. 29, 2017). The court explained the following:

“In breach of contract cases, “courts apply an even more stringent standard to determine when to pierce the corporate veil than in tort cases.” Saletech v. East Balt, 2014 IL App (1st) 132639. This is because “a party seeking relief for a breach of contract presumably entered into the contract with the corporate entity voluntarily and knowingly and expecting to suffer the consequences of the limited liability status of the corporate form.” Id. ¶ 26; 1 William Meade Fletcher, Cyclopedia of Corporations § 41.85 (1999).

“Where there is no evidence of any misrepresentation, no attempt to conceal any facts and the parties possess a total understanding of all of the transactions involved, Illinois courts will not pierce the corporate veil in a breach of contract situation.” Tower Investors, 371 Ill. App. 3d at 1034.”

“We find that the circuit court properly declined to evaluate plaintiffs’ veil-piercing claim under the principles applicable to breach of contract claims because the present dispute does not involve a breach of contract. Instead, this case involves the enforcement of a judgment: [P]laintiffs are attempting to hold Tsai and Cube Global liable for the underlying judgment obtained in the underlying action.

Under the merger doctrine, once the underlying judgment became final, the lease entirely merged into the judgment, and no further action at law or equity could be maintained on the lease. Poilevey v. Spivak, 368 Ill. App. 3d 412 (2006). The formation of the contract, therefore, is irrelevant.

This was not a contract action, and thus the circuit court was not required to find fraud, concealment or misunderstanding.”