These are interesting times, as a nominally Republican President calls for more lawsuits against domestic and overseas drug makers. The headline is from an August 16, 2018 article in the WSJ.
Asbestos litigation continues to include fairly frequent arguments and decisions regarding suits against recently dissolved entities. The dissolutions may or may not be legal, and can be adverse for both underlying plaintiffs and co-defendants. Unfortunately, the complaints sometimes are not well pleaded. That problem lead to a recent dismissal of Saberhagen Holdings in a case in Washington state. A link to the opinion and a summary are provided in a July 24, 2018 post at the Asbestos Case Tracker.
After months of procedural wrangling and negotiations about settlement, the asbestos plaintiff’s bar has now attacked the Bestwall/Georgia-Pacific chapter 11 as a “bad faith” filing. The motion is online.
The motion sets out a broad attack. Among other things, the motion focuses attention on GP’s one-day use of a Texas statute to divide up the assets, risks and liabilities related to the Georgia-Pacific business, including its asbestos-risks. The motion also alleges that Georgia-Pacific may have achieved “asbestos-free” products by substituting talc for asbestos. That argument/assertion is especially interesting in light of the recent verdict for plaintiffs in 22 consolidated cases in which all plaintiffs alleged that talc contained asbestos and caused their ovarian cancers.
Some day I would love to find a law review or treatise capturing and summarizing the various industries which hold legislative immunity from lawsuits. One immediately thinks, for example, of Congress’ awful decision to immunize the tobacco industry from lawsuits. Airline immunity from lawsuits also comes to mind. The topics come to mind because a blog post pointed out a new California Supreme Court ruling which applies a federal statute to grant an online platforms immunity from civil actions for materials posted online. The summary is an August 10, 2018 post from Perkins Coie.
It’s certainly been interesting to watch the last several years of opinions from the Delaware Supreme Court. A July 2018 opinion adds to the list of interesting opinions because it limits the circumstances under which business judgment deference will be allowed. The opinion is Elizabeth Morrison v. Ray Berry et. al., which was first issued on July 9, 2018, and then revised on July 27. The opinion is drawing ample commentary from corporate lawyers and litigators. For example, the comments below are the introduction to a commentary from Cooley on August 7, 2018. Also tote the emphasis of the authors regarding the burden of proof:
“In Elizabeth Morrison v. Ray Berry et. al., (dated July 9, 2018), the Delaware Supreme Court reversed the Delaware Chancery Court’s dismissal of deal litigation based on obtaining a cleansing vote under Corwin/Volcano because the defendants failed to show “as required under Corwin” that the vote was fully informed. The deal litigation arose from the sale of The Fresh Market to a private equity buyer through a cash tender offer that involved The Fresh Market’s founder and his son, who owned collectively 9.8% of The Fresh Market shares, rolling over their equity. The plaintiffs contend that the founder and his son teamed up with the private equity buyer to purchase The Fresh Market at a discount by inducing the board to run a process that gave the private equity buyer an improper bidding advantage. The plaintiffs used a Delaware General Corporation Law Section 220 books-and-records demand and then Section 220 litigation to seek and obtain board minutes and emails with the founder’s counsel that the plaintiffs then used as evidence in the post-closing fiduciary duty case. The Delaware Supreme Court found that a reasonable stockholder would find the following information that was not included in the Schedule 14D-9 to be material, and therefore, the tender was not fully informed and the business judgment rule was not invoked:”
Time and again, litigators experience hassles with a witness obtaining notarization of a signature. That sometimes leads to submission of affidavits that are technically not proper, and related angst. But is such an affidavit a declaration under penalty of perjury, if the “penalty of perjury” language is used? Yes, said an Illinois federal court See Snyder v. Wal-Mart Stores, No. 18 C 583 (April 2, 2018). Hat tip to Steven Garmisa for flagging the case in a July 16, 2018 article in the Chicago Daily Law Bulletin (paywall).
September and October 2018 trials are approaching for federal court litigation regarding State Farm’s 2004 contributions used for messaging said to be related to the campaign for office of Justice Karmeier of the Illinois Supreme Court. In a recent ruling, the district judge (Herndon) struck two of plaintiff’s expert opinions related to the contributions. The ruling is summarized in a July 24, 2018 article at the Madison County Record.
A new aspect of the practice of law is applying AI to sets of cases. That trend is now being applied to insurance coverage cases, according to an August 7, 2018 post at AI Lawyer. It will be interesting to watch the drill down process to subsets of subsets, and the resulting conclusions.
One litigation industry industry problem is that foolish actions by one litigant can harm many other similarly situated litigants. This reality arises for parties on either side of the versus.
A new example from the corporate defense side arises from the “bad faith” actions of Fitbit and MoFo (Morrison & Foerster) related to a consumer fraud arbitration. In short, Fitbit forced a would be class action into arbitration but then refused to arbitrate, after sending the plaintiff an amount it viewed as “resolving the case.” Plaintiff, however, would not take the money, and went back to federal court for relief. Ultimately, a federal judge issued an opinion strongly rapping Fitbit and MoFo for bad faith, ordered the payment of fees and costs, and also ordered Fitbit to submit his opinion to the parties in all motion to compel arbitration cases arising in the next year. The longer story is in an August 2, 2018 article at Northern California Record. The slip opinion, McLellan v. Fitbit, is online, and is from Judge Donato of the Northern District of California. Set out below are key excerpts from the opinion, at 1-2, and 10″
“Fitbit would like to treat this incident as a misunderstanding, but it is much more than that. It moved McLellan’s claims out of court and then undertook a course of conduct intended to shut her out of arbitration as well. It abandoned that plan at an early stage only because McLellan was diligent in sounding the alarm, and the Court expressed its concerns in plain terms at the hearing. Fitbit’s conduct has multiplied the proceedings in this case for no good reason and at the expense of plaintiffs’ and the Court’s resources. It has also bolstered the perception that arbitration is where consumer lawsuits go to die. While the merits of that view can be debated, it’s no surprise that many people, including judges, are skeptical about arbitration agreements in light of situations like this one. Fitbit’s conduct undermines the public’s confidence in getting a fair shake when arbitration is compelled.
McLellan has asked to be relieved of her arbitration agreement, and more broadly to strike down Fitbit’s arbitration clause for all users. Although there is some equitable appeal in those requests, the record here does not support terminating the arbitration. Nevertheless, the Court finds that Fitbit and its counsel engaged in bad-faith tactics that warrant corrective action.”
“To help ensure that Fitbit does not again impose “pointless and wasteful burden[s] on the supposedly summary and speedy procedures prescribed by the Arbitration Act,” Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 27 (1983), it is ordered to file a copy of this decision in all cases where it seeks to compel arbitration under its Terms of Service with consumers. This duty is imposed for a period of one year from the date of this order.”
In September, 2016, multidisciplinary colleagues and I published and sold our second, in-depth and multidisciplinary analysis of the changes to and new directions in asbestos litigation. The paper was anchored around law and science innovations, and implications for mass tort claiming. For that effort, I teamed with David Schwartz and other science people at Innovative Science Solutions, and William Wilt, a creative actuary and insurance company analyst who leads a business known as Assured Research.
This month, we are republishing – at no cost – the part of the paper that applies to cancer claims related to talc. Why? Because we were pretty darned prescient and the principles still apply. Our 2016 work included detailed thoughts on the scientific and legal developments, such as risks of more claims involving asbestos and cancers other than mesothelioma. In that context, we specifically focused on the possibilities related to claims involving ovarian cancer and the risks and science argued by litigants regarding use of talcum powder in both in industrial settings and for cosmetic uses. An overall point was that there many more “other cancers” than there are mesotheliomas, and that the numbers of “other cancer” claims could well rise. If the claims rise, defense costs for insurers also will rise due to the volume of claims as well as the costs of coming to grips with new science and related new case law.
For those who want free access to the republished section on talc claiming, please visit this August 1, 2018 post at the Innovative Science blog.