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FORUM
July 3, 2009
Around the web, July 3
Posted by Walter Olson
- Now that Harold Koh has been confirmed, let's have a calm debate on the merits of importing international law [Eric Posner, Volokh, parts one and two]
- New symposium on originalism in Northwestern U. Law Review has contributions from Barnett, Balkin, S. Calabresi, McGinnis, Rappaport [Prawfsblawg]
- Blogging by big-firm lawyers comes of age [Beck & Herrmann] Related: George Lenard.
- Arkansas, New Mexico AGs' responses to WSJ hints of pay-for-play in pharmaceutical price recoupment lawsuits [Arkansas Times, Santa Fe New Mexican, KRQE]
- Not good news: New York's second biggest medical malpractice insurer is insolvent [Crain's New York Business, Turkewitz, White Coat (last item)]
- duPont sued in Delaware over asbestos use in Argentina [Wilmington News-Journal]
Nicholas Kristof on med-mal reform
Posted by Walter Olson Missed this NYT column from him the other week: I don't mind the A.M.A. lobbying on behalf of doctors in the many areas where physicians and patients have common interests. The association is dead right, for example, in calling for curbs on lawsuits, which raise medical costs for everyone.
An excellent study published in 2006 in The New England Journal of Medicine found that for every dollar paid in compensation as a result of lawsuits against doctors, 54 cents goes to legal and administrative costs.
That's an absurd waste of money. Moreover, aggressive law leads to defensive medicine, in the form of extra medical tests that waste everybody's money. Tort reform should be a part of health reform. (h/t Common Good).
"2009 Mid-Year Review - Securities Litigation and Enforcement"
Posted by Walter Olson Securities Docket is presenting a webcast at 2 p.m. Eastern July 9 with panelists Kevin LaCroix (D&O Diary); Tom Gorman (SEC Actions) Francine McKenna (re: the Auditors); and Lyle Roberts (10b-5 Daily).
"Four Myths about Federal Preemption of State Tort Claims"
Posted by Walter Olson Lawrence Ebner's paper for the Washington Legal Foundation is here (PDF).
July 2, 2009
Someone notices the AAJ's leadership changes
Posted by Carter Wood Below we note the June 16 Roll Call story, "Trial Lawyers Now Playing Defense," a debatable assessment but still informative enough. The article includes the first reference we've seen in a news publication about Jon Haber's replacement as CEO of the American Association for Justice, the trial lawyers' lobby: "Meanwhile, the AAJ is looking for a new CEO after Jon Haber resigned this spring. Tom Henderson, a longtime veteran of the group, is serving as interim CEO. 'They're going forward with a search, but I can't tell you when it's going to be filled,' Lipsen said."
In a May 28 post, we observed, "AAJ is a powerful group, has an aggressive legislative agenda and is clearly recognized by the White House as an ally. Obviously AAJ isn't publicizing its leadership moves, but shouldn't the beat reporters be paying a little closer attention to the goings on there?"
So there you go.
P.S. Here's a photo of Tom promoting the AAJ convention in San Francisco.
Trial lawyers playing defense on health care reform? Really?
Posted by Carter Wood Medical malpractice and liability reform DID come up yesterday at President Obama's town-hall-style-flavored event on health care. Rep. Michael Burgess (R-TX), a physician, drew attention to Texas' success in capping non-economic damages and challenged the President to push for reforms that work. (Burgess has introduced the Medical Justice Act, HR 1468, to establish national liability limits.)
The President responded by reprising his June 15th remarks in Chicago to the AMA: I don't like the idea of just an artificial cap. I do want to work with doctors to find ways that we can reduce their liabilities where they haven't done anything wrong, where they've performed effectively. I want to see, are there ways that we can reduce the constant threat of lawsuits that doctors and hospitals experience, because I do think that that causes defensive medicine. And so I've committed to working with the AMA to see ways that we can reduce some of these litigation costs and malpractice rates. If this were really a priority, wouldn't we be seeing a high level of activity, table pounding and persuasion coming from the trial lawyers? News releases, op-eds, floor speeches? Have you seen anything on the TV about medical liability reform?
The silence speaks for itself. Roll Call interviewed the American Association for Justice's Linda Lipsen after the President's AMA speech, and she said the expected things, but two weeks later the story's headline seems unwarranted: "Trial Lawyers Now Playing Defense."
As the Wall Street Journal editorialized post-AMA in "Obama's Malpractice Gesture," "Mr. Obama's cri de coeur might have had more credibility had he not specifically ruled out the one policy to deter frivolous suits."
In the extended entry below you'll find the transcript of yesterday's event dealing with malpractice, as well as Rep. Burgess' response to the President.
Continue reading "Trial lawyers playing defense on health care reform? Really?" »
NY state senator sues -- and helps oversee -- city board of ed
Posted by Walter Olson In his capacity as a private lawyer, State Sen. John Sampson of Brooklyn "is suing Schools Chancellor Joel Klein on behalf of a former assistant principal who alleges wrongful dismissal". At the same time, wearing his public hat as Democratic leader in the State Senate, Sampson is helping to mount political resistance to mayoral control of the schools. Must get confusing to sort out all the different powers and responsibilities [NY Post reporting/editorial]
"Cloud" computing and employment law
Posted by Walter Olson Daniel Schwartz points out angles that might become traps for the unwary: For example, Connecticut's wage and hour laws require employers to keep track of various records of the employee including hours worked, etc. The catch? Such records need to be kept at the employer's place of business for three years. Does storing the information in "the cloud" satisfy that?
And suppose an employee is fired for improper use of the Internet and you want to "image" (or copy) the computer that the employee has worked on to preserve the evidence. How do you do that when the computer you want to image may be in a server thousands of miles away?
Or consider the lawsuit filed by an employee and the call that needs to go out to your IT department to put a "litigation hold" on your data. How do you do that when it's based in the "cloud"?
Cal. Appeal Court Reaffirms Assumption of Risk Defense
Posted by Michael Krauss In a very interesting case, California's intermediate appeals court has affirmed that state's assumption of risk defense.
Once a year, tens of thousands of participants pay hundreds of dollars in fees for the privilege of participating in the "Burning Man Project", which consists of creating "Black Rock City" in Nevada's Black Rock Desert. The atavistic gathering is dedicated to "community, art, self-expression, and self-reliance" [see here for a fuller description of Burning Man]. Anthony Beninati, the general manager of a company that rehabilitated property for resale, was attending his third Burning Man event. He approached the event's climax fire (a 60-foot-high wooden "burning man") to toss in a photograph of a recently deceased friend. Attendees were "authorized and invited to approach the flames," his complaint stated, "to deposit tokens, mementos and other commemorative objects into the fire so attendees can participate more fully and completely in the Burning Man experience." Unfortunately, he apparently tripped and fell so close to the fire that he was severely burned, occasioning more than $1 million in medical expenses that he sought to recover from the allegedly negligent organizers of the event. Negligent or not, said the appellate judges, the organizers were not liable to Beninati as a matter of law, since he was fully apprised of the risks of the Burning Man fire and chose to assume them. The court analogized to the firefighters's rule: if a rescuer who chooses to confront a negligently created hazard may not recover, one who confronts said hazard for his own self-fulfilling purposes may not either.
Beninati v Black Rock Inc., LLC is a refreshing reminder to those courts who have chosen to eliminate Assumption of Risk as a torts defense. Defendant's negligence is not sufficient for tort liability.
Calling in consultants in the ER
Posted by Walter Olson It's partly a function of defensive medicine, says Throckmorton: "Indigent patients are less likely to follow up and more likely to sue. So, you consult more to make someone else responsible. As one of our ER docs put it, you are recruiting co-defendants."
Madoff sentencing: "A retiree who spoke at the rally"
Posted by Walter Olson That's how the New York Times described attorney Helen Davis Chaitman, but Christopher Fountain, looking into the matter, finds that description less than adequate.
Also, Joseph Nocera in the Times on Madoff-victim compensation: "the government is not in the business of reimbursing for robberies".
July 1, 2009
No shrinking regulatory violet
Posted by Carter Wood David Vladeck, the new director of the Federal Trade Commission's Bureau of Consumer Protection, held his first news (joint) conference today, "FTC Cracks Down on Scammers Trying to Take Advantage of the Economic Downturn." Obviously an enforcement effort under way for quite some time, and who can object?
The news prompts us to follow up on yesterday's post on regulators and regulatory philosophy, finding additional coverage of Vladeck's remarks to a recent ABA conference on consumer protection. Vladeck, who came to the FTC via Georgetown Law, formerly headed the Public Citizen Litigation Group, and you can see the litigation-driven regulatory philosophy on display in the ABA speech.
From the Consumer Advertising Law Blog from Arnold & Porter, LLP: He believes he was chosen by Chairman Leibowitz to run the Bureau because he is an experienced litigator with a background in bringing test case litigation and also because of an interest in someone with "vision" and "fresh eyes." (For more on his background, see our post here.)
UPDATE: More from Kelley Drye & Warren LLP: "New Director of Consumer Protection Addresses Leaders at ABA Conference: Focuses on Enforcement and Privacy"
Continue reading "No shrinking regulatory violet" »
"Did the Court move right?"
Posted by Walter Olson Jonathan Adler challenges a pervasive press meme.
Around the web, July 1
Posted by Walter Olson
- My other blog, Overlawyered, turns ten years old today -- so far as anyone knows, the oldest weblog on law [Overlawyered]
- Look before you leap, guys: report for British courts suggests weakening loser-pays rule for class/collective actions [Hartley]
- You've probably never heard of this obscure federal appointee, but if EFCA passes he could soon be deciding your firm's labor future [ShopFloor]
- Blawg Review #218 [Adrian Dayton's Marketing Strategy and the Law]
- Fluoride -- yes, the same stuff dentists recommend and that figured in the plot of Dr. Strangelove -- is latest high-profile chemical set for mandatory warnings under California's Prop 65 [Cal Biz Lit, Popehat]
- Back pay awards for illegal-alien workers, notwithstanding the Supreme Court's ruling in Hoffman Plastics? [Workplace Prof]
Jim Copland on Ricci/firefighters case
Posted by Walter Olson At City Journal: "The Supreme Court's commendable Ricci verdict won't change the Catch-22 logic of discrimination law. ...It won't happen in this Congress, but ultimately, let's hope that disparate impact finds itself in the dustbin of history."
Some other noteworthy reactions to Ricci: Ilya Somin at Volokh (decision may increase costs of litigation and compliance for employers, shedding further doubt on critics' contention that Roberts Court is "pro-business"); Michael Fox (noting Ginsburg language about majority ruling lacking "staying power"); Daniel Schwartz (rounding up reactions) and followup (five things employers can learn from case); Marc Alifanz, Stoel Rives "World of Work" (Congress may undo, as it undid Wards Cove); NYT "Room for Debate". And as mentioned earlier, I've discussed the decision in pieces for Forbes.com and the New York Post.
"An Honest Services Bribery Case Gets Cert"
Posted by Walter Olson Tom Freeland has details on the Supreme Court's agreement to review a controversial body of federal criminal law, at least as regards one of its aspects: does the defendant's conduct in an "honest services" case have to violate a duty imposed by state law? The case, which originated in Alaska, is called Weyhrauch v. U.S.
June 30, 2009
"Court: Discriminate -- with discretion"
Posted by Walter Olson I'm in today's New York Post with a second take on yesterday's Ricci (New Haven firefighters) case. Link thanks: Instapundit. My first take on the decision, at Forbes.com yesterday, is linked here, and see also comments on it by Daniel Schwartz, Jon Hyman, Ohio Employment Law (to whom thanks for the kind comments as well), and Scott Greenfield (cross-posted, slightly adapted, from Overlawyered).
Regulatory philosphers, political sideshows and the FTC
Posted by Carter Wood You're worried about Cass Sunstein as a regulator? Please, now. Let's look at a more alarming law professor already in the halls of regulatory power.
In April, Chairman Jon Leibowitz of the Federal Trade Commission named David C. Vladeck to be Director of the Bureau of Consumer Protection. Vladeck came over from Georgetown University, but he's much better known for having spent nearly 30 years with Public Citizen Litigation Group -- an activist, lawsuit-filing group that seeks to expand the power of government at every turn.
Vladeck didn't start at the FTC immediately, giving him time to testify as a Georgetown prof at a May 14 House committee hearing on medical devices and federal preemption. He condemned the Supreme Court's decision in Riegel v. Medtronic, putting his personal views forward even though he had already been named a federal regulator. It was intemperate.
Now that he's at the FTC, we see a desire to accrue regulatory power. At a speech to an ABA gathering at Georgetown Law Center last week, Vladeck said the FTC should "be placed on equal footing with the other consumer protection agencies." From the Blog of the Legal Times:
He said that means the FTC should get expanded civil penalty authority, as well as independent civil litigation authority. Currently, the Department of Justice brings many FTC-related civil cases. Economic fraud and advertising issues will be priority areas, he said.
Many regulatory expansionists share the goal of an FTC reaching for more power.
Continue reading "Regulatory philosphers, political sideshows and the FTC" »
WSJ on Cuomo v. Clearing House Association
Posted by Walter Olson A WSJ editorial discusses yesterday's preemption surprise at the Supreme Court, in which Justice Scalia crossed over to join the liberal wing in holding that the National Bank Act and its enforcing regulations do not, after all, oust the states from regulating lending by federally chartered banks: Justice Scalia's opinion distinguishes between "visitorial" and "prosecutorial" power over national banks. By visitorial he means the power to demand whatever information may be necessary to regulate an institution. Mr. Scalia argues that while the federal Office of the Comptroller of the Currency (OCC) has sole visitorial power over federal banks, state AGs may nonetheless "prosecute" those banks for violations of state law.
There's nothing wrong with this argument as it pertains to, say, state employment law, fraud or other laws of general applicability. But as Justice Clarence Thomas points out in his dissent, lending, including mortgage lending, is a core banking activity authorized by the 1864 National Bank Act and already regulated by the OCC. It is exactly the kind of banking that national banks are supposed to have the freedom to do under a law designed to create a uniform regulatory environment across the entire country.
Epstein: "How Other Countries Judge Malpractice"
Posted by Walter Olson Richard Epstein surveys the ways other systems handle litigation, and medical litigation in particular: Even these features [jury trials, contingency fees, lack of loser-pays, extensive lawyer-driven discovery] aren't the whole story. American judges frequently let juries decide whether honest mistakes are negligent. Judges in other nations are less likely to do so. American courts commonly think it proper for juries to infer medical negligence from the mere occurrence of a serious injury. European judges usually will not.
American plaintiffs are sometimes spared the heavy burden of identifying particular acts of negligence, or of showing the precise causal connection between a negligent act and an actual injury. Lastly, damage awards for lost income and medical expenses in the U.S. tend to dwarf awards made elsewhere -- in part because governments elsewhere provide this medical care from their nationalized systems. In sum, the medical malpractice system provides incentives for plaintiffs that really do matter. Americans, for example, file claims about 3.5 times more often than Canadians. It's not clear what we're getting from our exorbitantly expensive way of doing things: More disturbingly, a careful 1992 study by Donald Dewees and Michael Trebilcock in the Osgoode Hall Law Journal concluded that the frequency of medical malpractice in Canada was about the same as in the U.S. -- for about 10% the total cost. In other words, our costly system doesn't seem to do much to deter malpractice. On medical malpractice at least, Canada does better than we do. More: Some thoughts from MedRants (citing this 2003 Medical Economics piece by Robert Lowes) and from John Stossel. And Eric Turkewitz takes issue with many of Epstein's contentions, deeming "flat out false" the assertion that courts commonly allow juries to infer medical negligence from injury, and saying Epstein "misses the mark, at least in New York" in asserting that juries need not link up particular negligent acts with injury. Max Kennerly echoes these criticisms and adds others as well. And yet more criticism: Day on Torts.
June 29, 2009
Now up at Forbes.com: my reactions on Ricci
Posted by Walter Olson I've got an opinion piece up at Forbes.com on today's Supreme Court decision in Ricci v. DiStefano, the New Haven firefighter reverse-discrimination case. The title: "Sued If You Do, Sued If You Don't: Through the Looking Glass on Affirmative Action" (cross-posted from Overlawyered).
Putting a hold on Cass Sunstein for the regulatory post
Posted by Carter Wood The Hill reports that Sen. Saxby Chambliss (R-GA) is blocking confirmation of Harvard law professor Cass Sunstein to head the OMB's Office of Information and Regulatory Affairs. As described in "Chambliss blocks regulatory pick over animal lawsuits," farm groups are also raising warning flags about Sunstein, and the American Conservative Union has created a StopSunstein website.
Sen. Susan Collins (R-ME) asked Sunstein about these hot button issues -- and the Second Amendment -- during his May 12 confirmation hearing before the Senate Homeland Security and Government Affairs Committee. Sunstein stressed his belief that his role at OIRA would be to implement the statutes, and explained his discussion of animal rights was theoretical and academic. We've transcribed the exchange, which includes this from Sunstein:
In terms of my own academic writings, the suggestion, which was meant as a suggestion for contemplation, was that under state law that prevents cruelty to animals, it might be that the enforcement by criminal prosecutors could be supplemented by suits by private people protecting animals from violations of existing state law, very much like under the Endangered Species Act, where people, rather than elephants, initiate lawsuits.
The idea was actually very conventional and a little boring, but maybe my rhetoric made it seem less so. That's not such a great idea, using the litigation-inviting Endangered Species Act as a model for further legislation. But stopping his confirmation is a bum idea, too.
Continue reading "Putting a hold on Cass Sunstein for the regulatory post" »
Toward fairer class action settlements
Posted by Walter Olson Ted Frank, a contributing blogger here as well as at Overlawyered, has a new project -- and a blog -- with the aim of reducing class action abuse by sticking up for the interests of class members at settlement-approval time. Check it out today. [Center for Class Action Fairness]
Suing the scientific advisor
Posted by Walter Olson It didn't work as a tactic in the jaw implant mass tort, as Beck and Herrmann relate.
June 28, 2009
Deformed frogs and chemical exposures
Posted by Walter Olson Nicholas Kristof, meet the BBC.
June 27, 2009
Around the web, June 27
Posted by Walter Olson
- Mark McKinnon, "All arbitration is not created equal" [National Journal "Hotline on Call"]
- They owe it to themselves: "Conn. Supreme Court Orders Trash Utility to Pay Towns $36 Million", though the utility's a quasi-public entity run as a consortium of towns [Connecticut Law Tribune]
- Statute of limitations was just one problem for these Zyprexa plaintiffs, another was how obviously the drug had done well for them [Beck & Herrmann]
- Mark Geistfeld (NYU) on products liability & consumer choice [SSRN, Mass Tort Prof]
- "BPA is the 'Toxin du Jour,' Banning It Means Lawsuits Tout de Suite" [California Civil Justice, Elizabeth Whelan/Forbes]
- With ABA support, Congress hastens to strip away funding curbs on federal Legal Services class actions and law-reform efforts [ABA Journal]
June 26, 2009
New NAAG president elected, quickly files against GM
Posted by Carter Wood June 19, www.naag.org, "Nebraska Attorney General Jon Bruning Elected NAAG President":
Colorado Springs, Colo.--Nebraska Attorney General Jon Bruning was unanimously elected yesterday by the members of the National Association of Attorneys General (NAAG) to become the Association's 102nd president.
"Attorneys general are uniquely situated to lead the way in building a stronger and safer future for our states and our families," said President Bruning. "Serving as president of NAAG is an honor, and I look forward to working with my colleagues on issues that affect us on both the state and national level." June 19, from the attorney general's office, Nebraska, "AG Bruning Files Objection in GM Bankruptcy Proceedings on Behalf of Nebraska and 36 Other States": (Lincoln, Neb) Attorney General Jon Bruning today filed an objection in the General Motors (GM) Bankruptcy proceedings on behalf of Nebraska and 36 other states. The federal court action comes after GM's recent claims that it can ignore state laws that protect dealerships.
Continue reading "New NAAG president elected, quickly files against GM" »
$7 million Mississippi verdict against Sherwin-Williams
Posted by Walter Olson Over a child's lead paint consumption. [Tom Freeland, with many comments; Jane Genova]
Sanford, Jackson, Wire Fraud, and Proportional Sentencing
Posted by Marie Gryphon It has been, as we all know, a celebrity news week to make Ahmadinejad cheer. First, South Carolina Governor Mark Sanford returned from a mysterious disappearance to confess, on Wednesday, to an extramarital affair with a woman in Argentina. Then, a day later, Michael Jackson died of sudden cardiac arrest.
As a lawyer currently researching the exceptional breadth of the federal wire fraud law, my first thought upon watching Sanford's halting confession this Wednesday was: this man could be indicted for leading his staff to incorrectly believe that he was hiking the Appalachian trail this past week. Of course, I don't know whether Sanford did any such thing. If there is enough evidence to convince a grand jury that he might have, though, he could face charges under a federal law that criminalizes "any scheme or artifice" involving any phone or email communication that is designed "to deprive another of the intangible right to honest services," regardless of whether any victim was concretely harmed and regardless of whether any benefit was inappropriately gained by the deception. The so-called "honest services" extension of the federal wire fraud law was explicitly intended to police the fiduciary relationship between state and local pols and their constituents, though it is now frequently invoked against private employees as well.
Sanford seemed very careful, during his press conference, not to admit that he may have intentionally misled his staff so that they might pass the "Appalachian trail" story along to the voting public, which leads me to believe that he may be getting legal advice. If you think that lying to voters for political advantage is such ubiquitous behavior that it can't possibly be illegal, you are only half right. Not only does the wire fraud law probably cover such conduct, but it prescribes a prison sentence of up to 20 years - ironically, the same maximum sentence faced by Jackson when he was indicted (though later acquitted) in 2003 on 14 counts of child molestation, provision of alcohol to minors, and similar offenses.
This comparison raises troubling questions about both the scope of federal wire fraud law and about the proportionality of sentencing to the blameworthiness of a crime. Surely, the crimes of which Michael Jackson was accused are far more reprehensible than a lie offered to staff over the telephone by a desperate pol. But as Justice Scalia has warned, "this expansive phrase [in the wire fraud law] invites abuse by headline-seeking prosecutors in pursuit of local officials ... who engage in any manner of unappealing or ethically questionable conduct." Let's hope that that federal prosecutors exercise better sense in the case of Mark Sanford.
Out with a whimper: California AG vs. automakers on global warming
Posted by Walter Olson "With far less fanfare than it generated when it was launched, California's battle to hold six car companies liable for contributing to global warming has come to an end. In a ruling on Wednesday, the U.S. Court of Appeals for the Ninth Circuit granted the state's June 19 motion for voluntary dismissal, ending California's three-year fight to extract hundreds of millions of dollars from the auto industry." [David Bario, AmLaw; Amanda Bronstad, NLJ] Our earlier coverage of the Bill Lockyer/Jerry Brown nuisance-law folly is here, here, here, and here.
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