What a bad precedent it set. [Prof. Bainbridge] More: Indiana Gov. Mitch Daniels, WSJ (via Stoll).
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Posts tagged as:
Chrysler
Lake Mary High School concedes it has no legal grounds on which to resist Chrysler’s request. Contrary to many readers’ suggestions, the automaker did not agree to license the logo’s use on cordial terms. To quote the Orlando Sentinel account:
“As I am sure you can appreciate from your years of work with the board, control of use of a mark by enthusiastic students and parents is quite simply not practical, and I know the school and board would not want to be in the position of censoring student expression associated with the design,” wrote Judith Powell, an attorney for Chrysler.
(& welcome The Truth About Cars readers)
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And lawyering ensues [Sun-Sentinel, Orlando Sentinel]
P.S. Commenter VMS: “Sometimes corporations need to use their marketing brains rather than their legal muscle…. If Walter Chrysler were still around, he would have instructed his lawyers to license the mark to the team at minimal cost.”
Update: High school yields and a Chrysler lawyer explains the company’s rationale for not doing a license.
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“The House approved legislation on Thursday that would grant Chrysler and General Motors dealerships the right to challenge the companies’ decisions to close them in third-party arbitration.” The measure apparently has the support not only of Democratic leaders but of House Minority Leader John Boehner (R-Ohio). [NYT]
Readers might remember the Mraz case, where a driver was run over by his own truck because he failed to engage the parking brake, and a jury nevertheless awarded $55 million. (March 8 and March 21, 2007.)
The Chrysler bankruptcy threw a wrench into the appellate process. Given the number of unsecured (and secured!) creditors who were taking a haircut on what Chrysler owed them, and the weakness of the case, one would expect the claim to be extinguished. But Chrysler unilaterally (and almost certainly politically) decided not to extinguish product-liability lawsuits against it, and the Mraz case has settled for $24 million. (Amanda Bronstad, “Chrysler bankruptcy judge approves $24 million personal injury settlement”, National Law Journal, Sep. 25). Of course, the likely $8-$10 million attorneys’ fee in this case is being funded by taxpayers’ bailout money.
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The supposed “bankruptcy” process that winds up sparing politically influential constituencies keeps rolling along: let’s hope the Senate can say “no”. [Detroit News via Salmon, Drum, Manzi ("seems only fair, as the dealers paid good money for these politicians")]
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I expressed skepticism this summer that the Exxon Shipping v. Baker decision was a positive sign for the Court’s punitive damages jurisprudence. After the replay of Philip Morris v. Williams and, now, the Court’s denial of certiorari in DaimlerChrysler v. Flax this week, I can say I was right.
As readers of Overlawyered know, the Tennessee Supreme Court reinstated $13.3 million of punitive damages over a good-faith dispute over a van’s seat back design (in an accident caused by a drunk driver), giving no credit to the fact that the design in question was safer than federal safety standards, or to Exxon Shipping’s suggestion that punitive damages greater than a 1:1 ratio were possibly constitutionally inappropriate where compensatory damages were substantial and the defendant’s actions were not intentional or done for profit. As I described the case back then:
In 2001, Louis Stockell, driving his pickup at 70 mph, twice the speed limit, rear-ended a Chrysler minivan. Physics being what they are, the front passenger seat in the van collapsed backwards and the passenger’s head struck and fatally injured 8-month old Joshua Flax. The rest of the family walked away from the horrific accident. Plaintiffs’ attorney Jim Butler argued that Chrysler, which already designed its seats above federal standards, should be punished for not making the seats stronger — never mind that a stronger and stiffer seat would result in more injuries from other kinds of crashes because it wouldn’t absorb any energy from the crash. (Rear-end collisions are responsible for only 3% of auto fatalities.) Apparently car companies are expected to anticipate which type of crash a particular vehicle will encounter, and design accordingly.
(h/t Cutting)
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- At Reason “Hit and Run”, Damon Root deems a certain website “indispensable” [accolades file]
- Montgomery Blair Sibley, colorful lawyer for the “D.C. Madam” and a figure much covered on this site, has new book out [Doyle/McClatchy]
- Although Indian tribal litigators attacked it as “disparaging”, the Washington Redskins football team can keep its trademark, for now at least. “My ancestors were both Vikings and Cowboys. Do I have a course of action?” [Volokh comments]
- “Is Patent Infringement Litigation Up or Down?” [Frankel, The American Lawyer]
- Maryland high court dismisses autism-mercury lawsuit [Seidel, Krauss @ Point of Law]
- Chrysler dealers are lawyering up against the prospect of being cast off [WSJ Law Blog]
- “Should doctors who follow evidence-based guidelines be offered liability protection?” [KevinMD]
- Obama proposes $1.25 billion to settle black farmers’ long-running bias claims against the U.S. Department of Agriculture [AP/Yahoo]
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- Yielding to pressure from state AGs, Craigslist will close “erotic services” section and replace with more highly moderated “adult services”; New York’s Cuomo is furious the site took unilateral action “in the middle of the night” rather than negotiating with him [NY Times, Hartford Courant, office of Connecticut AG (and longtime Overlawyered bete noire) Richard Blumenthal, Citizen Media Law, Above the Law] More: Ambrogi.
- Or they could absorb it and move on: “Bounty sues Brawny in paper towel tilt” [Atlanta Journal-Constitution]
- Was granting patents relating to diagnostic analysis of human genes a mistake? Should courts undo it? Via constitutional law? Three different questions there [Ars Technica, Doc Gurley/San Francisco Chronicle]
- Canadian Human Rights Commission wants new ban on discrimination based on “social condition” (with concomitant penalties for hurtful speech premised on such condition) [Ken at Popehat]
- Luxury-goods makers’ suits against eBay over sale of counterfeits may be petering out [Frankel, American Lawyer]
- Today must be exotic-dancer-litigation day at Overlawyered: Trademark Trial and Appeal Board denies trademark protection for “Cuffs and Collar Mark” of Chippendales male exotic dancers [TTA Blog via Lowering the Bar, Ron Coleman, opinion in PDF]
- Allegations fail to stick: “Judge drops class-action suit on Teflon cookware” [AP/Des Moines Register, WSJ, American Lawyer; earlier here and here]
- Asbestos litigation ramps up against Detroit automakers after bankruptcy of many earlier defendants [five years ago on Overlawyered; up-to-the-minute report from Kirk Hartley]
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Larry Ribstein has some pertinent comments about the rolling reinvention of debtor-creditor law going on as the Administration redistributes bankruptcy priorities away from traditional creditors and toward the UAW. And Mickey Kaus credits me with perhaps more prescience than I actually possess about the union role (not that I always venture the cynical prediction…)(cross-posted from Point of Law). More: Michael Barone, Ken Silber.
P.S. Joe Weisenthal is reminded of an episode of lawlessness that I wrote about a few months back: “Before The Chrysler Mess, There Was Republic Windows”. Incidentally, those who wonder what sort of signals the incoming Administration was sending last December about the illegal Chicago plant occupation may be interested to learn that late last month Vice President Joe Biden and Illinois Sen. Dick Durbin paid a visit to the reopened Republic Windows plant, a visit which from a news account sounds as if it might fairly be described as “triumphal” in tone.
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Readers may recall the landmark case in which laptop maker Toshiba agreed to a notional $2 billion settlement (and a very crisp and real $147 million in plaintiff’s legal fees) to resolve charges that its laptops could under certain extreme conditions result in loss of user data, although no real-world customer appeared to have experienced the problem. Copycat lawsuits followed against other laptop makers, the supposed glitch being by no means unique to Toshiba, and at last report (May 11, 2001 and Aug. 14, 2004) Compaq had enjoyed much success in beating suits of this sort filed by Texas lawyers.
Apparently its luck didn’t hold up forever, though, because in May Judge Tom Lucas of the Cleveland County, Oklahoma District Court approved a nominal $640 million settlement of laptop glitch claims against Compaq and its parent, Hewlett-Packard, with $40 million in attorneys’ fees to various attorneys, including Reaud, Morgan & Quinn, the Beaumont, Texas firm of Wayne Reaud. (Tom Blakey, “Local court OKs $640M class settlement in computer lawsuit”, Norman Transcript, May 16)(settlement website).
According to a paper by Anthony Caso for the Washington Legal Foundation (PDF), the change in fortunes owed much to some successful forum-shopping. It seems plaintiffs in the first rounds had attempted to form a nationwide class action on the premise that the consumer law of Texas, Compaq’s home state, could properly be applied to the claims of customers in all 50 states. The Texas courts, however, wound up rejecting that premise.
…instead of taking no for an answer from the Texas Supreme Court – the final arbiter of Texas law, the class action attorneys convinced an Oklahoma court to rule that the case should be a nationwide class action, and that class action status could be premised on the idea that Texas consumer law applied to all of the claims. Ignoring the ruling of the Texas Supreme Court, the Oklahoma courts agreed with this argument and certified the case as a nationwide class action.
Unfortunately for all of us, the United States Supreme Court declined to review the case.
And the $40 million in fees? Reaud & co. would have nothing but the best talent in to bless the fees, per the Norman Transcript account:
Testimony at the April 29 hearing in Cleveland County District Court included that of Arthur R. Miller, a renowned legal scholar and commentator on civil litigation, copyright and privacy laws. Miller, a professor to the faculty of the New York University School of Law and the NYU School of Continuing and Professional Studies, estimated the coupon redemption rate would be as high as 30 percent — more than double the average redemption rate in settlement cases.
And if actual coupon redemptions come in far below a 30 percent rate — not that we’re necessarily ever going to find out — Prof. Miller’s reputation will suffer, right?
More: Beck & Herrmann call attention to an automotive class action case (Masquat v. DaimlerChrysler, alleging defect in rack and pinion steering systems) that also took advantage of Oklahoma’s willingness to apply manufacturer’s-home-state law to fuel nationwide class actions. They write that because of that distinctive handling of choice of law, “class action plaintiffs’ counsel now gravitate to Oklahoma as moths to light.”
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As Michael Krauss notes, an AP story today rehashes the details of last week’s Flax v. Chrysler case, though it falsely treats Paul Sheridan as a credible witness and doesn’t acknowledge most of Chrysler’s arguments.
It’s worth noting the Jim Butler firm’s description of the case:
The evidence showed the impact was minor. Though Stockell was speeding at the time, the minivan was also moving forward and the change in velocity (Delta V) was only 17 to 20 mph.
To repeat: the plaintiffs’ attorney said that a Delta-V of 17-20 mph is “minor.” I suppose in the astronomical sense that a Delta-V of 17-20 mph wouldn’t escape earth orbit, but it seems fairly major for someone in a heavy minivan. For those of you at home who want to experience what a “minor” Delta-V collision of “only” 17-20 mph feels like, drive into a reinforced brick wall at 17-20 mph with your airbag turned off, but be sure to wear your seat-belt to reduce the chance that you go through your windshield. Another way you can have a Delta-V of 20 mph is if you are dropped about 12-15 feet onto a concrete surface. I sure hope that the trial judge didn’t let Butler lie about physics to the jury like that, but I fear I know the answer.
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Perhaps we spoke too soon when we commended the Tennessee appellate court for getting it partially right. As we stated in November 2004:
In 2001, Louis Stockell, driving his pickup at 70 mph, twice the speed limit, rear-ended a Chrysler minivan. Physics being what they are, the front passenger seat in the van collapsed backwards and the passenger’s head struck and fatally injured 8-month old Joshua Flax. The rest of the family walked away from the horrific accident. Plaintiffs’ attorney Jim Butler argued that Chrysler, which already designed its seats above federal standards, should be punished for not making the seats stronger — never mind that a stronger and stiffer seat would result in more injuries from other kinds of crashes because it wouldn’t absorb any energy from the crash. (Rear-end collisions are responsible for only 3% of auto fatalities.) Apparently car companies are expected to anticipate which type of crash a particular vehicle will encounter, and design accordingly. The $105M verdict includes $98M in punitives.
We had more details of trial shenanigans in December 2004 and noted the reduction of the punitives by the trial court to a still unreasonable $20 million in June 2005. In December 2006, the intermediate appellate court threw out the punitive damages and the negligent infliction of emotional distress claim, leaving a $5 million compensatory damages verdict to be split between Chrysler and the driver responsible for the accident. An injustice, but at least a smaller injustice.
However, today, a 3-2 vote of the Tennessee Supreme Court made it a larger injustice again, reinstating $13,367,345 of punitive damages over a good-faith dispute over appropriate seatback design, giving no credit to evidence that the design in the Caravan was safer than the plaintiffs’ proposed design, and effectively disregarding Tennessee statutory law that compliance with federal standards creates a presumption against punitive damages. The Court did not mention Exxon Shipping’s suggestion that punitive damages greater than a 1:1 ratio were possibly constitutionally inappropriate where compensatory damages were substantial and the defendant’s actions were not intentional or done for profit. The Court unanimously affirmed the elimination of the NIED claim; one justice would have thrown out the compensatory damages, as well, because of the volume of inadmissible and improperly prejudicial evidence admitted. (Flax v. Daimler Chrysler (Tenn. Jul. 24, 2008); id. (Wade, J., concurring); id. (Clark, J., partially dissenting); id. (Koch, J., partially dissenting); E. Thomas Wood, “High court upholds $18.4M damage award in DaimlerChrysler case”, Nashville Post, Jul. 24; Kristin M. Hall, AP/Chicago Tribune, Jul. 24). The majority decision relied heavily on the expert testimony of Paul Sheridan, an MBA non-engineer and professional anti-Chrysler witness whom a federal court called “wholly unqualified” to testify on seat back design.
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A very belated update to our earlier posts of 2004 and 2005. As we stated in November 2004:
In 2001, Louis Stockell, driving his pickup at 70 mph, twice the speed limit, rear-ended a Chrysler minivan. Physics being what they are, the front passenger seat in the van collapsed backwards and the passenger’s head struck and fatally injured 8-month old Joshua Flax. The rest of the family walked away from the horrific accident. Plaintiffs’ attorney Jim Butler argued that Chrysler, which already designed its seats above federal standards, should be punished for not making the seats stronger — never mind that a stronger and stiffer seat would result in more injuries from other kinds of crashes because it wouldn’t absorb any energy from the crash. (Rear-end collisions are responsible for only 3% of auto fatalities.) Apparently car companies are expected to anticipate which type of crash a particular vehicle will encounter, and design accordingly. The $105M verdict includes $98M in punitives.
We had more details of trial shenanigans in December 2004 and noted the reduction of the punitives by the trial court to a still unreasonable $20 million in June 2005. And now the rest of the story:
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- Easterbrook: “One who misuses litigation to obtain money to which he is not entitled is hardly in a position to insist that the court now proceed to address his legitimate claims, if any there are…. Plaintiffs have behaved like a pack of weasels and can’t expect any part of their tale be believed.” [Ridge Chrysler v. Daimler Chrysler via Decision of the Day]
- Retail stores and their lawyers find sending scare letters with implausible threats of litigation against accused shoplifters mildly profitable. [WSJ]
- Kentucky exploring ways to reform mass-tort litigation in wake of fen-phen scandal. [Mass Tort Prof; Torts Prof; AP/Herald-Dispatch; earlier: Frank @ American]
- After Posner opinion, expert should be looking for other lines of work. [Kirkendall; Emerald Investments v. Allmerica Financial Life Insurance & Annuity]
- Judge reduces jury verdict in Premarin & Prempro case to “only” $58 million. And I still haven’t seen anyone explain why it makes sense for a judge to decide damages awards were “the result of passion and prejudice,” but uphold a liability finding from the same impassioned and prejudiced jury. Wyeth will appeal. [W$J via Burch; AP/Business Week]
- Judge lets lawyers get to private MySpace and Facebook postings. [OnPoint; also Feb. 19]
- Nanny staters’ implausible case for regulating salt. [Sara Wexler @ American; earlier: Nov. 2002]
- Doctor: usually it’s cheaper to pay than to go to court. [GNIF BrainBlogger]
- Trial lawyers in Colorado move to eviscerate non-economic damages cap in malpractice cases [Rocky Mountain News]
- Bonin: don’t regulate free speech on the Internet in the name of “campaign finance” [Philadelphia Inquirer]
- “Executives face greater risks—but investors are no safer.” [City Journal]
- Professors discuss adverse ripple effects from law school affirmative action without mentioning affirmative action. Paging Richard Sander. Note also the absence of “disparate impact” from the discussion. [PrawfsBlawg; Blackprof]
- ATL commenters debate my American piece on Edwards. [Above the Law]
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When you dial 911 from some new Verizon Wireless phones, it seems the phone itself emits an audible alarm. The telecom provider says it installed the feature to comply with federal law requiring that phone services be made “accessible and usable by individuals with disabilities”. Unfortunately, it has a disconcerting effect on users like a nondisabled Austin, Texas woman who dialed 911 because she feared she was about to have a close encounter with vandals on a vacant property she owned. The FCC says it does not require specific ways of meeting the accessibility mandate and that other methods besides audible tones might be found. (Clara Tuma, “Verizon customer calls phone alarm ‘dangerous’”, KVUE, Nov. 9). Reader L.S. writes that the story reminds him of the “Neckbelts” article in The Onion. We noted some years ago that strobe-light-equipped fire alarms, being pressed on government standards-writers as a way to alert deaf persons to emergencies, might prove dangerous to persons with photosensitive epilepsy, many of whom risk being sent into seizures by brightly flashing lights.
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Reader Eric Bainter writes:
The shenanigans of the NC prosecutor Mike Nifong got me to thinking about misbehaving attorneys in general; me being from the San Antonio area, this led me to wonder “whatever happened to those attorneys in the fraudulent suit against Chrysler?” (covered on Overlawyered May 23 and Jun. 26, 2000; Mar. 17 and Jul. 10, 2003; Aug. 1, 2006). During a fit of insomnia I decided to find out.
I started by checking the coverage on your site which most recently had noted, in the post from August of last year, that the Texas bar had still not yet gotten around to dealing with Andrew Toscano, one of the lawyers implicated in the affair. I searched the Texas Bar website, and found this was not quite true – Toscano got his discipline, such as it is, the day before your entry. I have copied and pasted beneath (after the jump) the entries for all three lawyers. Robert Kugle, the central figure in the fraud, got disbarred in 2003. The other two, Toscano and Robert L. Wilson III, only relatively recently got their punishments – two year suspensions – and if I understand the term “fully probated” correctly, their “suspensions” are “suspended” and they can still practice law. Each was fined $2500 in attorney’s fees and court costs – I assume this goes to the Texas Bar. No mention of the $1 million in sanctions from Judge Peeples.
I also found this article from Law.com that sheds some light on the “suspensions”.
I searched on the Internet for the current whereabouts of Toscano and Wilson. Andrew E. Toscano apparently now practices with a firm called “Gene Toscano, Inc.” I don’t know whether that is a relative of his, or Andrew’s middle name happens to be “Eugene” and he has decided to practice under that. No website for that firm that I can find.
Robert L. “Trey” Wilson III apparently practiced environmental law for a while after leaving Kugle’s firm (or maybe Kugle’s firm left him?) — the San Antonio bar featured him in its newsletter last December. I also found a now-defunct profile/bio page within the website of the attorney Louis Rosenberg, who does environmental law in San Antonio, but I do not notice any current mention of Wilson’s name on Rosenberg’s home page — he is not in Attorney Profiles, for example. If “Trey” worked there, I suspect he no longer does.
My temporary bout of insomnia seems over now. Best wishes,
Eric Bainter
[details of Texas bar discipline follow after the jump]
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