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Exxon Shipping v. Baker

Stephanie Mencimer suggests that 11% of Alaskans would have switched their votes to Obama in 2008 if they knew that the eeeevil author of this op-ed was in Anchorage helping Governor Sarah Palin address the politically-motivated “Troopergate” investigation. Color me skeptical.

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Inside Counsel magazine’s March 2009 issue quotes me (and mentions this blog) in a story about punitive damages and a Third Circuit ruling imposing a 1-to-1 limit on punitive damages in a bad-faith-failure-to-settle case, Jurinko v. Medical Protective Co. (albeit in a mysteriously unpublished decision). (Lauren Williamson, “Court Imposes 1-to-1 Punitive Damages Ratio”, Inside Counsel, March 2009; see also Shannon P. Duffy, “3rd Circuit Slashes Punitives, Imposes 1-1 Ratio”, Legal Intelligencer, Dec. 30.) I do take issue with the line “The decision continues a trend of appeals courts beginning to rein in punitive damage awards when there is no physical injury or ‘reprehensible’ behavior.” A 1-to-1 ratio isn’t “reining in” punitive damages awards in such cases, because just a generation ago, the ratio for such situations was zero-to-one, because punitive damages were to be limited to intentional or particularly reprehensible conduct. As I feared a few months ago, the 1-to-1 ratio “ceiling” the Supreme Court suggested in Exxon Shipping v. Baker has become a benchmark.

The magazine also has a short interview with Andrew Frey, the Mayer Brown litigator who has argued several Supreme Court punitive damages cases.

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The latest issue of the Federalist Society’s Class Action Watch has many articles of interest to Overlawyered readers:

  • William E. Thomson & Kahn A. Scolnick on the Exxon Shipping case;
  • Jimmy Cline on Arkansas’s disregard for class action certification standards;
  • Jim Copland on the “Colossus” class action;
  • Laurel Harbour on the New Jersey Supreme Court decision on medical monitoring class actions;
  • Lyle Roberts on lead-counsel selection in securities class actions;
  • Mark A. Behrens & Frank Cruz-Alvarez on the lead paint public nuisance decision by the Rhode Island Supreme Court; and
  • Andrew Grossman, extensively citing to Overlawyered and my brief in discussing the Grand Theft Auto class action settlement rejection.

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Today’s Wall Street Journal has a short version of my take on the Exxon Shipping v. Baker decision. Cf. also my Federalist Society podcast.

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I’ve done a podcast for the Federalist Society on the Supreme Court punitive damages decision in Exxon Shipping v. Baker.

Anchorage is beautiful this time of year, but, alas, my interview discussing the Exxon Shipping v. Baker case was over the phone. Not sure when they’ll run the clip, but probably tonight, since the decision has a good chance of being issued tomorrow.

Update: Here’s the story.

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Letter to the editor

by Ted Frank on March 8, 2008

In today’s Washington Post:

Dana Milbank’s Feb. 28 column on Exxon Shipping Co. v. Baker operates on the premise that the winner of any Supreme Court argument should be whoever can best appeal to the justices’ sympathies regardless of the merits of the case. Such an approach is more appropriate for coverage of television game shows than the law.

The Post would do better to treat its readers like grownups and have its Supreme Court reporting done by journalists who don’t “yawn” at questions about the appropriateness of jury instructions.

— Theodore H. Frank

Washington

The writer is director of the American Enterprise Institute’s Legal Center for the Public Interest.

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March 1 roundup

by Ted Frank on March 1, 2008

  • Oregon Supreme Court plays chicken with SCOTUS over $79.5 million punitive damages award in Williams v. Philip Morris case. [Sebok @ Findlaw; Krauss @ IBD; POL Feb. 1]
  • Speaking of punitive damages, I did a podcast on Exxon Shipping v. Baker. I can’t bear to listen to it, so let me know how I did. [Frank @ Fed Soc]
  • Arkansas case alleged legal sale of pseudoephedrine was “nuisance” because meth-makers would buy it; case dismissed. [Beck/Herrmann]. This is why I’ve stockpiled Sudafed.
  • Lawyers advertise for refinery explosion victims before fire goes out. [Hou Chron/TLR]
  • Connecticut Supreme Court: cat-attack victim can sue without showing past history of violence by animal. [On Point] Looking forward to comments from all the anti-reformers who claim to oppose reform because they’re against the abrogation of the common law.
  • Op-ed on the Great White fire deep pockets phenomenon. [SE Texas Record; earlier: Feb. 2]
  • “FISA lawsuits come from Twilight Zone.” [Hillyer @ Examiner]
  • Legislative action on various medical malpractice tweaking in Colorado, Hawaii, and Wyoming. [TortsProf]
  • Request for unemployment benefits: why fire me just because I asked staffers for a prostitute? [Des Moines Register]
  • “So much for seduction and romance; bring in the MBAs and lawyers.” [Mac Donald @ City Journal; contra Belle Lettre; contra contra Dank]
  • Where is the Canadian Brandeis standing up for free speech? [Kay @ National Post]
  • In defense of lobbying. [Krauthammer @ WaPo]

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The WSJ’s Law Blog reported recently on the joy being experienced by lawyers in the firms representing plaintiffs in the Exxon Valdez case, their spirits dampened only mildly by the Ninth Circuit’s recent reduction in the punitive award from $4.5 billion to $2.5 billion. Those firms include traditional plaintiffs’ firms such as Milberg Weiss, but also firms normally seen representing defendants, such as Davis Wright Tremaine and Faegre & Benson.

How do Faegre & Benson lawyers feel about the prospect of sharing in perhaps one-third of $2.5 billion? “It’s great,” said partner Brian O’Neill to the WSJ. Any grief due to the $2 billion reduction is probably tempered by the amazing $2 billion in post-judgment interest that will be tacked onto the final bill. (Actually, maybe that’s not amazing in itself, since the case has been pending since 1989. Still, the interest “is not chicken s___,” as O’Neill put it.) O’Neill said of the titanic fee that is coming their way, “This is one of the few chances a bill-by-the-hour guy and a bill-by-the-hour firm has to get ahead.” I for one have been worried for some time about how the partners in these little “bill-by-the-hour firms” were managing to get by, so it’s good to know that for once they may have been able to afford that second can of beans for the family at Christmas dinner.

Damages in the case were estimated at about $500 million. The Ninth Circuit basically held that the evidence did not warrant a punitive award that went to the limit of what is permitted under State Farm v. Campbell, a 9:1 or “single-digit” ratio, and reduced the ratio to 5:1.

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