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Liability Outlook

In the latest Liability Outlook, I rebut the ABA’s resolution for guaranteed taxpayer funding of civil lawyers for the poor, expanding on my earlier ACS talk:

[The poor] will trade higher rents and higher taxes for the right to legal services that often will not help them.. . . [P]arties with meritorious cases will find it harder to signal to overwhelmed judges that their cases are distinguishable from the vast majority of meritless cases with appointed counsel that the courts will see every day.

Larry Ribstein approves: “The ABA resolution should be seen as what it is: a justification for rent-seeking by the organized bar.”

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Zombie Litigation

by Ted Frank on April 4, 2008

My latest Liability Outlook examines the problems of retroactive lawmaking and litigation, especially reviver statutes, and even Obama fans will find something to like:

The controversy over whether and how to seat the Michigan and Florida delegations at the Democratic National Convention shows the danger of changing rules midstream and upsetting settled expectations. Reviver statutes not only obviate statutes of limitations, which are a critical aid to justice, by “reviving” claims that have expired or never existed, but they can also pose the danger of undoing the benefits of future prospective legislation. In evaluating laws, the issue is not merely one of retroactivity, but of the importance of promoting legal certainty. For example, the FISA Amendments Act, S. 2248, while ostensibly acting retroactively to grant immunity to telecommunications companies that cooperated with the Bush administration’s antiterror surveillance program, works to protect settled expectations.

Among matters discussed: litigation against the Catholic church over child abuse by priests and the Michigan legislature’s proposed retroactive repeal of pharmaceutical tort reform in H.R. 4045. Walter has previously discussed the subject.

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The Patent Reform Act of 2007

by Ted Frank on February 22, 2008

My latest Liability Outlook is on the Patent Reform Act of 2007:

Despite some in the media calling patent reform dead, on January 24, 2008, the Senate placed S. 1145, the Patent Reform Act of 2007, on the general calendar. The next few weeks will be critical to the legislation, which the House passed in September. Although much of the discussion has focused on the different perspectives and concerns that the high tech and the biotech/pharma industries have about the legislation, the fact remains that the patent litigation system is broken. Congress should make every effort to fix it by writing into this legislation reasonable formulas for damage awards and venue rules that discourage forum-shopping. …

Affiliates of Erich Spangenberg’s Plutus IP have sued 476 different defendants in 42 lawsuits. The vast majority of those lawsuits allege infringements of patents that Plutus IP purchased for $1,000. The use of invalid patents in litigation is more than theoretical. Philip Jackson sued his attorneys, Chicago plaintiffs firm Niro, Scavone, Haller & Niro, for malpractice after his $12.1 million jury verdict against Glenayre Electronics Inc. was reduced to under $3 million; Niro challenged the malpractice suit by claiming that th e patent Jackson had successfully enforced was invalid. In 2006, approximately 6,000 defendants were sued in 2,800 patent cases; in 2007, the six thousand mark was reached in early October, implying a 30 percent increase in patent litigation in a single year. Such litigation stifles substantial technological innovation. Patent trolls claim to block entire fields, and one cannot hope to innovate in these areas without the financial capital to handle the threat of patent litigation. IBM has 370 corporate patent attorneys, not just to avoid the pitfalls of infringement, but to create a patent portfolio that can provide counterclaims (or cross-licensing opportunities) if a commercial entity were to sue them for infringement. Since the late 1990s, patent litigation costs have outstripped patent profits.

My latest Liability Outlook looks at the abusive litigation created by a statutory drafting oversight: a bill designed to protect against identity theft has instead become a mechanism for the entrepreneurial plaintiffs’ bar to attempt to bankrupt innocent businesses that haven’t harmed anyone.

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Ted has a new essay out by this title in AEI’s Liability Outlook series (Sept. 11). To quote from the conclusion:

One can debate the appropriate role for each of the three branches in the post-9/11 world in coordinating domestic and foreign policy in responding to terrorism. But one matter should be beyond debate. Individual litigants in individual cases should not be able to use the combination of civil liability rules and the power of the civil courts to interfere with larger national policy. Congress can disagree with the executive branch, but should do so through legislation, rather than abdicating its responsibilities to trial-lawyer proxies. Civil liability is a poor tool for deterring suicide bombers, and civil anti-terrorism laws are bound to have their greatest effect when used against innocent parties.

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The latest AEI Liability Outlook explores my take on the tort reform implications of October Term 2006.

The latest AEI Liability Outlook, which has my take on two years of CAFA, is on-line.

My latest Liability Outlook for AEI is about the Ford Explorer rollover litigation and what it says about products liability litigation in the US in general:

It went generally unnoticed last November when the California Supreme Court refused to review an intermediate court’s decision in Buell-Wilson v. Ford Motor Co. But then again, it went generally unnoticed when a jury awarded an arbitrary $368 million in damages in that case, when the trial judge reduced that verdict to an arbitrary $150 million judgment, and when an intermediate appellate court reduced that figure to an arbitrary $82.6 million (which, with interest, works out to over $100 million). Products liability verdicts have become so run-of-the-mill that even nine-digit verdicts and their aftermath receive only local or specialty press coverage, with cursory national coverage. But Buell-Wilson demonstrates much that is wrong with the current liability regime, including the fact that the media is so jaded by litigation abuse that a $368 million verdict is barely newsworthy.

I have a related letter to the editor in the Jan. 1 Legal Times. See also POL Dec. 13, OL Dec. 12, OL Jun. 3, 2004.

Martin Grace and I have written a Liability Outlook for AEI looking at the last several years of CJD/AIR studies on medical malpractice. The conclusion? “In many ways, the problem with AIR’s reports is a perfect microcosm of what doctors find most distasteful about the liability system: a trial-lawyer mentality that cherry-picks facts and twists data to reach knee-jerk conclusions under the guise of a false science.” See also Jim Copland’s dissection of one such study at Point of Law on Jul. 8.

We look forward to Kevin Drum giving this paper the same deference he credulously gave AIR’s last bogus report.

One flaw of the paper is that we didn’t include the story of “Bob,” the dummy literally used to scapegoat insurance-company executives by CJD at an ATLA conference. For other CJD shenanigans, see Dec. 23, 2004 and Mar. 19, 2004. (Cross-posted at Point of Law.)

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The first edition of the AEI Liability Outlook is out today, and features my analysis of pending asbestos legislation:

The AEI Liability Project hereby inaugurates its Liability Outlook series, designed to guarantee a paper trail to exclude any of its authors from Article III appointments. This Outlook examines the congressional attempts at asbestos liability reform. The eventual cost of asbestos litigation is estimated in the hundreds of billions of dollars, the majority of which will end up in the hands of attorneys, thus affecting thousands of corporate defendants with little or no culpability and costing tens of thousands of jobs. The trust-fund approach is a congressional attempt to reach a compromise on the liability problem, so long as nationwide reform is not politically feasible. While a trust fund has the potential to save tens of billions of dollars, the current legislation suffers from dangerous flaws that could make the cost of the asbestos litigation crisis far worse.

Other Point of Law coverage of S. 852. (Cross-posted at Point of Law.)