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Motley Rice

“A federal judge in Indiana ordered lawyers including the prominent firm of Motley Rice to pay ITT Educational Services almost $400,000 in legal fees for pursuing a ‘frivolous’ lawsuit the judge said was ‘based on a completely false story.'” In line with the reluctance of American judges to award Rule 11 sanctions, the judge awarded only a small fraction of the defendant’s actual outlay in attorney’s fees, which ran into many millions. Motley Rice is a chief beneficiary of the ongoing income stream of the tobacco litigation fees, which return $500 million a year to an assortment of plaintiff’s firms. [Dan Fisher, Forbes]

Following murmurs about pay-to-play, South Carolina has turned down offers from local powerhouse Motley Rice and from Labaton Sucharow, whose attorneys had donated $12,000 to Attorney General Alan Wilson. [The State]

“Ludicrous claims shouldn’t have caused U.S. District Joseph Goodwin to reject a class action over economic damages from heart medicine Digitek, according to Fred Thompson of Motley Rice.” [Chamber-backed WV Record] The background of the court action is interesting too:

Litigation began in 2008, after Actavis Totowa discovered 20 pills of double thickness in a batch at its plant in Little Falls, New Jersey.

Actavis Totowa recalled the batch, and no plaintiff has produced a double thick pill.

Some plaintiffs nevertheless claimed personal injuries and wrongful death. Others claimed only economic damages.

Thompson sought certification of a national economic damages class or single state classes in West Virginia, New Jersey, Kansas and Kentucky.

Judge Goodwin found that the claimants were too disparate in their posture to be joined appropriately as members of a single class; some had put in for the cost of such things as eyeglasses and enemas.

So AP reports. More details as they become available.

9:43: AP/Boston Globe reports a dramatic rejection of public-nuisance theory, holding the case should’ve been dismissed years ago. Good news that. The Rhode Island Supreme Court decision was unanimous.

5:00: Here is the opinion itself. James Beck has the most comprehensive analysis of the opinion so far; Walter gives thorough background at Point of Law as well as a roundup of other links. The defendants and NAM have released statements; Motley Rice claims they were doing it for the children, which doesn’t explain their self-serving settlement with DuPont or why they asked for a highly inefficient remediation remedy that would have maximized their attorneys’ fees.

Also: Jonathan Turley (who I just learned has a year-old blog with over a thousand posts), who, to his credit, has opposed such lawsuits; OpenMarket; Jane Genova; Publius. Attorney General Patrick Lynch is unhappy about the legal setback to his campaign contributors constituents.

Existing abatement efforts already required of landlords under Rhode Island law mean that lead paint exposure is at an all-time low in the state–evidence that was excluded at trial.

And more: ShopFloor; NFIB.

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Asbestos litigation has been around a long time. Early on, nothing like modern product liability law existed (see Richard Epstein’s discussion here); lawsuits resided in workplace injury law when filed in the 1920s and 30s, and were soon subsumed in workers compensation reforms.

Modern asbestos litigation began after the Selikoff study was published in 1964. In December 1965, Texas attorney Ward Stephenson filed a case on behalf of Claude Tomplait, who had worked as an asbestos insulator. Four years later, Stephenson extracted a settlement for $75,000 from seven defendants.

Notwithstanding this meager beginning, Stephenson persisted in asbestos litigation and won a major victory in Borel v. Fibreboard Paper Products Corp., 493 F.2d 1076 (1973), in which the Fifth Circuit Court of Appeals found asbestos manufacturers strictly liable for their workers’ injuries. The Borel court rejected statute of limitations, contributory negligence, and assumption of risk defenses; and modern asbestos product liability litigation was born.

The litigation got another shot in the arm when New Jersey attorney Karl Asch uncovered the “Sumner-Simpson papers,” which “described in great detail the efforts of Raybestos, Johns-Manville, and other manufacturers to find out about the hazards of asbestos, develop strategies to deal with them, and–most important–to keep that knowledge from the public and workers.” These documents were put to great effect by South Carolina lawyer Ron Motley, who actually used the papers to convince a South Carolina circuit judge to grant a new trial after a jury had ruled in favor of asbestos defendants. Motley of course went on to become an asbestos super-lawyer and an architect of the multibillion-dollar multistate tobacco settlement; his antics are well-known to long-time readers of this site.

Two more foundational cases are worthy of mention. In 1981, the D.C. Circuit ruled that insurers who had written asbestos policies were liable for the maximum insured between exposure and diagnosis, rather than only in the year of diagnosis. See Keene Corp. v Insurance Co. of North America, 667 F.2d 1034 (D.C. Cir. 1981). Given the long latency between asbestos exposure and ultimate illness, the level of insurance exposure was suddenly massive. Circuit Judge Patricia Wald warned that the court’s decision “requires a leap of logic from existing precedent, for it concerns diseases about which there is no medical certainty as to precisely how or when they occur.”

In 1982, the New Jersey Supreme Court threw out the “state of the art” defense for asbestos manufacturers, in essence holding that it mattered not whether business practice was the best available to the industry at the time the injury occurred. See Beshada v. Johns-Manville Products Corp., 442 A.2d 539 (N.J. 1982). The court opined, “The burden of illness from dangerous products such as asbestos should be placed upon those who profit from its production and, more generally, upon society at large which reaps the benefits of the various products our economy manufactures. ”

Thus, in less than a decade, the law was radically shifted, and asbestos litigation was born: “The decade after Borel saw 25,000 asbestos cases filed. By 1981, more than 200 companies and insurers had been sued; by 1982, defendants’ costs had topped $1 billion.” But these early years were just the beginning…

Mark Steyn throws down the gauntlet:

Last week the New York Times carried a story about the current state of the 9/11 lawsuits. Relatives of 42 of the dead are suing various parties for compensation, on the grounds that what happened that Tuesday morning should have been anticipated. The law firm Motley Rice, diversifying from its traditional lucrative class-action hunting grounds of tobacco, asbestos and lead paint, is promising to put on the witness stand everybody who “allowed the events of 9/11 to happen.” And they mean everybody – American Airlines, United, Boeing, the airport authorities, the security firms – everybody, that is, except the guys who did it.

According to the Times, many of the bereaved are angry and determined that their loved one’s death should have meaning. Yet the meaning they’re after surely strikes our enemies not just as extremely odd but as one more reason why they’ll win. You launch an act of war, and the victims respond with a lawsuit against their own countrymen.

But that’s the American way: Almost every news story boils down to somebody standing in front of a microphone and announcing that he’s retained counsel. Last week, it was Larry Craig. Next week, it’ll be the survivors of Ahmadinejad’s nuclear test in Westchester County. As Andrew McCarthy pointed out, a legalistic culture invariably misses the forest for the trees. Sen. Craig should know that what matters is not whether an artful lawyer can get him off on a technicality but whether the public thinks he trawls for anonymous sex in public bathrooms. Likewise, those 9/11 families should know that, if you want your child’s death that morning to have meaning, what matters is not whether you hound Boeing into admitting liability but whether you insist that the movement that murdered your daughter is hunted down and the sustaining ideological virus that led thousands of others to dance up and down in the streets cheering her death is expunged from the earth.

(Mark Steyn, “No terrorism, just war?”, Orange County Register, Sept. 9; Anemona Hartocollis, “Little-Noticed 9/11 Lawsuits Will Go to Trial”, New York Times, Sept. 4; also to the point).

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Roundup – June 4

by David Nieporent on June 4, 2007

Is it, or isn’t it?

  • It is: “Hopefully this means a better life,” says the energy company employee who won a $40 million judgment (almost half of it punitives) against Qwest Communications after the telephone pole he was working on collapsed and injured him. He was lucky; had he worked for the phone company, he likely would have been barred from suing by worker’s comp laws.
    “I could hear my heart pounding, pulsing faster and faster, and I tried keeping calm, but when they started reading the verdict I was in a state of shock,” he said. “It’s justice.”

  • It isn’t: “The lawsuit wasn’t about money, he said.” That’s New Hampshire resident Joseph Hewett, the rejected applicant for The Apprentice who settled his age discrimination lawsuit against Donald Trump and the producers of the show.
    “This was never about a disgruntled applicant trying to get back at (Trump’s) organization, it just gave me an opportunity to advocate on behalf of a protected class,” he said. “This was about the fact that I believe an entire class was aggrieved.”

    His evidence that age was what kept him off the show was a slam dunk; after all, he “claimed he was qualified for the show because he graduated magna cum laude from college and because of his ‘many years of experience maintaining large commercial properties.'”

  • Well, maybe it is: Human rights advocacy groups have been (mis)using the Alien Tort Claims Act for years to litigate foreign events in American courts, but those advocacy groups were motivated primarily by ideology. Now class action law firms, sensing an opportunity, are getting in on the action. Overlawyered repeat offender Motley Rice (many links) is suing officials of the United Arab Emirates on behalf of boys from South Asia and Africa who claim to have been kidnapped and enslaved as camel jockeys in the UAE; the case has no connection whatsoever to the U.S.

    The human rights movement isn’t thrilled because they figure that these lawyers are really in it for the money and not the cause; conservative tort reformers aren’t thrilled because they see it as just another example of entrepreneurial lawyering by trial lawyers.

    John M. Eubanks, a lawyer with Motley Rice who represents the former jockeys, disputed both points.

    “We’re trying to right wrongs that have been committed,” Mr. Eubanks said. “It’s not about money. It’s about exacting some form of justice.”

    Uh, yeah:

    Pressed, Mr. Eubanks conceded that the case was at least partly about money. “There is a contingency fee,” he said. “These cases do cost a lot of money. We don’t get paid unless we collect.”

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Billion dollar cleanup

by David Nieporent on February 27, 2007

Overlawyered has been covering the Rhode Island lead paint trial for quite some time. A year ago last February, a jury found lead paint makers liable (and see links therein); on Monday, a Rhode Island judge issued a 197 page opinion (PDF) rejecting all the motions filed by the manufacturers, and upholding the jury verdict. Associated Press; Providence Journal. There will, of course, be an appeal.

It’s a case which fits well with the theme I mentioned yesterday, with all the elements of litigation as Robin Hood-style wealth redistribution:

  • Creative lawyering, to turn a non-case into a case: this is really a products liability case, but if it had been tried under that theory, the state would have lost. So the plaintiffs called lead paint a “public nuisance,” even though any harms here are identifiably private.

  • Irresponsible victims: The proximate cause of lead-paint-related injuries is the failure of homeowners and landlords to fix peeling paint. But we wouldn’t want to hold people responsible for maintaining their own homes.
  • Going after the deep pockets rather than wrongdoers: Homeowners can’t sue themselves, and landlords don’t have nearly as much money as Sherwin Williams and the other paint manufacturers? So of course the paint manufacturers are liable. Never mind that the paint was perfectly legal when it was sold, sometimes as long as 50 years ago or more. Never mind that the plaintiffs didn’t and couldn’t prove that any of the outstanding problem was caused by any of the defendants.
  • Unlimited liability, unrelated to any money made by the manufacturers for the products in question: the judge hasn’t even figured out how much this cleanup will cost, but he’s nonetheless sure that it’s reasonable to hold that the paint companies should have done this already. Estimates range from a billion dollars to several billion, to clean up any remaining lead paint.
  • Dubious benefit to actual victims: people who have children affected by lead paint aren’t the ones who receive money as a result of this case.
  • Shades of the tobacco cases: private trial lawyers inducing the state to sue, and then then pretending to be acting on behalf of the public.

Of course, we get the obligatory disingenuous comments from the plaintiffs:

Jack McConnell, a lawyer representing the state, called the judge’s decision a “huge, huge victory for lead-poisoned children, homeowners and taxpayers.”

Except, of course, for taxpayers and homeowners who are shareholders in paint companies. Or taxpayers and homeowners who are looking to buy products whose prices will have to rise to cover the costs of lawsuits that may spring up decades down the road because of some unforeseeable risks.

And how it’s a victory “for lead-poisoned children” is a mystery, given that the only outcome of this case is that the paint companies will have to pay for the costs of cleaning up homes. The children who have actually been poisoned do not see a cent from this judgment. Jack McConnell and Motley-Rice, the lawyers “representing the state,” will rake in a few hundred million dollars in contingency fees, though.

Walter Olson also comments at Point of Law.

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That prospective lawsuit by the very needy and deserving plaintiff, the government of Saudi Arabia, against international tobacco companies, discussed in this space Nov. 16, 2000 and Dec. 10, 2001, is apparently on again. (“Saudis threaten to sue tobacco companies”, Reuters/GulfNews, Nov. 30). Hans Bader at CEI’s Open Market (Dec. 1) deplores the action, but seems to imagine that 1) it might make more sense for American victims of 9/11 to sue the Saudis and that 2) this isn’t happening already (see Jul. 11, 2003, Sept. 26 and Nov. 6, 2004, and Oct. 12, 2005).

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As if trial lawyers didn’t already have enough good friends in the U.S. Senate, Democratic challenger and former state attorney general Sheldon Whitehouse is making a strong bid to unseat incumbent Lincoln Chafee for a Senate seat from Rhode Island. (Jim Baron, “Poll: Senate race even; Gov. surges”, Pawtucket (R.I.) Times, Oct. 3; “Democrats bet on former attorney general to take back Senate seat”, AP/WPRI, Sept. 14). Of the fifty state attorneys general, Whitehouse was the only one willing to sign up for the Motley Rice law firm’s crusade to attach retroactive liability to former makers of lead paint and pigment; see Jun. 7, 2001, Oct. 30-31, 2002, Mar. 5-7, 2003, Feb. 23, 2006, etc. For more on Whitehouse’s enthusiasm for such creative litigation, see Oct. 26, 1999 (latex gloves).

September 11 litigation as an industry, courtesy of the asbestos/tobacco zillionaires from South Carolina:

While other lawyers have resolved most or all of their cases — at least 32 of the roughly 90 total lawsuits have settled — Motley Rice has settled only three. …According to several lawyers and plaintiffs in the case, Motley Rice has made unusually high settlement demands, often 5 to 10 times higher than similar plane crash cases. The higher demands stem from Motley’s calculations for what it calls “terror damages” — compensation for the amount of time frightened victims knew they were fated to die — of between $750,000 and $1 million a minute, according to those lawyers and clients, who requested that their names not be used because the settlement process is confidential.

The story deserves a place in the “Not About The Money” files because client after client informs the Boston Globe that their litigation stance is entirely unrelated to that disdained cash nexus; presumably it’s just happenstance that they have wound up represented by lawyers who are making monetary recovery a very high priority indeed. Somehow one is reminded of the character in Flannery O’Connor: “Mrs. Hopewell had no bad qualities of her own but she was able to use other people’s in such a constructive way that she never felt the lack.” (via Lattman)(cross-posted from Point of Law).

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“A Rhode Island jury today found Sherwin-Williams Co. and two other paintmakers guilty of creating a ‘public nuisance’ by manufacturing lead paint after it was found to be dangerous.” If upheld, the verdict will force the companies to contribute millions toward abatement of existing paint; a judge will also consider demands for punitive damages. The ruling, the first of its kind, is also expected to encourage the filing of more suits against the industry; the cities of Chicago and Milwaukee are among those with suits in progress. (Maya R. Payne, “Jury finds against three paintmakers”, Crain’s Cleveland Business, Feb. 22; AP/Boston Globe; Reuters). Blogger Jane Genova has been covering the three-month trial from the scene.

The verdict is an unfortunate confirmation that the “tobacco model” of mass tort litigation remains alive and well. In particular, contingency-fee private counsel have once again managed to 1) dream up a novel idea for litigation based on the idea that some category of public expenditure is really blameable on long-ago sales of a product; 2) sell the idea of suing to public officials who agree to front the action, and who thus provide (along with advocacy groups) a suitably public face for the lawsuit; and 3) manage to get liability attributed retroactively to businesses whose actions decades ago were plainly lawful under the standards of that time. In the Rhode Island case, in particular, the outcome represents the culmination of years of careful groundwork by South Carolina-based asbestos/tobacco powerhouse plaintiff’s firm Motley Rice (earlier Ness Motley), which some years embarked on a strategy of making itself a behind-the-scenes kingmaker in Rhode Island — one of America’s most politically insider-ish, as well as smallest, states. For details on how the Motley firm quickly established itself the number one donor in Rhode Island politics, with special generosity toward officials who could be helpful to its idea for a lead paint suit, see Jun. 7, 2001.

For more coverage of the Rhode Island suit, see Jun. 8-10, 2001; Jul. 2, Nov. 1 and Nov. 16, 2005; and various other entries.

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The law firm of Motley Rice has filed suit against Bombardier and numerous other defendants over the October 2004 crash of a Canadair regional jet operated by Pinnacle Airlines near Jefferson City, Mo., on behalf of the plane’s pilots. Aero-News.net editor Jim Campbell is decidedly critical of the suit. (“Barnstorming: Pinnacle Suit Pushes Aero-Litigation ‘Cringe-Factor’ Too Far”, Jan. 11).

Update: blame it on Riyadh

by Walter Olson on September 26, 2004

Even though the 9/11 commission (debunking certain widely circulated stories to the contrary) concluded that the government of Saudi Arabia did not fund al-Qaeda, several institutional victims of the terrorist attacks, including Cantor Fitzgerald Securities and the Port Authority of New York and New Jersey, recently filed suit against a long list of foreign entities including the Saudi government and various financial institutions for their alleged role in the attacks (Larry Neumeister, “Port Authority to Join Suit Against Saudi Arabia Over 9/11 Attack”, AP/Law.com, Sept. 13). The U.S. government has been highly critical of the freelance use of private litigation to second-guess the state of U.S.-Saudi relations, which has in no way deterred colorful asbestos-tobacco zillionaire Ron Motley from setting up his own mini-CIA-cum-State-Department-for-profit toward that end (Jennifer Senior, “Intruders in the House of Saud, Part II: A Nation Unto Himself”, New York Times Magazine, Mar. 14)(see Jul. 11, 2003). And in the New York Observer, Nina Burleigh in February profiled attorney Brian Alexander of the prominent plaintiff’s air-crash firm of Kreindler & Kreindler, who had “already filed a suit — on behalf of the families of more than 1,000 9/11 families?against a list of foreign entities hundreds of pages long.” (“Air Disasters, Legal Fees And Justice for the Victims”, New York Observer, Feb. 23).

Update: James Blair Down case

by Walter Olson on September 11, 2004

More developments in the Madison County case (Mar. 25, etc.) that Prof. Lester Brickman called “the most abusive class-action settlement of the decade, if not the century.” “Circuit Judge Phillip J. Kardis approved on Thursday a plan to notify potential claimants in the suit against Canadian con man James Blair Down.” However, New York attorney Jody Pope, representing objectors, says class members are not receiving proper notification of their right to make claims. The case involves prominent plaintiff’s firms Ness Motley (now Motley Rice) and Korein Tillery. (Paul Hampel, “Suit against con man nears settlement”, St. Louis Post-Dispatch, Sept. 9).

A feature from the Chicago Tribune on the Ness Motley sellout of its clients in the James Blair Down case (see Jul. 7 and follow-ups Aug. 24 and Jan. 17) is revealing about forum-shopping:

[Blair] Hahn told his clients he knew exactly where to find the class-action judgment they needed: in Madison County, across the Mississippi River from St. Louis.

In testimony later, [former Secret Service agent James] McGunn said Hahn assured them he could “manipulate” the court, and that “his wishes would be granted.”

“The reason that they selected Madison County was because the judge there looked very kindly on Ness Motley and would be very favorably impressed with whatever they said,” McGunn recalled Hahn telling him. “They would have no problem in Madison County.”

On February 18, Madison County Judge Phillip Kardis (Oct. 7) held a twenty-minute hearing and preliminarily approved a class action settlement that provided millions for the lawyers and little for the class. (Greg Burns, “The lawsuit capital”, Chicago Tribune, Mar. 8).

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Updating our Aug. 24 report: “A federal judge has upheld the $36 million malpractice verdict against Ness Motley, Loadholt, Richardson & Poole. U.S. District Judge Rebecca R. Pallmeyer agreed that the defunct South Carolina firm put its fees above the interests of Irish client Interclaim Holdings.” Appeal is planned. (Lori Patel, law.com, Jan. 14; “$36 Million Malpractice Award Against Firm Upheld”, New York Lawyer, Jan. 13).

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A Senate Minority Leader’s gotta drum up money, after all: he popped down to Jacksonville last Thursday for a fund-raiser hosted by plaintiff’s lawyer Wayne Hogan, part of the $3.4-billion-in-fees Florida tobacco team (see Apr. 12, 2000), and then yesterday attended an event at the Providence, R.I., home of Ness Motley’s Jack McConnell (see Jun. 7, 2001) (David DeCamp, “Party not big on bid from Weinstein”, Jacksonville Times-Union, Dec. 15; Liz Anderson, Scott MacKay and Katherine Gregg, “State House’s quick Thanksgiving food drive is no turkey”, Providence Journal, Dec. 1) (hat tip: South Dakota Politics blog)