Chronicling the high cost of our legal system
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According to Paul Secunda at Workplace Prof Blog, a monstrously overgrown employment discrimination dispute recently ruled on by a California appellate court helps explain “why people like Walter Olson rightly believe in some cases that litigation is just plain overlawyered“.
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At Point of Law, I take up a topic dear to my heart that has flared up into headlines for the first time in, well, practically forever.
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This fall, I had the honor of being elected to the American Law Institute—along with Point of Law blogger Michael Krauss and CL&P blogger Brian Wolfman.
Next week, the ALI has its annual meeting in Washington. Of critical importance is the May 20 vote on amendments and the Final Draft of its Principles of the Law of Aggregate Litigation—a document that could be of great influence in the way courts think about class actions. Beck and Herrmann have a must-read post detailing the issues involved. And they note that ALI is a nose-counting organization: policy is made by those that show up. If members of your law firm or university are ALI members, please pass along the post to them.
In Mississippi Litigation Review blog, Philip Thomas argues that Kim Strassel’s article (which we discussed Sunday) overemphasizes the role played by U.S. Silica’s CEO. I think that’s more the doing of the WSJ headline writers (which do pitch the story of one guy standing alone against the plaintiffs’ bar) than Strassel; as Thomas himself acknowledges, Ulizio doesn’t try to take undue credit, and Strassel merely (and correctly) notes that lawyers alone couldn’t defeat the silica lawsuits without the support of the business community willing to stand up against the tort bar.
Thomas also objects to Ulizio’s characterization of the victory as “luck,” but luck definitely played a huge role. The scandal came to light solely because Judge Janis Jack held mass Daubert hearings at an abnormally early stage in the litigation. In fact (and I seem to be the only person who has ever made this point), Jack’s ruling was especially abnormal, because she made the Daubert ruling before she made a jurisdictional ruling—and her jurisdictional ruling found that 99% of the cases in front of her lacked complete diversity and needed to be remanded. In other words, Judge Jack’s famous condemnation of plaintiffs’ experts was largely an ultra vires advisory opinion (which is why her sanctions order was for only a couple of thousand dollars).
The luck of the MDL draw had everything to do with that result. Another judge might not have held Daubert hearings at such an early stage; another judge might not have actually applied Daubert even if she had held the hearings; another judge might have preferred to empty her docket immediately, rather than stalling on the eventual remand.
And these aren’t purely hypothetical musings: in the welding fumes MDL in Ohio, there has been plenty of evidence of mass tort fraud, yet the judge has refused to throw out cases, so they slowly continue to proceed to trial.
In that sense, Ulizio is absolutely right: “When you have an entire system that condones these lawsuits, that does nothing to police its own, where there are no consequences, right or wrong has nothing to do with it. It’s a coin flip.” The lawyers who brought these fraudulent cases are still practicing law; thousands of fraudulent mass tort lawsuits continue to be brought since Judge Jack’s ruling without consequence to the unethical lawyers who bring them.
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If allegations by New York attorney general Andrew Cuomo are true, one of the most fundamental elements of due process for civil defendants — notice of a pending legal action through service of process — simply gets ignored in thousands of instances. “Sewer service” was a major concern of court reformers in the 1960s; it sounds as if the problem may never actually have gone away. [Newsday, Popehat]
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One can almost fill an entirely separate blog with variations on the McDonald’s hot coffee case. In Manhattan, 77-year-old Rachel Moltner ordered a hot tea from a Starbucks, but had trouble removing the tightly-secured lid, spilling the beverage all over her. (You will recall other lawsuits complaining that the Starbucks lids are not tight enough.) Moltner not only blames Starbucks for her resulting second- and third-degree burns (and recall that the raison d’être of the Stella Liebeck suit was the false claim that only McDonald’s served beverages that were hot enough to cause third-degree burns), but for the broken bones she suffered when she fell out of bed in Lenox Hill Hospital while being treated for burns. Moltner’s asking for $3 million.
Press coverage in the NY Post (h/t P.G.) is short on legal details (though one is encouraged to see Starbucks publicly defending themselves, an apparent change in policy). But I’ve downloaded and uploaded the complaint, which was filed in state court and removed to federal court. The kitchen-sink allegations include a defective cup, defectively hot tea, and a failure to warn. Right now the parties are haggling over federal removal jurisdiction, as Starbucks waited more than thirty days after receiving the complaint–until a formal demand for money was made–to seek removal. This is an interesting example of sandbagging; if defendants remove cases simply on the possibility that alleged damages will exceed the amount-in-controversy requirement, they may incorrectly remove cases that should remain in state court, but if they wait for the formal confirmation from the plaintiff, they may face the allegation that they’ve missed the 30-day window to remove a case–something to consider when plaintiffs’ attorneys complain that defendants reflexively remove cases to federal court that don’t belong there. Moltner has a good argument that Starbucks waited too long to remove, because alleged damages would have clearly exceeded $75,000 despite the lack of an ad damnum clause in the complaint citing a number, but the consequence of such a ruling will be that defendants will be forced to prematurely remove cases that perhaps should not be removed. (Moltner v. Starbucks Coffee Co., #: 1:08-cv-09257-LAP-AJP (S.D.N.Y.)).
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Lawyer Robert Bundy, representing a key witness at the Ted Stevens trial, is said to be all “torn up” about the judge’s accusation that he was transmitting secret nods and movements to convey to his client what testimony was desirable. Eric Turkewitz says that in his experience coaching during testimony takes three forms: “speaking objections”, nods and head movements (which may be unconscious), and deliberate signaling. (Oct. 7; AP/Google).
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If it’s going to put me in danger of removal from state to federal court, I guess it must have just been a typo. An Arkansas federal court bought the argument. (CAFA Law Blog, Sept. 18).
MDL Judge Eldon Fallon orders plaintiffs’ attorneys’ fees in the $4.85 billion settlement to be capped at 32%. Hooray, right? Certainly, the trial bar is capable of arguing for itself that the ruling is wrong and it is entitled to a couple of hundred million more, but I might just have to take their side here.
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If you wonder why insurance fraud and insurance expense are so high in New York state it’s because of opinions like AA Acupuncture Service v. State Farm Mutual Insurance Company. (The fact that the plaintiff is a quack-upuncturist immediately suggests problems, no?) Civil Court Judge Arlene P. Bluth agreed that there was “uncontradicted, overwhelming circumstantial evidence” that an accident had been faked. But State Farm was still not entitled to summary judgment on the litigation of bad-faith claims by three medical providers who insisted that State Farm was liable as the insurer of the woman who claimed to have been injured in the accident. (Plaintiffs deny fraud, though apparently wasn’t able to rebut the evidence of fraud at the motion stage.)
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There was an auto accident in Dallas; plaintiffs sued Volkswagen in Marshall, Texas, in the notoriously plaintiff-friendly Eastern District of Texas, which has a hugely abnormal number of product liability cases—17% of all federal automobile product liability lawsuits in the United States. Let us quote from In re Volkswagen of America, Inc., 506 F.3d 376 (5th Cir.2007), earlier discussed on POL Nov. 27 and Feb. 23:
Volkswagen moved to transfer venue to the Dallas Division of the Northern District of Texas (”Dallas Division”). Volkswagen asserted that a transfer was warranted as (1) the Volkswagen Golf was purchased in Dallas County, Texas; (2) the accident occurred on a freeway in Dallas, Texas; (3) Dallas residents witnessed the accident; (4) Dallas police and paramedics responded and took action; (5) a Dallas doctor performed the autopsy; (6) the third-party defendant lives in Dallas County, Texas; (7) none of the plaintiffs live in the Marshall Division; (8) no known party or significant non-party witness lives in the Marshall Division; and (9) none of the facts giving rise to this suit occurred in the Marshall Division.
The district court refused to transfer to the Northern District, VW sought mandamus, and got it on the second try, with the Fifth Circuit ordering transfer. (See also John Council, “5th Circuit Restricts Trial Courts’ Discretion in Venue Motions”, Texas Lawyer, Nov. 5; John Council, “5th Circuit Case Could Reduce Product Liability Caseload in Texas’ Eastern District”, Texas Lawyer, Aug. 7).
In February, however, the Fifth Circuit vacated the decision, and granted en banc rehearing. Argument is Thursday in New Orleans, and the decision will determine whether the Fifth Circuit will tolerate forum shopping in the federal courts. (Michelle Massey, “Appeals court scheduled to hear arguments over forum shopping”, SE Texas Record, May 20). The case is of special importance to the patent bar, given the fact that Marshall, Texas, has become the unlikely capital of United States patent litigation. Blog coverage: PatentlyO, Prior Art.
En banc briefs in 07-40058, In re Volkswagen AG:
Department of Strangely Shifting Academic Positions: In December 2007, law professor Georgene Vairo wrote a LexisNexis Expert Commentary on the Volkswagen case explaining its consistency with Supreme Court precedents, and writing
The Fifth Circuit is not alone in permitting the use of mandamus in limited circumstances. For example, in Lemon v. Druffel, 253 F.2d 680 (6th Cir. 1958), a case decided shortly after Congress codified § 1404(a), the Sixth Circuit ruled that mandamus was an appropriate remedy to test a district court’s discretion on a motion to transfer.
In April 2008, she signed on to a brief taking precisely the opposite position, which does not cite Lemon. Curious.
Overlawyered has more on the Eastern District of Texas, and on Judge T. John Ward.
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I have an op-ed in today’s National Review Online:
Pope Benedict XVI’s visit to the United States this week will be the first papal visit since the Roman Catholic Church abuse scandal broke in 2002. Archbishop Pietro Sambi, the Vatican’s top diplomat in the United States, expresses confidence that the pope will address the scandal while here. Trial lawyers, however, having been asking legislatures for years to address the problem in their own particular way: more lawsuits. That proposed solution, through undoing statutes of limitations and permitting new lawsuits over long-ago crimes, creates more problems than it solves, and hurts more than just the actors responsible for those crimes.
Reviver legislation is pending in six states, and has been proposed in many more.
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Updating our Jul. 25, 2007 post:
A plaintiffs lawyer who alleged in court that his adversary’s questions at a deposition caused his client emotional distress has been sanctioned for filing a frivolous suit.New Jersey Superior Court Judge Alfonse Cifelli entered an order March 26, assessing $2,500 in sanctions against Bruce Nagel, of Roseland, N.J.’s Nagel Rice. He must also pay his adversary’s legal fees of $11,630.
However, Cifelli stayed both payments until the Appellate Division rules on a pending appeal of his ruling last October that dismissed Nagel’s suit.
Cifelli, who sits in Newark, had found Nagel failed to state a claim, holding the litigation privilege allowed the adversary, Judith Wahrenberger, to pursue questions she considered relevant without fear of being sued and that the questions were not “extreme or outrageous.”
Nagel says he has received much encouragement from fellow plaintiff’s lawyers for his action; however, any suspension of the usual litigation privilege in favor of personal liability for attorneys would have been very much a double-edged sword, since the asking of emotionally distressing questions during depositions is not exactly a rarity on either side. (Maria Vogel-Short, New Jersey Law Journal, Apr. 9)(link fixed now).
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In 1993 the U.S. Congress, urged on by organized litigators, gutted Rule 11, which for ten years had provided relatively strong remedies to those targeted by groundless litigation in federal courts. It’s time to look again at the case for a stronger Rule 11, argue Zeke J. Roeser and Karen Harned (National Federation of Independent Business, in a new article for the Federalist Society’s Engage (cross-posted from Point of Law).
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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…as well as your keychain drives, backup tapes, laptops and network servers. New rules of federal procedure will make it more likely that a litigation opponent will show up on your doorstep with such a demand. (Martha Neil, “Opponent Computer Searches Likelier Under Revised Civ Pro Rule”, ABA Journal, Mar. 12; Nolan M. Goldberg, “Is Your Data Wide Open to Your Opponent?”, National Law Journal, Mar. 12).
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It has long been noted that lawyers can (when judges let them) employ the process of jury selection to plant themes, factoids and manipulative images favorable to their cause before a trial even gets under way. Which brings us to the just-begun Galveston trial of lawsuits against BP over a deadly 2005 explosion at its Texas City, Tex. refinery:
As Brent Coon, an attorney representing four of the five workers whose lawsuits are set to be tried, talked to potential jurors, he displayed a picture of Enron’s logo on two large screens behind him.Jim Galbraith, one of BP’s attorneys, objected to the oil company being compared to what happened at Enron, which went bankrupt in 2001. Galbraith accused Coon of arguing his case before the trial had begun.
“We are not trying to say BP is Enron. But Enron did have a major case with a lot of publicity and did a lot of things wrong,” Coon said before state District Judge Susan Criss ordered the Enron logo off the screens. …
Galbraith later objected when Coon showed the jury pool of more than 200 people a well-known photograph of major tobacco company CEOs raising their hands in 1994 just before they testified to Congress that nicotine wasn’t addictive when internal documents showed the companies knew the opposite was true.
“He’s still arguing his case,” Galbraith said.
Criss later told Coon he couldn’t show any more of these images. …
Just to confirm for those who may be wondering, BP, long known as British Petroleum, is not a tobacco company and has no particular connection to Enron other than being in the energy business. Maybe BP should have used its side of juror selection to flash large images of scandal-plagued or widely disliked Texas plaintiff’s attorneys who are not Brent Coon. (Juan A. Lozano, “BP Objects to Enron Comparisons”, AP/Forbes.com, Aug. 31).
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Point of Law Volokh