Posts Tagged ‘tobacco settlement’

Confirmed: climate denial heresy hunt based on contingency fee deal

Papers obtained by The Hill confirm that the prominent plaintiff’s law firm of Cohen Milstein is in for a 27 percent slice (plus costs) of loot from at least one branch of the ongoing probe over erroneous opinion on climate change, a campaign advanced by a subpoena dragnet from state attorneys general seeking papers and correspondence from dozens of free-market and right-of-center advocacy and scholarship groups. [The Hill]

Although the blithe denials of a couple of sources who spoke to The Hill might suggest otherwise, contingency-fee representation of states and other public bodies in damages claims was deemed ethically improper over most of American history. It’s a story I tell in The Rule of Lawyers, where I talk about Dickie Scruggs’ pioneering venture in the early 1990s in representing the state of Mississippi in claims for removal of asbestos from government property:

The United States [as of this point] had long justified its departure from other countries’ [bans on contingent fees] on the grounds that otherwise [given our lack of “loser-pays”] some poorer clients might be unable to obtain a lawyer at all. But no one was seriously claiming that no lawyer could be found to handle the asbestos case for the state of Mississippi on an hourly fee basis.

Until quite recently the notion of letting lawyers represent government on a contingency-fee basis would have been seen as pernicious, absurd, or both. But as Scruggs was no doubt aware, times were changing fast. Many of America’s legal authorities had begin to regard contingency fees — and the encouragement they gave to speculative litigation — not as a lesser evil that should be limited to the cases where it was necessary, but as something wholesome and beneficial in itself. The first experiments had already been noted by the end of the 1980s, with the state of Massachusetts hiring private lawyers on contingency for asbestos rip-out cases. If contingency fees for public lawyering could pass the ethical smell test in the state that was home to Harvard Law School, why shouldn’t they do so in Mississippi, too?

Since the Great Tobacco Robbery steered billions of dollars in fees to the pockets of politically influential law firms, the practice has been the subject of continued lively controversy, with legislative proposals in many states aiming to curtail or eliminate the opaque or even undisclosed deals by which private law firms get themselves cut themselves in on a share of public moneys by attorneys general dependent on their political support. Earlier on the contingency-fee angle in the climate subpoena affair here and here.

“Oil as the new tobacco” — and what that might mean

Promoters of the “Exxon Knew” climate denial subpoena campaign have made a point of saying they intend to repeat the playbook of the 1990s multi-state and federal tobacco litigation, this time with the energy industry and its various trade associations, allies, and non-profit/university well-wishers as targets. But what does it mean to repeat the tobacco playbook? As one who has written at length about that episode (along with various other authors including Cato’s Robert Levy, the late Martha Derthick, and Margaret Little) I can help spell out what that means. The public-sector tobacco litigation fell out of favor as a policy model because it was the scene of vast corruption fueled by the availability of billions in fees to politically favored private lawyers; because of its grotesque violations of elemental legal fairness, such as the enactment of statutes retroactively knocking out legal defenses for the state’s opponents; because of its quick-change remake of purported initial idealism into cash on the barrelhead as the primary driver of settlement; and because of its grave civil liberties violations such as the federal government’s assertion of a right to close down industry trade associations and seize their files. Are advocates of the new climate-denial litigation hoping for it to follow the same path? [Valerie Richardson, Washington Times, thanks for quoting me]

Peggy Little on the climate advocacy subpoenas

At the Federalist Society blog, Margaret (Peggy) Little, practicing attorney and director of The Federalist Society’s Pro Bono Center, has published a summary and analysis (parts one, two) of the ongoing criminal investigation of Exxon and its relations with dozens of advocacy groups, university scholars, trade associations and others with whom it is said to have collaborated in the supposedly improper cause of climate “denial.”

As one of the shrewdest analysts of the outrageous tobacco litigation saga, Little is particularly well situated to spot the parallels:

…Nearly every speaker [at the “AGs United for Clean Power” press conference] expressly cited the state AGs’ successful victory over the tobacco industry as a template for this action. One AG called upon other countries, states, communities and individuals to join in this effort. Why the public announcement before the facts come in? Why the global call to arms by this minority of state AGs?

An alert observer will recognize that this press conference follows right on the heels of drastic fiscal crises in many states. The state AGs’ wildly successful settlement with the tobacco industry in the 1990s –which incidentally also deployed foreign countries, dissenting states, cities, towns and health insurers to amass industry-busting claims– shifted a quarter of a trillion dollars to the states and their attorneys, leading to fiscal and governmental bloat that, to borrow a term from the climate activists, is unsustainable. New targets need to be identified and demonized so that this state regulatory confiscation from private industry can continue.

Another echo is the role of private law firms angling for what could be stupendously large contingency fees, a phenomenon that was the driving force of the state tobacco litigation. Little notes the role of prominent class action and tort firm Cohen Milstein, which “has a state AG practice headed by partner Linda Singer, former AG of the District of Columbia. The New York Times has profiled [its] solicitation of state AGs to bring class action and mass tort suits.” Another private attorney involved in the new affair, Matt Pawa, is likewise deep in contingency-fee representations of state attorneys general to pursue ostensibly governmental claims in which public officials would ordinarily be expected not to take a personal financial interest. If the AGs’ press conference was characterized by “hot,” accusatory, prejudicial rhetoric more often associated with plaintiff’s lawyers than with professional prosecutors, this might be why, Little notes.

She also makes clear the deep political illegitimacy and unaccountability of the regulation-through-litigation Fourth Branch these suits are intended to set up:

These extortionate suits are cynically Made to Settle. Professor G. Robert Blakey, a RICO consultant engaged by the Department of Justice to plan the federal tobacco lawsuit, frankly admitted, “this case is not made to win, it’s made to settle.” Both the state and its contingency fee outside financiers are thus in a position to reap enormous rewards with no risk of judicial precedents that would stem the tide of other, like initiatives against other industries. A state is a subsidized political plaintiff, driven by interest groups and ideology and its officers’ political ambitions; it can afford to bring a weak case and pursue it more vigorously than could any private plaintiff. Further, the arsenal of remedies at its disposal—consent decrees, injunctive relief, enforcement powers available under its consumer protection, trade practices and antitrust statutes—are simply not available to a private tort plaintiff. All of which underscores why these contingency arrangements violate the targets’ due process rights.

I wrote a whole book in 2003 — The Rule of Lawyers — on the pretensions of this emerging Fourth Branch of litigators and why they were not consistent with American self-government. For a while — as one after another attempt at a “next tobacco,” from guns to soft drinks, failed to take off — it looked as if maybe our system had learned the lesson and that the scandals would not repeat. If only that were so!

The FDA’s war on vaping

I’ve got a new piece at Ricochet on the Food and Drug Administration’s just-announced measures against vaping (e-cigarettes), which will drastically restrict and maybe even ban a popular option for smokers seeking to quit the cigarette habit. It’s not just an assault on individual choice and commercial freedom — it could wind up killing people. Read it here.

Relatedly, Andrew Stuttaford thinks I am too kind in describing CDC director Thomas Frieden as in denial about the prospective health benefits when smokers switch to vaping. And thank you to Andrew for describing Overlawyered as “must-read”.

P.S. Faced with two options on how to regulate premium cigars, FDA chose the harsher, of course [HalfWheel, Jacob Grier (“The market for cigars is about to become a lot less diverse and a lot more boring.”)]

More: I’ve got a piece up at Cato now on winners and losers from the FDA’s move. Plus, a new Jacob Sullum column: “The FDA’s deadly e-cigarette regulations.” And a Washington Post editorial defends the agency’s action on a for-the-children rationale, yet says not a word about the precipitous plunge in youth smoking rates and only refers in passing to the issue of harm reduction.

Climate advocacy subpoenas, III

  • “…the open, naked promise to use prosecutorial powers as a political weapon is a prima facie abuse of office. In a self-respecting society, every one of those state attorneys general would have been impeached the next day.” [National Review editorial]
  • Lefty foundations funded investigative report that kicked off the prosecute-climate-deniers push, and even funded the group that then gave an award to that ostensibly independent report [Jon Henke, earlier on Columbia School of Journalism role here and here; Jillian Kay Melchior on Inside Climate News]
  • Grand public announcement by attorneys general and former Vice President Al Gore made no mention of huddles with Rockefeller philanthropies that led up to it [Reuters; summaries of conversations via pro-CEI public records request]
  • Major angle not yet widely publicized is that ALEC, hugely demonized on Left, likely to be in cross hairs: “In his remarks, Maryland Attorney General Brian Frosh made a point of adding … [the] American Legislative Exchange Council as potential targets.” [Climate Investigations]
  • What’s private class action law firm Cohen Milstein doing in the middle of all this? Three guesses [National Review editorial; note “place of production” commanded in subpoena text]
  • “Climate Investigations” website seeks to promote idea of giving private lawyers what could prove wildly lucrative contingent-fee role in crusade against climate deniers; note that such private lawyers not only drove tobacco Medicaid recoupment litigation from the start, but (a tale told in Chapter 1 of my book The Rule of Lawyers) helped shape the epic corruption of that tobacco caper;
  • Reactions by the targets: a statement from incoming CEI president Kent Lassman vows to fight; “Exxon Fires Back at Climate-Change Probe” [WSJ; AP/U.S. News via Virgin Islands Free Press on move to quash subpoena]
  • “Federal law makes it a felony ‘for two or more persons to agree together to injure, threaten, or intimidate a person in any state, territory or district in the free exercise or enjoyment of any right or privilege secured to him/her by the Constitution or the laws of the Unites States, (or because of his/her having exercised the same).'” It doesn’t exempt state attorneys general [Glenn Reynolds, USA Today]

Earlier generally here and specifically on the subpoena of the Competitive Enterprise Institute here and here.

February 5 roundup

  • In November I wrote in Jurist on a Third Circuit panel’s refusal to order that sports great Jim Thorpe be disinterred and reburied under provisions of the Native American Graves Protection and Repatriation Act (NAGPRA); in response, Elizabeth Varner, Diane Penneys Edelman and Leila Amineddoleh of the Lawyers’ Committee for Cultural Heritage Preservation argue that the panel could have based its result on specific language in the statute rather than via the roundabout path it did take [Jurist]
  • Electing judges, a relic of Jacksonianism, still generating problems today [John Steele Gordon, Commentary]
  • “Obama issues ‘executive orders by another name'” [USA Today on Presidential “memoranda”; earlier on executive orders]
  • “Legislators Say E-Cigarette Companies Are Bound by an Agreement Reached Before They Existed” [Jacob Sullum]
  • Woman upset at exclusion of service kangaroo but agrees to leave McDonald’s [AP, Wisconsin News, earlier (although local law may vary, federal government these days takes view that aside from qualified dogs and some miniature horses, ADA does not require businesses to accept customers’ service animals)]
  • Join the crowd: “Various plaintiffs v. various defendants,” an actual case caption [Lowering the Bar]
  • “..the very kind of odious racialization of politics that Congress wrote the Voting Rights Act to forbid” [Ilya Shapiro]

Tobacco loot securitization fiasco

Inevitably, Felix Salmon draws different policy conclusions than would I from the story, but this essay explains at length how state governments’ wish to enjoy the extorted legal proceeds of the tobacco settlement up front, rather than stretched out over time as was the original idea, did not work out quite as planned. [Medium]

Product liability roundup

  • “Furniture company founder files federal chair-collapse suit against rival manufacturer” [ABA Journal]
  • Wrangling over Pennsylvania tobacco settlement aftermath “a never-ending buffet for attorneys” [Allentown Morning Call] Florida $27 million smoking award upheld [Daily Business Review]
  • Autonomous cars and tort liability [Kyle Colonna, Case Western RJLTI/SSRN]
  • Asbestos: Death of single fiber theory [Sean Wajert, Pa.] Radiologist Herron says he did nothing wrong [W.V. Record]
    Peculiar tale of Russian asbestos-mining town [Foreign Policy] More: Lester Brickman on smokers’ asbestos cases [Chamber-backed LNL]
  • From the defense side, Beck chooses favorite and least-favorite drug and medical-device decisions of 2013;
  • One can always hope: Will 3-D printing end product liability litigation as we know it? [Nora Freeman Engstrom, SSRN] “Philadelphia Becomes First City To Ban 3D-Printed Gun Manufacturing” [Zenon Evans] Once again on the vacuous but oft-repeated “NRA is a front for gunmakers” line [Tuccille]

The Great Tobacco Robbery, 15 years later

Fifteen years after the $246 billion tobacco settlement, an ingenuous National Public Radio retrospective wonders where all the money went, if not to smoking-reduction programs and Medicaid. Absent from the piece, as indications where some of the money went, are phrases like “lawyers’ pockets” or “political contributions,” or names like “Dickie Scruggs.” Speaking of the latter, the Supreme Court has refused to hear the disbarred Mississippi attorney’s appeal of his corruption conviction. AP, reporting this development, calls Scruggs “the architect of the multibillion dollar tobacco lawsuits of the 1990s.”