The Chamber of Commerce is calling attention to its ten favorites for the year [via Bainbridge, list can be found there]. Eight of the ten may ring a bell with those who have followed our coverage (goblin-toppler, helmet toss, undecillion dollars, man saved from drowning sues rescuers, California ADA serial filer, falls after seeing “Dexter” ad on subway, caught sleeping on camera at Yankees game, claims “Frozen” based on own life story), while two are new to us:
Six months ago the Delaware Supreme Court upheld the right of an enterprise to include a loser-pays provision in its bylaws, specifying that losing shareholder-litigants would have to contribute reasonable legal fees to compensate what would otherwise be loss to other owners. Since then there’s been a concerted campaign to overturn the ruling, either in the Delaware legislature or if necessary elsewhere. But as I argue in a new Cato post, allowing scope for freedom of contract of this sort is one of the best and most promising ways to avert an ever-rising toll of litigation. Contractually specified alternatives to courtroom wrangling have played a vital role, and are under attack for that very reason, in curbing litigation areas like workplace and consumer arbitration, shrinkwrap and click-through disclaimers of liability, and risk disclaimers at ballparks and elsewhere. (& Stephen Bainbridge).
To the extent America has made progress in recent years in rolling back the extreme litigiousness of earlier years, one main reason has been the courts’ increased willingness to respect the libertarian and classical liberal principle of freedom of contract. Most legal disputes arise between parties with prior dealings, and if they have been left free in those dealings to specify who bears the risks when things go wrong, the result will often be to cut off the need for expensive and open-ended litigation afterward.
More on the Delaware bylaw controversy: D & O Diary (scroll), Andrew Trask on state of the merger class action, WSJ Law Blog first and second, Daniel Fisher, and ABA Journal in June, Alison Frankel/Reuters (forum selection bylaws).
Organized trial lawyers usually don’t make minimum wage increases a top priority, but they may do so in order to deprive incoming GOP Gov. Bruce Rauner of leverage he might use to extract liability reform. [Rich Miller, Crain’s Chicago Business]
- “Sign Installer Cited for Violating Rule on the Sign He Was Installing” [Lowering the Bar, Santa Barbara]
- YouTube yanks exhibit from public court case as terms-of-service violation. How’d that happen? [Scott Greenfield on controversy arising from doctor’s lawsuit against legal blogger Eric Turkewitz]
- Philadelphia narcotics police scandal (earlier) has an alleged-sex-grab angle; also, given the presence of compelling video clips, shouldn’t the story be breaking out to national cable news by now? [Will Bunch, Philadelphia Daily News; Barbara Laker and Wendy Ruderman, PDN 2009 Pulitzer series, on Dagma Rodriguez, Lady Gonzalez and “Naomi” cases]
- The most dynamic part of the economy? Its endangered “permissionless” sector [Cochrane] Call it subregulatory guidance, or call it sneaky regulation by agencies, but either way it can evade White House regulatory review, notice and comment, etc. [Wayne Crews, CEI “Open Market”]
- What’s Chinese for “Kafkaesque”? Dispute resolution in Sino-American contracts [Dan Harris, Above the Law]
- In another win for Ted Frank’s Center for Class Action Fairness, Ninth Circuit reverses trial court approval of Apple MagSafe settlement [CCAF]
- Mississippi’s major tort reform, viewed in retrospect after ten years [Geoff Pender, Jackson Clarion Ledger]
- By convention the business/defense side isn’t fond of jury trial while plaintiff’s side sings its praises, but Louisiana fight might turn that image on its head [Hayride, sequel at TortsProf (measure fails)]
- Generous tort law, modern industrial economy, doing away with principle of limited liability: pick (at most) two of three [Megan McArdle]
- Fallacies about Stella Liebeck McDonald’s hot coffee case go on and on, which means correctives need to keep coming too [Jim Dedman, DRI]
- Interaction of products liability with workplace injury often provides multiple bites at compensation apple, overdue for reform [Michael Krauss]
- Ford Motor is among most recent seeking to pull back the curtain on asbestos bankruptcy shenanigans [Daniel Fisher; related, Washington Examiner] “Page after page he sits on the straw man’s chest, punching him in the face” [David Oliver on expert affidavit in asbestos case]
- Kansas moves to raise med-mal caps as directed by state supreme court, rebuffs business requests for collateral source rule reform [Kansas Medical Society]
- Let’s hope so: “More stringent pleading for class actions?” [Matthew J.B. Lawrence via Andrew Trask, Class Strategist]
…circa 1897,” in Chicago. It is well recognized that a legal culture of entrepreneurial claims-making and suit-filing, especially as regards road and transport mishaps, had emerged in some large American cities by the early Twentieth Century. But its development in all likelihood can be traced to even earlier points than that, perhaps stimulated in part by the widespread electrification of urban streetcar lines (previously animal-drawn) in the early 1890s. [Kyle Graham]
…the U.S. Supreme Court heard argument in what was to become one of its most celebrated tort reform decisions. A profitable national manufacturer had been sued in a distant rural state in which it was decidedly unpopular, resulting in a runaway jury verdict which it sought to challenge on appeal. Pointing out the disadvantages of unpredictable and locally variable tort standards, the corporation’s lawyers pushed for a more uniform and modern standard of liability suited to a nationwide market, which the high court agreed unanimously to develop for the occasion and impose on state courts. And ever since 1964, the winning party in the case — that is to say, the New York Times Company — has taken a sympathetic editorial interest in the plight of other national businesses subjected to runaway verdicts in local courts.
Well, OK, maybe not that last sentence. But the rest of it did happen, in the celebrated case of New York Times v. Sullivan.
Per Eugene Volokh‘s new article, a wide range of actors from landlords to employers to colleges to product manufacturers correctly see themselves as being at legal risk if they don’t surveill, probe, and share information about those they deal with:
Gathering or disclosing information about people’s backgrounds, tendencies, and actions is increasingly inexpensive, and increasingly effective at helping avoid, interrupt, or deter harm. …Failure to take those precautions thus becomes negligent. … Failure to provide camera surveillance is now a common claim in negligence cases.
An especially fertile source of such incentives is the duty (much expanded by modern developments in liability law) to take reasonable precautions against criminal acts by others. It will soon be feasible at low cost, if it is not already, for automakers to install electronic components in new cars that send a warning communication — to police monitors, for example — when a motorist tries to drive at very high speed. What will happen after automakers begin to be sued after accidents for not installing such components?