Overlawyered: Chronicling The High Cost Of Our Legal System

Archive for October, 2003

Update: Oxycontin suits

As we reported Oct. 19, Rush Limbaugh’s recent entry into drug rehabilitation has resulted in publicity over the litigation troubles involving the manufacturer of Oxycontin, Purdue Pharma L.P., which has been sued in 285 lawsuits over the drug alleging that the drug is dangerously addictive. Purdue litigates all of them, and so far plaintiffs have a record of 0-for-50.

Says Purdue’s [in-house counsel Tim] Bannon, “We see three types of plaintiffs. One is the substance abuser. The next are those who get the drug appropriately from their doctor, perhaps innocently, but then begin taking too much of it and not following the instructions. The third are those who have a pain problem, are taking OxyContin and are not addicted, but then stop abruptly, sometimes because of the plaintiff ads seeking clients, and they experience withdrawal problems.”

Bannon says the defense has yet to encounter a plaintiff who is injured from addiction who followed the instructions and did not abuse the drug.

The company cites a U.S. Chamber of Commerce study that alleges that suits over prescriptions are interfering with the way doctors practice medicine. (Tim O’Brien, “Suits Abound by Users Claiming Addiction to Painkiller OxyContin”, N.J. Law Journal, Oct. 21; Tanya Albert, “OxyContin suit can proceed as class action”, American Medical News, Aug. 4; Jul. 3 Chamber of Commerce press release).

Calif.: here comes labor-law bounty hunting

Outgoing Calif. Gov. Gray Davis has quietly signed S. 796, a first-of-its-kind bill that authorizes lawyers to file private damage suits over labor code violations. Business leaders “argue it could have far-reaching financial consequences to employers across the state and be more costly than the landmark employee health bill, SB 2, signed by the governor earlier this month. … The legislation would allow a worker to sue on behalf of other employees for wage and labor code violations. Moreover, it permits a judge to force employers to pay attorney’s fees and penalties.” (Gilbert Chan, “Sue-your-boss bill becomes law”, Sacramento Bee, Oct. 20). “This is probably the worst bill I’ve seen in my three years in the State Legislature. Senate Bill 796 is the ‘Son of 17200’ ? California?s much-maligned and highly abused Unfair Competition Law,” said Assemblymember Tom Harman, R-Huntington Beach. “Large employers in California will now be a cash cow for trial lawyers thanks to SB 796,” said Harman. “A minor one-year Labor Code violation at the business employing 3,000 workers will generate civil penalties totaling more than $31 million”. (California Assembly Republicans press release, Sept. 11) (& welcome Employer’s Lawyer readers)

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Law.com: “The Future of Litigation”

American Lawyer/Corporate Counsel runs a multi-article feature on “The Future of Litigation (contents) with articles on asbestos, the Class Action Fairness Act, and other topics, some of them more to our taste than others. We shouldn’t omit mention of Alison Frankel’s overview piece (“Where We Are”, Law.com, Oct. 8) since it quotes a certain “litigation pundit who slays lawyer-excesses on his ‘Overlawyered’ Web site”.

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Albany Law School event tomorrow

For fans of this site within driving distance of Albany, N.Y., I’ll be appearing tomorrow (Tues.) at the 2003 Public Forum at Albany Law School entitled, “Does America Need Tort Reform?” The host will be Prof. Timothy Lytton. I will be debating Prof. Carl Bogus of Roger Williams Law School, who is the author of “Why Lawsuits Are Good for America” as well as a considerable body of work supportive of regulation and lawsuits aimed at firearms makers. It’s free and open to the public, and includes a moderated discussion.

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Oxycontin: a Rush for clients

A law firm in notorious Madison County, Ill. (more) may succeed in capitalizing on the publicity accorded to news of talk show host Rush Limbaugh’s prescription pill addiction. The Simmons Law Firm of East Alton “is waging a national media campaign in search of potential plaintiffs who allegedly have become addicted to the painkiller, OxyContin, the same drug [Limbaugh] is accused of obtaining illegally.” (Sanford Schmidt, “Law firm seeks users of OxyContin”, Alton (Ill.) Telegraph, Oct. 13). For our coverage of trial lawyers’ campaign against drugmaker Purdue Pharma, see Apr. 10, 2002 and links from there. On the Limbaugh affair’s implications for federal narcotics policy, see Robyn Blumner, “Limbaugh scandal puts Oxycontin on trial”, St. Petersburg Times, Oct. 19 (formatting problems); Jacob Sullum, “Drug rush”, Reason, Oct. 17.

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Ferry-fear funding foreseen

New York City taxpayers are probably going to be liable not only for the physical injuries inflicted in Wednesday’s Staten Island Ferry crash — which include ten deaths and about 60 injuries resulting in hospitalization, some of them horrific — but also for damages potentially payable to all of the unhurt passengers, widely estimated to number 1,500. A “federal maritime doctrine allows all those who were in the face of danger and who suffered emotional distress to file for compensation, even if they were not physically injured”. Among likely claims, according to Columbia law dean David Leebron, are those from “passengers who claim to now have a fear of ferries that affects their ability to commute and earn a living”. (“City Could Face a Deluge of Suits Over Ferry Crash”, New York Times, Oct. 18; “Staten Island ferry pilot to be investigated”, AP/Globe and Mail, Oct. 16). For awards of $300,000-$6.5 million in the related area of suits by air-crash survivors with minor or no injuries, see Oct. 8, 1999, Oct. 19, 2000, and Aug. 24-26, 2001. (& welcome Samizdata.net readers)

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$1.3 billion oyster damage

A Louisiana state appellate court, by a 3-2 vote, has upheld an award of $1.3 billion–more than $21 thousand an acre–to 130 oyster farmers who leased land from the state. The award, supposed damages for a state environmental project meant to save Louisiana’s disappearing coast, is worth more than the entire haul of oysters from Louisiana over the last century and is twice the cost of the Caernarvon Freshwater Diversion Project in question. As if to demonstrate that this case is nothing more than a wealth transfer to enrich lawyers over taxpayers, one of the plaintiffs did not purchase his lease until the day the lawsuit was filed, and thus could not possibly have suffered damages, since nobody made him purchase the lease. The appeals court actually increased his award.

The state plans to take further appeals; the Secretary of the state Department of Natural Resources says the ruling left him “shocked.” “‘There’s no way in the world that any one acre of oysters can be worth $21,000,’ Jack Caldwell said. ‘Particularly when there’s no evidence that these leases had any oysters on them or even any oyster reefs.'” Oyster leases in Louisiana typically go for about $200/acre; the leases from the state are for $2/acre/year. Moreover, many of the leases in question had a clause indemnifying the state that the trial and appeals courts refused to rule upon. And in a final irony, when the project was first proposed in the 1980s, oyster farmers supported it as a means of restoring changing salinity levels that were destroying the industry. The state passed a constitutional amendment to limit the awards, but the constitutionality of its retroactivity provisions is obviously questionable. (Jeffrey Meitrodt, “Oyster Damages Upheld”, New Orleans Times-Picayune, Oct. 16; AP, “Appeals court: $1.3 billion is reasonable claim for oyster farmers”, Oct. 16; Jeffrey Meitrodt, “Election didn’t put to rest all coastal liability”, New Orleans Times-Picayune, Oct. 13; “Oystermen offer suit settlement”, AP, Aug. 10; Jeffrey Meitrodt, “Oyster farmers originally backed project”, New Orleans Times-Picayune, May 4; “The Avenal Lawsuits”, Louisiana Coastal Law, Oct. 2000 at pp. 4-5; “Naked Ownership” blog entry with many other links, May 4; related story on this site, Mar. 25-26, 2002). A lawsuit against the United States on identical grounds was thrown out of federal courts in 1995 and upheld on appeal in Avenal v. United States, 100 F.3d 933 (Fed. Cir. 1996). Update Oct. 24, 2004: La. Supreme Court throws out cases.

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Racketeering suit names nearly 70 Miami lawyers

“Three years after more than 60 lawyers, county employees and medical professionals were arrested on charges of bilking Florida’s Miami-Dade County out of millions of dollars through fraudulent personal injury claims, the county has filed a civil racketeering lawsuit against the accused perpetrators and others.” In the 715-page complaint, Miami-Dade County charges that 85 defendants, including nearly 70 South Florida lawyers, were implicated in schemes in which “attorneys who filed personal injury lawsuits against the county paid kickbacks to county risk management employees in return for expedited and inflated settlements. Miami-Dade Police Director Carlos Alvarez has said that county claims adjusters typically received 10 percent of the settlements. The claims against the county generally involve slip and fall accidents on county property, injuries on county buses, accidents with county cars and false arrests.” Defendants dispute some of the indictments as vague and untimely and point out that not all those sued had faced criminal charges earlier. (Matthew Haggman, “Miami-Dade Files Massive RICO Civil Suit”, Miami Daily Business Review, Oct. 8).

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First-rate bilge on secondhand smoke

Jacob Sullum eviscerates an embarrassingly bad op-ed that the New York Times chose to run yesterday (Rosemary Ellis, “The Secondhand Smoking Gun”, Oct. 15) on the issue of smoking in public places, based on the supposed “Helena miracle” — heart attacks in the Montana capital (population 26,000) are said to have dropped suddenly by 58 percent when smoking in public buildings was banned. The claim, he says, is based on a single unpublished study “involving tiny, highly volatile numbers”. Had the Times been interested in whether the asserted result would hold up as a matter of epidemiology, it could easily have checked out the experience of other jurisdictions which could offer much, much larger sample sizes than wee Helena: “why have we not heard about a dramatic drop in heart attacks [in New York City itself] since the city’s smoking ban took effect in April”? A few phone calls to Columbia-Presbyterian, St. Lukes-Roosevelt and the city’s other big hospitals should suffice to establish whether there had been any massive effect of this sort on New Yorkers’ proneness to cardiac arrest. (Reason Hit & Run, Oct. 16; Jacob Sullum, “Heartstopping Discovery”, Reason, Apr. 4). More: Cato’s Steven Milloy weighs in (“Secondhand smoke scam”, FoxNews.com, Oct. 17).

Read On…

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