Some states have changed laws to cap noneconomic damages–and, in some cases, limit the use of inspection records as evidence–in lawsuits against nursing homes. (Cherie Song, “States Move to Curb Nursing Home Suits,” National Law Journal, July 8).
Archive for 2003
Class action firm subject to judgment
A federal jury in Chicago awarded $36 million ($8.3 million compensatory, the rest punitive) to the former client of class action plaintiffs’ firm Ness, Motley for breach of contract and fiduciary duty. The law firm negotiated a settlement (over the objection of its clients, which it fired at the behest of the defendant) with a convicted felon with tens of millions in frozen assets that gave the firm $2 million in fees, but “next to no compensation” for the ostensible injured parties. (Ness, Motley has since broken up.) (Adam Liptak, “Big Litigation Firm Found to Have Acted Unethically,” NY Times, July 4). The Manhattan Institute issued a press release and a study of the case last August.
Zyprexa
Michael Fumento laments that a single study is being misconstrued to justify perverse lawsuits over anti-psychotic medication Zyprexa. (Michael Fumento, “Lawyers Exploiting the Mentally Ill,” Scripps-Howard News Service, June 26).
Daubert debate
Peter Nordberg and David Bernstein debate the study on Daubert discussed in this post. If I can take up Mr. Nordberg’s challenge to identify problems with the SKAPP report, I’ll just identify a handful that immediately came to mind as I read it. (This is long, so I’ve moved it off the main page. Click the link below.)
New York gun suits
As earlier discussed by Walter, a Manhattan appellate court has affirmed the dismissal of Attorney General Eliot Spitzer’s state lawsuit against gun manufacturers. Spitzer had sued under a theory of “public nuisance.” The opinion is now on-line and the court’s language is interesting:
[P]laintiff would have us summarily ignore: […]
2) the importance and fairness of considering such concepts as remoteness, duty, proximate cause and the significance of the indisputable intervention of unlawful and frequently violent acts of criminals — over whom defendants have absolutely no control — who actually, directly, and most often intentionally, cause the cited harm;
3) the significance and unfairness of holding defendants accountable even though their commercial activity is wholly lawful and currently heavily regulated, and that their products are non-defective; and
4) the plain fact that courts are the least suited, least equipped, and thus the least appropriate branch of government to regulate and micro-manage the manufacturing, marketing, distribution and sale of handguns.
An identical federal suit filed by the NAACP is pending before Judge Jack Weinstein in Brooklyn. (Samuel Maull, “Appeals court affirms dismissal of state’s lawsuit against gun makers,” AP, June 24).
Weinstein is perhaps best known for his work on the Agent Orange class action settlement, which the U.S. Supreme Court recently allowed to be reopened when it split 4-4 in its review of a Second Circuit opinion holding that the settlement did not preclude veterans from seeking additional damages. There are obvious implications, since now class action defendants risk losing the benefits of finality in the Second Circuit. (Tony Mauro, “Vets Win Chance At Agent Orange Damages,” Legal Times, June 10).
(Full disclosure: My firm filed an amicus brief on behalf of the Product Liability Advisory Council in Dow Chemical v. Stephenson.)
Fast food second update
You can never have too much information about fast food lawsuits department: The Center for Consumer Freedom is running humorous ads on news channels showing a lawyer cross-examining a Girl Scout for selling Girl Scout cookies. (Marguerite Higgins, “Food companies use humor as defense in ads,” Washington Times, June 26). Thing is, plaintiffs’ lawyers are immune to parody: John Banzhaf threatens to sue the Seattle school district if it agrees to renew a $400,000 contract with Coca-Cola for vending machines. (Deborah Bach, Seattle Post-Intelligencer, July 2).
Infinite punitive damages ratio
A jury found that a plaintiff was not damaged by false promises a former Texaco salesman made (against corporate policy) in selling franchises, but decided that the fact of the promise entitled the plaintiff to $33.8 million in punitive damages. (Why $33.8 million? Because it was a percentage of the size of the defendant’s net value. Strikes me as a punishment for being a successful business, rather than for wrongdoing. If Texaco had taken half of its net value and invested it in a failed fiber optics business, should punitive damages be half as much?) The coverage doesn’t indicate if the promise was written or part of an oral sales pitch, but it does note that the plaintiff did not sue the salesman, who was fired after it was discovered he made such promises. (Matthew Haggman, “ChevronTexaco Subsidiary Hit With $33.8M Punitive Damages Verdict,” Miami Daily Business Review, July 3). Update Dec. 2: award thrown out.
Today’s fast food update
“I think food is the tobacco of the 21st century” says an aspiring plaintiffs’ lawyer attending a secret strategy conference at Northeastern University. (Karen Robinson-Jacobs, “Lawyers Put Their Weight Behind Obesity Cases,” LA Times, July 2 (via Appellateblog)). Other papers have reported on the conference (Marguerite Higgins, “Fast food next on the menu for lawyers,” Washington Times, June 23; Jay Fitzgerald, “Lawyers in fat city,” Boston Herald, June 21; Duane Freese, “Nutrition Irrelevant?”, TechCentralStation, June 24).
The U.S. Chamber of Commerce released a study yesterday arguing that fast food is not the culprit for the nation’s obesity (also via Bashman). News coverage on the study: Fox News; CNBC.
Daubert
It’s the tenth anniversary (plus four days) of the Daubert v. Merrill Dow Pharmaceuticals opinion that limited in federal trials the use of expert testimony that is not scientifically reliable. Peter Nordberg’s Daubert on the Web is one of the more comprehensive sites on the web on any subject; he has started a blog that promises to be fascinating.
Along with recent Supreme Court jurisprudence on punitive damages in cases such as BMW v. Gore and the expansion of interlocutory review of class action certification, Daubert has been one of the few brakes on the expansion of tort liability in the last ten years. As my former Brandeis colleague and GMU Law professor David Bernstein points out, however, Daubert did not stop the use of junk science to extract billions from breast implant manufacturers, and now some of that money is being used to fund efforts to weaken Daubert.
In honor of Canada Day
The Loewen Group is a Canadian funeral home company that was the victim of a runaway Mississippi jury that held it liable for $500 million in damages in 1995 for ostensible antitrust damage to a local funeral home company worth less than $10 million. The company could not post the $625 million bond that was a prerequisite for appeal, and was forced to settle for $175 million. Loewen sued the US under NAFTA provisions prohibiting discrimination against foreign investors. The tribunal called the verdict a “disgrace,” but held that it was not a violation of NAFTA.