There’s a fascinating and detailed piece in the Wall Street Journal about the Baycol mass tort litigation, with a plaintiffs’ lawyer seemingly out of a John Grisham novel, complete with personal airstrip. (Monica Langley, May 3).
Archive for May, 2004
“String Of Fast-Food Suits Expected By End Of Year”
The plaintiffs’ bar regularly pooh-poohs efforts at legal reform (Mar. 11, Mar. 13) to prevent a shakedown blaming the food industry for obesity by noting that no anti-obesity lawsuit has succeeded yet. (For example, blogger-lawyer Evan Schaeffer claims that the publicity of obesity litigation is really a conspiracy of the defense bar to generate fees.) A Lawyers Weekly USA puts the lie to this by talking to the plaintiffs’ bar; Trial Lawyers Inc. clearly thinks that obesity lawsuits are a profitable new business opportunity. (Elaine McArdle, “String Of Fast-Food Suits Expected By End Of Year”, Lawyers Weekly USA, May 10 (and can temporarily be found here); Laura Parker, “Legal experts predict new rounds in food fight”, USA Today, May 6; Alex Beam, “A super-size portion of half truths”, Boston Globe, May 11). As with the tobacco lawsuits, the strategy is to keep filing frivolous lawsuits until random chance assigns a sympathetic judge who writes an opinion that creates a precedent that opens the doors for future lawsuits–and John Banzhaf and other plaintiffs’ lawyers claim that has already happened.
Update: “Court tosses $48.5M Propulsid award”
“The Mississippi Supreme Court on Thursday threw out a $48.5 million damage award imposed on the makers of the heartburn drug Propulsid and ordered that separate trials be held for each of the 10 plaintiffs.” The jury in the case had originally rendered a verdict of $100 million parceled equally among the ten complainants; the defendants, Johnson & Johnson, denied that the drug was responsible for any of the complainants’ health problems (see “Robbery on Highway 61”, Oct. 1-2, 2001). With the acquiescence of the plaintiffs, Judge Lamar Pickard later cut the award by a bit more than half before its appeal. (Jackson Clarion-Ledger, May 14).
Fla. Supreme Court to review Engle
The “Florida Supreme Court has agreed to review last year’s Miami appellate court decision that vacated a record-setting $145 billion punitive damage verdict against the nation’s largest cigarette companies.” We’ve had a lot to say over the years about the travesty that is the Engle case: see Jul. 12, 1999; Jul. 18, 2000; Mar. 23, Jun. 24 and Aug. 3, 2003; other posts on this site. (Laurie Cunningham, “Fla. High Court to Review $145 Billion Tobacco Case”, Miami Daily Business Review, May 13).
Automakers now in asbestos gunsights
Lawsuits have been filed for years blaming automakers for exposure to asbestos found in brake pads and other auto parts, but the volume of such litigation appears to be sharply increasing. Between February 2002 and February 2003 the number of cases filed against Ford nearly doubled, from 25,000 to 41,500. “In a filing with the SEC, Ford said that it is facing a rise in lawsuits as the original manufacturers of the components have gone bankrupt over the past several years. Ford’s report said, ‘In most asbestos litigation, we are not the sole defendant. We believe we are being more aggressively targeted in asbestos suits because many previously targeted companies have filed for bankruptcy.'” (Robert Lane, “Asbestos Suits Costing Ford As Others Go Broke”, Blue Oval News, Apr. 14; Ed Garsten, “Automakers see asbestos lawsuits rise”, Detroit News, Mar. 21).
Shareholder lawyers in Hevesi heaven
Citigroup announced the other day that it was paying an unexpectedly munificent $2.65 billion to settle lawsuits filed on behalf of investors in WorldCom, the telecom stock which collapsed after being hyped by Citigroup analyst Jack Grubman. (Mark Hamblett, “Citigroup Settles WorldCom Litigation”, New York Law Journal, May 11). According to a New York Sun editorial, two law firms noted for their work in shareholder class actions — Barrack, Rodos & Bacine and Bernstein Litowitz Berger & Grossman LLP — “stand to share a legal fee of up to $144.5 million for representing the lead plaintiff, the New York State comptroller, Alan Hevesi, in the case against Citigroup.” As it happens, both law firms donated generously to the political campaigns of Hevesi and his predecessor, Carl McCall. And while a chunk of the settlement will indeed flow into the coffers of New York state and city pension funds to compensate them for their losses in WorldCom stock — holdings worth around $306 million at their peak — it turns out that the same public entities own $1.6 billion in stock in Citigroup itself, which was hurt by the litigation (and which of course is also a major New York employer). In fact, the Sun notes in its detailed analysis of the affair, that “stock is worth about $45 million less now than it was before Mr. Hevesi’s heroics,” a sum that may or may not exceed what the city and state wind up gaining by recouping some of their WorldCom losses. (“Citigroup wake-up call” (editorial), New York Sun, May 11).
Judge flays bias suit’s “legal extortion”
U.S. District Judge Samuel Kent, famed for the tongue-lashings he’s dealt out to lawyers in the past, “has fined attorney Anthony Griffin nearly $18,000 for filing a lawsuit the judge termed an attempt to ‘legally extort money’ from the Galveston Independent School District.” Judge Kent “said Griffin, a nationally known black civil rights lawyer, conducted ‘virtually no meaningful investigation’ before filing a suit in which a fired administrator maintained the district paid her less than others because she is black. … ‘Even a minimal investigation into the facts and the law of this case would have revealed the abject frivolity of all of [plaintiff Sonia Boone’s] claims,’ Kent said. ‘Filing it shows either an ignorance of the law or an utter disregard for it, both of which are inexcusable.'” (Kevin Moran, “Attorney rebuked and fined”, Houston Chronicle, May 10). Unsurprisingly, attorney Griffin says he plans to appeal (“Attorney will appeal fines set by judge”, Galveston Daily News, May 12). For more on Judge Kent, see Sept. 6, 2001 and links from there.
Occasions of authorial pride
The new softcover edition of The Rule of Lawyers, promoted in this space only a few days ago, arrived this afternoon from the printers. Yes, it looks nice. The front inside pages reprint eight excerpts from favorable reviews the book received last year in its hardcover edition, including the following from Gene Epstein at Barron’s: “With a marvelous combination of irony, insight, and outrage, Olson covers the whole range of opportunistic litigation over tobacco, asbestos, breast-implants, autos, and guns. And yes, he knows that tobacco and asbestos can kill people, and that corporations aren’t angels. Olson even proposes sensible ways of reforming the jury system that might actually make a difference.” The hardcover edition continues to be available here.
Prisoner abuse
Not just in faraway places: Rodney Hulin case (Texas 1996, from Human Rights Watch 2001 report) (via Right Side of the Rainbow) (more from Curmudgeonly Clerk).
Damage caps for me, but not for thee
Most of organized lawyerdom, as we know, strongly opposes any notion of capping damages recoverable by victims, even as applied to “non-economic” damages claimed for intangible harms such as pain and suffering or emotional distress. It turns out, however, that the bar enthusiastically supports the capping in nearly every state of one particular form of compensation, namely, the compensation of clients who are embezzled from or otherwise defrauded by their lawyers. In Pennsylvania, for example, the official Pennsylvania Lawyer Fund for Client Security (more) caps damages payable to defrauded clients at $75,000, although the loss actually sustained by the victimized client often runs far higher than that. Columnist Don Spatz of the Reading, Pa. Eagle notices the irony: “Even if you can prove your lawyer stole $200,000 from you, you’re out of luck. There’s a cap. … I haven’t heard lawyers worry about caps taking away those victims’ rights.” (“First, lawyer, heal thyself”, Reading Eagle, Mar. 24, at HALT site).
It should be noted that the damages clients attempt to recover after being defrauded by their lawyers are typically direct out-of-pocket economic losses, as opposed to money for humiliation, psychic distress and the like. Yet lawyers in most states have secured payout caps even lower than Pennsylvania’s $75,000, often much lower: Illinois lawyers cap their collective responsibility at a paltry $10,000 per case, for example, and Nevada’s at $15,000. (2002 ABA Center for Professional Responsibility survey of state plans, reprinted at Michigan Bar Association site, PDF, scroll to Chart II, part 2). Perhaps these lawyers are worried that setting caps at a more generous level (or, heaven forfend, removing them entirely) would increase the premiums currently assessed against them to cover the risk pools. In Pennsylvania, according to columnist Spatz, these premiums were recently running at the very extravagant level of $45 per lawyer per year.
In a number of states, it should be noted, lawyers impose an effective cap of zero on this particular kind of claim, by the simple method of not having established any collective client protection scheme at all. And there is a certain very plausible logic to that position: why after all should rank and file attorneys be asked to clean up the messes left by their errant brethren? Is a lawyer his brother’s keeper? It’s just that this argument would sit better were the leaders of the bar not constantly denouncing the medical profession for its alleged failure to police itself.