“Short version of this column: If the Republicans wish to lose their majority, they can expend great amounts of energy to outlaw soft-core skin flicks on cable TV.” (James Lileks, “Don’t These People Have Better Things to Do?”, syndicated/Newhouse, Mar. 9).
Archive for March, 2005
Four law professors
…are out with a new study saying that medical malpractice payouts in Texas didn’t increase sharply between 1990 and 2002, hence no “crisis”, hence no case for damage limitations, etc., etc. (study; Reuters; N.Y.Times op-ed). Ted has some questions for the authors, though, at Point of Law. They seem like pretty good questions, too.
Other medico-legal topics covered recently at our sister website: the federal Health and Human Services department introduces an “early offers” pilot program; nurse-midwives call for reform; more criticism of New York Times coverage; and who gave the 66 cents?
Vietnamese Agent Orange case dismissed
In a 233-page ruling, federal judge Jack Weinstein has dismissed a lawsuit on behalf of Vietnamese plaintiffs demanding compensation over the use of the defoliant Agent Orange during the Vietnam War. (William Glaberson, “Agent Orange Case for Millions of Vietnamese Is Dismissed”, New York Times, Mar. 10). As Julian Ku puts it, “If the plaintiffs can’t convince Judge Weinstein, who can they convince?” The case is separate from one that has been allowed to proceed seeking compensation on behalf of U.S. veterans, despite a settlement brokered and approved by Judge Weinstein years ago which had been widely thought to have resolved that category of claim (see Jul. 4, 2003).
NYC gun-suit law
Lawprofs Anthony Sebok (Brooklyn) and Timothy Lytton (Albany) tend to view firearms liability litigation in a much more favorable light than I do. They agree, however, that New York City’s Gun Industry Responsibility Act, signed into law by Mayor Bloomberg earlier this year (Feb. 6; more), “may do more harm than good” and is likely to assist efforts in Congress to protect the gun industry from being taken to court over criminal misuse of weapons. They also say GIRA raises a second problem, little discussed so far: “whether local municipalities can create their own tort law, independent of their state legislatures or courts”. (“New York City’s Gun Industry Responsibility Act: Why It May Do More Harm than Good”, FindLaw, Mar. 7).
At the accident scene
Let’s be dignified and not actually troll for business at the scene of the crash, OK, guys? That’s the State Bar of California’s view (Nancy McCarthy, “Public protection takes center stage in disaster”, California Bar Journal, Mar.) (via Legal Ethics Forum)(more: Jan. 28, Feb. 1).
Blockbuster late fees
The Washington Monthly’s Amy Sullivan really admires the lawsuit filed against the movie rental chain over its new “no more late fees” pricing structure, but blogger Mad Anthony doesn’t. See Jessica Seid, “Blockbuster sued over late fees”, CNN/Money, Feb. 18. Update Apr. 23: Blockbuster settles with AGs of 47 states.
Florida asks jury to cherry-pick
Alliance Capital Management fund manager Al Harrison was a contrarian. He invested in troubled companies whose stock value is depressed; the companies he picks rebound often enough that he gets a good return. Florida liked this strategy, and gave Harrison $344 million of public pension funds to invest in 1984; by 2001, he had turned it into $3.57 billion, an above-market 15% rate of return, albeit a volatile one that included some huge losses in technology stocks. Alas, this record of high-risk, high-return strategy includes one particular stock, Enron, that did particularly poorly, and there was a $281 million loss on that series of transactions–about a third of a percent of the $100 billion pension fund. (Pension participants aren’t affected by these fluctuations because Florida has a defined-benefit plan; if, however, the fund becomes insolvent, taxpayers would be on the hook to the extent federal law provides pension fund insurance.)
Now, with the benefit of hindsight, Florida is cherry-picking. Florida had access to data about what Harrison was trading throughout the term of Alliance’s contract with the state; Harrison’s trades were consistent with that contract; indeed, Alliance met the contract’s performance goal. But Florida is dissatisfied. Florida complains that Harrison’s portfolio construction wasn’t completely consistent with a description of strategy in an Alliance brochure issued in March 2000. And, with the benefit of hindsight, Florida has decided that it prefers the terms of that particular brochure to the terms of the contract, and is asking a jury to retroactively balance the portfolio and award the state a billion dollars in damages.
Florida also complains that there was an Alliance board member, Frank Savage, who coincidentally served as a board member for Enron. Alliance notes that Savage couldn’t have influenced trading without violating insider trading laws. (And, indeed, a Florida state attorney general investigation turned up nothing nefarious; Alliance had strict rules prohibiting board members from discussing investments in their associated corporations.)
Finally, Florida complans that Harrison overruled one of his analysts, Annie Tsao, who didn’t like Enron stock, without informing the state of Tsao’s opinion. Florida hasn’t indicated, however, that it will give back money for the profitable stock purchases where Harrison disagreed with one of his twenty analysts. (And apparently Tsao’s objective analysis had merely downgraded Enron from a top-rated 1 to a 2 while reaffirming her earnings outlook, though she subjectively expressed skepticism in at least some communications.) The idea that the investor should be notified every time there’s an internal disagreement between the fund manager and an analyst about a potential investment strategy seems questionable at best, but the state is inviting a jury to impose that rule retroactively. (David Royse, “Trial opens in retirement fund Enron loss case”, AP, Mar. 8; Joni James, “Who pays when a money manager makes a bad call?”, St. Petersburg Times, Mar. 6; Harriet Johnson Brackey, “Enron among various targets”, Miami Herald, Mar. 9; David Barboza, “Analyst Dropped Enron, but Her Firm Loaded Up”, NY Times, Oct. 15, 2002; James L. Rosica, “Trial centers on manager”, Tallahassee Democrat, Mar. 9; Joni James and Alfonso Chardy, “State’s losses get scrutiny”, Miami Herald, Feb. 27, 2002).
My firm represents Alliance in other matters. As with all of my posts, I speak for neither my firm nor any of its clients.
Michael O’Keefe, Sr. / ATLA on Med-Mal Reform
Reader Stan Sipple writes me that “a Louisiana attorney several years ago took you up on your proposal that plaintiffs’ attorneys should run insurance companies. Was this what the trial lawyers had in mind?”
Me, I’m sad; it’s been two weeks since I wrote that column. While ATLA issued a press release March 3 claiming and complaining that congressional legislation on caps won’t make medical malpractice insurance cheaper, they’re not taking advantage of my modest proposal how to simultaneously prove their point about tort reform, improve medical care, reduce malpractice insurance rates, and make more money. I can’t imagine why they’re passing up this opportunity if they believe what they say in their press release.
“SEC Chair Scolds Hedge Fund Lawyers”
“‘Think how much anguish we could have avoided if a few more lawyers had pointed out to their hedge fund clients that late trading of mutual fund shares is illegal, as are duplicitous market-timing arrangements,’ [Securities and Exchange Commission chair William] Donaldson told securities lawyers at the Practising Law Institute’s annual SEC Speaks conference.” (Ron Orol and Donna Block, The Deal, Mar. 8).
Update: Mohr v. DaimlerChrysler $53 million verdict
DaimlerChrysler statement on the suit after the jump; it’s almost scandalous what the press accounts (Feb. 26)left out, but not as scandalous as the verdict. The unbelted Vickie Mohr was killed from blunt force trauma to the back of the head–caused when she was hit by the 245-pound unbelted passenger in the backseat. (The jury found that passenger, Carolyn Jones, responsible for only a small percentage.) Brett McAfee, the 17-year-old driver who killed the two plaintiffs when he fell asleep at the wheel going 45 mph, but was found slightly less than half-responsible by the civil jury, pleaded no contest to vehicular homicide criminal charges. (via Dodgeforum, which has an impressive array of photos of the totalled Durango Caravan).