My sincerest thanks to all three of the guestbloggers who (along with Ted) have kept things lively over the past two weeks: George M. Wallace, whose work you can follow at Declarations and Exclusions and A Fool in the Forest; Kevin Underhill of Lowering the Bar; and Skip Oliva of the Voluntary Trade Blog. Well done! I also notice that the comments section has been humming along busily. I should go away more often.
Five more for the road
I’d like to thank Walter and Ted for letting my play in their sandbox this past week. Before I go, I’d like to highlight a few more antitrust cases and stories to watch in 2007:
Rambus, Antitrust & the Common Law
In the next few weeks, the FTC is expected to issue a final order in its five-year case against Rambus Inc., a California-based developer of memory technology. Rambus has proven to be the longest and possibly costliest litigation in FTC history. The FTC’s trial costs alone approached $3 million, with over $1 million going to “expert” witnesses and consultants.
The Rambus case started as a patent infringement dispute between the company and several memory manufacturers. Rambus doesn’t produce any memory itself; it develops and patents technologies and licenses them to manufacturers. During the mid-1990s, Rambus participated in a memory standard-setting group, JEDEC, and this is where the trouble began. The manufacturers claim Rambus misled JEDEC into incorporating Rambus patents into certain memory standards. Rambus said it was denied permission to present its technologies for standardization and that JEDEC members simply infringed Rambus’s patents.
FTC snares doctors in price fixing trap
The Federal Trade Commission ended its year by prosecuting a 1,900-member physician group in Chicago for price-fixing. Since 2001, the FTC and DOJ have coerced 29 physician groups—some with as few as six members—into signing consent orders that restrict the right of doctors to negotiate contracts.
The FTC and DOJ apply a double standard to doctors and third-party payers. Payers may represent thousands of individual consumers and present doctors with a “take it or leave it” contract offer. But if even a handful of doctors get together to present a counter-offer, it’s a “per se” antitrust violation.
Update: Fountain Diet Coke class action
We mentioned the lawsuit over the absence of Nutrasweet in fountain versions of Diet Coke in 2004. In a typical “harm-less” class action, plaintiff Carol Oshana did not see any advertising for Nutrasweet in Diet Coke, knew that fountain Diet Coke tasted different than bottled Diet Coke, and continued to buy fountain Diet Coke after she learned it had saccharin, but demanded to be the representative of a class of all Diet Coke purchasers in Illinois on a “consumer fraud” claim. Via Howard Bashman, the Seventh Circuit affirmed federal jurisdiction and the district court’s refusal to certify a class. Oshana did get a $650 nuisance settlement, which would buy 1000 liters of Diet Coke at my local grocer.
Best of 2006: October
- Safety vs. “discrimination”:9th Circuit: UPS must hire deaf drivers; EEOC challenges Exxon’s pilot age limit; “To avoid charges of ‘racism,’ we disciplined black and white students differently.”
- Jackpot justice: $217M for misdiagnosed stroke in Florida (and followup)
- Trespass atop rail car, win $24 million
- Jackpot justice: $20M for $25,000 insurance claim
- Judicial elections and the New York Times
- On picking a jury
- Public Citizen and DMI caught using misleading statistics
- Encore on the falling-out-of-a-loft-bed case
- Why there aren’t DVDs of some of your favorite old TV series
- Tag banned because of liability fears
- Punitive damages and the Supreme Court
- Two more hot-coffee-lawsuit datapoints. It might be easier to list the chains that haven’t been sued for serving coffee.
Best of 2006: September
- Calif. AG sues automakers for global warming
- Plaintiff: McDonald’s should’ve warned me and my boss not to be gullible. Incidentally, the circumstantial criminal case against the guy behind the insidious phone calls fell apart because his defense attorney was able to impeach the victims (in a different Louisville case) by accusing them of trying to shake down McDonald’s for hundreds of millions. So he’s still on the street. Thanks, plaintiffs’ bar!
- The burglar and the skylight: another debunking that isn’t
- First rumblings of NYC trans fat ban gets Wally TV coverage.
- Suit: plaintiff was too stupid to be admitted into law school
- Neglect your kid now, sue for $5 M later
- Lonelygirl 15 creator defends Grand Theft Auto against meritless lawsuit
- NAACP suit: unlawful for clinic to close on Jewish Sabbath
- Can we blame lawyers for pro se claims?
- New Bizarro-Overlawyered blog writers don’t realize they’re arguing for reform, or providing excellent examples of how lawyers hurt medical consumers. See also the relationship between efficiency and safety; Milberg Weiss Fellow Cyrus Dugger visits the comments in an unrelated post to make an unfounded accusation that he refuses to back up.
- Pelman allowed to sue McDonald’s over getting fat.
Gross v. Industrial Commission of Ohio
Jonathan Adler beat me to talking about this Ohio Supreme Court case, but I think it presents an interesting example of “hard facts make bad law”—and, in this case, the plaintiff, an especially undeserving fellow, should have won, but didn’t.
David Gross, a teenager, was a callow sort who worked for the local KFC. Among his duties was cleaning out the pressure cooker, but Gross repeatedly ignored explicit instructions not to use water in cleaning it. This was no arbitrary command, for in November 2003, Gross did just that, and the cooker exploded, burning Gross and two co-workers. The franchise investigated and fired Gross in February 2004 for the safety violation, and sought to end their workers’ comp payments to Gross. Their theory: the egregious safety violation was a voluntary abandonment of employment. The administrative agency agreed, the court of appeals reversed, and the Ohio Supreme Court restored the original decision that the franchise didn’t have to pay workers’ comp after it fired Gross.
A Volokh commenter suggests that the fact that the franchise waited to fire Gross means that they’re on the hook. That seems like the wrong rule: it would punish the franchise for taking additional steps to ensure that it was acting fairly to its employees by investigating the incident before firing someone.
That said, it’s wrong to treat the firing, even the for-cause firing, as a “voluntary abandonment.” Workers’ comp is a no-fault regime. Raising the question of fault, even when the fault is as egregious as Gross’s here, inserts a complicating factor into the system. There’s a certain unfairness to assessing liability against the franchise: they told Gross not to do something dangerous on multiple occasions, he did it anyway, and Gross gets to recover. But the alternative is to create an ambiguous rule that gives other employers the incentive to turn workers’ comp hearings into a question of whether a worker’s negligence was really recklessness or intentional disregard for safety rules. One reduces Type I errors, while increasing Type II errors, and substantially decreasing administrative efficiency: straightforward proceedings now have uncertainty, raising expenses for everyone. Perhaps Gross should be criminally prosecuted for reckless endangerment; perhaps a penalty of a criminal conviction should include restitution to the employer. But in the civil proceeding, the legislature made a conscious decision of the tradeoffs here, and it’s not for the courts to decide that those tradeoffs should be recalibrated in individual cases.
Note that valuing efficiency here favors plaintiffs, rather than defendants, putting the lie to the argument of anti-reformers that reformers hide behind efficiency to mask a pro-defendant bias. This reformer favors efficiency because it makes all of us better off in the long run. Efficiency isn’t the only value—a society can rationally choose inefficient procedures because it believes the protected values are worth the additional cost—but the public policy debate shouldn’t ignore the questions of costs and benefits and act as if results can be achieved for free.
Best of 2006: August
- Wal-Mart lawn mower suit: newspaper reporter parrots plaintiff’s attorney’s implausible tale without fact-checking
- The Kessler RICO ruling on tobacco
- NJ court: no warning that one might fall out of loft bed required
- $18 million “sudden acceleration” verdict in South Carolina
- Another way lawyers hurt safety
- ADA frequent filer forgets who he’s suing
- Lawyers fake evidence in $2B suit, still practice today
- The return of the spilled-coffee tort—or is it?
- Trial lawyer wikiality
Best of 2006: July
- Junk faxers get a bigger bounty than Osama bin Laden (and here)
- Wore boxer shorts to game, sues over yearbook photo
- Mistaken for Michael Jordan, so he sues
- Revealed preference for trans fats
- 151-proof rum is flammable, who knew?
- Plaintiff sues Con Ed because Dr. Bartha blew himself up with gas
- Red Buttons, comedian, litigant
- “Sued for expressing “glee” over lawyer’s indictment”
- Town seeks to hold parents liable for kids’ drinking in homes