It isn’t just happening to trains (see Jun. 29): “For over half a century, kits have been sold that enable military history buffs to assemble scale models of military ships, aircraft and vehicles. But that era is coming to an end, as the manufacturers of the original equipment, especially aircraft, are demanding high royalties (up to $40 per kit) from the kit makers. Since most of these kits sell in small quantities (10-20,000) and are priced at $15-30 (for plastic kits, wooden ones are about twice as much), tacking on the royalty just prices the kit out of the market.” (James Dunnigan, “Lawyers Lay Waste to Military Models Industry”, Strategy Page, Feb. 3)(via Instapundit).
New England sledding
From north of Boston: “The Norman Rockwell image of children sledding in New England snow is being replaced by a snowy hill with a ‘No Trespassing’ sign posted. In many cases, golf courses offer the best sledding in town, but higher insurance rates — and in some cases a refusal to insure — have pushed many golf course managers to ban the traditional winter activity.” (David Rattigan, “This winter, sledders finding it a tough go”, Boston Globe, Jan. 6)(via Common Good Society Watch). For similar reports from New Jersey, see Jan. 28.
Nannyware blocks Overlawyered
About a year ago we printed a reader letter saying that (Symantec) Norton Internet Security was blocking access to our site because, with all our discussion of firearms litigation, we had too much talk about “weapons”. Now Martin Grace is reporting the same problem (Feb. 1).
California court to examine award in biotech case
The California Supreme Court has agreed to review a judgment of $500 million against Genentech, a California biotechnology company. The judgment, which was upheld by an intermediate state appellate court, awards $300 million in compensatory damages and $200 million in punitive damages to the City of Hope, a cancer research center. Genentech and City of Hope collaborated in the 1970s on a methodology for inserting human genes into bacteria and using them to produce medically useful proteins, such as insulin. This development led to the first drugs made by the biotech industry. Genentech held the patents on these technologies and was to pay royalties to City of Hope. City of Hope claims that through fraud and concealment, Genentech cheated the research center out of hundreds of millions of dollars. (Bob Egelko, “State’s highest court steps in Genentech dispute over royalties to be heard by justices,” S.F. Chron, Feb. 3).
Genentech claims that the contract required royalty payments only on patents using DNA synthesized by City of Hope. The appeal does not focus as much on the compensatory damages for breach of contract, but stresses that assessing punitive damages sets a dangerous precedent. Genentech and amici warn that assessing tort liability may stifle innovation by “reduc[ing] investment in research and development for [intellectual property] that is not yet patented — that is, the very newest technologies with the greatest potential social value.” (Mike McKee, “Calif. Justices to Review $500 Million Judgment Against Genentech,” The Recorder, Feb. 3). The knowledge that they could be liable for punitive damages if a mistake is made could prevent a number of biotech companies and research facilities from collaborating with one another, impeding biomedical and scientific development. The ruling also affects any other type of royalty agreement.
Movable Type upgrade
Yesterday we upgraded to the current version of Movable Type from the old version we’d been running. I’ve noticed a few resulting glitches in font display, etc., and will be working to fix those over the next couple of days. Feel free to let me know about any problems you notice on the site that may be related to the switch.
Is $8M enough for being accused of sexual assault?
In December, Kevin Lindsey, a public school teacher and principal for thirty years, was arrested and “charged with two counts of child abuse, two counts of second-degree sex offense and one count of third-degree sex offense.” His name, and the allegations that he had abused two students in the late 1970s, made headlines in his community. Three weeks later, the charges were dropped because of a lack of evidence about the girls’ “recovered memories” and everything went back to normal for Mr. Lindsey. Right?
Not quite. Though he has been reinstated as the principal of his school after briefly being reassigned to the district office, one can only imagine the long-term damage done to his reputation. Now he has filed suit against the women, asking for $8 million for “malicious prosecution, defamation and invasion of privacy.” (Sara Neufeld, “Principal files lawsuit against accusers,” Baltimore Sun, Feb. 2).
A sign of things to come?
In a rare move, an Israeli court has awarded “American”-style punitive damages against defendants in an assault case. In addition to awarding 700,000 shekels (NIS) for direct damages, the court also awarded 300,000 NIS in punitive damages both to teach the criminals a lesson and to deter similar conduct. The Israeli courts have had the authority to issue punitive damages but were waiting for a “suitable” case. The judge said in issuing the ruling: “The awarding of punitive damages is indeed reserved for unusual and extraordinary cases, and I firmly believe that this is an unusual and extraordinary case. It is not every day that two people conspire to grievously harm another, pouncing on him with knives, practically slaughtering him and causing him such extensive wounds.” (Anat Roeh, “Teaching criminals an expensive lesson in the ‘American’ way,” Haaretz Daily, Jan. 31). It will be interesting to see if judges in Israel continue to reserve punitive damages for such extraordinary cases or if this is the beginning of a more “American” system of compensation.
Dillard’s pays $15M to settle escalator suit
Dillard’s has agreed to pay $15 million to the family of a young girl who lost three fingers when they became trapped in an escalator in one of its Florida stores. At the time of the settlement, the jury had already awarded the family $9.4 million in compensatory damages and was about to hear evidence in the punitive damage phase. The department store chain admitted some liability for the accident, because the escalator had a history of catching shoppers’ shoes. (“Dillard’s must pay $9 million to girl maimed by escalator, South Florida Sun Sentinel,” Feb. 1)
The jury, however, assigned only fifteen percent of the blame to the little girl’s mother, who left her five year-old unsupervised in the store. At the time of the incident, the girl was playing on the down escalator, running and jumping up it in the wrong direction. She slipped while doing so and her fingers became trapped. (Jamie Thompson, “Dillard’s blames escalator accident on girl’s misuse,” St. Pete Times, Jan. 28)
Apparently, some members of the jury have not seen the movie Mallrats, which clearly warns of this danger. At least two jurors wanted to give the little girl all $35 million asked by her lawyers. (Jamie Thompson, “Settlement Surprises Jurors,” St. Pete Times, Feb. 2)
A thank you and an introduction
I apologize to all that turned out hoping for a fantastic new guestblogger. Sadly, it is only me – Greg from the Sports Law Blog. Thank you to Walter and Ted for the gracious invitation. This is a topic I am very interested in and I look forward to contributing. Please feel free to email me if you have any comments or suggestions. More posts will follow later today.
More on the $105 million Aramark verdict
We previously reported (Jan. 21) on Daniel Lanzaro’s drunk driving accident litigation; the little girl he paralyzed won a $105 million verdict against Aramark over beer sales at Giants Stadium because Lanzaro did some of his drinking there that day, in part by bribing a beer vendor to ignore Aramark’s two-beer-per-purchase rules. (Before the game, Lanzaro purchased a six-pack of Heineken; he did some drinking at two strip-clubs after the game, as well.) The New Jersey Law Journal has more on the case:
- The NFL defendants settled for $700,000, despite prevailing on a summary judgment motion;
- Judge Richard Donohue excluded evidence that Antonia Verni’s father might have prevented the injuries to his daughter had he put the two-year-old in a car seat rather than an adult seat-belt;
- Verni also sued Toyota; Verni’s Corolla didn’t fare well when Lanzaro’s pickup slammed into it head-on, and Toyota paid $190,000 to get out of the case;
- There’s collateral litigation to be had among plaintiffs’ family members and sets of lawyers over who gets the money. And, of course, there will be an appeal.
As previously reported, the judge also excluded evidence of Lanzaro’s two previous drunk-driving arrests. (Henry Gottlieb, “In Wake of Record $105M Verdict, Fee Fights and Coverage Contests Emerge”, Feb. 2; Wayne Coffey, “Wasted Innocence”, NY Daily News, Jan. 30; Kibret Markos, “Expert backs beer vendor”, The Record, Jan. 12). As famous sportswriter/treacle-author Mitch Albom notes, “Either your stadium goes dry, or people will leave drunk.”
A correction: we previously reported that the entire $135 million verdict was awarded against Aramark; in fact, $30 million of the verdict is damages against the drunk driver, Daniel Lanzaro, who had already settled for the limits of his insurance coverage. Aramark’s share is $30 million compensatory, $75 million punitive, and about $6-7 million in interest, with the interest continuing to accumulate. After he settled with the plaintiffs, Lanzaro changed his story to be more favorable to the Vernis’ case. (Ana M. Alaya, “Lawyer for Giants Stadium beer vendor loses bid for mistrial”, Newark Star-Ledger, Jan. 13).
An additional thought: A big argument for plaintiffs at trial was the claim that Aramark, which serves to the two million or so fans who attend football games at Giants stadium each year, had been averaging about seven complaints a year for selling beer to drunks, but only took disciplinary action a fraction of the time. The press hasn’t covered Aramark’s response to this assertion, but one wonders if fear of employment litigation stayed its hand. Earlier damned-if-you, damned-if-you-don’t files include Aug. 30.
Another point: A reader writes to note that Aramark was probably selling watered-down beer, which would be further evidence that post-game drinking was responsible for Lanzaro’s .266 blood-alcohol level, though, again, it shouldn’t matter: Aramark didn’t make the guy drive drunk.