Update: Texaco $33.8 M punitive damages award tossed

A jury had found that the plaintiffs had not suffered compensable damages, but went ahead and awarded $33.8 million in punitives against ChevronTexaco for the actions of a fired salesperson (Jul. 3). The Miami trial judge threw out the award November 12. (Laurie Cunningham, “$33.8M Jury Verdict Against ChevronTexaco Thrown Out”, Miami Daily Business Review, Dec. 1).

Canada: What it takes to get fired from a public service job

New Brunswick, Canada: “The City of Moncton thinks that showing up drunk at work toting a loaded, sawed-off shotgun in search of the boss is a firing offence. The city’s union disagrees. Seven days after George Pavlovsky was fired from his job as a senior tree cutter with the City of Moncton, the Canadian Union of Public Employees Local 51 filed a grievance to his employer challenging the dismissal.” Mr. Pavlovsky is unavailable for immediate service since he is currently serving a two-year prison term over the incident, but he “is hoping to get his job back when he is released.” (Shawna Richer, “Gun-toting, drunk Moncton employee grieves firing”, The Globe and Mail, Nov. 28)

Alabama jury to Exxon Mobil: pay the state $11.9 billion

In a retrial of a case which earlier led to an exorbitant punitive damages award, an Alabama jury two weeks ago ordered ExxonMobil to pay $63.6 million in compensatory damages and $11.8 billion in punitive damages to the cash-strapped state government in a dispute over natural gas royalties (“Alabama jury orders Exxon Mobil to pay $11.9 billion in dispute over natural gas royalties”, AP/San Francisco Chronicle, Nov. 14; Phillip Rawls, AP/Miami Herald, Nov. 13). A former state administration had hired two of the state’s most successful private trial lawyers, Jere Beasley and Robert Cunningham, to take the case on a 14 percent contingency, which in this case would amount to $1.6 billion in fees; the two lawyers are also important campaign contributors. Earlier verdict: Dec. 20, 2000. Editorial reactions: “The truly ridiculous”, Huntsville Times, Nov. 17; “Exxessive verdict”, Birmingham News, Nov. 19; “Don’t over-celebrate ExxonMobil verdict”, Mobile Register, Nov. 17. Update Apr. 18: judge cuts verdict to $3.6 billion. Further update Nov. 8, 2007: Alabama Supreme Court throws out punitives.

“Lawsuit alleges alcohol marketed to teens”

The lawsuit, which seeks class-action status, was filed by the Armonk, N.Y. firm of Boies Schiller & Flexner LLP and by “David Boies III, of the Fairfax, Va., law firm Straus & Boies,” who is the son of Boies Schiller’s David Boies (Nov. 6, earlier cites). Although it claims not to be (yet) a broad-scale assault on the liquor industry a la tobacco, the suit seeks to recover “unlawful profits” made by Coors, Heineken, Brown-Forman, Diageo, and others for such supposed atrocities as employing the Captain Morgan character to sell rum and advertising in rock music magazines. Also being sued is the trade association The Beer Institute. (AP/Salon, Nov. 26). As we noted in July, liquor companies “have been curiously absent from the list of targets of mass litigation campaigns in the U.S.A. in recent years; but see Mar. 22, 2000.”

Juan Non-Volokh notes (Nov. 28) that Miller Brewing Co., which has been a client of Boies, Schiller & Flexner in the past, “is not among the named defendants in the suit. … Boies claims this is because Miller is not one of the ‘more egregious’ actors in the industry”. Julian Sanchez (Reason “Hit and Run”, Nov. 28) discerns the ripple effects of anti-alcohol agitation by the Robert Wood Johnson Foundation and other Safety Dry forces. Jim Leitzel (Nov. 19) takes note of a study suggesting that alcohol advertising probably does raise the rate of underage drinking. Professor Bainbridge (Nov. 28) has some thoughts on the regulation-through-litigation angle. Further: for more on the Neo-Drys, see Radley Balko, “Back Door To Prohibition”, Cato Policy Analysis #501, Dec. 5. (Update Feb. 16: second suit targets brewers).

“Lawsuits battering local governments”

Arizona: “Taxpayers have shelled out more than $140 million since 1998 to cover the cost of claims against Valley and state governments, and experts expect the losses to mount as the public sector’s deep pockets become an ever more attractive target.” Arizona Republic does a heavily reported feature on the state of public liability in the surprisingly litigious Phoenix area, including the case of the Scottsdale parkgoer who got $10,000 for being attacked by a goose. A bunch of sidebar stories too, and more is promised on Wednesday (Pat Flannery, Arizona Republic, Nov. 30)

Update: ABA Journal settles “fixer” libel case

The American Bar Association Journal will publish a half-page apology, as well as pay an undisclosed sum, to settle attorney Richard A. Sprague’s claim that he was defamed when the magazine described him as “perhaps the most powerful lawyer-cum-fixer” in the state of Pennsylvania. (Dec. 5-6, 2001) Although the word “fixer” is widely employed to describe political wheeler-dealing of a lawful sort, a judge had ruled that it might also convey the impression that Sprague improperly “fixed” court cases. “In its answer to the suit, the ABA attached a list of more than 100 examples of prominent lawyers described as ‘fixers’ in such publications as The New York Times and the Washington Post.” (Shannon P. Duffy, “ABA, Sprague Agree to Settlement”, The Legal Intelligencer, Nov. 21).

Update: second cardiologist sued over alleged fen-phen fraud

“A second doctor was accused of fraud [earlier this month] in a federal lawsuit filed by the AHP Settlement Trust, the entity created to process claims related to the $3.75 billion fen-phen settlement.” (see Sept. 21, Sept. 25). The new suit alleges that a New York City cardiologist conspired with an unnamed law firm to submit medically unreasonable claims of heart valve injury, resulting in the payment of millions of dollars in claims. “Compensation was a motivating factor in the fraud, the suit alleges, noting that for each VHD [valvular heart disease] certification, Mueller allegedly received an immediate payment of $500 over and above the $900 he received for interpreting the echocardiogram. The suit alleges that Mueller received another payment of $1,500 following compensation to the claimant, earning more than $1 million.” Contingency fees for expert witnesses are not necessarily prohibited as such in American courtrooms, though they have been widely viewed with distaste by ethics authorities. (Shannon P. Duffy, “Fen-Phen Settlement Trust Sues Second Doctor for Fraud”, Legal Intelligencer, Nov. 17).

Update: Library Hotel settles Dewey suit

To settle a lawsuit by the Ohio-based library cooperative that owns the copyright to the Dewey Decimal System, the Library Hotel in New York City has agreed to make an unspecified payment to a nonprofit organization that promotes children’s reading and specify in its advertising that the copyright belongs to the nonprofit group. (“N.Y. Hotel Settle Dewey Decimal Case”, AP/Akron Beacon Journal, Nov. 25)(see Sept. 25).

Romo roundup

The LA Times article on the California court of appeals decision in Romo v. Ford Motor Co. (see Nov. 26 and links therein) shows how far the media has tilted in coverage of tort reform: there are lots of unchallenged complaints from the plaintiffs’ attorneys and their interest groups that a $29 million total award won’t be enough to deter wrongful behavior and will allow companies “to avoid liability and responsibility.” This is mathematically nonsensical: if 1 in 10,000 Ford Broncos were subject to such an award over the course of their lifetime, it would wipe out Ford’s profits and then some. And if fewer autos than that cause damage, then perhaps Ford’s behavior isn’t so “reprehensible”, notwithstanding the characterization of the appeals court? (Indeed, three of the twelve jurors refused to join the Romo verdict.) No one is quoted questioning whether $29 million is too much to award against an auto company for a 1978 Ford Bronco that had 200,000 miles on it at the time of the accident and which exceeded federal safety standards put in place years after the 1993 accident. (Lisa Girion and Myron Levin, “Appellate Court Cuts Huge Crash Case Award”, LA Times, Nov. 26). The good news is that the California Court of Appeal recognized that the size of the corporation is not grounds on which to award punitive damages: though the court does not say so, to base punitive damages on such a metric effectively punishes corporations for being big than for a particular course of conduct. (Washington Legal Foundation amicus brief before U.S. Supreme Court).

Relatively uncommented on: the same day the same California Court of Appeal reversed a $10 million punitive damages award against Ford in Johnson v. Ford, where a couple bought a used car and had to replace the transmission twice. The couple will still walk away with over $170,000 from Ford and the dealer for their trouble. Anyone think that a $170,000 hit on the sale of a used Taurus isn’t enough to deter selling used cars with problems? Update Feb. 15: case settles.

Disclosure: I represent Ford Motor Co. in other litigation.