A jury found that a plaintiff was not damaged by false promises a former Texaco salesman made (against corporate policy) in selling franchises, but decided that the fact of the promise entitled the plaintiff to $33.8 million in punitive damages. (Why $33.8 million? Because it was a percentage of the size of the defendant’s net value. Strikes me as a punishment for being a successful business, rather than for wrongdoing. If Texaco had taken half of its net value and invested it in a failed fiber optics business, should punitive damages be half as much?) The coverage doesn’t indicate if the promise was written or part of an oral sales pitch, but it does note that the plaintiff did not sue the salesman, who was fired after it was discovered he made such promises. (Matthew Haggman, “ChevronTexaco Subsidiary Hit With $33.8M Punitive Damages Verdict,” Miami Daily Business Review, July 3). Update Dec. 2: award thrown out.
Today’s fast food update
“I think food is the tobacco of the 21st century” says an aspiring plaintiffs’ lawyer attending a secret strategy conference at Northeastern University. (Karen Robinson-Jacobs, “Lawyers Put Their Weight Behind Obesity Cases,” LA Times, July 2 (via Appellateblog)). Other papers have reported on the conference (Marguerite Higgins, “Fast food next on the menu for lawyers,” Washington Times, June 23; Jay Fitzgerald, “Lawyers in fat city,” Boston Herald, June 21; Duane Freese, “Nutrition Irrelevant?”, TechCentralStation, June 24).
The U.S. Chamber of Commerce released a study yesterday arguing that fast food is not the culprit for the nation’s obesity (also via Bashman). News coverage on the study: Fox News; CNBC.
Daubert
It’s the tenth anniversary (plus four days) of the Daubert v. Merrill Dow Pharmaceuticals opinion that limited in federal trials the use of expert testimony that is not scientifically reliable. Peter Nordberg’s Daubert on the Web is one of the more comprehensive sites on the web on any subject; he has started a blog that promises to be fascinating.
Along with recent Supreme Court jurisprudence on punitive damages in cases such as BMW v. Gore and the expansion of interlocutory review of class action certification, Daubert has been one of the few brakes on the expansion of tort liability in the last ten years. As my former Brandeis colleague and GMU Law professor David Bernstein points out, however, Daubert did not stop the use of junk science to extract billions from breast implant manufacturers, and now some of that money is being used to fund efforts to weaken Daubert.
In honor of Canada Day
The Loewen Group is a Canadian funeral home company that was the victim of a runaway Mississippi jury that held it liable for $500 million in damages in 1995 for ostensible antitrust damage to a local funeral home company worth less than $10 million. The company could not post the $625 million bond that was a prerequisite for appeal, and was forced to settle for $175 million. Loewen sued the US under NAFTA provisions prohibiting discrimination against foreign investors. The tribunal called the verdict a “disgrace,” but held that it was not a violation of NAFTA.
Nike v. Kasky
Professor Volokh, of the Volokh Conspiracy, on the Nike v. Kasky case. Under a 4-3 California Supreme Court decision, Nike is potentially liable to any California citizen if its response to political speech criticizing Nike is deemed “misleading.”
(Full disclosure: Walter Dellinger of my law firm filed a U.S. Supreme Court brief on behalf of Nike.)
Gun store suit
DC sniper Lee Malvo shoplifted the rifle he used from a Tacoma store, which is now subject to a lawsuit, as is Bushmaster Firearms, the gun manufacturer that sold the rifle to the store. (And why not the coal miners that supplied the steel manufacturers that supplied Bushmaster Firearms?). Update Sept. 25, 2004: case settles.
Big Food Next?
The first lawsuits against fatty-food sellers were justifiably the subject of parody, but a few months later, without plaintiffs having won a single case, a USA Today front-page article treats the idea of big damages awards as a near-inevitable outcome, quoting two plaintiffs’ lawyers, and without a single quote from anyone suggesting that such lawsuits may not be good public policy. Such coverage has a tendency, of course, to be a self-fulfilling prophecy.
Milberg Weiss Update
Famed plaintiffs’ firm Milberg Weiss, rather than risk a motion for sanctions, settled a case and agreed never to sue Titan International again. The firm, the subject of a fawning New Yorker article a few months back, recently announced that it would split. Federal authorities in Los Angeles are investigating whether the firm paid shareholders to participate in lawsuits.
Ted Frank, guest blogger
Greetings. My name is Ted Frank, and I’m honored to be your guest blogger for the week. I’m a former clerk for Judge Easterbrook and am currently practicing law as counsel in a Washington, D.C., firm, often on behalf of clients who are dealing with the types of lawsuits that Walter Olson has catalogued here for years.
Speaking of Judge Easterbrook, here is his opinion in McMahon v. Bunn-O-Matic, a classic variant of the plaintiff-who-spills-hot-coffee case.
Guest blogger through July 8
I’ll be on vacation for the next week. If all goes as planned, a guest blogger should be stepping in momentarily to fill the gap. An outstanding group of volunteers offered their services, and you should be seeing some of their names as guest bloggers over the coming months. See you next Wednesday.