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A novel means of processing asbestos claims was initiated in 1988, when the Johns-Manville corporation emerged from bankruptcy and established the Manville Personal Injury Settlement Trust, the first "bankruptcy trust" set up to pay out money to asbestos claimants. Unfortunately, plaintiffs' attorneys controlled the trust's claimants committee and set up procedures for the trust that were advantageous to themselves, rather than potential claimants. The trust rules minimized requirements of proof of actual injury or causation (exposure to Johns-Manville products). The trust thus paid out a lot of money quickly to the attorneys, all the while exhausting its funds for potential future claimants.

In just its first nine months of operation, the trust paid out some $500 million to 12,600 claimants -- and by the end of 1989, 89,000 more claimants were outstanding. Eventually, the trust had to sharply curtail payments to claimants -- to 10 percent in 1995, and 5 percent in 2001. Injured claimants were literally getting a nickel on the dollar. "As of June 30, 2006, the trust had received more than 773,000 claims and paid out about $3.4 billion--just $4,400 per claimant."

Asbestos litigation has been around a long time. Early on, nothing like modern product liability law existed (see Richard Epstein's discussion here); lawsuits resided in workplace injury law when filed in the 1920s and 30s, and were soon subsumed in workers compensation reforms.

Modern asbestos litigation began after the Selikoff study was published in 1964. In December 1965, Texas attorney Ward Stephenson filed a case on behalf of Claude Tomplait, who had worked as an asbestos insulator. Four years later, Stephenson extracted a settlement for $75,000 from seven defendants.

Notwithstanding this meager beginning, Stephenson persisted in asbestos litigation and won a major victory in Borel v. Fibreboard Paper Products Corp., 493 F.2d 1076 (1973), in which the Fifth Circuit Court of Appeals found asbestos manufacturers strictly liable for their workers' injuries. The Borel court rejected statute of limitations, contributory negligence, and assumption of risk defenses; and modern asbestos product liability litigation was born.

The litigation got another shot in the arm when New Jersey attorney Karl Asch uncovered the "Sumner-Simpson papers," which "described in great detail the efforts of Raybestos, Johns-Manville, and other manufacturers to find out about the hazards of asbestos, develop strategies to deal with them, and--most important--to keep that knowledge from the public and workers." These documents were put to great effect by South Carolina lawyer Ron Motley, who actually used the papers to convince a South Carolina circuit judge to grant a new trial after a jury had ruled in favor of asbestos defendants. Motley of course went on to become an asbestos super-lawyer and an architect of the multibillion-dollar multistate tobacco settlement; his antics are well-known to long-time readers of this site.

Two more foundational cases are worthy of mention. In 1981, the D.C. Circuit ruled that insurers who had written asbestos policies were liable for the maximum insured between exposure and diagnosis, rather than only in the year of diagnosis. See Keene Corp. v Insurance Co. of North America, 667 F.2d 1034 (D.C. Cir. 1981). Given the long latency between asbestos exposure and ultimate illness, the level of insurance exposure was suddenly massive. Circuit Judge Patricia Wald warned that the court's decision "requires a leap of logic from existing precedent, for it concerns diseases about which there is no medical certainty as to precisely how or when they occur."

In 1982, the New Jersey Supreme Court threw out the "state of the art" defense for asbestos manufacturers, in essence holding that it mattered not whether business practice was the best available to the industry at the time the injury occurred. See Beshada v. Johns-Manville Products Corp., 442 A.2d 539 (N.J. 1982). The court opined, "The burden of illness from dangerous products such as asbestos should be placed upon those who profit from its production and, more generally, upon society at large which reaps the benefits of the various products our economy manufactures. "

Thus, in less than a decade, the law was radically shifted, and asbestos litigation was born: "The decade after Borel saw 25,000 asbestos cases filed. By 1981, more than 200 companies and insurers had been sued; by 1982, defendants' costs had topped $1 billion." But these early years were just the beginning...

Yesterday, I had the privilege to do a brief interview with Lester Brickman, a professor of law at Cardozo School of Law in New York. Professor Brickman is one of the nation's leading legal ethicists and the national adacemic expert on asbestos litigation. The discussion is available as a podcast, downloadable here.

I'm happy to see that my initial post -- which doesn't really include any details of yet -- has already begun to spark debate in the comments. I have thoughts on the views expressed, but I'll begin with some background. This information might be old hat to those familiar with the asbestos mess, but it's essential for those with little knowledge. This summary largely follows the account from the introduction to our Trial Lawyers, Inc.: Asbestos report.

Asbestos manufacturing in the United States was ubiquitous. At one point, asbestos-related industries employed as many as 2.5 million Americans. Asbestos commercial mining began in the U.S. in 1874, and after the Johns-Manville corporation was founded in 1890 with a patent for a process that blended short asbestos fibers with magnesia, asbestos manufacturing exploded: "asbestos consumption went from only 956 metric tons in 1890 to a peak of 803,000 tons in 1973."

While asbestos ultimately proved deadly, it was originally thought to be a "magic mineral," as it was dubbed at the 1939 World's Fair. The word asbestos itself is derived from the Greek for "indestructible," and the product is an incomparable flame retardant: it insulated generations of schoolchildren from fire and indeed fireproofed our World War II Pacific fleet.

But asbestos has also long been known to be dangerous when inhaled--as far back, perhaps, as the days of Pliny the Elder. In the early 20th century, asbestos was deemed as dangerous as lead and mercury (two products that have themselves spawned much litigation). In 1918, the U.S. Department of Labor declared that there was an "urgent need for more qualified extensive investigation" into the harms of asbestos, and in 1938, the U.S. Public Health Service issued a "good-practice" guideline for Threshold Limit Values of asbestos exposure.

Thus, asbestos was known publicly to be dangerous when virtually everyone suffering from asbestos-related illness was exposed. The extent of the danger, however, was not known definitively until 1964, when a seminal study by Mount Sinai Hospital's Irving Selikoff established a definitive link between asbestos exposure and lung cancers and asbestosis.

Subsequently, evidence indicated that asbestos manufacturing companies knew more about asbestos' dangers than they originally let on, and indeed in some cases hid that information from the public. Still, as my colleague Peter Huber pointed out in his review of Paul Brodeur's Outrageous Misconduct, a much-cited book that harshly criticizes the asbestos industry, the asbestos companies' early knowledge about asbestosis--asbestos-related lung injury that is rarely fatal, and was generally known--should not be confused with knowledge of the deadly lung cancer mesothelioma, which was exposed by the Selikoff study: "In his account of who knew what when--the core of his cover-up theory--Brodeur systematically obscures the difference between asbestos-related cancer and asbestosis, usually a much less serious disease, and understood and discussed in the Manville boardrooms much earlier."

In any event, the original asbestos manufacturers like Johns-Manville have long been bankrupt due to litigation exposure. (Johns-Manville, ranked 181 on the Fortune 500 with over $2.2 billion in sales, declared bankrupcty in 1982 due to its looming caseload of 16,500 cases, and projections of up to 200,000 in the future.) The story of how that litigation evolved will be the subject of my next post.

I can't say how excited I am to be here as a guest at overlawyered -- the first legal blog still in existence! I'll never be the indefatigable blogger that is my colleague Walter, or my friend and fellow legal reformer Ted, but I jumped at the opportunity to come over here to Mr. Olson's "other" blog (he and Ted are also the mainstays of the Manhattan Institute's PointofLaw.com, to which I occasionally contribute).

Overlawyered's long-time readers have doubtless read a lot about asbestos. And we've covered asbestos litigation very extensively over at Point of Law. But there's a lot of new material in the Manhattan Institute's just-released Trial Lawyers, Inc.: Asbestos, as well as a lot of background for those new to the subject. Over the next week, I'll be going through both.

I'd urge anyone interested to read the entire report, available here. Those who want a quicker review of some of the newer material should read my column in the Washington Examiner, which ran yesterday. And there's a good overview of my thoughts in an on-line interview available here.

I'll be back shortly to begin my walk-through of the report, looking at the underpinnings of the trial lawyers' big asbestos machine.

Yesterday the Manhattan Institute released a new report by my colleague Jim Copland, "Trial Lawyers Inc. -- Asbestos". As I note at Point of Law, even as a longtime observer of asbestos litigation I found it quite an eye-opener. I'm happy to announce that Jim Copland will be joining us tomorrow for a guestblogging stint to explain some of his findings.

Philadelphia federal district court judge Harvey Bartle III has awarded $567.67 million in fees to plaintiff's lawyers in the gigantic fen-phen litigation, which has lasted nine years. Judge Bartel accepted 70 firms' claim to have spent 578,048 hours on the suit (Alison Frankel, American Lawyer, Apr. 10). Ted, at Point of Law, notes that the sum does not include large contingent fees obtained on behalf of claimants who opted out of the group settlement.

The Republican candidate sticks his foot in it in a major way on a topic extensively covered here over the years (as well as at my other site). Writes Mark Kleiman: "the thimerosal-autism theory is as dead as phlogiston in respectable company. I'm not surprised that 'respectable company' excludes a few ambulance-chasing lawyers looking for deep pockets and a some emotionally devastated parents looking for someone to blame. But it's distressing — to use no stronger term — that the presumptive Republican nominee for President, rather than looking at the evidence, has chosen to side with the panic-spreaders and pander to the emotions of the panic victims." More: Orac.

One of the justifications for FDA preemption is the fear of overwarning; warning overload can be counterproductive, causing people to ignore important warnings. Thus, failure-to-warn litigation impedes safety. See "Requirements on Content and Format of Labeling for Human Prescription Drug and Biological Products," 71 Fed. Reg. 3922 (Jan. 24, 2006); Larkin v. Pfizer, Inc., 153 S.W.3d 758, 764 (Ky. 2004).

Further evidence comes from a CNNMoney.com report (Aaron Smith, "Consumers tune out FDA warnings", Feb. 25) suggesting that the FDA's post-Vioxx caution has already caused the agency to be at the point of diminishing returns, as it is averaging 50% more safety alerts a year for 2005-2007 than it did in 2004, the year Vioxx was withdrawn from the market.

I discussed overwarning in other contexts on Overlawyered in Sep. 2006.

Ted Frank and Michael Krauss are covering the new Supreme Court decision in Riegel v. Medtronic -- one of the biggest wins for the product liability defense side in memory. We've also got plenty of coverage of the mortgage/foreclosure situation: Providence's dumb idea for a punitive tax on vacant properties, the role of the Comptroller's office, bond insurers' woes, and some bad ideas from Hillarymandias. Plus off-label prescribing, suicidality, and Ted on Trasylol; and Obama comedown syndrome.

ACSH's Jeff Stier in today's New York Post:

CONGRESS is poised to pass a massive giveaway to the ambulance-chasing trial attorneys - under the guise of protecting consumers.

The proposed law [the CPSC Reform Act] would give the 50 state attorneys general new powers to sue the makers of allegedly unsafe products - and even to demand help in their suits from the federal Consumer Product Safety Commission.

Headline-hungry AGs will even be able to sue over products the CPSC has already found to be safe. In other words, national standards will effectively go out the window, as politically ambitious AGs compete to bash business so as to win popularity for future elections.

The legislation - which the House has already passed and the Senate's likely to pass - would hamper CPSC's mission by creating multiple unscientific "safety" standards. Each AG's vision of what the latest scientific studies imply about purported dangers would prevail in a given state, rather than the CPSC's own (far more expert) findings.

All this would mean a bonanza to trial lawyers - who'd stand to make hundreds of millions from relentless lawsuits within just a few years, since each state would become a new roulette-wheel of potential jury verdicts against manufacturers. ...

Further encouraging bogus complaints, the bill would grant unprecedented "whistle-blower" protection to any employee who alleges a fear of product danger - an easy way to secure your job until your case is adjudicated.

(Updating and bumping Feb. 4 post about to roll off bottom of page because of new comment activity)

• Judge Fallon denied the motion of Florida plaintiffs to expedite a hearing on their inclusion into a settlement when they did not even bring suit (Jan. 30). Merck and the PSC are required to respond Feb. 15, and the hearing will be Feb. 21, where one can expect the motion to be denied.
• At Point of Law, I comment on the recent grand jury investigation into Merck marketing of Vioxx.
Update, Feb. 8: separately, Merck yesterday settles for $650 million different Medicaid fraud allegations over the marketing of Vioxx and other drugs. The qui tam relator will get a jackpot award of $68 million. [WaPo; DOJ; Merck] The pricing theories at the center of these lawsuits—which hold Merck liable for purportedly charging too little—definitely deserve longer discussion another time.

The Simplicity Manufacturing riding mower, manufactured in 1994, includes the following warning, almost so obvious and over-the-top as to be wacky:

(I) DO NOT MOW WHEN CHILDREN OR OTHERS ARE AROUND; (ii) NEVER CARRY CHILDREN; (iii) LOOK DOWN AND BEHIND BEFORE AND WHILE BACKING.

Moreover, the manual includes the following warnings:

(I) Tragic accidents can occur if the operator is not alert to the presence of children. Children are often attracted to the unit and the mowing activity. Never assume that children will remain where you last saw them.
(ii) Keep children out of the mowing area and under the watchful care of another responsible adult.
(iii) Be alert and turn unit off if children enter the area.
(iv) Before and when backing, look behind and down for small children.

Nevertheless, on May 7, 2003, in Honeybrook, Pennsylvania, Melvin Shoff backed up his riding mower and managed to run over the foot of four-year-old Ashley Berrier, resulting in its amputation. This is, Ashley's parents complain in a lawsuit, the fault of Simplicity Manufacturing for not doing more to idiot-proof the mower. The federal district court threw out the suit based on a 2003 Pennsylvania Supreme Court precedent (involving a two-year-old and a lighter), but the Third Circuit, twelve months after the case was argued, has certified the question to the Supreme Court whether they've changed their mind in the last five years. The Court appears to have been swayed by the American Law Institute's "Restatement" proposal to expand product-liability law in this area. (Berrier v. Simplicity Manufacturing (3d Cir. Jan. 17, 2008) via Steenson; Legal Intelligencer).

Great moments in $800-an-hour-or-thereabouts lawyering: "As it turns out, a lawyer at Pepper Hamilton, one of two high-priced law firms negotiating the deal [for drugmaker Eli Lilly] with the government [over allegedly improper marketing of Zyprexa], mistakenly sent an e-mail containing a comprehensive and confidential document to a reporter at The New York Times. How could that have happened? The reporter, Alex Berenson, has the same last name as another lawyer who was supposed to have received the e-mail, Bradford Berenson, who works at Sidley Austin." (Pharmalot, Feb. 5). Ted also has a (more serious) take at Point of Law on the problems with federal criminal enforcement of drug marketing laws.

But note correction Thurs. 12:30 EST: in updates, Beck/Herrmann and Pharmalot say that Portfolio mag, which originally reported this story, got aspects of it wrong: the email was a short one, not a comprehensive document, and reporter Berenson had other sources of information. Pepper Hamilton has been flogged up one side of the legal blogosphere and down the other for the slip, but Beck/Herrmann says that isn't fair: the misdirected email doesn't appear to have made much difference. Yet more: Ambrogi, Feb. 11 (initial report maybe not so wrong after all).

The New York Times arts page (Edward Wyatt, "ABC Drama Takes on Science and Parents", Jan. 23) gives the producers of the forthcoming ABC television series "Eli Stone" a surprisingly sound thwacking for lending credibility to theories that seek to blame autism on the vaccine preservative thimerosal. The script of the show, notes the Times, "takes several liberties that could leave viewers believing that the debate over thimerosal — which in the program's script is given the fictional name mercuritol — is far from scientifically settled." But, the review notes, "reams of scientific studies by the leading American health authorities have failed to establish a causal link between the preservative and autism. Since the preservative was largely removed from childhood vaccines in 2001, autism rates have not declined."

Greg Berlanti, a creator of the series, tells the Times that the show presents both sides. If so, there is little doubt which side is presented as the "right" one. The title character of the TV show is supposed to have been a "bad" lawyer (he represented big businesses, you see) who after being struck by a spiritual crisis crossed over to redeem himself by representing the "little guy" in lawsuits. (Per the Times, "In each episode Eli Stone takes on a different cause; in other episodes sent to television reviewers for preview, he wages court battles against a pesticide maker and a priest.") The ABC preview site, and trailer running in theaters, end with a logo in which the "o" in the character's surname is presented as a halo. Nothing heavy-handed about that!

Maybe next season Stone can sue on behalf of a client claiming that overhead power line emissions triggered recovered memories of autoimmune damage from her breast implants.

P.S. Orac at Respectful Insolence, no surprise, is on the warpath: "It's times like these that I wish the Hollywood writers' strike had really and truly shut down production of new dramas completely." Other reactions: Autism Vox, Richard's Asperger's Blog, and various others rounded up by Liz Ditz.

(Re-posted from Point of Law.)

Yesterday's guilty plea by Booneville, Miss. attorney Joseph ("Joey") Langston in the attempted improper influencing of a Mississippi state judge would be major news even if it had nothing to do with the state's most famous attorney, Richard ("Dickie") Scruggs. That's because Langston and his Langston Law Firm have themselves for years been important players on the national mass tort scene. The firm's own website, along with search engines, can furnish some details:

• Per the firm's website, it has represented thousands of persons claiming injury from pharmaceuticals, including fen-phen (Pondimin/Redux), Baycol, Rezulin, Lotronex, Propulsid and Vioxx. It was heavily involved in the actions against Bausch & Lomb over ReNu contact lens solution (and its former #2 Timothy Balducci, the first to plead in the widening round of corruption scandals, won appointment to the steering committee of that litigation.)
• The Langston firm has represented thousands of asbestos claimants and says it has "significant" experience in the emerging field of manganese welding-rod litigation, also a specialty of the Scruggs law firm. The website AsbestosCrisis.com includes the Langston law firm in its listing of about thirty law firms deemed notable players on the plaintiff's side of asbestos litigation ("Tiny firm founded by Joe Ray Langston powerhouse in Mississippi with 50-year roots in state political circles.")
• Langston appeared to play a sensitive insider role for Scruggs in the largest and most lucrative legal settlement in history, the tobacco-Medicaid deal between state attorneys general and cigarette companies, the ethical squalor of which was a central topic of my 2003 book The Rule of Lawyers; as mentioned previously, when Dickie Scruggs routed mysterious and extremely large tobacco payments to P.L. Blake, he used attorney Langston as intermediary.
• Langston has repeatedly taken a high profile in the same fields of litigation as has Scruggs, including not only suits over asbestos, tobacco and welding rods but also two of Scruggs's "signature" campaigns, those against HMOs/managed care companies and not-for-profit hospitals.
• Though the firm is better known for its plaintiff's-side work, the Langston firm's "national practice" page asserts: "The Langston Law Firm virtually defined the role of 'Resolution Counsel' in the modern era of jurisprudence. Prominent domestic and foreign companies facing massive litigation have turned to The Langston Law Firm to create winning strategies to save their companies."

Many commenters (as at David Rossmiller's) have noted that Langston appears to have drawn an unusually favorable plea deal from federal investigators, who are granting him remarkably broad impunity as to uncharged offenses, and not even stipulating that he give up all ill-gotten funds. Presumably this signals that they expect Langston's cooperation to be unusually extensive and valuable. One hopes that this cooperation will include the full and frank disclosure of any earlier corruption and misconduct there may have been in all the past litigation in which Langston has been involved. In particular, tobacco, asbestos, and pharmaceutical litigation have all raised suspicions in the past because of instances in which forum-shopping lawyers took lawsuits of national significance to relatively obscure local courts -- quite often in Mississippi -- and proceeded to get unusually favorable results which paved the way for the changing hands of very large sums in settlement nationally. Were all these results achieved honestly?

Incidentally, and because it may confuse those researching the matter on the web, it should be noted that there is a second prominent Mississippi plaintiff's lawyer who bears the same surname but has not been involved in the recent Scruggs scandals, that being Joey's brother Shane Langston, formerly of Jackson-based Langston, Sweet & Freese. Shane Langston, whose name turned up often in connection with the "hot spots" of pharmaceutical litigation of Southwest Mississippi, has more recently been in the news over client complaints regarding alleged mishandling of expenses related to the Kentucky fen-phen litigation scandals. [Family relationship between the two confirmed 1/16 on the strength of emails from several readers.] (& welcome WSJ Law Blog readers)

[First of a two-part post. The second part is here.]

That's the title of a post by Ed Silverman over at Pharalot. The issue is the use if atypical antipsychotics in children:

Florida Medicaid records show the number of children - some just months old - who were prescribed the drugs went from 9,364 seven years ago to 18,137 in 2006. No records for privately insured patients are available.

As I mentioned earlier this week, putting the blame on the pharmaceutical industry is an oversimplistic reaction to how psychiatry, psychology,and our culture have transformed childhood into a diagnostic checklist. As mentioned in Ed's post, the litigation in Florida appears to be the recommendation by agencies receiving Medicaid funds to use these drugs in children with ADHD who also had tics. While none of the atypical antipsychotics, to my knowledge, are FDA approved for this condition, it is common knowledge among mental health professionals that the most effective treatment for tics are dopaminergic antagonists such as atypical antipsychotics. True, the recent National Institute of Health's CATIE study demonstrated that most of the atypicals were no better than the older ones. But that doesn't mean that the newer atypicals aren't effective or an appropriate treatment. Perhaps, our current social construction of adolescence is partly to blame for the boom in mental health diagnosis in our children.

Libertarian medical school blogger "Frommedskool" has been critical of the Vioxx litigation (regularly citing to our coverage at Point of Law). An April 2006 post about the Cona/McDarby case, however, appears to have generated a December 2007 comment from someone calling himself Mark Lanier, the plaintiffs' attorney in the case:

Third, there was a huge amount of info Merck had that it never gave the FDA, there were smoking gun memos and emails, and there was huge harassment of the medical community done by Merck. For example, Merck did a full meta-analysis of placebo trial that showed a statistically significant increase in heart attacks, but Merck excised that from the report given the FDA. Even Merck’s head admtted they should have given the analysis to the FDA.

(Point of Law discussed the so-called withholding of the meta-analysis back in 2006. It wasn't all that.) Fascinatingly, this comment immediately provokes comments from another lurker (just two hours later?!) claiming to be a plaintiff, reasonably asking why, if the evidence was so good, Lanier was agreeing to settle 47,000 plaintiffs' cases for under $5 billion, essentially a nuisance settlement given that victorious plaintiffs were being awarded in the millions and tens of millions.

Please register for this event online at http://www.aei.org/event1626.

The AEI Legal Center for the Public Interest and the Federalist Society present:

The Vioxx Settlement

Monday, January 7, 2008, 12:00 p.m.–2:00 p.m.
Wohlstetter Conference Center, Twelfth Floor, AEI
1150 Seventeenth Street, N.W., Washington, D.C. 20036

In 2004, Merck withdrew its pain reliever Vioxx from the market because of new studies showing increased cardiovascular risk. Merck announced that it would not settle any of the tens of thousands of Vioxx lawsuits filed, and set aside over a billion dollars to litigate cases without reserving a penny for damages. After a $254 million verdict in the first Vioxx trial in 2005, some observers predicted over $25 billion in liability for the company. Fifteen trials later, Merck and the plaintiffs’ attorneys announced a settlement of the outstanding personal injury litigation—for under $5 billion. Merck stock rose after the announcement, and is now higher than before it withdrew Vioxx from the market. But some law professors are arguing that a new and unusual provision in the settlement raises ethical concerns.

Why did Merck settle? And why was the settlement for so much less than originally anticipated? Is the Merck settlement different from the Wyeth fen-phen settlement, which was originally announced as a $3.75 billion settlement, but has so far cost more than $20 billion? Will the settlement stand up under legal challenge, and what will remain of the Vioxx litigation if it does?

At this event cosponsored by AEI and the Federalist Society, a panel of experts will explore these and other questions. Speakers include Vanderbilt law professor Richard Nagareda, author of Mass Torts in a World of Settlement; Virginia legal ethics professor George Cohen; author and leading pharmaceutical mass torts defense attorney Mark Herrmann; Andy Birchfield, a member of the Vioxx Plaintiffs’ Steering Committee; and Ted Frank, director of the AEI Legal Center for the Public Interest. AEI resident scholar John E. Calfee will moderate.

11:45 a.m.
Registration and Lunch

12:00 p.m.
Panelists:
Andy Birchfield, Beasley Allen
George Cohen, University of Virginia School of Law
Ted Frank, AEI
Mark Herrmann, Jones Day
Richard Nagareda, Vanderbilt University Law School

Moderator:
John E. Calfee, AEI

2:00 p.m.
Adjournment