Overlawyered: Chronicling The High Cost Of Our Legal System

Posts Tagged ‘punitive damages’

Flashback: the tort system in action in the case of Curtis Campbell

In 1981, Curtis Campbell (Campbell) was driving with his wife, Inez Preece Campbell, in Cache County, Utah. He decided to pass six vans traveling ahead of them on a two-lane highway. Todd Ospital was driving a small car approaching from the opposite direction. To avoid a head-on collision with Campbell, who by then was driving on the wrong side of the highway and toward oncoming traffic, Ospital swerved onto the shoulder, lost control of his automobile, and collided with a vehicle driven by Robert G. Slusher. Ospital was killed, and Slusher was rendered permanently disabled. The Campbells escaped unscathed.

Guess quickly: which plaintiff in the resulting twenty years of litigation won the biggest jury verdict?

How many of you say Ospital?

How many of you say Slusher?

You’re both wrong. The plaintiff with the biggest jury verdict was Curtis Campbell, whom a jury awarded an incredible $147.6 million.

Read On…

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And more May 17 updates

  • Google beats Perfect 10 in Ninth Circuit appeal over copyright suit over thumbnail images. (Earlier: Feb. 06, Jul. 05, Nov. 04.) [LA Times; WaPo; Bashman; Perfect 10 v. Amazon (9th Cir. 2007)]
  • Judge thinks better over Brent Coon’s attempt to intimidate local press through subpoenas. Earlier: Apr. 24. [WSJ Law Blog]
  • US Supreme Court throws out punitive damages ruling in Buell-Wilson case, lets rest of decision stand. Earlier: Jan. 4 and links therein. Beck and Herrmann also discussed the case in March in the context of a larger discussion of the appropriateness of issuing punitive damages against a company that relied on government safety standards in good faith. [LA Times; AP].
  • Big LA Times piece on the still-pending Extreme Makeover suit, where a family seeks to hold ABC responsible for an intra-household dispute over the spoils of a reality show. Earlier: Mar. 4, Aug. 12, 2005. [LA Times]
  • KFC may have won on trans-fats litigation, as David reported May 3, but they capitulate to Jerry Brown’s pursuit of Lockyer’s equally bogus acrylamide suit over the naturally-occurring chemical in potatoes (Oct. 05, Aug. 05, Aug. 05, May 05, Apr. 04, etc.). KFC will pay a nuisance settlement of $341,000 and will add a meaningless warning in California stores. (Tim Reiterman, “KFC to tell customers of chemical in potatoes”, LA Times Apr. 25).
  • McDonald’s sued over hot coffee. Again. One of the allegations is that McDonald’s failed to secure the lid, which is a legitimate negligence suit, but there’s also a bogus “failure to warn me that coffee is hot” count. [Southeast Texas Record; and a Southeast Texas Record op-ed that plainly read Overlawyered on the subject]

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Major SCOTUS punitive damages ruling

Some initial thoughts on Philip Morris v. Williams from Jim Copland at Point of Law. By a 5-4 vote, in an opinion by Justice Breyer, the Court held that a punitive damage award cannot be based in part or whole on a jury’s desire to punish harms committed against non-parties to the litigation, although (a fine distinction, if indeed a tenable one) such harms may be taken into account in determining the defendant’s degree of reprehensibility.

More: Ted comments and rounds up links, also at PoL. Roger Parloff (Feb. 20) calls the majority’s distinction “narrow” and “confusing”. And Eric Turkewitz offers one view from the plaintiff’s side (“hair-splitting”; majority’s “Clintonian parsing…was too much for four of the justices”).

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“Rollover Economics: Arbitrary and Capricious Product Liability Regimes”

My latest Liability Outlook for AEI is about the Ford Explorer rollover litigation and what it says about products liability litigation in the US in general:

It went generally unnoticed last November when the California Supreme Court refused to review an intermediate court’s decision in Buell-Wilson v. Ford Motor Co. But then again, it went generally unnoticed when a jury awarded an arbitrary $368 million in damages in that case, when the trial judge reduced that verdict to an arbitrary $150 million judgment, and when an intermediate appellate court reduced that figure to an arbitrary $82.6 million (which, with interest, works out to over $100 million). Products liability verdicts have become so run-of-the-mill that even nine-digit verdicts and their aftermath receive only local or specialty press coverage, with cursory national coverage. But Buell-Wilson demonstrates much that is wrong with the current liability regime, including the fact that the media is so jaded by litigation abuse that a $368 million verdict is barely newsworthy.

I have a related letter to the editor in the Jan. 1 Legal Times. See also POL Dec. 13, OL Dec. 12, OL Jun. 3, 2004.

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Plaintiffs’ counsel in Exxon Valdez case will try to survive on share of lowered verdict

The WSJ’s Law Blog reported recently on the joy being experienced by lawyers in the firms representing plaintiffs in the Exxon Valdez case, their spirits dampened only mildly by the Ninth Circuit’s recent reduction in the punitive award from $4.5 billion to $2.5 billion. Those firms include traditional plaintiffs’ firms such as Milberg Weiss, but also firms normally seen representing defendants, such as Davis Wright Tremaine and Faegre & Benson.

How do Faegre & Benson lawyers feel about the prospect of sharing in perhaps one-third of $2.5 billion? “It’s great,” said partner Brian O’Neill to the WSJ. Any grief due to the $2 billion reduction is probably tempered by the amazing $2 billion in post-judgment interest that will be tacked onto the final bill. (Actually, maybe that’s not amazing in itself, since the case has been pending since 1989. Still, the interest “is not chicken s___,” as O’Neill put it.) O’Neill said of the titanic fee that is coming their way, “This is one of the few chances a bill-by-the-hour guy and a bill-by-the-hour firm has to get ahead.” I for one have been worried for some time about how the partners in these little “bill-by-the-hour firms” were managing to get by, so it’s good to know that for once they may have been able to afford that second can of beans for the family at Christmas dinner.

Damages in the case were estimated at about $500 million. The Ninth Circuit basically held that the evidence did not warrant a punitive award that went to the limit of what is permitted under State Farm v. Campbell, a 9:1 or “single-digit” ratio, and reduced the ratio to 5:1.

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Potter v. Ford Motor

Betty Potter, who weighed 230 pounds, was driving her Ford Escort in the rain on bald tires, lost control of her car, and collided backwards into a tree at 30 mph. Her seatback collapsed in the impact, rendering her paraplegic when her head hit the back seat. She was allowed to argue to a jury that the design was “defective” even though her lawyers could not identify an alternative design that would have prevented the harm; Ford was held 70% liable for $10 million in damages. The Tennessee Court of Appeals affirmed the state trial court verdict. Of course, it’s impossible to design seatbacks to handle all conceivable combinations of collision direction and driver sizes; as the plaintiffs’ expert admitted, using a rigid seatback instead of a yielding seatback to withstand this sort of collision makes other types of injuries much more likely, and low-speed collisions where the yielding seatback has benefits are far more likely than high-speed collisions. The jury (and Tennessee court) is essentially punishing Ford for failing to have perfect foresight in matching its cars with the accidents the cars’ drivers will have. (Potter v. Ford Motor Co.; concurring opinion; via Products Liability Prof. Blog).

In other rigid v. yielding seatback lawsuit news, the Illinois Court of Appeals released on the web the Mikolajczyk v. Ford Motor Co. opinion for the case we discussed Dec. 1, 2006 and March 21, 2005. The same issues apply in that case, except there, the accident was caused by a drunk driver plowing into the back of a stopped car at over 60 mph.

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Punitive damages and the Supreme Court

I have written a piece on the Philip Morris v. Williams case for the Business and Media Institute. For other views, see Anthony Sebok (Brooklyn Law), Alan Morrison (Public Citizen), and Adam Cohen (New York Times). Morrison argues that the federal courts have no role in reviewing state-court decisions, which makes one wonder what his position is on habeas corpus. Cohen’s op-ed misstates what happened in Andrade, which was a case of collateral (and thus limited) review, rather than a direct appeal, like Williams, where a civil defendant does not even have the option of collateral review.

Earlier on Point of Law (from which this was cross-posted): Oct. 12; May 30; Feb. 2.

Update: The American Constitution Society press briefing on Philip Morris v. Williams (in which I participated with Peter Rubin, Neil Vidmar, and Bill Schultz) is now online.

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Responses to comments on yesterday’s McDonald’s coffee posts

Several comments on yesterday’s post merit responses.

1. One commenter invokes the Ford Pinto case, which is interesting because that’s perhaps the most famous anti-reform urban legend of all. He mistakenly says that Ford’s problem there was undervaluing human life (though the figure in the memo merely repeated the NHTSA number), but, in reality, the plaintiffs sought and obtained punitive damages because Ford performed a cost-benefit calculation at all. Any manufacturer caught performing the cost-benefit calculation that the commenter believes reflects the tort system operating at its most efficient is going to be accused of “putting profits before people” and undervaluing human life, and is at severe risk of being hit with punitive damages unless the judge or jury is unusually economically literate.

2. I’m not saying the court should have thrown the case out because of the factual dispute. The jury made the wrong decision on the facts, but the judge made the wrong decision on the law: see McMahon v. Bunn-O-Matic and the dozen or so cases throwing identical theories out.

3. I agree that it’s not enough to look solely at the costs of the tort system, and that one must look at the benefits also. I don’t oppose the tort system as a whole, but there are certainly problems with the tort system that can be improved to increase the benefits while decreasing the costs. The McDonald’s case illustrates several of these problems: (a) bogus expert testimony; (b) the distorting effect of punitive damages, especially when punitive damages in a products liability case is based on the defendants’ sales, rather than the defendants’ conduct; (c) the erosion of the concept of proximate cause from the tort system; and (d) the erosion of the concept of personal responsibility from the tort system; (e) the backwards-looking “failure to warn” cause of action; (f) the system’s unscientific rejection of concepts of statistical significance.

This would be bad enough if the case was simply an outlier, a case where bad luck, a bad judge, a bad jury, and defense mistakes combined to create a wrong result, but ATLA and law professors are holding up this case as a good result, and there’s a generation of law students who mistakenly think that this is what the tort system should aspire to.

4. I mentioned Snopes.com in the post; they appear to have taken down their original McDonald’s coffee page. I’ve changed the link from the main Snopes page to a different post discussing the “Stella Awards” (which we debunked August 27, 2001). There, Snopes.com repeats the claim that the McDonald’s coffee lawsuit was legitimate, and furthers the urban legend that there’s a sinister force behind the Stella Awards—a curious claim, given that the Mikkelsons’ experience with urban legends has surely taught them that no right-wing conspiracy is needed to result in the spreading of a good yarn that isn’t true. (See also Aug. 14.) In contrast, ATLA affirmatively promotes urban legends about the Ford Pinto and McDonald’s coffee case on their page.

5. Side note about an irony of the Ford Pinto case: the litigation was sold to the American public as a godsend because Pintos were so dangerous that their gas tanks killed a thousand or more. Gary Schwartz added up the numbers, and discovered that only 28 people died in Ford Pinto fuel-fed fires—a rate lower than many other small cars. ATLA shamelessly uses the new number to exclaim that current product manufacturing snafus are “worse than the infamous Ford Pinto,” which is, of course, infamous only because of the successful propaganda of the trial bar.

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Urban legends and Stella Liebeck and the McDonald’s coffee case

Thirteen courts have reported opinions looking at product-liability/failure-to-warn claims alleging that coffee was “unreasonably dangerous” and the provider was thus liable when the plaintiff spilled coffee on him- or herself. Twelve courts correctly threw the case out. Another trial court in New Mexico, however, didn’t, and became a national icon when the jury claimed that Stella Liebeck deserved $2.9 million in compensatory and punitive damages because McDonald’s dared to sell the 79-year-old hot 170-degree coffee.

The case is ludicrous on its face, as a matter of law and as a matter of common sense. Eleven years later, this should be beyond debate, yet somehow, it keeps coming up in the blogs, and we keep having to refute it. (Dec. 10, 2003, Aug. 3, 2004, Aug. 4, 2004).

Amazingly, rather than argue that the tort system shouldn’t be judged by the occasional outlier, the litigation lobby has succeeded in persuading some in the media and on the left that the Liebeck case is actually an aspirational result for the tort system, and, not only that, but that anyone who says otherwise is just a foolish right-winger buying into “urban legends” (Aug. 14, Aug. 16, and links therein). Even the Mikkelsons at snopes.com have made the mistake of buying into the trial lawyer hype, calling the case “perfectly legitimate” and effectively classifying the common-sense understanding of the case as an urban legend.

But the real urban legend has to be that the case has any legitimacy. Worse, this urban legend is being taught to a generation of law students by professors like Jonathan Turley and Michael McCann. Now, any peripheral mention of the McDonald’s coffee case provokes a gigantic backlash from the left, who, while congratulating themselves on their seeing past the common-sense view of the case and being above urban legends, spread a number of urban legends of their own about the case. Witness the 200-plus comment outpouring at Kevin Drum’s Political Animal blog. This post provides a partial rebuttal to some of the things said in that thread, and will hopefully serve as a FAQ in the future.

Read On…

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