Friday, October 12, 2007

Prempro Jury Confused; Damages Reduced

If Wednesday's verdicts in the Nevada Prempro case seemed implausibly large for compensatory damages, here's the explanation:  the jury was confused about the difference between compensation and punitive damages.  Although for now, this means a substantial reduction in the verdicts, under the circumstances it cannot be considered good news for Wyeth.

According to this Reno Gazette-Journal article -- Jurors to reconsider Prempro damages -- the judge instructed the jury to reconsider its damages calculations:

Jurors in the Wyeth trial were sent back to the jury room this morning to reconsider the amount of damages the company must pay after they told the judge that they were confused about punitive damages when they ordered the company to pay millions on Wednesday.

The jurors told Judge Robert Perry that they included punitive damages in the total they awarded three women who had sued Wyeth, claiming its hormone replacement drugs caused their breast cancer.

... After learning of the confusion, Perry sent the jury back and said they must first recalculate the past and future damages, and then said he would hold a hearing with witnesses before the panel would decide punitive damages.

Later today, an article by AP writer Sandra Chereb -- Jury Cuts $100M From Award Against Wyeth -- reported that upon reconsideration, the jury reduced the total verdicts from $134.5 million to $35 million:

A jury on Friday slashed $100 million from a judgment against pharmaceutical giant Wyeth after it conceded a previous award was improper because it was intended to punish the company for its hormone replacement drugs.  Washoe District Judge Robert Perry instructed the five-man, two-woman jury to reconsider a $134.5 million compensatory award issued Wednesday after questions were raised about whether the judgment included punitive damages.  Perry said the matter was brought to his attention by a bailiff, who overheard discussion in the jury room.  "If we don't correct it now, we'll be trying this case again," the judge said.  After deliberating for about three hours, jurors on Friday awarded $35 million to three Nevada women for past and future medical expenses, as well as physical and emotional pain and suffering. ...

Perry twice denied a motion by Wyeth lawyer Dan Webb to declare a mistrial over the jury's confusion.  Webb argued that jurors were predisposed to punish the company before the punitive phase of the trial had begun.  The judge said jurors raised questions expressing their confusion during the initial deliberations, but Wyeth lawyers wouldn't allow an explanation. ...

The revised compensatory damage verdicts include $10.5 million for Jeraldine Scofield, $12 million for Arlene Rowatt, and $12.5 million for Pamela Forrester.  The jury will return Monday to decide whether to impose punitive damages.  Given the jury's premature attempt to punish Wyeth with an extra $100 million or so, there cannot be much doubt about how the punitive damages phase will turn out next week.

HME

October 12, 2007 in Prempro, Punitive Damages | Permalink | Comments (0) | TrackBack (0)

CAFA's Home State Exception Interpreted

BNA's class action report came out today.  One of the more interesting decisions reported concerns the interpretation of the "home state" exception to removal under CAFA.  Here is a bit from the report:

A federal court in Pennsylvania Sept. 27 concluded that the "home-state" exception to the Class Action Fairness Act does not apply if one or more primary defendants is not a resident of the state in question (Anthony v. Small Tube Manufacturing Corp., E.D. Pa., No. 06-CV-4410,  9/27/07). 

The court rejected plaintiff's argument that the case ought to be remanded to state court because the home state exception (28 USC sec. 1332(d)(4)(B) applies if a single primary defendant is of the same state as plaintiffs.  A bit more from the BNA summary:

Few courts have dealt with the definition of "primary defendants" in the home-state exception, [Judge] Gardner said. Using an analysis set out in Passa v. Derderian, 308 F. Supp.2d 43 (D.R.I. 2004), on a similar law, the judge said primary defendants are those with direct liability to the plaintiffs, while secondary ones are those who are liable under such theories as indemnification or vicarious liability. Under this definition, he found both Small Tube and Cabot were primary defendants, as were the other defendants in the litigation, rejecting the plaintiffs' argument that only Small Tube met that test.

ADL 

October 12, 2007 in Procedure | Permalink | Comments (0) | TrackBack (0)

Thursday, October 11, 2007

Big Plaintiffs' Verdict in Nevada Prempro Trial

Yesterday, a Nevada jury hit Wyeth Pharmaceuticals with a $134.5 million verdict in a three-plaintiff hormone replacement therapy case.  According to a story in the Reno Gazette-Journal -- Jury Orders Wyeth to Pay Out Millions -- the jury found for the plaintiffs on negligence, product defect, and causation, found that Wyeth "concealed a material fact about the safety of the product," and found by clear and convincing evidence that Wyeth "acted with malice or fraud":

A Washoe County jury has ordered pharmaceutical giant Wyeth to pay more than $43 million each to three Northern Nevada women who claimed in a lawsuit the company's hormone-replacement drugs caused their breast cancer.

The jury said Premarin, an estrogen replacement, and Prempro, a combination of estrogen and progestin, were defective products and found Wyeth was negligent in producing, marketing and selling the drugs.

The bad news for Wyeth is that this was merely the compensatory damages phase; jurors will return tomorrow to decide punitive damages.  Yesterday's verdict broke down as follows:  for Jeraldine Scofield, $7.5 million in past damages and $36 million in future damages; for Arlene Rowatt, $7.5 million in past damages and $36 million in future damages; and for Pamela Forrester, $7.5 million in past damages and $40 million in future damages.  A year ago, Wyeth settled with Carol McCreary, a fourth HRT plaintiff who had been part of the same lawsuit.

The article notes that Wyeth is facing about 5300 HRT lawsuits involving about 7800 plaintiffs.

The Wall Street Journal reports that the financial markets do not seem particularly troubled by the Nevada verdict or by the Prempro litigation, which pales in comparison to the woes Wyeth faced in fen-phen.

HME

October 11, 2007 in Prempro | Permalink | Comments (0) | TrackBack (1)

Dickinson on Tort Liability for Military Contractors

My colleague Laura Dickinson, who is writing a book called Outsourcing War and Peace, has an interesting post on Balkinization about tort liability for military contractors.  Click here for the post. She explains that there are three types of suits that might be brought:

(1) suits brought by troops who’ve been injured by a contractor (an example here would be Carmichael v. KBR, 450 F. Supp. 2d 1373 (N.D. Ga. 2006), filed after a soldier suffered massive injuries in Iraq when the truck he was escorting, owned and operated by KBR and Halliburton, overturned in a ravine in Iraq); (2) suits brought by contractor employees (an example here would be the suit brought against Haliburton for deploying convoy as a decoy in an area the contractor allegedly knew to be under attack); (3) suits by third parties who’ve been injured by contractors (an example here would be the pair of cases brought by Abu Ghraib victims against CACI, Inc. and Titan Inc., the firms that provided interrogators and translators at the prison), see Ibrahim v. Titan Corp., 391 F. Supp. 2d 10 (2005); Saleh v. Titan Corp., 436 F. Supp. 2d 55 (D.D.C. 2006).

For purposes of this blog, the most intriguing  categories of cases are suits by third parties and employees.  Suits by Iraqis could be the next big human rights mass tort action, though the litigants may face jurisdictional problems -- remember the Bhopal suit against Union Carbide dismissed for forum non conveniens in the mid-80s?  Whether such suits survive such a challenge will depend on a lot of factors, including the state of the Iraqi legal system.   Dickinson also explains that such suits might be dismissed on either political question or immunity grounds.  She convincingly argues that the political question rationale is dubious.  The contractor immunity defense may have more teeth, but she reminds us, it was rejected in the most recent iteration of In re Agent Orange Prod. Liab. Litig., 373 F. Supp. 2d 7, 85-90 (EDNY 2005).

Addendum:  CCR and two lawfirms have already filed suit on behalf of Iraqis harmed by Blackwater employees under the ATCA.  A press briefing and link to the complaint can be found here.

ADL

 
 

October 11, 2007 in Mass Disasters, Procedure | Permalink | Comments (0) | TrackBack (0)

Wednesday, October 10, 2007

Schulman Pleads Guilty in Milberg Weiss Case

Steven Schulman, former partner of Milberg Weiss, pleaded guilty yesterday to a racketeering conspiracy charge.  Here's an excerpt from the New York Times article:

Mr. Schulman ... admitted in federal court to being part of a scheme in which the firm, known for its class-action lawsuits against companies, gave secret kickbacks to individuals who remained on call to act as lead plaintiffs. This allowed the firm to file suit faster than its competitors and to gain a lead position that generally resulted in higher fees.

... Mr. Schulman is also cooperating with prosecutors and agreed to forfeit $1.85 million in profit, pay a $250,000 fine and accept a prison sentence. Though his plea could bring a sentence of up to 20 years, court filings suggest 27 to 33 months.

HME

October 10, 2007 in Class Actions, Ethics | Permalink | Comments (0) | TrackBack (0)

Mass Tort Lawyer Running for Governor of Mississippi

"If it wasn't your fault or an act of God then someone must be held responsible."

This paean to overlitigiousness is the pitch made to prospective clients on the John Arthur Eaves Law Firm website, now advertising for Benzene, Bextra, Vioxx, Celebrex, terrorism, and nursing home cases.  It is not an accurate statement of tort law, of course, unless one interprets "act of God" to include all those slings and arrows that do not give rise to legitimate legal claims.

John Arthur Eaves, Jr., a prominent Mississippi plaintiffs' lawyer, may not interpret "act of God" broadly when evaluating potential tort claims, but apparently he is playing the God card for all it's worth in his effort to unseat Republican Governor Haley Barbour.  A story on the front page of today's New York Times outlines the difficulties faced by a Democrat in Mississippi, and Eaves' strategy of emphasizing his born-again Christian fervor and his corresponding positions on issues such as school prayer and abortion.  The Times article mentions that Eaves has largely self-financed his campaign with wealth acquired from representing asbestos plaintiffs.  Today's Wall Street Journal Law Blog echoes the Times article, adding a choice passage about Eaves' religiosity from the campaign web site.  Overlawyered has comments, as well.

HME

October 10, 2007 | Permalink | Comments (0) | TrackBack (1)

Tuesday, October 9, 2007

Bellwether Trials

In recent thoughtful blog posts here and on Drug and Device Law, informal bellwether trials have been singled out as a potential answer to the problems of caused by mass torts in multi-district litigation.  Both Erickson and Beck/Hermann support bellwether trials with the caveat that they are a second-best solution.  I agree, but I think that mandatory bellwether trials should get a second look, a point I argue in an article (fittingly called "Bellwether Trials") that I just posted on SSRN (available here) and on bePress (available here).   

The Article makes two points.  First, a democratic justification for permitting mandatory bellwether trials can balance out the autonomy concerns that this form of collective justice raises.  Tort trials are understood as an atomistic enterprise.  The jury trial, however, realizes not just individualistic but also democratic values that can help justify mandatory bellwether trials.  This argument is different from the utilitarian arguments made by Beck/Hermann and in most of the scholarly literature on the subject.  Second, although it is generally believed that bellwether trials are unconstitutional, I show that this is not the case.  Although the Seventh Amendment has been seen as an absolute barrier to bellwether trials since the Fifth Circuit's decisions in Cimino v. Raymark Industries, there is significant historical and doctrinal material supporting the constitutionality of binding bellwether trials. 

Of course, there are problems with bellwether trials.  For example, bellwether trials may create distributional injustice because the process of averaging verdicts redistributes wealth from those plaintiffs that would have received larger verdicts to those that would have received smaller ones.  On a similar note, permitting opt-outs in a mandatory bellwether procedure may cause plaintiff flight as plaintiffs realize that their larger expected verdict will be reduced by the averaging process, which even if refined somewhat is necessary for the procedure to work.  I provide some responses to these concerns in the piece. 

One of the questions raised by the continuing use of bellwether trials is why our system so easily tolerates the use of informal procedures to reach settlements that would be impermissible if they were formalized and mandated by a court.  The traditional response is that consent justifies settlements where litigation would be impossible, and bellwether trials encourage settlement.  But most observers recognize that consent is a pretty thin justification in the mass tort context.  So does that mean expedience is the real justification?  That does not seem good enough. 

ADL

October 9, 2007 in Mass Tort Scholarship, Procedure | Permalink | Comments (0) | TrackBack (0)

Sunday, October 7, 2007

Blog Roundup

New Law Blog: Evidence Prof Blog

Welcome to Evidence Prof Blog, which is edited by Professor Colin Miller of John Marshall and which joined the blogosphere as of October 2, 2007.  Certainly, our mass tort readers will hope that among the issues addressed in the future will be Daubert expert witness issues and scientific evidence.  Welcome aboard!

BGS

October 7, 2007 in Mass Tort Scholarship | Permalink | Comments (0) | TrackBack (0)

Penn Law Symposium on CAFA

Penn Law is hosting a symposium entitled, Fairness to Whom? Perspectives on the Class Action Fairness Act of 2005, on November 30, 2007 and December 1, 2007.  Those participating include Geoffrey Hazard (Penn & Hastings), Stephen Burbank (Penn), Edward Purcell (New York Law), Stephen Subrin (Northeastern), David Shapiro (Harvard), Richard Marcus (Hastings), Judge Anthony Scirica (Third Circuit), Tobias Barrington Wolff (Penn), Catherine Struve (Penn), Samuel Issacharoff (NYU), Richard Nagareda (Vanderbilt), William Rubenstein (Harvard), Catherine Sharkey (NYU), Arthur Miller (NYU), Judith Resnik (Yale), Suzanne Sherry (Vanderbilt), Linda Silberman (NYU), Deborah Hensler (Stanford), John Coffee (Columbia), Howard Erichson (Seton Hall), Kevin Clermont (Cornell), Theodore Eisenberg (Cornell), Emery Lee (FJC), Judge Lee Rosenthal (S.D. Tex.), and Thomas Willging (FJC).

BGS

October 7, 2007 in Class Actions, Conferences, Procedure | Permalink | Comments (0) | TrackBack (0)