Saturday, February 17, 2007
Article in The Economist -- If you can't beat them, join them: An infamous legal strategy crosses the Atlantic. Here's an excerpt:
THE idea that American-style class actions could soon be coming to Europe makes most European businessmen shudder. They fear the sort of astronomic damages granted to aggrieved consumers and shareholders on the other side of the Atlantic: $145 billion awarded by a Florida jury against five tobacco companies on behalf of all American smokers in 2000 (later overturned); a $1.1 billion settlement against Ahold, a Dutch retailer, in a shareholders' class action in 2005; a $65m settlement last year against IBM in an overtime claim by technical and support staff.
Last week a federal appeals court gave the go-ahead to what could become the biggest class action in history: a gender-discrimination claim against Wal-Mart on behalf of some 2m past and present female employees in America. The claim still has several legal hurdles to cross, but it could end up costing the world's biggest retailer hundreds of millions, if not billions, of dollars, especially if it is extended to include women working for the firm abroad.
But American companies are not the only ones involved. Increasingly, the notoriously long arm of American law is stretching into Europe and beyond. A class action brought by a group of American shareholders of Parmalat, a failed Italian dairy giant, is pending in New York. Earlier this month, a group of investors in BP launched a class action in Alaska against the British petroleum giant over the £70m severance package offered to John Browne, its departing boss. British Airways is also facing a class-action lawsuit in America, and Lufthansa settled one last year.
When class actions were first introduced in America in the mid-1960s, they were seen as means for powerless individuals, whose claims were not worth pursuing separately, to win redress against mighty corporate evil-doers. Sadly, juries took on the task rather too eagerly, awarding not just economic damages, but swingeing punitive ones too. Starting with securities claims, the actions soon spread to mass consumer suits involving tobacco companies, pharmaceutical firms, medical malpractice, employment issues and so on. Nowadays, the winners are not so much the victims of corporate wrongdoing as the lawyers.
Friday, February 16, 2007
Article in the Los Angeles Times -- Court ruling reignites tobacco suits, by Maura Dolan:
The California Supreme Court made it possible Thursday for people who become ill from smoking to once again win large judgments from tobacco companies, unanimously rejecting a four-year-old federal court decision that had virtually halted all smoker lawsuits in the state.
"It reopens tobacco litigation in California," said Northeastern University Law Professor Richard A. Daynard, who heads a group that promotes lawsuits against the industry. "The light just went from red to green."
Since California began allowing individual lawsuits over smoking damage in 1998, plaintiffs had won some of the biggest tobacco awards in the country, including a $28-billion jury verdict in Los Angeles.
The awards came to a halt when a federal appeals court in 2002 set a strict deadline, saying smokers should have filed suit years earlier, when it became widely known that smoking was a health hazard and addictive.
Taking advantage of the federal ruling, the tobacco industry had exercised its right to move cases into federal court, which hears disputes between litigants in different states. Lawyers said every single case was dismissed.
In a decision written by Justice Carlos R. Moreno, the high court said that although judges and juries can presume that plaintiffs should have known of the dangers and filed their lawsuits earlier, smokers can rebut that presumption by presenting evidence that tobacco companies misrepresented the risks.
"Although knowledge of smoking addiction has been widespread … ," Moreno wrote, "tobacco companies misrepresentation of the danger and addictiveness of smoking were also widespread."
Wednesday, February 14, 2007
Article in the New York Times -- Bloomberg Urges More Aid for Those Ailing After 9/11, by Anthony DePalma:
Mayor Michael R. Bloomberg called on the federal government yesterday to increase health spending sharply for thousands of people who became ill after the Sept. 11 attack on the World Trade Center, and called for the creation of a special fund to compensate those who are sick.
Mr. Bloomberg said he would lobby the Bush administration for $150 million a year to cover the cost of screening, treating and monitoring rescue workers, business owners, residents and others who might have been affected by the smoke and dust released by the destruction of the twin towers.
The current federal budget proposal includes $25 million for such programs.
At a City Hall news conference yesterday, Mr. Bloomberg said he was hopeful that a Congress controlled by Democrats would respond positively to the city’s needs.
Although his past statements about 9/11 health issues have been measured, Mr. Bloomberg yesterday strongly linked the trade center dust that blanketed Lower Manhattan to respiratory, digestive and mental health problems that have been diagnosed in recovery workers and residents.
Judge Jack Weinstein yesterday faulted the attorney, expert, and reporter involved in disseminating confidential documents that were covered by a protective order in the Zyprexa multidistrict litigation. Here's a link to the court's order, and an excerpt from the story in today's New York Law Journal:
A federal judge Tuesday rebuked an attorney, an expert witness and a reporter for The New York Times for violating a protective order in a mass-tort action concerning the health risks of Zyprexa, an anti-psychotic drug manufactured by Eli Lilly.
Eastern District of New York Judge Jack B. Weinstein, said the men -- Alaska attorney James Gottstein; Dr. David Egilman, an expert hired by plaintiffs; and Alex Berenson, of the Times -- had "conspired to obtain and publish documents in knowing violation of a court order not to do so, and that they executed the conspiracy using other people as their agents in crime."
The documents in question were among millions of internal e-mails and files given to attorneys representing 30,000 plaintiffs who sued Eli Lilly over Zyprexa, a schizophrenia drug that patients alleged caused obesity and diabetes. Most of the suits involving Zyprexa have been settled for a total of $750 million, according to reports.
The documents were covered by a protective order, and Weinstein said all three men knew about the order.
The judge alleged, based on testimony from Gottstein, that Berenson and Egilman had devised a way to circumvent the order: Have Gottstein subpoena Egilman for a case in Alaska, and then send the documents to Berenson for an exclusive story.
Berenson relied on the documents for several articles he wrote in December alleging that Lilly played down data that found Zyprexa increased the risk of obesity and diabetes in patients.
Although the court called Berenson's conduct "reprehensible," it imposed its injunction against further dissemination only on Gottstein and Egilman.
Tuesday, February 13, 2007
Walter Olson has an interesting article in Reason magazine -- Dangerous When in Power: Does government protect us from hazardous products, or does it put us in harm's way? Here's an excerpt:
Asbestos exposure has been a genuine public health calamity, having caused much death and disability among exposed workers. Much of the early journalistic coverage, taking its lead from Paul Brodeur's early series in The New Yorker, has treated the episode as a case study in the callousness of private enterprise, which is said to have exposed workers to the lethal mineral for decades until at last brought to heel by the efforts of public-health activists, government regulators, and trial lawyers. That's consistent with the wider conventional view, which treats hazardous products as a sort of standing reproach to capitalism: Businesses foist such products on us in search of profit, the narrative goes, while government protects us from them. And there is much in the asbestos debacle that does reflect discredit on private companies' actions.
Yet the government, our alleged protector, has done much at all levels to promote products later assailed as needlessly unsafe, from tobacco to lead paint, from cheap handguns to Agent Orange. Often the state is at least as aware of the risks as the businesses that distribute the product, and in at least as good a position to control or prevent them. But-shaped and propelled by the incentives provided by our litigation system-our process of organized blame hardly ever puts the government in the dock.
The New Jersey Supreme Court oral argument in the Vioxx third-party payor class action had been scheduled for tomorrow, although apparently it has been postponed. The case, International Union of Operating Engineers #68 Welfare Fund v. Merck & Co., involves a nationwide class action of Vioxx third-party payors. The trial court granted class certification after finding that New Jersey's Consumer Fraud Act applied to all of the claims. The Supreme Court will address both the class certification and choice of law issues. It's an important appeal, both because of the stakes in this class action and because it may shed light on the extent to which mass tort class actions remain viable for claims other than personal injury.
The number of lawsuits against Medtronic concerning allegedly defective defibrillators has increased significantly, according to this Bloomberg story in the Seattle Post-Intelligencer -- Medtronic Defibrillator Suits Double:
The number of heart patients suing Medtronic Inc. over faulty defibrillators more than doubled in the past two months, raising the company's risk of getting hit with damage awards.
Through Monday, about 1,670 patients had filed 943 suits in U.S. courts related to the 2005 recall of 87,000 implanted electronic devices that protect against sudden cardiac death, said Hunter Shkolnik, a trial lawyer helping to manage the cases. In December, the number was 417 lawsuits.