Monday, June 30, 2008
An article in this morning's Wall Street Journal by Avery Johnson and Ron Winslow details the flip-side of increased FDA scrutiny: fewer new drugs in the pipeline. Drug companies such as Eli Lilly & Co, Japan's Daiichi Sankyo Co. and Merck believe that the FDA has become too careful while consumer advocates welcome the FDA's increased warnings and drug withdrawals. Here's an excerpt of the article:
Grousing by drug-industry executives about the FDA is nothing new. It's a product of the perennial tension between regulators and the companies they oversee.
But the Vioxx debacle, which sparked harsh criticism of both drug companies and their chief regulator, appears to have led to a climate shift. The drug industry largely has itself to blame for allegedly manipulating clinical data, concealing dangerous side effects and aggressively promoting risky products, which created widespread mistrust. The FDA, for its part, was harshly criticized for its decisions on Vioxx and in a litany of subsequent drug scares.
Outspoken scientists, watchdog groups, medical-journal editors and politicians have fanned worries about safety. The wave of post-Vioxx drug scares included concerns that GlaxoSmithKline PLC's widely used diabetes drug, Avandia, could raise heart-attack risk, and that Pfizer Inc.'s smoking-cessation drug, Chantix, may be connected to suicides. More than 80 U.S. deaths linked to contaminated heparin from China have further ratcheted up public anxiety. The FDA has been battered by criticism that it wasn't vigilant enough, including from Cleveland Clinic cardiologist Steven Nissen, Sen. Chuck Grassley of Iowa and Rep. John Dingell of Michigan.
Thursday, June 26, 2008
I just finished reading the decision in Exxon v. Baker and have a few preliminary thoughts. As most of our readers are aware from Byron's post, the decision reconsidered the punitive damages in the case arising out of the Exxon Valdez disaster. The court held that punitive damages are available under maritime law, that this is a federal common law question, and that the appropriate punitive damages award for the type of reckless conduct found in this case was a 1:1 ratio to the compensatory damages awarded in the case. For those wanting more commentary, you might check Scotusblog commentaries here.
So what's so weird about the decision?
1. Its a punitive damages class action! Forgive me for not noticing this before, but that is a rare bird indeed.
2. The Court's main concern is that punitive damages are inconsistent. But that assertion, if true, doesn't at all support the idea that punitive damages should be pegged in a 1:1 ratio to compensatory damages. We need to ask why they are inconsistent and what that means. For example, assume there are two trials arising out of the same conduct. In one trial there is a punitive damages award of $8 million and in another trial a punitive damages award of $0. Does this mean that $0 punitive damages is the right answer? No. There are three possible answers: $8, $0 and $4. Which is right? I don't know. But none of them bear any relationship to the compensatory damages in the hypothetical case (which is why, you may have noticed, I did not mention the compensatory damages). What inconsistent punitive damages tell us is that the whole concept of punitive damages is contested, and people can't agree on whether and how much we should punish wrongdoers through the civil justice system. Some juries think we should, some think we shouldn't. Imposing a randomly selected ratio does not solve the underlying policy question. In any event, here the punitives across cases are consistent because all the cases arising out of this conduct were included in this class action! Furthermore, we tolerate inconsistent verdicts all the time in personal injury cases. This is part of life, because the process of valuing cases is one of the social construction of damages. And it is contested.
2a. And on that ratio, the idea that the appropriate measure of punitive damages is the same as the mean ratio is absurd. The court did not even consider comparable cases (because there aren't any, perhaps). Can you imagine what my students would say if I told them that I am not reading their exams and grading them individually, but instead giving them a B, because we have a B median requirement at the law school where I teach? That would be incredibly unfair, regardless of what I think about grading as a policy matter.
3. The Court stands the economic theory of punitive damages on its head. The majority quite clearly states that the purpose of punitive damages is retribution and deterrence. But if deterrence is your goal, pegging punitive damages (in any multiplier) to compensatory damages makes no sense. The theory of deterrence requires that the wrongdoer pay something more than the cost of preventing the accident/bad act. That cost has no relationship to compensatory damages. If the cost of preventing the the wrongful act is the same as the damages that act cost, that is pure luck. For example, maybe a test to find out if ship's captains are relapsed alcoholics only costs $100 per captain per year. Then the punitive damages need to be something more than that amount. Not $2.5 billion. Not $20 million either.
3a. To the extent that its not about deterrence but about retribution, pegging the punitive damages to compensation still doesn't make sense. If you want to hurt the defendant, you have to look at the defendant's wealth and figure out what amount will hurt him. Knowing how much the defendant hurt the plaintiff will not help because there is, again, no relationship between the marginal value of a dollar to the plaintiff and to the defendant. For an article on the retribution theory of punitive damages see Anthony Sebok, Punitive Damages: From Myth to Theory on SSRN and Iowa L. Rev.
3b. The only way that pegging compensatory damages to punitive damages makes sense is to say that punitive damages are a part of compensatory damages - they compensate for other things, say harm to third parties. This is a theory, but its one the court has rejected as far as I can tell in
Philip Morris v. Williams as well as in Exxon. For an article on this theory see Catherine Sharkey, Punitive Damages as Societal Damages abstract on SSRN , published in the Yale L. J.
Wednesday, June 25, 2008
Article on cnn.com -- High court reduces Exxon oil spill damages. Here's an excerpt:
The Supreme Court has reduced a $2.5 billion punitive damages award against energy giant Exxon for its role in an infamous 1989 maritime oil spill.
The high court concluded, 8-0, that punitive damages should roughly match actual damages from the environmental disaster, which were roughly $507 million. Justice Samuel Alito took no part in the case because he owns Exxon stock.
The court ruled that victims of the worst oil spill in U.S. history may collect punitive damages from Exxon Mobil Corp, but not as much as a federal appeals court determined.
Monday, June 23, 2008
Interesting, expansive article in the New York Times -- To the Trenches: The Tort War Is Raging On, by Jonathan Glater. Thanks to Evan Anziska for emailing it to me. Here's an excerpt:
In a Washington ballroom bedecked with flags honoring explorers who overcame oceans and mountains to pursue international trade, Thomas J. Donohue congratulated the assembled modern merchants — a group of executives, lobbyists and lawyers — for challenging a more mundane adversary.
“It took guts, bravery and vision to get behind what must have seemed like an insurmountable task — taking on the powerful trial bar,” said Mr. Donohue, the chief executive of the United States Chamber of Commerce. “We have succeeded beyond our expectations.”
There were plenty of reasons for self-congratulation at the dinner, held earlier this month to commemorate the 10th anniversary of the chamber’s Institute for Legal Reform. Some of the best-known plaintiff-side lawyers in the country — Richard F. Scruggs, Melvyn I. Weiss and William S. Lerach — have all pleaded guilty to charges that they tried to manipulate the justice system. The very phrase “trial lawyer” has become associated with unadulterated greed; the Association of Trial Lawyers of America now calls itself the American Association for Justice.
But it is still too early to declare an end to the so-called tort wars, a decades-old conflict over the rules governing civil lawsuits. Corporate interests have won several potent victories, but trial lawyers continue to try to undo legislation restricting litigation and are pursuing new strategies of their own.
Article in the Wall Street Journal -- Sentencing Doesn't End Scruggs's Legal Woes, by Ashby Jones. Here's an excerpt:
Richard "Dickie" Scruggs, the high-profile plaintiffs lawyer who pleaded guilty in March to conspiring to bribe a Mississippi judge, will likely learn his fate Friday, when he is scheduled to be sentenced for his crime.
But the sentencing won't necessarily put an end to the legal woes of Mr. Scruggs, 62 years old, who gained wealth and notoriety in the 1980s and 1990s in massive litigation against the tobacco and asbestos industries.
Mr. Scruggs and several colleagues, including his son, Zach Scruggs, were indicted last November for participating in a scheme to pay a state judge $40,000 in exchange for a favorable ruling in a $26.5 million legal-fee dispute. All five of the defendants ultimately pleaded guilty to various charges. None have been sentenced, though a former colleague of Mr. Scruggs, Sidney Backstrom, is also scheduled to be sentenced Friday. Zach Scruggs is slated to be sentenced on July 2.
Friday, June 20, 2008
A U.S. District Court in Boston and New York state court held joint hearings on whether lawsuits against Pfizer, Inc. based on Neurontin could continue. Plaintiffs allege that the drug lead to suicides. Here's an excerpt of Jeremy Singer-Vine's Wall Street Journal report:
A British neurologist who analyzed effects of the drug Neurontin told a court hearing Thursday that he advised its maker -- now a unit of Pfizer Inc. -- to include a warning on the drug's label for potential side effects of depression and aggression, but his advice wasn't followed.
The University of London neurologist, Michael R. Trimble, was testifying at a hearing to decide whether civil cases brought against Pfizer alleging suicides linked to Neurontin can proceed. . . .
Dr. Trimble described what he said was a "plausible biological pathway" that could lead from the compound gabapentin -- the chemical name for Neurontin -- to suicidal behavior, hostility, and aggression. Dr. Trimble said that in 1995 and 1996, he was hired to write two confidential reports for Parke-Davis -- now a unit of Pfizer -- because the company "was concerned about psychosis in relation to their drug." Dr. Trimble said he was unable to find a link to psychosis, but noted effects of depression and aggression.
Lawyers for Pfizer argued at the hearing that the evidence linking the drug to suicidal side effects wasn't scientifically sound. Under cross-examination, they challenged his description of a pathway as a patchwork of studies that didn't prove a biological connection. Neurontin and generic forms of gabapentin are approved for treating epileptic convulsions, but have also been prescribed widely "off label" for other conditions.
Sheila Scheuerman (Charleston) just posted an article entitled "Two World Collide: How the Supreme Court's Recent Punitive Damages Jurisprudence Affects Class Actions" on SSRN. Here is the abstract:
This article examines the intersection between two controversial areas of the law - punitive damages and class actions - and argues that the Supreme Court's recent jurisprudence clarifying the due process limits on punitive damages has broad implications on the procedural laws governing the types of cases that can properly be certified as a class action. Specifically, the article discusses the Supreme Court's evolving approach to punitive damages from one that considered the harm a defendant's conduct caused to society as a whole to one that now focuses almost exclusively on the harm to the specific individual bringing the lawsuit. This shift, which recently culminated in the Court's 2007 decision in Philip Morris USA v. Williams, constitutionally requires that the amount of a punitive damages award relate to the amount of harm suffered by the party bringing the suit. That requirement is at odds with class action practices that treat punitive damages as a common, class-wide issue and that have allowed juries to assess a punitive damages award before evaluating the harm to the individual class members. The article argues, therefore, that where injuries are not uniform among class members, punitive damages cannot be pursued as a class-wide remedy.
Wednesday, June 18, 2008
The Widener Law Journal has published its issues in connection with its February 2008 symposium, Crimtorts. Torts Prof Blog has links to all the articles, which include the following:
Christopher J. Robinette, Introduction
Kenneth W. Simons, The Crime/Tort Distinction: Legal Doctrine and Normative Perspectives
Michael L. Rustad, The Supreme Court and Me: Trapped in Time with Punitive Damages
Jeffrey O'Connell, The Large Cost Savings and Other Advantages of an Early Offers "Crimtorts" Approach to Medical Malpractice Claims
Byron G. Stier, Crimtorts, Class Actions, and the Emerging Mass Torts Method
Keith N. Hylton, A Theory of Wealth and Punitive Damages
Sheila B. Scheuerman, The Road Not Taken: Would Application of the Excessive Fines Clause to Punitive Damages have Made a Difference?
There are several recent articles on the Milberg fallout. The first is an article in the American Lawyer by Alison Frankel on William Taylor III, Milberg LLP's counsel on its recent deal. Here's an excerpt:
In the end, says the lawyer who defended the Milberg firm for more than four years, he had no choice: If Milberg was to survive as a law firm, it had to reach a deal with Los Angeles prosecutors to avoid a guilty plea or conviction in the federal probe of kickbacks to lead plaintiffs in securities class actions.
"The firm had to accept terms which were onerous financially," says the soft-spoken William Taylor III. "I can't tell you I'm happy my client has to pay $75 million." But, he adds, "the firm will survive. Its lawyers can practice law. ... It will be tight [financially] but they have a platform that is well-established [and] they're very good at what they do."
Taylor said the government placed no restrictions on contributions to the firm's $75 million payment by the three one-time name partners who've pleaded guilty, including firm patriarch Melvyn Weiss. He declined to comment on reports that Milberg had asked spin-off firm Coughlin Stoia to contribute and had been turned down. Unlike Milberg, Coughlin Stoia was never indicted in the kickback case.
The other article is by Anthony Lin of the New York Law Journal and reports that ex-Milberg partners are now suing the firm for breach of financial duty. Here's a bit of the article:
Two former Milberg partners have sued the law firm's founder, Melvyn I. Weiss, and the three other firm leaders recently convicted of participating in a scheme that paid kickbacks to class action plaintiffs, claiming the four men's illegal conduct constituted a breach of their fiduciary duty to their partners.
The suits, which came just one day after federal prosecutors agreed to drop criminal charges against Milberg itself in exchange for the payment of $75 million in fines, could be the beginning of a tide of litigation against Weiss, William S. Lerach, Douglas J. Bershad and Steven G. Schulman, the former Milberg name partners who have pleaded guilty over the past several months to orchestrating the kickback scheme.
J. Douglas Richards, one of the two ex-partners to sue Tuesday, predicted as much in an e-mail to the Law Journal.
"Private litigation by those injured by the misconduct is just beginning," he said. Indeed, Milberg management committee member Sanford Dumain said in interviews Monday with the Law Journal and other publications the firm itself was exploring litigation against its former leaders.
Richards and Michael M. Buchman, both former antitrust partners who left Milberg together in January 2007, filed separate pro se complaints Tuesday in Manhattan federal court. Buchman named all four of the former name partners as defendants but Richards excluded Bershad. Richards declined to discuss this aspect of the case, but the exclusion is presumably to preserve diversity jurisdiction, as both Richards and Bershad are New Jersey residents.
Each suit is asking for $3 million in damages.
Tuesday, June 17, 2008
Geoffrey Miller (NYU) just posted an article called "Preliminary Judgments" on bepress. Here is the abstract:
This article proposes the preliminary judgment as a means for facilitating the settlement of legal disputes. A preliminary judgment is simply a tentative judicial assessment of the merits of a case or any part of a case, based on the same sorts of information that the courts already consider on motions for summary judgment. The difference between a preliminary judgment and a summary judgment is that the court, in a preliminary judgment, would not be limited to deciding issues with which no reasonable jury could disagree. Instead, the court would provide its own judgment on the merits of the case based on the information provided by the parties. A preliminary judgment, once given, would convert into a final judgment after the expiration of a reasonable period of time. However, the losing party would have the right to object prior the expiration of the period (with or without explanation), in which case the judgment would be vacated and the case would proceed according to ordinary rules of procedure. Preliminary judgments would increase prospects of success in settlement bargaining by providing litigants with a credible evaluation of case value. Preliminary judgments could offset settlement-defeating party optimism, anchor the parties’ discussions on realistic outcomes, focus attention on basic strategic questions, counteract the danger that attorneys will distort settlements, and enhance the willingness of litigants to accept the outcome. Because preliminary judgments would be announced publicly, moreover, they would provide information to guide future conduct. In point of fact, judges already communicate their provisional views on the merits through a variety of pretrial procedures. The preliminary judgment would represent a more direct, honest and systematic approach to practices which until now have been employed in less transparent ways.
Miller often has interesting, creative proposals and this is certainly one of them. That's why I always enjoy reading his work. I'm going to think more about it, but my first reaction is that there is no existing problem with the current system that this particular procedure is needed to solve. There are several reasons why we might not want more preliminary decisions in cases. One is that if there are some good reasons to have a jury trial to determine a cases' value (I explain these in my article on Bellwether Trials). Judges already have ways to take causation determinations away from the jury if they want to, and whether that is a good or a bad thing is the subject for a serious policy debate. And it is not clear to me that a mini-trial the result of which can be accepted or rejected at the litigant's discretion will really make the process more efficient than it is today. On the other hand, once the judge has decided on an outcome or number through a formal process, how open-minded is that judge going to be going forward? The bottom line, why not just have a full blown, binding trial instead?
Monday, June 16, 2008
For mass tort plaintiffs' lawyers, the scariest legal issue of the moment is preemption. If FDA approval of a warning or product preempts state law tort claims, lots of otherwise viable mass torts disappear. Preemption has figured prominently on this blog in recent months, including here (on the Third Circuit Colacicco decision), here (on the Supreme Court split in Warner-Lambert), and here (on the Supreme Court decision in Riegel).
Plaintiff lawyers' preemption dread picks up on a running theme: tort reform as a supposed death knell for mass tort litigation. A year and a half ago, Byron Stier commented on Alison Frankel's American Lawyer piece declaring the end of the wild west era of mass tort litigation. Two months ago, we linked to a Houston Chronicle interview with a legal recruiter suggesting dim prospects for mass torts in the wake of tort reform. But mass litigators are nothing if not enterprising and resilient. To me the interesting question is not "Will mass litigation dry up?" but rather "If pharmaceutical mass torts and medical devices litigation dry up because of preemption, what's the mass litigator's next move?"
Earlier this month, Forbes.com ran a piece by William Barrett called Looking for Mass Torts. Reporting on the latest Mass Torts Made Perfect plaintiffs' attorneys conference in Las Vegas, Barrett describes the gathering's potent mix of doomsdayism and entrepreneurial verve:
But behind this bravado the lawyers are running scared. After decades of victories in asbestos and tobacco, they are contending with appeals courts rulings reining in class actions involving drugmakers. A case now before the Supreme Court could sharply curtail their bread-and-butter tort suits. The defendants are asking the court to decree that suits built on the theory that drug labels had inadequate warnings are preempted by Food & Drug Administration regulation of labels.
"These are scary times," said R. Larry Morris, another partner in the law firm of Levin Papantonio Thomas Mitchell Echsner & Proctor. Philadelphia lawyer Fred S. Longer made a presentation entitled "fda Preemption: Is This the End?"
But good businesspeople that they are, these legal practitioners are hedging their bets by seeking new markets. One possible new territory where preemption is not a big problem is litigation over environmental debacles. (Witness the recent extraction of money from gasoline refiners who damaged groundwater with a federally approved additive.) The tort mavens also talked about switching to securities law, a field not especially starving for practitioners.
The prospect of mass litigators turning from one type of litigation to another as legal developments alter their cost-benefit analysis is a theme I explore in a forthcoming article on the impact of CAFA. CAFA altered forum-selection strategy directly and indirectly in interesting ways, but beyond that, it appears to have had an impact on claim selection and litigation emphasis as well. Preemption could affect the work of mass litigators even more emphatically than CAFA has.
Thursday, June 12, 2008
Today the Supreme Court decided Taylor v. Sturgell, the FOIA virtual representation case. The unanimous opinion by Justice Ginsburg unequivocally rejects virtual representation as a basis for nonparty preclusion, as Alexi Lahav noted earlier. As far as I'm concerned, the Court got it exactly right.
The D.C. Circuit had held that a plaintiff was barred by claim preclusion from pursuing his FOIA claim because he was virtually represented by an earlier plaintiff who had made an identical request, litigated, and lost. Rather than accepting the D.C. Circuit's multi-factor approach, the Supreme Court carefully listed and explained each of the possible bases for nonparty preclusion -- the exceptions to the principle that only parties are bound by a judgment -- and why they do not apply based on the record in the case.
For those interested in nonparty preclusion as it relates to mass litigation, one of the most interesting passages addresses the problem of de facto class actions:
An expansive doctrine of virtual representation, however, would "recogniz[e], in effect, a common-law kind of class action." That is, virtual representation would authorize preclusion based on identity of interests and some kind of relationship between parties and nonparties, shorn of the procedural protections prescribed in Hansberry, Richards, and Rule 23. These protections, grounded in due process, could be circumvented were we to approve a virtual representation doctrine that allowed courts to "create de facto class actions at will."
Slip Op. at 19 (quoting Tice v. American Airlines, 162 F.3d 966, 972, 973 (7th Cir. 1998)). The Court also drew comparisons to bankruptcy and probate, in which nonparties may be bound pursuant to a statutory scheme with its own justifications, constraints, and protections. This was a point that several colleagues and I emphasized in our amicus brief and that I mentioned in a previous blog entry: the law offers numerous ways to bind multiple persons to a judgment, but such joinder or representation must be accomplished ex ante and with appropriate procedural protections, not ex post through the backdoor of preclusion.
The Court ultimately remanded for a determination of whether the second plaintiff was suing as an agent on behalf of the first plaintiff, in which case claim preclusion might apply (this sort of remand seemed likely based on the oral argument), but that's a different and less mischievous idea than the virtual representation theory applied by the D.C. Circuit.
Beth Musgrave of the Kentucky Herald-Leader has the latest report on Kentucky fen-phen attorneys William Gallion, Shirley Cunningham Jr. and Melbourne Mills Jr., who are accused of taking more than $65 million from their clients in the diet drug settlement. Here's an excerpt:
Three lawyers for American Home Products had testified earlier in the trial that the $200 million settlement was for only 440 people and was not meant to settle future claims brought by people who had taken fen-phen but were not part of the 2001 Boone Circuit Court lawsuit. The three lawyers have argued that some money from the settlement had to be set aside in case other people who took fen-phen came forward with other lawsuits.
When no one came forward, the lawyers put some of the money in a non-profit and the rest went to legal fees and expenses. The lawyers on the case received approximately $105 million, their clients received $74 million and the remaining money went into a non-profit.
But Robbins, after reviewing transcripts, depositions and court documents related to the 2001 case, said he doesn't understand how American Home Products could say the $200 million settlement was strictly for the 440 clients. Documents indicate that American Home Products said the 440 people who took the drug were entitled to $30 million to $50 million.
Instead, the pharmaceutical company paid $200 million. Why would the company pay an additional $150 million, if it was not to pay for future claims?
"They were buying peace in Kentucky," Robbins said. Robbins will continue his testimony Tuesday. Gallion, who took the stand on Friday, is expected to return to the stand later this week.
The Wall Street Journal Law Blog also has an update:
Prosecutors allege that as part of the fraud, the three failed to tell clients how much the total settlement was for, threatened many with a fine if they told their family members about the settlement and also failed to tell many that some of the settlement money was going into a non-profit. The three Lexington-area lawyers deposited millions of the settlement money into their own accounts after the settlement was reached in 2001 and then later moved some of that money back into the settlement account after the Kentucky Bar Association issued a subpoena asking about the details of the settlement, the indictment alleges.
Robbins testified that the judge decides if and when clients are notified in a class action. “It is the judge’s responsibility to decide when notice should be given and what that notice should consist of.”
The Supreme Court issued its opinion in Republic of the Philippines v. Pimentel (06-1204), a Rule 19 case (failure to join a necessary party) arising out of a human rights mass tort action against Marcos. The opinion can be found here. Justice Kennedy writing for the majority overturned the 9th Circuit opinion and held that the case must be dismissed under Rule 19. I'm wondering whether I should add this to my civ pro syllabus this fall. Hopefully we'll hear more about the opinion soon from Howard Erichson, who blogged on the case in December (see here).
The Supreme Court also issued its opinion on Taylor v. Sturgell (07-371), with Justice Ginsburg writing the unanimous court disapproving of the doctrine of "virtual representation," reversing and remanding the case. The opinion can be found here. Erichson's take on the oral argument on this blog can be found here. Erichson got what he asked for!
All this breaking news thanks to Scotusblog.
Tuesday, June 10, 2008
The Daily Business Review reports that animal owners are seeking class certification over a new type of pet food class action that resembles a false-advertising claim. They claim that certain advertisements make false claims about the contents of pet food, when in reality the food contains unsavory ingredients. Here's an excerpt:
The pet food companies claimed they are allowed to use words, such as "complete and balanced," "veterinarian recommended" and "natural" in advertising as authorized by the Association of American Feed Control Officials and approved by U.S. Food and Drug Administration. The defense claims the allegations in the lawsuit castigating the entire pet food industry are culled from the Internet.
Altonaga didn't buy it.
"Defendants do not assert that the FDA or any other regulatory body has specifically approved the advertisement or statements at issue in this action, and nothing in the AAFCO standards authorizes defendants to engage in false advertising," Altonaga wrote in her order.
The 84-page, fourth-amended complaint filed April 11 names seven pet food manufacturers: Tennessee-based Mars Petcare, Ohio-based Iams, Kansas-headquartered Hill's Pet Nutrition -- makers of Science Diet, California-based Del Monte Foods, Missouri-based Nestle Purina Petcare, California-based Nutro Products and California-based Natura Pet Products.
Also named are some large retailers: Target, Wal-Mart, Publix Supermarkets, Kroger and Albertsons, as well as pet specialty stores PetSmart, Pet Supermarket, Petco Animal Supplies and Pet Supplies "Plus/USA."
The pet owners seek damages and injunctive relief to prevent pet food companies from advertising their product is akin to human food.
One other defendant is Menu Foods, a Canadian-based packing concern, which really opened the door to litigation nationwide against pet food companies.
Last week, five pet food companies won preliminary court approval of a $24 million settlement in New Jersey of class action lawsuits for selling tainted food. The lawsuits were filed after Menu Foods said more than 180 brands of foods and treats needed to be recalled because they contained melamine-tainted wheat gluten imported from China. About 1,950 cats and 2,200 dogs died from kidney failure from eating melamine-contaminated pet food, according to the U.S. Justice Department.
The Florida lawsuit, though, takes a different path than the Menu Food class action litigation."I think this is a different case because it focuses on advertising as opposed to content of food and the damage done to pets," said attorney Marcos Jimenez, who represented retailers Safeway and Stop & Shop Supermarkets, which were dropped as defendants in the Florida case.
"It's more of a false advertising-type of case than product liability."
The lawsuit alleges defendants "humanize" pet food by, among other things, including pictures or drawings of human-grade ingredients. "Defendants' marketing makes numerous deceptive and/or false claims," the lawsuit alleges.
Monday, June 9, 2008
The Supreme Court today granted certiorari to hear another appeal concerning punitive damages in Williams v. Philip Morris, this time to decide whether the Oregon courts complied with the U.S. Supreme Court's earlier ruling in the case. Here's a link to the Oregon Supreme Court opinion in question, and an excerpt from the NY Times article by David Stout:
The United States Supreme Court will review a $79.5 million punitive-damages award against Philip Morris in the latest back-and-forth between the justices and the high court of Oregon. The last time the case was before the United States Supreme Court, the justices overturned the award by an Oregon jury on the ground that jurors might have improperly calculated the monetary figure to punish the cigarette maker, by weighing the harm the company caused to smokers other than Mr. Williams.
That ruling, on Feb. 20, 2007, sent the case back to the Oregon Supreme Court, which concluded in January that the award against Philip Morris could stand because the United States Supreme Court had acknowledged that harm to people not involved in the lawsuit could still play a role in the punitive-damages calculation “in the sense that it is relevant to showing the degree of reprehensibility of a defendant’s conduct.”
In announcing on Monday that it would look at the Williams case once again, the United States Supreme Court said it would not consider whether the amount of the judgment was constitutionally permissible. Rather, it would decide if the Oregon court’s January action was taken in defiance of the February 2007 ruling.
For earlier accounts of the Williams case on this blog, see here (on the Supreme Court's opinion and a related editorial), here (on a subsequent law review symposium), and for earlier accounts with links to articles, audio, and more, see here, here, here, here, here, here, and here.
Conde Nast's Portfolio.com's July issue features a story by Bill Lerach titled "I Am Gulity." New York Times writer Joe Nocera offers a less flattering perspective in his story, "Serving Time, but Lacking Remorse." Both are interesting reads.
Saturday, June 7, 2008
Article in the Wall Street Journal -- FDA Warning Letters to Companies Decline Sharply, by Jared Favole. Here's an excerpt:
The number of Food and Drug Administration warning letters sent to companies dropped by half in the past 10 years, highlighting a change in enforcement tactics at an agency facing criticism about its policing of the food and drug industries.
In 2002, the FDA changed its policies and required that all warning letters go through the agency's chief counsel's office, a move it said was designed to strengthen the letters and make them legally consistent and credible.
In fiscal 2001, the year before this change took effect, the agency issued 1,032 warning letters. In 2006, the FDA sent 538 letters, and in 2007 sent 471, according to agency data. The FDA sends warning letters for an array of reasons, from the mislabeling of chocolate-chip cookies to the improper manufacturing of blood bags.
Friday, June 6, 2008
An article entitled "Summary Judgment Cases Over Time, Across Case Categories, and Across Districts: An Empirical Study of Three Large Federal Districts," by Theodore Eisenberg & Charlotte Lanvers, just posted on SSRN (available here) reaches some interesting conclusions about summary judgments. Good for mass tort plaintiffs: the summary judgment rate in tort cases remained steady after the summary judgment trilogy. Bad for civil rights plaintiffs: summary judgment rates increased in these cases. Here is the abstract:
Prior research on summary judgment hypothesizes a substantial increase in summary judgment rates after a trilogy of Supreme Court cases in 1986 and a disproportionate adverse effect of summary judgment on civil rights cases. This article analyzes summary judgment rates in the Eastern District of Pennsylvania (EDPA) and the Northern District of Georgia (NDGA), for two time periods, 1980-81 and 2001-02. It also analyzes summary judgment rates for the Central District of California (CDCA) for 1980-81 and for other civil rights cases in the CDCA in 1975-76. The combined sample consists of over 5,000 cases. The three-district sample for 1980-81 had an overall summary judgment rate of 4.5%. The summary judgment rate increased from 6.5% to7.0% in the two-district EDPA and NDGA sample from 1980-81 to 2001-02, a statistically insignificant difference. The pattern was inconsistent across case categories. For contract, tort, and a residual category of other noncivil rights cases, there was no evidence of a significant increase in summary judgment rates over time. Interdistrict differences were not dramatic in these three areas except that NDGA had a higher rate of summary judgment in tort and contract cases than did EDPA. The most striking effect was the approximate doubling - to almost 25% - of the NDGA summary judgment rate in employment discrimination cases and a substantial increase in the NDGA summary judgment rate in other civil rights cases. Subject to the limitation that both time periods studied are removed in time from the Supreme Court's 1986 summary judgment trilogy, the only strong evidence in this study of a post-trilogy increase is in NDGA employment discrimination cases. Civil rights cases had consistently higher summary judgment rates than noncivil rights cases and summary judgment rates were modest in noncivil rights cases.
Wednesday, June 4, 2008
The New Jersey Supreme Court issued its decision in Sinclair v. Merck, a medical monitoring class action filed against Merck on behalf of Vioxx users who had not filed personal injury claims. The opinion is available here. The court rejected the plaintiff's claims. This opinion joins a spate of recent decisions in Merck's favor. Vioxx continues to be a vehicle for making new law and rethinking old ones. Whether the New Jersey courts' tightening of medical monitoring claims is a good idea from a policy perspective will have to wait to another day.
For a defense-side take on this opinion, see the Drug and Device Law Blog here. Their analysis is useful. Thanks to Mark Hermann for bringing this to my attention.