April 3, 2008
Nagareda on the Globalization of Aggregation
Richard Nagareda (Vanderbilt) has just posted a promising article on SSRN entitled "Aggregate Litigation Across the Atlantic and the Future of American Exceptionalism." Here is the abstract:
This article analyzes the emerging phenomenon of trans-Atlantic civil litigation on an aggregate basis - chiefly, though not exclusively, by way of class actions. European systems have shown a growing receptiveness for aggregate litigation, but treatments of this development have consisted largely of description. This article offers an analytical framework with which to anticipate the structural dynamics of transnational aggregate litigation in the twenty-first century.
Simply put, these structural dynamics will tend to recreate the difficulties seen in the context of nationwide class action litigation within the United States. The nationalization of US commerce led to aggregate litigation of a commensurately national scope. The result, however, was regulatory mismatch - for the scope of aggregation to expand to match the scope of the disputed nationwide activity, rather than the jurisdictional sovereignty of the forum. The globalization of commerce, coupled with the very multiplicity of approaches to aggregate litigation seen today, has a considerable tendency to replicate these mismatches - now, with international proportions. The recent Vivendi securities class action in the United States and the pathbreaking Royal Dutch Shell settlement under the 2005 Dutch collective settlement act confirm this trend.
The article then analyzes the vehicles by which to address regulatory mismatches. Here, too, the US experience is instructive, underscoring both the centrality and the limitations of the two vehicles by which to achieve a kind of de facto, informal governance: the principles for transnational claim preclusion and the latitude available for private contracts to shift disputes from litigation to arbitration.
Second Circuit Dismisses Light Cigarette Class Action
The Second Circuit dismissed an $800 billion light cigarettes class action against tobacco companies today. Although Judge Weinstein approved the class in September of 2006, the Second Circuit held found that individual issues, such as why smokers chose light cigarettes, predominated over common ones. Here’s an excerpt of the New York Times story:
Plaintiffs’ lawyers had wanted to represent potentially millions of people across the country who had smoked light cigarettes, but the court found that it was impossible to tell why smokers chose light cigarettes, so the group could not be treated as a class. Instead, smokers would have to sue individually.
"Individualized proof is needed to overcome the possibility that a member of the purported class purchased lights for some other reason than the belief that lights were a healthier alternative," the ruling said.
The ruling by a three-judge panel of the United States Court of Appeals for the Second Circuit means that individuals can still pursue lawsuits against cigarette makers, but they cannot be grouped together as a class.
Although not entirely unexpected, the ruling was a setback for lawyers who thought that the ruling approving the class, issued by Federal District Judge B. Weinstein in Brooklyn in September 2006, could have opened a new avenue for litigation against the tobacco industry, exposing cigarette companies to potentially large damages.
Judge Weinstein’s ruling in the case, known as Schwab for one of its plaintiffs, Barbara Schwab, had been viewed as significant. That was partly because it was the first so-called lights case certified as a class in federal court and partly because such lawsuits on behalf of smokers of light cigarettes have generally not been successful.
Unlike most tobacco lawsuits, the Schwab case did not contend that smokers were injured but instead that they had been subjected to a fraud since 1971, when Philip Morris began selling Marlboro Lights, the first light cigarette.
On a related note, the House of Representatives approved a bill today that would give the Food and Drug Admistration the authority to regulate tobacco.
April 2, 2008
Brooklyn Law School Symposium -- The Products Liability Restatement: Was it a Success?
On November 13 and 14, 2008, Brooklyn Law School will host a symposium entitled, The Products Liability Restatement: Was it a Success? Presenters from academia include: Professors Richard Ausness (Kentucky), Anita Bernstein (Brooklyn), Margaret Berger (Brooklyn), Ellen Bublick (Arizona), Edward Cheng (Brooklyn), Richard Cupp (Pepperdine), Mary Davis (Kentucky), Mark Geistfeld (NYU), Michael Green (Wake Forest), James Henderson (Cornell), Lars Noah (Florida), David Owen (South Carolina), Robert Rabin (Stanford), Jane Stapleton (Texas), and Aaron Twerski (Brooklyn). Presenters from the practicing bar include: Sheila Birnbaum (Skadden), Hildy Bowbeer (3M), Elena Cappella (ALI), Bob Conason (Gair, Gair), Michael Hoenig (Herzfeld & Rubin), Paul Rheingold (Rheingold, Valet), Kenneth Ross (Bowman & Brooke), Victor Schwartz (Shook, Hardy), Larry Stewart (Stewart Tilghman), and Malcolm Wheeler (Wheeler Trigg).
April 1, 2008
Charleston Law Review Symposium Issue on Punitive Damages After Philip Morris v. Williams
Last September, Charleston Law School hosted a symposium entitled, Punitive Damages, Due Process, and Deterrence: The Debate After Philip Morris v. Williams. (See prior posts here and here.) The resulting symposium issue of the Charleston Law Review has just been published. Articles in the issue include the following:
Anthony Sebok, After Philip Morris v. Williams: What is Left of the "Single-Digit" Ratio?, 2 Chas. L. Rev. 287 (2008)
Anthony J. Franze, Clinging to Federalism: How Reluctance to Amend State Law-Based Punitive Damages Procedures Impedes Due Process, 2 Chas. L. Rev. 297 (2008).
Neil Vidmar & Matthew Wolfe, Fairness Through Guidance: Jury Instruction on Punitive Damages After Philip Morris v. Williams, 2 Chas. L. Rev. 307 (2008)
Christopher J. Robinette, Peace: A Public Purpose for Punitive Damages?, 2 Chas. L. Rev. 327 (2008).
Keith N. Hylton, Due Process and Punitive Damages: An Economic Approach, 2 Chas. L. Rev. 345 (2008)
Victor E. Schwartz & Christoper E. Appel, Putting the Cart Before the Horse: The Prejudicial Practice of A "Reverse Bifurcation" Approach to Punitive Damages, 2 Chas. L. Rev. 375 (2008)
Elizabeth J. Cabraser & Robert J. Nelson, Class Action Treatment of Punitive Damages Issues After Philip Morris v. Williams: We Can Get There From Here, 2 Chas. L. Rev. 407 (2008)
Byron G. Stier, Now It's Personal: Punishment and Mass Tort Litigation After Philip Morris v. Williams, 2 Chas. L. Rev. 433 (2008).
Michael L. Rustad, The Uncert-Worthiness of the Court's Unmaking of Punitive Damages, 2 Chas. L. Rev. 459 (2008)
Downloads of the articles via .pdf files are available at TortsProf Blog.
Alemanno on the Precautionary Principle and the ECJ
A very interesting article recently posted on SSRN by Alberto Alemanno entitled: The Shaping of the Precautionary Principle by European Courts: From Scientific Uncertainty to Legal Certainty. Here is the abstract:
The aim of this study is to illustrate the role played by EC Courts in shaping the controversial precautionary principle which allows the adoption of protective measures in situations of scientific uncertainty. Called upon reviewing the legality of national and Community measures inspired by a precautionary approach, both the European Court of Justice (ECJ) and the Court of First Instance (CFI) contributed to development of the precautionary principle. They did not simply lay the ground for the recognition of the principle in the EC legal order, by turning a mere state of mind into a general principle of Community law, but they also defined the conditions triggering its invocation. In short, the EC courts' case law has been crucial in determining when, how and by whom the precautionary principle may be relied upon in Community legal order.
No Immunity for NYC in 9/11 Claims
BNA Law Week reports that on March 26 the Second Circuit held that New York City and its contractors are not automatically entitled to derivative Stafford Act immunity for state law claims brought by various persons (police, firefighters, etc.) who helped clean up the site of the World Trade Center attacks of September 11, 2001. In re World Trade Center Disaster Site Litigation, 2d Cir., No. 06-5324-cv, 3/26/08. The opinion is available here, on the Second Circuit website.
A quote from the opinion:
"Separation of powers animates discretionary function immunity; this doctrine does not permit us to extend limitless derivative immunity to ensure that, in the event of another attack, contractors are willing to assist in disaster recovery efforts. We are confined to the parameters of the derivative defense. Nonetheless, we observe that private contractors, unlike volunteers or conscripts, are paid for their services and able to pass along the cost of liability protection to the government, either by including the cost of liability insurance in their contract or by seeking indemnification from the government."
Regulating the Global Economy: Foreign Pharmaceuticals
An article by Walt Bogdanich in the New York Times on March 30 describes the difficulties of regulating the content of drug imports, with special reference to the heparin scandal. The article can be found here. The article explains: "Anti-counterfeiting experts say that the longer the chain, the greater the opportunity for counterfeiters to adulterate the product. In fact, F.D.A. investigators have yet to figure out where in the multistage manufacturing process the chemical that mimics heparin was added."
March 31, 2008
Foreign Courts Wary of Punitive Damages
The New York Times has an interesting story on Italians’ view of punitive damages. Apparently they are "so offensive to Italian notions of justice" that Italy refuses to enforce judgements containing punitive damages. Here’s an excerpt of the full article, which begins by highlighting an Alabama woman who sued when her 15-year old’s motorcycle helmet failed:
Most of the rest of the world views the idea of punitive damages with alarm. As the Italian court explained, private lawsuits brought by injured people should have only one goal — compensation for a loss. Allowing separate awards meant to punish the defendant, foreign courts say, is a terrible idea.
Punishments, they say, should be meted out only by the criminal justice system, with its elaborate due process protections and disinterested prosecutors. It is not fair, they add, to give plaintiffs a windfall beyond what they have lost. And the ad hoc opinions of a jury, they say, are a poor substitute for the considered judgments of government safety regulators.
Some common-law countries do allow punitive damages, though in limited circumstances and modest amounts. In the United States, by contrast, enormous punitive awards are relatively common, although they are often reduced or eliminated on appeal. Last month, for instance, the United States Supreme Court heard arguments in the Exxon Valdez case, where a jury’s initial award of $5 billion was later reduced to $2.5 billion.
Still, such awards terrify foreign courts.
"The U.S. practice of permitting a lay jury to exercise largely discretionary judgment with limited constraints in awarding punitive damages is regarded almost universally outside the U.S. with a high degree of disfavor," said Gary Born, an American lawyer who works in London.
Foreign lawyers and judges are quick to cite particularly large American awards. Julian Lew, a barrister in London, recalled a Mississippi court’s $400 million punitive award against a Canadian company in 1995 with scorn. "It did bring America into total and utter contempt around the world," Mr. Lew said.
Yet there are signs that the gap between the United States and the rest of the world is narrowing, as American courts and legislatures start to limit punitive awards and other countries start to experiment with them.
Punitive damages have deep roots in American and English common law, but their nature has changed here over time. "Until well into the 19th century," Justice John Paul Stevens of the Supreme Court wrote in 2001, "punitive damages frequently operated to compensate for intangible injuries" like pain and suffering or emotional distress.
These days, driven by the structure of the American civil justice system, entrepreneurial plaintiffs’ lawyers and the populism they embrace, punitive damages are used to send messages to large corporations, to fill gaps in regulation and to reward successful plaintiffs with multiples of what they have lost. Distinctive features of the American legal system — civil juries, class actions, contingency fees and the requirement that each side bear its own lawyers’ fees — all play a role in amplifying punitive damages.
Cardiologists Question Continued Use of Vytorin and Zetia
This morning’s Wall Street Journal reports that a panel at the American College of Cardiology Study questioned heavy use of Vytorin and Zetia in fighting cardiovascular disease. Merck and Schering-Plough countered by saying "they believe Vytorin failed to show a benefit likely because most of the study patients had previously been treated with statins, and their arteries were healthier than expected." Here’s an excerpt of the article:
The panel's opinion, which came at the annual meeting of the American College of Cardiology Sunday, could prompt many physicians to switch heart patients away from significant use of the drugs, known as Vytorin and Zetia, and frustrate efforts of the drug companies to shore up sales of the medicines. Together, the perspective and the study results themselves appeared to strengthen the view that adoption of the medicines has far outpaced any evidence supporting their benefits.
"You've just seen a negative trial that should change practice, especially the way we in this country have prescribed" the drugs, Yale University cardiologist Harlan Krumholz told thousands of cardiologists. He urged doctors to go "back to statins," the class of cholesterol-lowering drugs that includes Lipitor and Zocor. Major studies have demonstrated their ability to save lives and prevent heart attacks.
If the advice is followed by cardiologists and primary care physicians, it would almost certainly spur a significant drop in sales of the drugs. The companies have been trying to revive or hold the line on already slumping sales of the pills, which climbed to a combined $5.1 billion last year.
Officials with both Merck and Schering-Plough took issue with calls to curtail their use. Enrico Veltri, a group vice president for clinical research at Schering-Plough, said Zetia and Vytorin remain an important "practical option" for helping patients to reduce LDL cholesterol, the type associated with cardiac issues.