August 8, 2008
International Human Rights Litigation in U.S. Courts
Beth Stephens, Judith Chomsky, Jennifer Green, Paul Hoffman, and Michael Ratner have published the second edition of International Human Rights Litigations in U.S. Courts (2008).
Jefrrey Davis has published his book, Justice Across Borders: The Struggle for Human Rights in U.S. Courts (2008).
August 7, 2008
WSJ Editorial on FASB Proposed Rule Requiring Disclosure of Estimate of Lawsuit Cost
Editorial in the Wall Street Journal -- FASB's Lawyer Bonanza. Here's an excerpt:
Under the proposed change, a company facing a lawsuit would have to list on its financial statement its best-guess estimate of what that litigation could end up costing -- not just in attorney fees, but in any potential payout. For a company in high-stakes litigation, that means showing its hand to plaintiffs' attorneys, allowing them to gauge management's upper estimate of what the case is worth.
The effect will be to force corporate defendants to fight lawsuits with one hand tied behind their backs -- assuming the company can even figure the "fair value" of a lawsuit it has no idea if it will win or lose. Predicting the trajectory of complex, often multiyear litigation is inherently unscientific. As we saw with Merck and Vioxx, a company's stock price can jump or fall depending on jury verdicts whose results are impossible to predict.
August 6, 2008
Krueger and Serotta on Cy Pres Class Distributions
Editorial in the Wall Street Journal -- Our Class-Action System Is Unconstitutional, by George Krueger and Judd Serotta (both of Blank Rome). The editorial criticizes the cy pres method of distribution of class proceeds. Here's an excerpt:
In our view, this as-near-as-possible remedy in class actions is defective. The Constitution provides for the resolution of "cases" and "controversies" between aggrieved parties. Courts are empowered to resolve those specific disputes, and not to transfer a corporate defendant's assets to an outside organization that has not appeared before the court. The Constitution does not give courts the authority to satisfy notions of "deterrence" by giving institutions like legal aid societies or universities windfalls when those entities are not even parties to the lawsuit.
The best solution would be to give the remainder of the uncollected funds back to the defendant; to those class members who have already collected their initial portion; or even to the government, thereby at least allowing society to benefit in some way, while still serving as a deterrent. Another solution would be to come up with a less arbitrary -- and more objective and disinterested -- mechanism for finding an appropriate beneficiary organization that shares the plaintiffs' common interests.
We also recommend a new wave of class-action reform, following up on certain successful elements of the Class Action Fairness Act of 2005. In our view, class-action attorneys should be compensated only based on the reward actually recovered by class members, as opposed to the total claimed "value" of the settlement. The claimed value is often calculated by including monies paid to these third parties who benefit from the settlement even though they did not participate in the litigation and are thus not even aggrieved.
August 5, 2008
WSJ Editorial on Milberg
Editorial in the Wall Street Journal -- Justice and Milberg. Here's an excerpt:
Poor Bernie Ebbers, the former WorldCom boss now serving a 25-year prison sentence. If he'd been a class-action lawyer, the former CEO might have ended up with a fat payout from his employer despite his felony rap. At least that's one way to look at the Justice Department's recent nonprosecution agreement with the notorious Milberg law firm.
We criticized the deal last month for letting the law firm pay Melvyn Weiss -- its former lead partner and now admitted felon -- a share of the firm's future lawsuit winnings. Milberg also picked up his legal fees and expenses. We've since learned that all of this was fine with prosecutors at Justice. Thom Mrozek, spokesman for the U.S. Attorney's office in the Central District of California, confirmed the contents of last week's letter to us from five Milberg partners saying Justice had given them the green light to keep Weiss in the financial style to which he had become accustomed