Saturday, August 30, 2008
Article in the Economist -- Legal Advice: Should you buy shares in a law firm?, which discusses recent changes in the UK allowing for non-partnership structures for law firms, and external investing by the public via, for example, initial public offerings. While there are real confidentiality concerns that would need to be addressed in any such proposal, investing in law firms strikes me as a proper way to harness the market to even the playing field in mass tort litigation. In particular, plaintiffs' firms should have access to investment capital, so that claims that should be brought are in fact brought. Then our litigation system can focus on getting the economic incentives right via the litigation system, confident that the firms will have the capital to respond. Here's an excerpt from the article:
WERE it possible to buy shares in big British and American law firms, they would appear to be attractive investments. They boast double-digit revenue growth at a time when many companies are suffering. Baker & McKenzie, one of America’s biggest firms, has just announced a 20% increase in annual revenues, which exceeded $2 billion for the first time. Britain’s top four firms have reported revenues up by an average of 15% this year, with all four passing the £1 billion ($1.85 billion) mark.
Investing in law firms is more than just a pipe dream. A change in British law, introduced last year, enables law firms to use business structures other than private partnerships, and allows for external investment and initial public offerings (IPOs). Law firms will have to wait for a new regulator, the Legal Services Board, but everything is due to be in place by 2011.
Thursday, August 28, 2008
Article in Forbes -- Another Storm Brewing For Vytorin, by Matthew Herper. Here's an excerpt:
When a study linking the widely used cholesterol drug Vytorin to cancer came out in July it caused a stir--for a few hours.
It should have lasted longer. A 1,873-patient study called SEAS found there were 50% more cancers among patients who took Vytorin than those who received placebo. Researchers involved in the study put together a hastily organized, company-funded press conference on July 21 to release the data.
There, Richard Peto, an Oxford University statistician, quieted the cancer scare before it really began. He pooled data from two much larger ongoing studies of Vytorin and said they showed that the cancer risk was a statistical fluke. He called the contention that Vytorin could cause cancer "bizarre." Deutsche Bank pharmaceuticals analyst Barbara Ryan says the impact of SEAS on Vytorin sales has been "negligible."
Shares of Vytorin makers Merck and Schering-Plough are still down 6% and 9%, respectively, since SEAS was released. The companies say the cancer finding is "an anomaly."
Next week, the full results of SEAS will be presented at a medical meeting in Munich, and, if some of world's top cardiologists, drug safety experts and statisticians are to be believed, the stage is set for yet another battle over Vytorin, which is already being haunted by worries over its effectiveness.
Wednesday, August 27, 2008
Professor Richard Epstein (Chicago) has published The Case for Field Preemption of State Laws in Drug Cases on Northwestern University Law Review's Colloquy. Here's an excerpt:
This brief Comment renews my defense of strong field preemption for FDA regulation. In Part I, I shall set out the emergence of modern preemption law in light of the vast expansion of federal power after the New Deal with special reference to two cases of great current concern, Riegel and Levine. Thereafter, in Part II, I shall comment first not on Professor Sharkey’s article, but on a recent essay by David Kessler and David Vladeck that takes the strong view that the doctrine of implied preemption should not be applied in duty-to-warn drug cases. Then, in Part III, I address Professor Sharkey’s agency model, and lastly, in Part IV, I offer a brief capitulation of my field preemption position.
Tuesday, August 26, 2008
I've posted my manuscript, Another Jackpot (In)Justice: Verdict Variability and Issue Preclusion in Mass Torts, on Bepress. Here's the abstract:
If there are no prior inconsistent verdicts, non-mutual offensive issue preclusion generally allows a finding by a single jury to bar relitigation, in future cases, of the issue by the defendant who lost in the prior case. This approach, however, ignores the possibility that the first verdict delivered may have been an outlier if further verdicts were permitted to be delivered. In mass tort litigation, such a flawed approach may result in critical issues such as defect or negligence being resolved by only six jurors, whose potentially outlier verdict is then applied to resolve the cases of thousands, perhaps bankrupting a company or an industry when most juries would not so hold. Focusing on mass tort litigation, this article presents the growing empirical evidence of verdict variability and then critiques the use of issue preclusion, whose downside is applied only against defendants, not plaintiffs, because only defendants were parties to the prior action. As a result, the article argues that courts should exercise their discretion to deny issue preclusion in mass tort litigation. Instead, courts should join the emerging consensus of mass tort management that ultimately better serves the goals of efficiency and public respect supposedly underlying issue preclusion: allow multiple verdicts to unfold a more balanced view of liability that will frequently be used for well-informed and far-reaching settlements.
This manuscript extends the analysis begun in my prior article, Jackpot Justice: Verdict Variability in the Mass Tort Class Action, Temple L. Rev. (forthcoming 2008).
Few pre-trial motions in our civil justice system elicit as much controversy as those for the certification of class actions. This Article offers the first account in the literature of the challenges faced today by courts in light of an important series of federal appellate decisions that direct the courts to resolve competing expert submissions on the class certification question in the pre-trial stage - even when the dispute overlaps with the merits of the litigation - in the course of determining the application of Rule 23.
Across broad swaths of class action litigation today, proponents of class certification invoke aggregate proof - evidence, typically of an economic or statistical nature, that presupposes the cohesiveness of the aggregate unit for litigation and, from that perspective, seeks to reveal quantitatively a common wrong attributable to the defendant. Debates over the proper role of aggregate proof unite what otherwise might seem disparate disputes over class certification today across securities, antitrust, RICO, consumer fraud, and employment discrimination litigation. Too often, however, courts have taken at face value the evidentiary form that aggregate proof assumes in class certification.
This Article urges a new conceptualization of the challenges facing courts in class certification today. The real question about aggregate proof in class certification is not one that speaks to the relationship between the court and the fact finder in the (usually, purely hypothetical) event of a class-wide trial. Rather, the institutional relationship that really matters is the one between the court and the legislature as expositors of governing law. Properly understood, aggregate proof offers not so much a contested view of the facts but, more fundamentally, a contested account of governing law - one eminently suited for judicial resolution and appellate correction de novo, without concern about possible intrusion into the role of the fact finder.
This Article exposes how renewed attention to the judicial role to say what the law is can lend coherence to the law of class certification, offering the first extended assessment of such controversial recent litigation as the civil RICO class action against the tobacco industry concerning its marketing of light cigarettes and the largest employment discrimination class action in history against Wal-Mart concerning the pay and promotion of its hourly female employees. The Article concludes by relating the analysis of class certification to larger changes in the civil justice system to grapple with the reality of settlement, rather than trial, as the endgame of litigation.