September 20, 2008
Class Actions in Australia and Finland
Peter Spender of Australian National University has written an article titled "The Class Action as Sheriff: Private Law Enforcement and remedial Roulette," which discusses class actions in Australia, Canada, and the U.S. Mikko Valimaki, of Helsinki University of Technology, has written a piece titled "Introducing Class Actions in Finland - Lawmaking without Economic Analysis." Here's the abstract of Peter Spender's piece:
In this essay I will explore the effect of developments in class action law and practice upon remedial law, and investigate the state of health of the compensation principle.
The compensation principle requires that plaintiffs should as nearly as possible be awarded a sum of money that will place them in the same position as if they had not suffered a wrong. The principle has occupied a central position in modern private law to provide standing to plaintiffs and to limit the powers of courts. Yet commentators such as Berryman argue that the compensation principle is in decline and suffering a death by a thousand cuts. Some of the deepest cuts have been inflicted by the modern class action.
I will examine this argument by reference to class actions in Australia, Canada, and the US, using the vitamins antitrust litigation in those jurisdictions as a case study.
My overall hypothesis is that whilst the compensatory principle is being assailed by the calls for the class action to deter corporate misconduct, the principle still acts as a moral compass. Corrective justice has not entirely yielded to instrumentalism, but the current autonomous, individualistic, and substantive law model of corrective justice under private law needs to adjust to group procedural justice as practiced in law firms and in the courts.
And here's the abstract for Mikko Valimaki's article:
Finnish Parliament accepted in February 2007 a new law on class actions (literally group actions), which entered into force 1 October, 2008. The legislative process was particularly slow. Finland has been preparing a law on class actions since the early 1990s and this was - depending on the criteria of counting - the fourth try. Some fifteen years ago the idea of class actions was something new in Europe. Time passes quickly however, and the new Finnish law cannot be described as radical by any meaning of the word. Many European countries have changed their existing procedural codes and enacted new laws to make class action litigation possible.
The new Finnish class action law differs from the mainstream in fundamentally limiting its scope of application. Although the law is titled as being a general law on class actions, it only applies to consumer cases where the government-funded Consumer Ombudsman is acting as the lead counsel. This was not the case in the beginning. Years ago, the first law proposals had much broader scope of application but as the lobbying between potential defendants (the industry) and plaintiffs (consumer agencies etc.) became polarized, it became evident that there can be either a major compromise or no law at all.
This article analyses the Finnish lawmaking process from comparative and economic policy viewpoints. First, the article discusses how did the Finnish legislative process end up with a certain outcome. It is argue that neither well-founded economic nor empirical arguments had any relevant role. Instead, partisan claims on class action cases in the United States and their potential implications to companies were used as a strong argument to restrict the law's scope of application. The official preparatory documents did not present any study on experiences from the United States. There was non-partisan empirical evidence of the use of class actions only from Sweden.
Second, this article compares the claims presented in the Finnish lawmaking process to studies and legislative work made in other countries. The article concludes that the most of the claims were based on partisan opinions, not on well-founded studies. The examples of other Nordic countries however show that there is nothing uncommon in implementing class actions in a Northern European legal system. Misuse of class actions is not likely due to e.g. fundamental differences in the substance of accident law and the rules regarding the indemnification of legal costs in litigation.
Third, this article argues that the main reason why the Finnish class action law failed was the dynamics of the legislative process. The idea of reaching a consensus in preparatory work before a law is submitted to the parliament means that if certain interest groups are able to form a strong opposition, the law may never enter the parliament no matter of the substantial arguments. The result is that an unknown number of cases are not litigated at all in Finland because the scope of application of the law is restricted. Regulatory authorities have no resources to provide as extensive preventive threat as would a complementary private mechanism.
September 19, 2008
Wyeth v. Levine Background
Adam Liptak's article in the New York Times today describes the key people involved in Wyeth v. Levine, the pre-emption case that could change the face of mass torts. Here's a short excerpt:
In the spring of 2000, suffering from a migraine, Ms. Levine visited a clinic near here for a treatment she had received many times: Demerol for the pain and Wyeth’s drug Phenergan for nausea.
“Nothing wrong with either drug,” Ms. Levine said. “They’re both safe when given the right way.”
But if Phenergan is exposed to arterial blood, it causes swift and irreversible gangrene. For that reason, it is typically administered by intramuscular injection. According to Ms. Levine’s lawyers, using an intravenous drip is almost entirely safe as well.
This time, though, a physician’s assistant used a third method. She injected the drug into what she thought was a vein, a method known as “IV push.” But the assistant apparently missed.
In the following weeks, Ms. Levine’s hand and forearm turned purple and then black, and they were amputated in two stages.
September 17, 2008
New Tort Books from Cambridge University Press
Cambridge University Press has published two tort books of interest: Toxic Torts: Science, Law and the Possibility of Justice, by Professor Carl F. Cranor (UC Riverside); and Tort Wars, by Joel Levin (Levin & Associates).
September 15, 2008
Metrolink Train Crash in Los Angeles
Los Angeles suffered one of the worst train crashes in American history on Friday, leading to approximately 25 dead and more than 100 injured. A Metrolink commuter train rammed head-on into a Union Pacific freight train. Initially, Metrolink blamed the accident on the deceased Metrolink engineer, whom Metrolink said had ignored the signal not to proceed. Oddly, this blame came before the complete investigation has been completed.
Interestingly, the Metrolink engineer was employed by an independent contractor, Veolia Transportation, Inc. As a result, some have wondered if Metrolink was seeking to avoid liability by blaming the injury on the engineer, claiming that Metrolink and the state were not responsible for the independent contractor's conduct. Not so fast. Although it's true that liability is not generally traced from acts of independent contractors to those hiring them, the law does generally allow liability to continue where the independent contractor appears to be an employee, or where the independent contractor's work is controlled by the hiring entity. Here, I would imagine the engineer appeared to everyone as a Metrolink employee, and the public assumed as much. In addition, I would imagine Metrolink closely controlled the work of an independent contractor who is engineer on its trains. Cases under the California Tort Claims Act also have recognized, particularly in cases involving public defenders as independent contractors, that those hired by the state may still trigger liability for the state where the state treated them as employees and controlled their work.
A separate issue of interest is the question of positive train control, which allows trains to be monitored and controlled remotely using GPS. This technology, which though not currently widely used, is in increasing use across the country and would slow and stop trains if they appeared to be heading toward a crash. Metrolink's failure to use this technology might be another basis for a negligence claim.
For more on the disaster, see this article in the Wall Street Journal -- Crash Highlights Risk on the Rails, by Peter Sanders, Alex Roth, and Andy Pasztor. I'm quoted in the article.