November 14, 2008
Parchomovsky & Stein on Torts and Innovation
Gideon Parchomovsky (Penn) and Alex Stein (Cardozo) have recently posted "Torts and Innovation" on NELLCO. The article will come out shortly in Michigan Law Review (107 Mich. L. Rev. 205 (2008)). You can find the link here. Here is the abstract:
This Essay exposes and analyzes a hitherto overlooked cost of the current design of tort law: its adverse effect on innovation. Tort liability for negligence, defective products, and medical malpractice is determined by reference to custom. We demonstrate that courts’ reliance on custom and conventional technologies as the benchmark of liability chills innovation and distorts its path. Specifically, the recourse to custom taxes innovators and subsidizes replicators of conventional technologies. We explore the causes and consequences of this phenomenon and propose two possible ways to modify tort law in order to make it more welcoming to innovation.
A very interesting piece. Their two proposals are (1) to move to a pure cost-benefit system, rather than looking at custom, or (2) to have special boards of industry experts designate some innovations for privileged status that would be equal to custom. These review boards would be optional and private. Whether they would be subject to capture and whether courts would be well placed to trust them (or whether this privileged status would become the subject of dueling experts) remain open questions, noted but not fully resolved by the authors.
Brazil Vacates Tobacco Award
A press release by Souza Cruz, a subsidiary of British American Tobacco, indicates that a Sao Paulo Court of Appeals vacated an award against Souza Cruz and Philip Morris Brasil, a subsidiary of Philip Morris International. Here's an excerpt:
The 7th Civil Chamber of the Court of Appeals of the State of Sao Paulo vacated yesterday, by unanimous vote, the judgment of the court of 1st instance that had found in favor of the indemnification claim brought by the Association for the Defense of the Health of Smokers ("ADESF") against the Brazilian cigarette manufacturers Souza Cruz (a subsidiary of British American Tobacco) and Philip Morris Brasil (a subsidiary of Philip Morris International). The Court of Appeals granted the appeals of the manufactures on grounds that the lower civil court decision had violated the constitutional principle of due process of law since it had failed to extend to the manufacturers the opportunity of producing any evidence, including expert evidence that had already been ordered by the Court of Appeals itself.
. . .The main reasoning of the Brazilian Courts for rejecting this type of claim is: consumers have free will to decide (or not) to smoke, since the decision to consume the product or not is a question of free choice, the widespread public knowledge of the diseases associated with cigarette consumption and the absence of defect in the product because it is a product of inherent risk, the manufacture, distribution and sale of which in Brazil is authorized and subject to severe regulations by the State.
November 11, 2008
Issacharoff & Miller on Aggregate Litigation in Europe
Samuel Issacharoff (NYU) and Geoffrey Miller (NYU) have posted "Will Aggregate Litigation Come to Europe?" on SSRN. Here is the abstract:
This paper considers Europe's experiment with aggregate litigation in light of American experience. European thinking on the topic appears to have reached consensus on two points: first, aggregate litigation will soon be the norm for Europe; and second, whatever form European aggregate litigation takes, it will not replicate American class action litigation with its domination by entrepreneurial plaintiffs' attorneys. We first examine four sources of dissatisfaction with the class action to assess which are meritorious, which are ill-founded, and which derive from a deeper debate over whether or not there should be private legal accountability for consumer claims. Drawing on America's long history of collective enforcement, we then ask whether Europe will adopt the incentives and institutional arrangements necessary to make aggregate litigation an effective remedy. Our concern is that Europe's revulsion at accepting the reality of legal enforcement as an entrepreneurial activity may leave the incipient reforms without the necessary agents of implementation.
November 10, 2008
FDA Preemption of State Pharmaceutical Suits
Very interesting article in the ABA Journal -- The Pre-emption Prescription, by Terry Carter. The FDA has been increasingly moving to pre-empt state suits based on its approval of pharmaceutical labeling. I'm troubled at the prospect of a large, unwieldy regulatory agency trying to assess reasonable care in warning when information on safety changes all the time, one can't even assume that the FDA has all the pertinent information when it decides, and the FDA's assessment of that information may not be correct. On the flip side, defendants shouldn't be held liable for adhering to any label they are forbidden to change by the FDA. While the prospect of regulation through juries is sometimes pilloried, one wonders whether individual litigation with well-credentialed expert witnesses and negligence standards incorporating arguments from custom wouldn't be more nimble in adapting legal standards to changing safety information and more effective at incentivizing adequate safety in warning. One could argue that juries may result in inconsistent decisions, but in a mass tort involving numerous cases and trials, wouldn't one prefer the verdict pattern that emerges (and the deterrence benefits of anticipating such jury accountability) to the rigidity, slowness, and possible regulatory capture affecting the FDA? I'll take traditional contract and tort law over FDA attempts at micro-management in both approval and liability.
WSJ on Asbestos Screenings in Michigan
The Wall Street Journal commented today in an editorial on problems involved with asbestos screenings involving a particular doctor in Michigan State Court. Here's an excerpt from Michigan Malpractice:
One reason we know about the great silicosis legal scam is that a Texas judge was brave enough to expose doctors who'd been paid by tort lawyers to gin up phony diagnoses. So it is encouraging to see a Michigan judge now helping to expose evidence of similar medical fraud in asbestos claims.
This action is taking place in the courthouse of Wayne County Circuit Court Judge Robert Colombo, Jr. Asbestos defendants have been attempting to disqualify Michael Kelly, a physician who appears to have falsely diagnosed thousands of people with asbestos-related disease. Judge Colombo recently gave them an opening, which is already having a dramatic effect on state asbestos claims.