Friday, December 26, 2008
Article in the Clarion Ledger -- Fen-Phen conviction upheld: Vicksburg lawyer bilked company out of $6.7M, by Jerry Mitchell. (H/t to Pharmalot.) Here's an excerpt:
The 5th U.S. Circuit Court of Appeals on Monday upheld the conviction of Vicksburg lawyer Robert Arledge, convicted of bilking the drug company Wyeth of more than $6.7 million over the diet drug Fen-Phen.
"We find that there was sufficient evidence to support the jury's verdict as to all counts," the court wrote.
U.S. District Judge David Bramlette sentenced Arledge to six years in prison for knowingly allowing clients to make claims of about $250,000 each for health complications although they had no legitimate reason.
Arledge was the sole lawyer charged in the joint Internal Revenue Service-FBI investigation of fraudulent claims in a $400 million settlement fund and subsequent settlement funds involving the use of Fen-Phen - a prescription diet drug pulled from the market in 1997 after research revealed it could cause heart problems.
Thursday, December 25, 2008
Wednesday, December 24, 2008
An article in the Wall Street Journal -- The Debate Over Who Pays Fees When Litigants Mount Attacks, by Dan Slater -- chronicles the increasing discussion over loser-pays lawsuit financing. (H/t Torts Prof Blog.) Professor Richard Nagareda (Vanderbilt) is quoted in the article. In a recent symposium piece in the Widener Law Journal Download stier_crimtorts_class_actions_and_the_emerging_mass_tort_method.pdf , I suggested that rather than class actions, a properly crafted loser-pays system may be preferable for small-value claims. Here's an excerpt from the article in the Wall Street Journal:
Who should foot the costs of a lawsuit? It's a question that splits the legal world.
Should each side bear its own lawyers' fees and other costs, as they do in the U.S.? Or should the loser pick up the tab for both parties, as they do in Canada, the U.K. and Germany?
The debate simmers across the international divide. In the U.S., the plaintiffs' bar generally cheers the "American rule" status quo, saying it is the only way to ensure that even the poorest litigants can access the courts. Tort-reformers say adopting the "English rule" would cut down on frivolous lawsuits while encouraging defendants to settle meritorious claims.
A recent trade article zeroed in on a long-overlooked component of the loser-pays system: insurance that covers legal fees. That article, penned by Marie Gryphon, an attorney and a fellow with the right-leaning Manhattan Institute's Center for Legal Policy, is reframing the debate.
UPDATE: More on the loser-pays discussion from the Wall Street Journal Law Blog.
Basically, it appears you sue the government for negligence in school-building construction that contributed to thousands of nationwide school-children earthquake deaths, and they just tell you to go away -- with the "judge t[elling] parents' representatives that government internal documents made it clear that the court should not be involved." That's according to an article in today's Wall Street Journal that describes a lawsuit by parents of Fuxin No. 2 primary school in Wufu, China. Indeed, even finding a lawyer is difficult because as one parent noted, "All the lawyers told us the government didn't allow them to receive such cases."
UPDATE: More from the Wall Street Journal Law Blog:
Sang [(who is one of the parents suing)], reached on his cellphone, told the WSJ that he’s moving around in an effort to avoid the police, fearing that he will be detained. Sang said that families who lost children have each received an average of about 60,000 yuan, or about $8,800, in payments from government agencies.
Martin Redish (Northwestern) has a new book on class actions titled Wholesale Justice that will be published in May with the Stanford University Press. Here's the description:
In recent years, much political and legal debate has centered on the class action lawsuit. Many lawyers and judges have noted the intense pressure to settle caused by the very filing of a suit. Some contend that the procedure amounts to a form of judicial blackmail. Others counter that it is an effective means of policing corporate behavior and assuring injured victims' fair compensation.
This book represents the first scholarly effort to view the modern class action comprehensively through the lenses of American political and constitutional theory. Redish argues that the modern class action undermines foundational constitutional principles, including procedural due process and separation of powers, and has been improperly transformed from its origins as a complex procedural device into a means for altering controlling substantive law in highly undemocratic ways. Redish proposes an alternative vision of the class action lawsuit, one that is designed to enable the device to serve its valuable procedural purposes without simultaneously contravening core precepts of American constitutional democracy.
And the reviews so far:
"Redish offers a novel analysis of the class action lawsuit from the perspective of political and democratic theory. All who write about class actions, whatever their perspective, will need to consider and address this provocative work."
—Erwin Chemerinsky, University of California, Irvine
"Widely regarded as one of the most important federal courts scholars of the past quarter century, Redish is also a leading figure in constitutional law. In this convincing, dramatic work, he has fused his fields of expertise in a unique effort to address the class action in terms of democratic theory. He makes a startlingly strong case that class practice undermines significant notions of democratic accountability and raises serious questions about underlying democratic values." —Richard D. Freer, Emory University
Tuesday, December 23, 2008
From tomorrow's New York Times. The FDA has decided to reconsider the dangers posed by bisphenol-A (BPA), a chemical found in plastic bottles, the linings of metal cans, and other often used household products after an FDA advisory committee on the subject accused the administration of being too lax in its review of these dangers. Canada has added BPA to its list of toxic substances and plans to ban it from baby bottles. There is some dispute over what dangers BPA actually poses to humans. Animal studies have shown various dangerous outcomes, but multigenerational studies (conducted by the industry) showed little or no risk at low levels of exposure. This brings up a critical issue in tort causation - can (or should) animal studies be used to prove causation? Often the tort system, because of statute of limitations issues, has to proceed before science can catch up. Furthermore, it is difficult to conduct controlled human studies with toxic substances, and thus consumers end up being the proverbial guinea pigs. For example, the Times article explains:
The Environmental Protection Agency has calculated that adults and infants can consume 50 micrograms of BPA per kilogram of body weight every day over a lifetime with little appreciable risk of harm. Yet more than 40 studies have found health effects in rodents fed as little as 0.2 micrograms per kilogram of body weight, according to Frederick S. vom Saal, a reproductive endocrinologist at the University of Missouri, Columbia, and a leading BPA researcher.
The Times article states that the Philips, the makers of Avent brand bottles, will begin selling BPA free bottles shortly or perhaps already have. Its good to see manufacturers being responsive even before the FDA acts, but seems clear that consumers cannot rely on manufacturers to change their formulation without some pressure, either regulatory, legal (i.e. the tort system) or from consumer action. The more responsive companies are early on in these types of things, the more likely they are to draw consumers and sustain their confidence.
Echoing the shot heard round the world -- Judge Jack's opinion exposing systemic misdiagnoses by plaintiffs' experts in the silica litigation -- a Michigan state judge has now found a similar pattern of plaintiff-expert misdiagnoses in the asbestos litigation. From an editorial in today's Wall Street Journal:
Good legal news for a change: The courts keep making progress against phony asbestos lawsuits, this time in Michigan, where Wayne County Circuit Court Judge Robert Colombo, Jr., has risen to the challenge of a case we wrote about in November.
Judge Colombo has been overseeing asbestos cases in which defendants were trying to disqualify Michael Kelly, a physician who had diagnosed thousands of people with asbestos-related disease on dubious grounds. The judge made clear in court that he didn't appreciate the national attention of our editorial, to put it mildly. But in the end he did the right thing by granting a hearing into Dr. Kelly's diagnoses. Tellingly, the plaintiff attorneys immediately withdrew all but one of their suits.
The judge plowed ahead anyway, helping to expose another asbestos scam. Defendants presented evidence that Dr. Kelly was neither a radiologist nor a pulmonologist and had failed the test that certifies doctors to read X-rays for lung disease. They also showed that the overwhelming majority of hospital radiologists who had reviewed Dr. Kelly's patients found no evidence of disease. An outside panel of radiologists who looked at Dr. Kelly's work found abnormalities in only 6 of 68 patients; Dr. Kelly had found abnormalities in 60 of those 68.
Monday, December 22, 2008
Here's an excerpt from In re Weiss, 2008 N.Y. Slip. Op. 09935 (App. Div. 1st Dep't Dec. 18, 2008) (h/t Overlawyered):
Specifically, respondent admitted that beginning around the 1970's and continuing at least into 2005, he and other individuals at Milberg Weiss, entered into secret, illegal kickbacks with a cohort of persons who were essentially on call to act as lead plaintiffs in class actions. The Milberg Weiss partners who agreed to this secret pay arrangement to certain named plaintiffs included, among others, William Lerach, David Bershad, and Steven Schulman ("the conspiring partners"). The individuals, who received the secret kickbacks to serve as lead plaintiffs in the class actions ("paid plaintiffs") included Howard Vogel, Seymour Lazar, Steven Cooperman and three individuals who resided in Florida. This arrangement permitted Milberg Weiss to file lawsuits faster and to gain the position as lead counsel to receive higher legal fees.
Respondent further admitted that he agreed to the secret payment agreement between Milberg Weiss and Lazar; he was aware of the payment arrangements between Milberg Weiss and the Florida plaintiffs, and personally made a cash payment to one of those plaintiffs in the late 1980's; and he was aware of the payment arrangement between Milberg Weiss and Cooperman, to whom he personally made at least one payment by check. In addition, respondent and others caused Milberg Weiss to issue checks to intermediary law firms, lawyers and other professionals with the intent and understanding that the money would be distributed to the paid plaintiffs. Respondent and others' also knew that although these payments were falsely described [*3]as, among other things, "referral fees" or "professional fees" owed by Milberg Weiss to the intermediaries, they were actually disguised kickbacks to the paid plaintiffs.
Additionally, respondent and others knew they had to conceal their payment scheme with the paid plaintiffs from the federal and state courts presiding over the class actions by making and causing to be made false and/or misleading statements in documents filed in class actions (including complaints, motions and certifications) and in testimony and discovery documents. Absent such concealment, there was a risk of disqualification because the kickbacks created an apparent conflict of interest between the paid plaintiffs and the class members they purported to represent. Respondent admitted that he knew the secret arrangement was improper. Among the false and/or misleading statements one or more of the conspiring partners caused to be submitted to the court in connection with four class actions were certifications by Cooperman, Lazar, and Vogel that they would not accept any payment for serving as a representative party beyond their pro rata shares of any recovery. These certifications falsely represented the true nature of Milberg Weiss' payment arrangement with the paid plaintiffs and constituted four racketeering acts that formed a "pattern of racketeering activity" under 18 USC § 1961(1) and (5).
Article in the Wall Street Journal -- Altria Ruling Ignites Legal Moves, by Brent Kendall. Here's an excerpt:
The Supreme Court's ruling last week allowing smokers in Maine to sue Altria Group Inc.'s Philip Morris unit for allegedly deceptive advertising of "light" cigarettes already is prompting new legal activity, including an effort to revive a multibillion-dollar case against the tobacco company that had been thrown out.
The high court's decision came just in time for St. Louis trial lawyer Stephen Tillery, who filed a legal motion Thursday seeking to reopen a $10.1 billion judgment in Illinois he obtained against Philip Morris in 2003. The judgment was later tossed out by the Illinois Supreme Court, which said Mr. Tillery's plaintiffs couldn't sue the tobacco company for marketing cigarettes with "light" and "low tar" descriptions.
Mr. Tillery says the U.S. Supreme's Court's 5-4 decision "eviscerates" the legal basis for the Illinois court's ruling and could breathe new life into his case. He was nearing a final deadline for finding a basis to revive the suit.