February 22, 2008
Kentucky Mass Tort and Class Action Litigation Committee
The Kentucky Supreme Court has created a committee to explore possible improvements in the handling of mass tort litigation. According to the press release, the committee "will determine whether current court rules for attorneys and judges provide adequate safeguards against unethical conduct and whether rule changes may provide guidance to attorneys and courts dealing with complex litigation." The appointment comes in the wake of indictments against several Kentucky lawyers charged with stealing client funds in fen-phen settlements. Here's the Torts Prof post about the committee, with a link to a news account.
I met with the Kentucky committee in Frankfort last month, and enjoyed the opportunity to discuss with them the challenges of mass tort litigation and some of the ways in which rules of procedure and rules of professional conduct may be modified or sensibly interpreted to accommodate the demands of mass disputes while respecting core values of justice and attorney-client relationships. It will be interesting to see what proposals, if any, the committee generates after exploring the possibilities. It will be equally interesting to see how many of those proposals are ultimately adopted.
February 21, 2008
Chris Seeger to speak on Vioxx settlement
Chris Seeger, a leading plaintiffs' lawyer and one of the chief architects of the Vioxx settlement, will deliver a lecture entitled "The Vioxx Story: Mass Settlement Without Class Actions" on March 11, 2008, 6:30 p.m. at Cardozo Law School in New York. The program will be moderated by Cardozo Professor Tony Sebok and will include commentary from Kathleen O'Connor of Dechert and from Howard Erichson (me).
For those who wish to understand mass tort litigation, Vioxx is the most important tale to grapple with since fen-phen. It's a story of mass collective representation, parallel state and federal litigation, multiple categories of claims, class cert denials, rejection of large-scale trial consolidation, informal bellwether trials, widely varying trial outcomes, a classic turnabout in defense strategy from vigorous litigaton to comprehensive resolution, and a sophisticated but not problem-free mass aggregate settlement. It's pretty much everything that's right and wrong with mass tort litigation today. I'm looking forward to the event.
Merck Appeals Canadian Class Certification
Merck announced yesterday that it would seek review of a Canadian decision to certify a Vioxx class action. Here’s an excerpt of its press release on the matter:
Merck Frosst Canada Ltd. has learned that the Saskatchewan Court of Queen's Bench has decided to certify class proceedings in a lawsuit regarding VIOXX®. The Company intends to seek appellate review of the decision because it believes that each plaintiff's case should be tried separately.
"Our legal strategy remains the same," said Maurice Laprairie, of MacPherson, Leslie & Tyerman LLP, Saskatchewan counsel for Merck Frosst and Merck & Co., Inc. "Although we argued against the creation of a class, the Court's decision still requires that each plaintiff must prove his or her claims on an individual basis because each plaintiff's case is unique and depends on an individual set of facts. Heart attacks, for example, are unfortunately common in the population and caused by many different risk factors."
"The Company intends to defend these cases vigorously over the coming years, and we are confident that the courts will decide these cases based on sound science," said Mary M. Thomson, of Gowling Lafleur Henderson LLP, Canadian national counsel for Merck Frosst and Merck & Co., Inc. "We will continue to argue that centralized judicial management of individual cases, not a class action, is the preferable procedure for trying each case in a fair and expeditious manner."
Canada appears more willing to resolve these claims through class action procedures than did the U.S., where Judge Fallon consolidated and (is in the process of) settling the claims on a multidistrict litigation basis. Canada’s National Report, submitted in conjunction with Stanford’s Globalization of Class Actions Conference last December observes:
Class actions have given rise to a wide variety of claims, including: governmental liability, products liability and mass torts; breach of contract; insolvency proceedings; and, securities, environmental and competition law violations. Whether or not a class is certified, of course, depends on many factors. However, Canadian courts have not singled out a particular kind of claim as being particularly problematic for class action treatment. For example, a number of product liability and mass tort class actions have been certified. Regarding these kinds of claims, the Canadian courts’ approach appears more receptive than their American counterparts.
February 20, 2008
Supreme Court Embraces Medical Device Preemption
The Supreme Court today decided Riegel v. Medtronic, an important case concerning federal preemption of state law product liability claims. Justice Scalia wrote for the 8-1 majority in favor of preemption, reasoning that experts at the FDA are better positioned than jurors to evaluate the risks and benefits of medical devices. Justice Ginsburg dissented. Here's a copy of the opinion on Findlaw. And here's an excerpt from David Stout's story in the New York Times, Justices Make It Tougher to Sue Medical Device Makers:
In a case with huge implications for the health care-technology industry, the Supreme Court ruled on Wednesday that the manufacturer of a federally approved medical device cannot be sued under state law if the device causes an injury.
The 8-to-1 ruling in favor of Medtronic, the Minneapolis-based maker of cardiovascular devices, made it much more difficult for patients and their families to sue makers of medical devices that have been granted federal approval. ...
The Supreme Court upheld the lower federal courts on Wednesday, with Justice Antonin Scalia writing for the majority that Medtronic and other manufacturers were protected under the Medical Device Amendments of 1976, which in its section on pre-emption bars states from imposing on medical devices “any requirement which is different from, or in addition to, any requirement applicable under this chapter.”
But the justices’ ruling was hardly the last word on when F.D.A. approval bars patients from suing. They are already considering at least three cases involving drugs and drug-labeling.
Judge Reduces Jury Verdict in Premarin & Prempro Case
This morning's Wall Street Journal reports that a district court judge in Nevada reduced a jury award against Wyeth from $134 million to $58 million. The damages included both compensatory and punitive damages based on the theory that the drugs Premarin and Prempro caused plaintiffs' breast cancer. The judge was concerned that the amounts represented "the result of passion and prejudice." Here's an excerpt of the story:
Washoe County District Court Judge Robert Perry granted the drug maker's motion to find the damages excessive. He ordered the award reduced to about $58 million -- $23 million in compensatory and $35 million in punitive damages.
The judgment had been the largest award to date against the Madison, N.J., company, which faces about 5,300 similar lawsuits across the country.
All involve the drugs Premarin, an estrogen replacement, and Prempro, a combination of estrogen and progestin.
Judge Perry said the jury's judgment of $35 million in compensatory and $99 million in punitive suggested the amounts were "the result of passion and prejudice."
"The court believes that this reduction in damages adequately compensates plaintiffs for the serious consequences which the jury found to have been caused by defendant, while also serving to punish defendant and deter others from similar conduct," he wrote.
February 19, 2008
Asbestos and Mass Torts with Fraudulent Victims
Keith Hylton (Boston University) has posted his piece, Asbestos and Mass Torts with Fraudulent Victims, on SSRN. This piece was part of Southwestern's Perspectives on Asbestos Litigation Symposium. Here's the abstract:
Deterrence and compensation goals should be distinguished, and compensation priorities should change in response to the deterrence goal. This has immediate implications for the problem of handling marginal and fraudulent claims in asbestos litigation. Where the deterrence goals come to the forefront, for example in instances of reckless exposure, it may be desirable for courts to require defendants to pay damages that are not transferred to any claimants. Where the deterrence goals are less compelling, as in instances of ordinary negligence, the importance of weeding out marginal and fraudulent claims becomes paramount. I consider optimal penalties for attorneys who bundle fraudulent claims.
February 18, 2008
CPSC to Toy Industry: Eliminate Lead in Toys
Article on cnn.com -- Toymakers, stores must act on lead - regulator. Here's an excerpt:
The head of the U.S. Consumer Product Safety Commission said Monday that toymakers and retailers need to step up their efforts to eliminate lead from toys.
"I will not tolerate this industry or any other not complying with our regulations," said Nancy Nord, the acting chairwoman of CPSC. "This problem must be fixed."
Nord, speaking at the annual American International Toy Fair, called on manufacturers to audit their factories. She also said that retailers must do more to assure that they don't sell tainted toys.
"We will be relentless with recalls," Nord said. "There is no reason why they can't certify that every toy has been designed for safety."
The CPSC has been working with the Toy Industry Association over the past few months to hammer out tougher toy safety standards after more than 25 million toys were recalled last year because of lead paint hazards and defective designs.
The TIA board of directors on Sunday approved a proposal for testing and a safety verification system for toys sold in the United States. Specifics of the plan will not be released until Friday. The association said key elements include procedures for design hazard analysis, auditing manufacturing process controls and product safety testing.
February 17, 2008
Geistfeld on Punitive Damages, Retribution, and Due Process
Professor Mark Geistfeld (NYU) has posted his paper, Punitive Damages, Retribution, and Due Process, 81 Southern Cal. L. Rev. 263 (2008), on the NELLCO Legal Scholarship Repository. Here's the abstract:
Tort law provides awards of punitive damages for reasons of deterrence and retribution. In light of a recent decision by the U.S. Supreme Court in Phillip Morris USA v. Williams, the retributive rationale for punitive damages will inevitably come under heightened scrutiny. The case involves a punitive award of $79.5 million, which is ninety-seven times greater than the compensatory damages, making it constitutionally suspect for exceeding the single-digit ratio between punitive and ompensatory damages. The Court, though, has never addressed the institutional issue in a case involving serious bodily injury or death, and so Williams poses a number of new questions. How can compensatory damages provide an appropriate baseline for evaluating punitive damages in a case of wrongful death, given that monetary damages provide no compensation to a dead person? What is the appropriate baseline? Any future deterrence provided by a punitive award cannot protect the decedent’s tort right, and so the award must be justified exclusively in terms of retribution. Is retribution inherently subjective and arbitrary, unless constrained by some objective measure such as the single-digit ratio between the punitive and compensatory damages? Or is there some way to translate retribution into dollars? These questions are not limited to wrongful death cases and must be resolved by any court trying to determine whether a punitive award is unconstitutional for exceeding the single-digit ratio. These questions can all be answered once retribution is tied to the inherent limitations of compensatory damages, which yields a method for quantifying this form of punitive damages. Based on government data and methodology for quantifying the social cost of a premature death, this method shows why vindication of the decedent’s tort right in Williams justifies the $79.5 million punitive award. When formulated in this manner, vindictive damages satisfy the requirements of both substantive and procedural due process and provide a baseline for reviewing courts to determine whether any given punitive award, like one based on general deterrence, is excessive in violation of substantive due process. This method fully accounts for the reprehensibility factors that determine the constitutionality of a punitive award, while also explaining why the Court could defensibly rely on procedural due process to reverse and remand Williams back to state court.