Friday, June 26, 2009
Article in the Wall Street Journal -- Car Liability, Dealers Pose New Hurdles For GM Plan, by Mike Spector and Jeffrey McCraken. Here's an excerpt:
The discussions show how the federal government's GM rescue is brushing up against the limits of its ambitious legal approach, which attempted to use the Bankruptcy Code to override many state legal contracts and protections.
This could ultimately expand the cost of GM's $60 billion bailout, though government officials say it
shouldn't delay the emergence of a "new GM" from bankruptcy protection.
Article in the Wall Street Journal -- Safety Board Cites Two New Reports of Problems With Airbus Sensors, by Andy Pasztor. Here's an excerpt:
The National Transportation Safety Board on Thursday identified separate malfunctions on two different airlines that ended with safe landings over the past few weeks. They appear to describe the same type of malfunction -- triggering a loss of autopilot and automatic-throttle -- that investigators believe occurred on the Air France A330 shortly before it crashed May 31 en route from Rio de Janeiro to Paris in stormy weather.
Such airspeed issues aren't enough to bring down a jetliner. Investigators in the Air France crash suspect a combination of turbulent weather, possible computer glitches, pilot actions and perhaps other factors combined to put the jet into a fatal dive.
Article in the Wall Street Journal -- Nestlé Unit Denied FDA Requests, by Jane Zhang. Here's an excerpt:
In a September 2006 visit, for example, managers at the Danville, Va., plant refused to allow a Food and Drug Administration inspector to review consumer complaints or inspect its program designed to prevent food contamination. The inspector found dirty equipment and "three live ant-like insects" on a ledge but nothing severe enough to give the plant a failing grade.
A year earlier, officials at the Nestlé plant presented another FDA inspector with a list of things it wouldn't do. "Among these are the refusal to review the firm's consumer complaint file, refusal to permit photography, refusal to sign affidavits or receipts and refusal to provide specific information on interstate commerce," the inspector wrote.
Some of the highlights include:
Class members may sue an attorney who altered a class settlement in a smokeless tobacco class action without first notifying class members, the Fourth Circuit held in an unpublished opinion (Martin v. Ball, 4th Cir., No. 08-1757, 6/12/09)
A CAFA jurisdictional ruling -- the Eleventh Circuit held (per curiam) that the plaintiff's pleadings must establish that the amount in controversy has been met. Other Circuits had held that the defendant could produce evidence that the amount had been met through its own documentation. (Thomas v. Bank of America Corp., 11th Cir., No. 09-11143, 6/12/09).
A $30 million criminal fine in the case against two lawyers accused of bilking their clients in connection with the diet drugs litigation has been affirmed. (U.S. v. Gallion, E.D. Ky., No. 2:07-39-S-DCR, 6/17/09).
Tuesday, June 23, 2009
BNA Law Week reports that the 9th Circuit has held that each party must bear its own costs in the Exxon punitive damages litigation. (Baker v. Exxon Mobil Corp. (In re Exxon Valdez), 9th Cir., No. 04-35182, 6/15/09). The costs were substantial -- approximately $70 million -- mostly attributable to the bond the company had to put up. The original award was $5 billion and it was reduced to approximately $500 million. While the reduction was substantial, the 9th Circuit held that the results were sufficiently mixed that Exxon was not the "prevailing party" such that costs could be shifted under Fed. R. App. P. 39(a)(4) (stating that "if a judgment is affirmed in part, reversed in part, modified, or vacated, costs are taxed only as the court orders.")
Monday, June 22, 2009
Article on cnn.com -- Obama signs bill putting tobacco products under FDA oversight. Here's an excerpt:
President Obama signed landmark legislation Monday giving the Food and Drug Administration new power to regulate the manufacturing, marketing and sale of tobacco.
The Family Smoking Prevention and Tobacco Control Act gives the FDA power to ban candy-flavored and fruit-flavored cigarettes, widely considered appealing to first-time smokers, including youths. It also prohibits tobacco companies from using terms such as "low tar," "light" or "mild," requires larger warning labels on packages, and restricts advertising of tobacco products.
It also requires tobacco companies to reduce levels of nicotine in cigarettes.
Ray Brescia (Albany Law School) has posted an article entitled, Tainted Loans: The Value of a Mass Torts Approach in Subprime Mortgage Litigation, advocating the employment of techniques such as class actions, consolidation of related cases, and global settlements for litigation concerning subprime litigation. The full abstract is presented below:
A poison has entered the financial bloodstream. The subprime mortgage crisis and the wider financial crisis it has spawned have caused the erosion of trillions of dollars in wealth, the destruction of whole communities and the dislocation of millions of homeowners. Yet, unlike in other situations where toxic products have caused widespread harm, to date, we have not seen an avalanche of litigation, large jury awards, massive settlements compensating victims and financial ruin for the distributors of those products. Some of this is changing, however. Litigation arising out of the present financial crisis is hitting the courts, including suits alleging discrimination in the proliferation of subprime mortgages, securities litigation, and claims under state unfair trade practices laws and common law fraud principles. Courts may soon be inundated with these cases and will need effective tools for handling them.
With some exceptions, the litigation presently underway is an incoherent collection of random cases, however. If we view the subprime mortgage crisis and the financial crisis that has followed as the result of the proliferation of toxic products, a mass tort approach to the subprime mortgage disaster would seem inevitable. Such an approach would include utilization of the following techniques: class actions; consolidation of related cases; global settlements; and aggregation of factual, liability and damages assessments. This article makes the case that subprime litigation should adopt the techniques utilized in mass torts cases to make the prosecution of such litigation more efficient, comprehensive and effective, while bringing those most responsible for the present financial crisis to justice. It is argued that these techniques are best suited to achieve what I identify as goals for a legal response to the financial crisis: reducing the number of foreclosures; correcting for past illegality in the mortgage market; uncovering and spreading information about the presence of such illegality; promoting the modification of outstanding mortgage loans; strengthening and expanding voluntary efforts to overcome past abuses in the market; preserving home values; and complementing legislative and regulatory efforts to improve oversight of financial markets. The article also concludes that a mass torts approach in the subprime litigation context is superior in terms of meeting these goals when compared to other potential legal responses: i.e., individual litigation, individual bankruptcy, regulation, voluntary efforts and social insurance.