August 20, 2009
Anita Bernstein on Asbestos Achievements
Anita Bernstein (Brooklyn) has posted to SSRN her article, Asbestos Achievements. Here's the abstract:
This Article defends a much-maligned cohort of lawyers by pointing out their unique accomplishments. Critics of the asbestos plaintiffs’ bar call these advocates greedy, unethical, and over-enriched. Regardless of the merits of the accusations, any judgment of these lawyers must also recognize what they achieved. American legal doctrines, both substantive and procedural, had stood in the way of asbestos plaintiffs’ claims. The vigorous advocacy and creative challenges that overcame these barriers should inspire all lawyers who seek to perform effectively in behalf of clients.
Kenneth Klein on Pleading, Iqbal, and the 7th Amendment
Kenneth Klein (Cal Western) has posted on SSRN his article, Ashcroft V. Iqbal Crashes Rule 8 Pleading Standards on to Unconstitutional Shores. Here's the abstract:
Over the course of the last two centuries, the realities of modern civil litigation and the traditional interpretation of the Seventh Amendment have been on a collision course. The recent Supreme Court Opinion in Ashcroft v. Iqbal, heightening the pleading standards under Rule 8, is the point of impact. The thesis of this Article is that while the Iqbal Opinion fails even to acknowledge a potential conflict with the Seventh Amendment, the decision interprets Rule 8 in a manner that is unconstitutional when measured against the traditional interpretation of the Seventh Amendment.
August 19, 2009
Fraud in the DBCP Lawsuits
Rule 11 Ruling in the DC Circuit
The ABA/BNA Lawyers Manual on Professional Responsibility reports that Judge Merrick Garland overturned a sanction against a lawyer who failed to distinguish between facts and inferences in his memorandum opposing summary judgment. Judge Garland wrote: “There is no basis in the text of Rule 11(b)(3) for the legal proposition that an attorney must separately identify ‘fact’ and ‘inference.’ ” Lucas v. Duncan, D.C. Cir., No. 07-5264, 7/31/09.
The magistrate judge below had imposed the sanctions ($3,500) sua sponte. The spurious distinction between a "fact" and an "inference" (which, after all, is a finding of fact based on circumstantial evidence) was rightly put to rest in the opinion.
The magistrate also apparently ruled that sanctions were appropriate because the motion told a one sided story - he believes that lawyers have an obligation to present evidence for both sides. Judge Garland rightly ruled that the lawyer is under no such obligation. A good lawyer ought to construct a narrative that can account for bad facts, but no rule in our adversarial system requires lawyers to recite the facts for the other side.
I should also note that the underlying case was for age discrimination. Studies have shown that Rule 11 sanctions are more common in civil rights cases.
August 18, 2009
First Circuit Decision on Federal Claims Act
FDA Law Blog analyzes the decision in United States ex rel Duxbury v. Ortho Biotech Products.
Climate Change Litigation and Legislation
Sean Wajert (Dechert) from Mass Tort Defense offers an update.
Kentucky Fen-Phen Lawyers Given Long Prison Sentences
Attorneys William Gallion and Shirley Cunningham Jr. were sentenced yesterday to 25 and 20 years, respectively, for defrauding clients out of millions of dollars in connection with a settlement of fen-phen claims. They were ordered, in addition, to pay over $127 million in restitution and to forfeit $30 million to the government. Both were already disbarred. Although lighter than the prosecutors recommended, these sentences mean that Gallion and Cunningham will probably spend most of the remainder of their lives in prison; both men are in their 50s and the federal system does not allow parole. The defendants plan to appeal.
According to this news report from the Louisville Courier-Journal, U.S. District Judge Danny Reeves said that both lawyers were guilty of "unbridled greed" and neither showed "a grain of remorse." Had they taken what they were entitled to, each would have earned millions of dollars in legitimate fees, but Judge Reeves said that it “appears to the court that they just wanted more.” Bloomberg reports that the judge stated that the sentences are intended to deter other lawyers from stealing settlement funds.
The case involved a settlement of over 400 fen-phen plaintiffs who had opted out of the nationwide diet drugs settlement class action reached by Wyeth (formerly American Home Products). After thousands of plaintiffs nationwide opted out of the settlement class action, Wyeth proceeded to negotiate aggregate settlements with plaintiffs' law firms around the country. In Kentucky, a state court had certified a fen-phen class action for litigation but Wyeth negotiated a settlement of the individual clients' claims on condition that the class be decertified. The attorneys -- Gallion, Cunningham, and Melbourne Mills -- had individual retainer agreements with their clients that provided for contingent fees of 30% and 33%. The government charged that the lawyers took far more than they were entitled to. It charged that the lawyers lied to their clients about the settlement allocations, took millions of dollars in court-awarded fees in addition to their contingent fees, and took millions more to set up a foundation called the Kentucky Fund for Healthy Living that would pay them as salaried managers. Mills was initially charged along with Gallion and Cunningham, but he was acquitted in an earlier trial where he successfully contended that he was too drunk to have been guilty of the crime. According to the Bloomberg report, Gallion and Cunningham tried to avoid responsibility by arguing that they didn't understand what they were doing and were following another lawyer's advice: "Lawyers for Gallion and Cunningham argued that they were innocent, inexperienced in handling large awards in class-action suits and made mistakes. They tried to blame Cincinnati lawyer Stan Chesley for many of the men’s decisions."
At the trial, I testified for the government as an expert on questions of civil procedure and legal ethics. The case raised questions about the intersection of class actions and non-class aggregate settlements and about lawyers' duties in connection with class and non-class settlements. The court, after a Daubert hearing, agreed with my analysis of the issues and disqualified the defendant's expert from testifying, finding his proposed testimony unreliable. U.S. v. Gallion, 257 F.R.D. 141 (E.D. Ky. 2009).
In one of many odd twists, the case captured the attention of sports fans because Gallion and Cunningham were part owners of the champion racehorse Curlin.
August 17, 2009
Mass Tort Litigation on Facebook
Those interested in following mass tort developments via Facebook may be interested in choosing to "Become a Fan" of Mass Tort Litigation on Facebook.
Beck/Herrmann on Moving to Dismiss MDL Master Complaints
Discussed at Drug & Device Law.
Quarter Million Page Views!
Thanks to all our readers -- the Mass Tort Litigation Blog has exceeded 250,000 page views! Keep on reading, and we'll keep on posting!
S. Todd Brown on The Private Market for Specious Claims
S. Todd Brown (Buffalo) has posted on SSRN his article, The Private Market for Specious Claims. Here's the abstract:
One of the most curious aspects of the rise of aggregate mass tort litigation is the evolution of private markets for the development, trade, and sale of personal injury claims among attorneys. Much has been written about the economic efficiencies of mass tort litigation, and a far more modest body of scholarship has addressed the manner in which the private market for developing and prosecuting these claims generate these efficiencies. For all of their efficiencies, however, these markets have not developed in a way that makes actual litigation of claims possible, much less efficient. Rather, the efficiencies achieved have consistently promoted building the 'mass' of claims that may be brought, not developing and producing information sufficient to support the presentation and litigation of those claims in anything more than a superficial manner. Thus, even if nontraditional, streamlined adversarial processes might be employed to test the validity of these claims, these markets are ill-suited to provide courts and other participants with access to sufficient information to do so. The evolution of these markets in this manner is no accident. Efficiency is maximized where the parties do only as much as required and no more. And once a body of tort claimants achieves a sufficient mass, the perceived need to provide accurate in-depth information for the claims presented effectively vanishes. Developing efficient mechanisms for developing and communicating this information will provide no additional advantage (the information is not required for the claims to be paid in most cases) and may, in fact, reduce the number of claims that a lawyer may bring under applicable ethical and procedural rules. Ignorance in this case is not only bliss, it is also far more profitable. Moreover, as in other areas of law (such as the trading of specious debt collection claims), the multiple levels of claim acquisition and development in the private mass tort market may be viewed as shielding lawyers and service providers from culpability for filing specious claims, failing to satisfy traditional ethical duties to clients, and ignoring red flags that might otherwise demand additional investigation. The ability to control the flow of information to those affected by a particular action, a universal attribute of these markets, enhances the perceived insulation from liability. Even if this perception is misguided, it may nonetheless alter the participants' risk assessment and encourage the filing of specious claims. This article suggests that the markets for mass personal injury tort claims may be corrected by modest adjustments to party expectations, including the need to present testable information in a timely fashion. Although some commentators have suggested that such requirements will erase the positive efficiencies of mass tort litigation, the evidence in support of this suggestion is, at best, anecdotal and ignores the practical realities of mass tort practice and technological development. In short, insisting upon basic information development and ready availability of that information will necessitate fundamental changes to the private market for tort claims and better align the end goals of those markets with the goals of the tort system.