March 12, 2010
Nagareda on "Pretrial as Trial in Complex Litigation"
Richard Nagareda (Vanderbilt) has just posted an intriguing article "1938 All Over Again? Pre-Trial as Trial in Complex Litigation" on SSRN. Here is the abstract:
This Essay for the Sixteenth Annual Clifford Symposium analyzes the transformation of the pre-trial process for complex civil litigation. Settlement, rather than trial, has emerged as the dominant endgame. As a result, in functional terms, the pre-trial phase effectively operates as the trial. Over the past quarter-century, doctrinal developments have shifted steadily backward within the pre-trial phase the major checkpoints for judicial scrutiny of claims. The key developments consist of the Supreme Court’s summary judgment “trilogy” (1986), the rise of Daubert scrutiny for the admissibility of expert testimony (1993), the elaboration of a distinctive law of class action certification (circa 2006) and, most recently, the invigoration of pleading standards in the Court’s Twombly and Iqbal decisions (2007 and 2009).
During the same period, an equally dramatic transformation has taken place with respect to litigation scholarship. Insights from economics, cognitive psychology, and finance – among other non-law disciplines – have broadened the vocabulary now available for analysis. Two big-picture points emerge from this literature: first, costs (especially, the ability to impose costs on one’s opponent) matter greatly to the choice whether to continue litigation or to settle; and, second, risk (or, more specifically, variance) matters in the pricing of civil claims via settlement, above and beyond calculations of expected value.
The emergence of judicial checkpoints in the pretrial phase has elicited considerable debate – most strikingly, today, over the Court’s pleading decisions. At one level, those decisions are rightly seen as pushing against the ethos of the 1938 reforms that put into place our modern notice-pleading regime. Yet, in a deeper historical sense, we actually find ourselves today in much the same position as the 1938 reformers. Today, as then, there is a lingering – but, often, undertheorized – sense that procedure itself is having an undue and even deleterious effect on the pricing of claims via settlement. It is just that the procedure now suspected to be distortive consists of the 1938 reforms. This Essay explains, in particular, how the Court’s attention to pleading standards in recent years marks a shift of emphasis from the regulation of variance in the litigation process to a concern over cost imposition.
The various pretrial checkpoints today exhibit a similar structural feature. They seek to manage variance or cost imposition by way of third-party judicial regulation – specifically, court rulings that signal “stop” or “go” on the road to trial. Evaluation of procedural doctrine as an enterprise of regulation opens up inquiry to the existence of other potential regulatory modes. This Essay concludes with examination of alternatives in the nature of first-party regulation (e.g., cost shifting) and regulation in the form of judicial action that would not be dispositive vis-à-vis trial but, rather, would seek to inform directly the pricing of claims in the settlement endgame.
March 11, 2010
First Responders Litigation Settles
The New York Times reports that In Re World Trade Center Disaster Site Litigation in the Southern District of New York has settled. The case involved nearly 10,000 plaintiffs and at least 90 defendants.
The parties agreed that if 95% of the plaintiffs sign on to the litigation, then the settlement will go forward at $575 million. If 100% agree, then the settlement will go forward at $654.5 million. This looks a lot like the Vioxx settlement in that sense. It sets aside a $23.4 million "insurance fund" to cover future claims - those plaintiffs whose illnesses have yet to develop.
The amounts allocated to each plaintiff will be based on a points chart that will be administered by a neutral claims administrator on the model of the Sept. 11th Victims Compensation Fund. The points will be based on illness severity and, according to the Times, "Other factors that will be considered include evidence of a link to ground zero and adjustments for age, pre-existing conditions, time of diagnosis and smoking history. The process could take up to a year." The process is set up to weed out fraudulent claims.
The lawyers will get up to a third in fees, and the insurer that will fund this settlement has already paid over $200 million in fees to defend the litigation.
How will they value the cases? They haven't held any bellwether trials (and they won't now) so it will be interesting to see what the basis of calculations will be. A study of the Sept. 11th Victims Compensation Fund found that most people who disputed the forensic economists findings got higher compensation; and the judge has said that the amounts individuals get must be individualized and subject to his review even though the case is not certified as a class action. See Tinari et al, Did the 9/11 Victim Compensation Fund Accurately Assess Economic Losses?
I urge any readers with ideas or insights into this question to contact me via email.
March 8, 2010
Amicus Brief - Cert Petition: Legislative Jurisdiction/Extraterritoriality
My colleague at Southwestern Law School, Austen Parrish, is asking that law professors contact him if they might be interested in signing on to an amicus brief in support of a petition for writ of certiorari in British American Tobacco v. United States. See the notice, below, for details.
UPDATE -- The links are fixed in the notice below and should now work.
Amicus Brief – Extraterritoriality and Legislative Jurisdiction
Max Huffman (Indiana) and Austen Parrish (Southwestern) have written an amicus brief in the case British American Tobacco v. United States in support of a petition for cert. The cert. petition is part of a massive case brought by the U.S. against the tobacco companies. Various cert. petitions have been filed, including a government petition seeking recovery of a $280 billion disgorgement award. Details about the underlying case can be found on SCOTUSblog.
The amicus brief focuses only on the narrow issue of how a court should approach issues of extraterritorial jurisdiction. They are looking for full-time law professors at U.S. law schools to sign on to the brief. If you would consider signing on to the amicus brief, please email Austen Parrish at firstname.lastname@example.org, and he can send you a draft for review. There’s a tight deadline and the brief will be finalized this week: the deadline for providing notice to file the amicus is this Friday and the brief will likely go to the printer early next week. Because the effects test applies in a number of contexts (antitrust, securities, trademark, labor law, environmental law, criminal law etc.), the D.C. Circuit's decision could have far-reaching implications. This would be a good opportunity for the Court to clarify what is now a confused area of law.
Quick Overview of Case and Issues
The petitioner's cert petition implicates the question of whether RICO applies to the overseas conduct of foreign corporations. The D.C. Circuit did not directly address whether Congress intended RICO to apply extraterritorially -- an issue on which the lower courts are divided. Instead, it found: (1) that when domestic effects are felt in the United States, regulation of foreign conduct of a foreign corporation does not implicate extraterritorial jurisdiction; and (2) that it need not decide whether RICO applies extraterritorially so long as the foreign conduct has substantial effects in the United States. Because the D.C. Circuit found a domestic effect, it presumed that Congress intended RICO to regulate abroad. The case raises interesting questions about the role of the presumption against extraterritoriality, the effects test, and international law. It implicates at least a three-way circuit split on how the courts determine legislative (prescriptive jurisdiction).
The amicus brief focuses on how a court should interpret the geographic reach of federal law (the extraterritoriality question). The brief is being submitted to encourage the Court to grant certiorari. After explaining the confusion that exists in the lower courts on the issue of legislative jurisdiction, the brief clarifies the history and application of the effects test and shows how that history bears upon the proper interpretation of whether Congress intended a statute to reach extraterritorial conduct. The brief does not take a position on the underlying merits: the federal government's use of RICO to prevent and restrain an alleged scheme to deceive American consumers about the health risks of smoking. The amicus brief argues that courts should not use the effects to create a presumption in favor of extraterritorial regulation, but rather that the effects test sets the outer limit of Congressional power under international law (assuming one of the other bases for jurisdiction under international law does not exist). The brief highlights how assuming that legislation applies extraterritoriality can cause harm and undermine the meaningful development of international law.
Professors Huffman and Parrish have previously written about these issues, which forms the basis for the amicus brief. Professor Huffman’s article on the Foreign Trade Antitrust Improvements Act can be found here. Professor Parrish has written two pieces. The first, Reclaiming International Law from Extraterritoriality can be found here. The second, The Effects Test: Extraterritoriality’s Fifth Business can be found here.
Tort law conference at Pepperdine
Here's an announcement from Prof. Richard Cupp about an upcoming conference at Pepperdine:
The Pepperdine Law Review is hosting a symposium on April 16, 2010 entitled Does the World Still Need United States Tort Law? Or Did it Ever? The symposium will examine the present and future influence of United States tort law on other nations in light of globalization’s rise and United States tort law’s concurrent retrenchment on many fronts.
Some of the symposium speakers include Michael Bidart (Shernoff, Bidart & Echeverria), Ellen Bublick (University of Arizona), Richard L. Cupp (Pepperdine), John C.P. Goldberg (Harvard), Michael D. Green (Wake Forest), Ellen S. Pryor (SMU), Robert L. Rabin (Stanford), Michael L. Rustad (Suffolk), Victor E. Schwartz (Shook, Hardy & Bacon), Marshall S. Shapo (Northwestern), Stephen D. Sugarman (Boalt Hall), and Roger P. Alford (Pepperdine) . International scholars speaking at the symposium include Peter Cane (Australian National University), Bruce Feldthusen (University of Ottawa), Lewis N. Klar (University of Alberta), the Honorable Allen M. Linden (Pepperdine; former judge of the Federal Court of Appeal of Canada), and Jane Stapleton (University of Texas). The Honorable Allen M. Linden will be honored at the symposium for his enormous contributions as a tort law scholar and teacher both in Canada and in the United States.
A limited number of stipends are available for law professors who wish to attend the symposium. Please contact Professor Richard Cupp at email@example.com regarding stipend applications.
SCOTUS Accepts Vaccine Preemption Case
BNA Law Week reports:
Bruesewitz v. Wyeth,
No. 09-152. Does Section 22(b)(1) of the 1986 National Childhood
Vaccine Injury Act, which states that "[n]o vaccine manufacturer shall
be liable in a civil action for damages arising from a vaccine-related
injury or death associated with the administration of a vaccine ... if
the injury or death resulted from side effects that were unavoidable
even though the vaccine was properly prepared and was accompanied by
proper directions and warnings," preempt all vaccine design defect
claims, whether based on strict liability or negligence?