Saturday, April 23, 2011

Erichson on Civil Procedure and the Legal Profession

Our own Howie Erichson (Fordham) has posted a forward to the Fordham Law Review's symposium on Civil Procedure and the Legal Profession on SSRN.  Here's the abstract:

This Foreword introduces the papers of the 2011 Fordham Law Review symposium on Civil Procedure and the Legal Profession. The papers address a number of topics at the intersection of procedure and legal ethics, including sanctions, conflicts of interest, work product doctrine, evidence preservation, attorneys’ fees, class actions, and the duties of MDL leadership counsel. The Foreword introduces these papers and briefly reflects on the perspectives of proceduralists and ethicists.

ECB

April 23, 2011 in Mass Tort Scholarship | Permalink | Comments (0) | TrackBack (0)

Glover on The Structural Role of Private Enforcement in Public Law

Maria Glover, currently a Climenko Fellow at Harvard, has posted the abstract of her article, The Structural Role of Private Enforcement in Public Law, on SSRN.  Although I haven't seen the piece yet, the abstract raises significant questions about the role of private attorneys' general in an disaggregated regulatory system and the article looks like a worthwhile read.  Here's the abstract:

The American regulatory system is unique in that it relies upon a diffuse set of regulators, including private parties, rather than upon a centralized bureaucracy, for the effectuation of its substantive aims. In contrast with the traditional conception of private enforcement as an ad hoc supplement to public law, this Article argues that private regulation is part of the structure of the modern administrative state. Private enforcement and the mechanisms that enable it are not merely add-ons to our regulatory regime, much less are they fundamentally at odds with it. 

Yet these mechanisms today are being restricted in numerous ways, and on numerous fronts, in the form of judicial and legislative efforts to reform substantive tort law, prohibitions on the use of the class action device, the recalibration of procedural mechanisms through private contract to discourage suit, and pre-emption of state law causes of action, just to name a few. These types of restrictions, however well-intentioned, threaten to undermine substantive regulatory law, yet little thought has been given to the systemic consequences of these reform efforts. In fact, as this Article posits, these efforts raise ‘quasi-constitutional’ concerns that derive from fundamental precepts of our representative government - concerns that, once appreciated, can help set sensible boundaries on reform. 

This Article then provides a conceptual framework for designing appropriate mechanisms of enforcement in light of the contours of particular regulatory regimes. This framework seeks to effectuate and extend the systemic interests in aligning private enforcement mechanisms with the regulatory goals of particular areas of substantive law, and at the same time seeks to balance the value of such mechanisms with concerns that they will generate undesired regulatory consequences by suggesting mechanisms, not yet in existence, that address potential pathologies. In doing so, this framework replaces current, one-size-fits-all approaches to a number of seemingly disparate debates across our legal landscape, including those regarding restrictions on private mechanisms of enforcement, with one that seeks to align private enforcement mechanisms with the needs of various regulatory schemes. By offering sounder analysis of, and adding conceptual clarity to, these various debates, this framework offers the hope of eventual resolution of these seemingly intractable disputes. More fundamentally, this framework will help judges and legislatures better design mechanisms to enable private regulation to serve well its structural role in the American system.

ECB

April 23, 2011 in Mass Tort Scholarship | Permalink | Comments (0) | TrackBack (0)

Lofaso on What We Owe Our Coal Miners

Mass torts encompass a broad array of harms, including, as many of you may recall, The Buffalo Creek Disaster, as publicized by Gerald Stern's book of the same title.  Following up on coal mine safety, Anne Marie Lofaso (West Virginia) has an interesting piece titled What We Owe Our Coal Miners, which is forthcoming in the Harvard Law Review.  Here's the SSRN abstract:

In 2007, I published Approaching Coal Mine Safety from a Comparative Law and Interdisciplinary Perspective, which raised, but did not answer, the following question: What do citizens of a “just” society owe workers, such as coal miners, who daily risk their lives for our collective comfort? I endeavor to answer that question in What We Owe Our Coal Miners. 

I begin with three observations. First, borrowing from philosopher Thomas Scanlon, I observe that justice requires us to justify dangerous jobs by presenting reasons that “no one could reasonably reject as a basis for informed, unforced, general agreement.” In this context, I note that underground miners put themselves in physical danger and health risk to generate energy for all members of our society. Accordingly, those who benefit from the fruits of their labor owe reasons to those miners. Second, I acknowledge my own bias to live in a society that directly values the dignity of human life. Third, I note that the free-market argument does not directly value life, but values efficiency instead, which leads inevitably to markets clearing at a Kaldor-Hicks efficient level of fatalities as an acceptable risk rather than policies promoting the safest possible workplace. 

Accepting that, in reality, the political will does not exist to stop underground mining, the question becomes – what do we owe our coal miners? My conclusion, of course, is safer working conditions, but not after considerable deconstruction of free-market justifications. I begin by relating the human cost of meeting global energy demand through the profitable coal mining industry. Using economic data and historical circumstances, I then show the enormous power disparity between the well-compensated coal mine operators and coal miners, who actually risk their lives and health to mine the coal that generates about half of U.S. electricity. I draw the conclusion that the coal industry is particularly well-suited for collective bargaining because it is precisely the type of industry – large disparities in labor-management bargaining power with the potential for enormous disruptions in interstate commerce – that Congress had in mind when passing the National Labor Relations Act. 

In searching for a solution that presents sufficient reasons to justify coal mining, I test the hypothesis whether coal mining laws have in fact resulted in safer mines. Using a broken stick statistical method, I show that coal mine laws have in fact resulted in safer mines. Observing further that union mines have resulted in fewer disasters than nonunion mines in the past several decades, I argue for imposing the union model on top of this regulatory floor of rights. This solution has the added benefit of empowering those individuals who are actually risking their lives for our collective comfort. I end with the hope that this model for dignifying human life can be used for analyzing other dangerous jobs in crucial industries.

ECB

April 23, 2011 in Mass Tort Scholarship | Permalink | Comments (0) | TrackBack (0)

Friday, April 22, 2011

Pennumbra Debate: The Future of Mass Torts

An earlier post highlighted one side of the debate over the future of mass torts by Sergio Campos (in Pennsylvania's online companion, Pennumbra).  Here's an update with both sides, including our own Howie Erichson (as well as the SSRN link): 

In this series of essays, Professor Sergio Campos and Howard Erichson debate the wisdom of compelled collective treatment of mass tort claims. 

Campos urges abandonment of the "day in court" model and adoption of mandatory class actions for mass torts. Campos advances a view of mass tort claims as collective property and offers a reading of the Supreme Court's due process precedents that would permit mandatory collective treatment. Collective ownership of claims would allow plaintiffs' lawyers to litigate based on aggregate stakes and thus would reduce mass harms. Given the priority of reducing mass harms, Campos argues, individual ownership of claims should not be accommodated. 

Erichson responds that mandatory class actions are not necessary to level the field in mass torts. Mass representation by lawyers and the work of leadership counsel in multidistrict litigation can provide many of the benefits of collectivization without ultimately depriving claimants of the decision whether to release their claims in settlement. Emphasizing the agency risks of class actions as well as the availability of non-class settlement mechanisms, Erichson argues that absolute collectivization carries real dangers but only illusory benefits.

ECB

April 22, 2011 in Mass Tort Scholarship | Permalink | Comments (0) | TrackBack (0)

Popper on The Gulf Oil Spill and Arbitrary Limits on Civil Liability

Andrew Popper (American University) has posted his recent piece, Capping Incentives, Capping Innovation, Courting Disaster: The Gulf Oil Spill and Arbitrary Limits on Civil Liability, on SSRN.  Here's the abstract: 

Limiting liability by establishing an arbitrary cap on civil damages is bad public policy. Caps are antithetical to the interests of consumers and at odds with the national interest in creating incentives for better and safer products. Whether the caps are on non-economic loss, punitive damages, or set for specific activity, they undermine the civil justice system, deceiving juries and denying just and reasonable compensation for victims in a broad range of fields. 

This Article postulates that capped liability on damages for offshore oil spills may well have been an instrumental factor contributing to the recent Deepwater Horizon catastrophe in the Gulf of Mexico. More broadly, it argues that caps on damages undermine the deterrent effect of tort liability and fail to achieve economically efficient and socially just results.

ECB

April 22, 2011 in Mass Disasters, Mass Tort Scholarship | Permalink | Comments (0) | TrackBack (0)

Wednesday, April 20, 2011

The Japanese Liability System & Mass Disasters

I just saw a summary of a talk at Columbia Law School by Curtis Milhaupt, an expert on Japanese Law.  Here's what he says about liability for Tokyo Electric Power Co. (TEPCO):

Japanese law provides for strict and unlimited liability for a nuclear plant operator except for damages caused by a “grave natural disaster of exceptional character, which Milhaupt said would seem to apply here.
 
“To an American lawyer, if this doesn’t constitute a grave natural disaster, I don’t know what would,” said Milhaupt, an expert on Japanese law. “But very interestingly, several government officials came out shortly after the accident and said this exception does not apply.”
 
Even if Tepco were to claim the exception did apply, Milhaupt said that could create problems for the company. “The public anger at Tepco is so great that this may be a pyrrhic victory.”
 
Milhaupt, the Parker Professor of Comparative Corporate Law and Fuyo Professor of Japanese Law, said that suits may also be brought under Japanese corporate and securities laws. “One could imagine suits brought against Tepco by investors for misleading disclosure with respect to its crisis management systems,” said Milhaupt. He added that Tepco’s board of directors might also be sued for ignoring signs that its disaster prevention systems were woefully inadequate.

This could drive TEPCO into bankruptcy, but it won't because TEPCO is too big to fail. Milhaupt says

“Bankruptcy for Tepco is extremely unlikely. It’s too important a company for Japan and the impact on the other power companies would be too great,” Milhaupt said. “Whether through nationalization, or through capital injections, the bottom line is the Japanese government will have to support Tepco for years to come.”
ADL

April 20, 2011 in Current Affairs, Environmental Torts, Mass Disasters | Permalink | Comments (0) | TrackBack (0)

Tuesday, April 19, 2011

The New, New Opt-Out

As all class-action enthusiasts know, neither plaintiffs lawyers nor defendants like for class members to exercise their opt-out rights.  Opting out from the plaintiffs' attorneys' perspective diminishes their fee award and undermines their ability to deliver total peace to the defendant; the defendant wants finality and closure, which opt outs undermine.  So, lawyers developed mechanisms to thwart class members from opting out, such as including walk-away provisions, liens on the defendants' assets in favor of those remaining in the class, and most-favored-nation provisions in the settlement.

Recently, attorneys have begun settling mass-tort cases outside of the class-action process.  (As most of you know, CAFA makes it increasingly difficult to certify mass-tort cases as Rule 23(b)(3) class actions--not that they were ever easy.)  Merck settled the Vioxx litigation by contracting with the plaintiffs' attorneys and requiring those law firms to recommend the deal to 100% of their clients (with the caveat that the plaintiffs' attorneys deemed the settlement in their clients' best interests), and to withdraw from representing those clients who refused.  Moreover, Merck could walk away from the deal if fewer than 85% of the claimants signed on.  Thus, while claimants technically opted "into" the settlement offer, realistically claimants had to opt out of their lawyer-client relationship if they didn't want to settle.  

Yesterday's article in the NY Times by John Schwartz and Cambell Robertson, "Many Hit by Spill Now Feel Caught in Claims Process," illustrates the new, new opt out: plaintiffs' lawyers are claiming to represent clients who have never consented to an attorney-client relationship.  Consider this excerpt from the article:

Last summer and fall, numerous Vietnamese households — including some who say they were not even affected by the spill — received letters signed by Mr. Watts, of San Antonio. The letters, in Vietnamese, addressed some recipients by name and others as: “Dear Client.” The letters directed people to send their financial records and added, “Do not sign anything from BP or anyone else except Watts Guerra Craft,” the name of the firm.

“As far as I know almost every other house got it,” said Felix Cao, a law student at Loyola University in New Orleans. “I don’t know how they even found my address.”

Mr. Cao said he did not know whether he had become a client or simply a marketing target. He said he was not affected by the spill.

Nor was Nga Nguyen, who lives in New Orleans and also received one of the letters. “I think they just went through the phone book,” she said.

Let me be clear: the Gulf Coast Claims Facility is a private compensation scheme set up by BP.  The claims pending before Ken Feinberg are NOT class actions.  Thus, no attorney-client relationship exists absent either class certification and a judicial determination that lawyers are adequately representing absent clients (in the MDL pending before Judge Barbier) or an individual's affirmative consent to enter into an attorney-client relationship.

Yet, if this is what attorneys are doing, the new, new opt-out requires "clients" to opt out of an attorney-client relationship they never formed.  The result is nothing short of lawless.  

ECB

 

April 19, 2011 in Aggregate Litigation Procedures, Current Affairs, Environmental Torts | Permalink | Comments (0) | TrackBack (0)