Thursday, October 7, 2010
The Supreme Court granted cert in yet another class action case (Smith v. Bayer Corp., No. 09-1205) to determine whether a federal judge can enjoin plaintiffs from bringing an economic injury class action in a state court after a federal court declined to certify the class. The Anti-Injunction Act, 28 U.S.C. 2283, provides that, subject to three important exceptions, a federal court may not grant an injunction to stay proceedings in state courts. Those exceptions include where Congress expressly authorizes the injunction, where it's in necessary aid of the federal courts jurisdiction, or to protect and effectuate federal judgements. Should one of the exceptions apply, the All Writs Act provides the positive authority for federal courts to enjoin state court proceedings.
Some of the most famous class action injunction cases to date include:
(1) the Third Circuit's In re General Motors Corp. Pick-Up Truck Fuel Tank Products Liability Litigation, a 1998 case in which the Third Circuit refused to enjoin a Louisiana state court from certifying and settling a class where the Third Circuit had previously reversed the finding that the settlement was fair;
(2) the Fifth Circuit's decision in In re Corrugated Container Antitrust Litigation, where the Fifth Circuit approved the use of two exceptions in the Anti-Injunction Act to prevent a group of South Carolina plaintiffs from certifying similar antitrust claims in South Carolina because they attempted to escape the preclusive effect of a federal-court judgment approving the class settlement; and
(3) Judge Weinstein's opinion in In re Joint Eastern and Southern District Asbestos Litigation in which he invoked the exceptions to effectuate a limited fund class action settlement under Rule 23(b)(1)(B).
In Smith v. Bayer Corp., the Eighth Circuit affirmed the trial court's ruling that prevented Baycol plaintiffs from bringing another economic injury class action in West Virginia state court after the federal judge overseeing the MDL proceedings already denied class certification on similar issues. Keith Smith and Shirley Sperlazza, the petitioners, argued that they weren't parties to the federal case and didn't know about the lawsuit. They also argued that they were asserting a common-law fraud claim under West Virginia law, which the federal plaintiffs did not assert.
The BNA Class Action Litigation Report (subscription required) has a nice write-up of the issues in the case, including the injunction and personal jurisdiction issues. Here are links to the Petition for Certiorari, the Brief in Opposition, and the Petitioner's Reply (courtesy of SCOTUSblog).
Monday, September 27, 2010
Though I realize that, as an employment discrimination class action, Dukes v. Wal-Mart Stores, Inc. technically falls outside the realm of mass torts, its class action status has most proceduralists watching with interest to see whether the Supreme Court will grant Wal-Mart's petition for a writ of certiorari. Over the next two months, Vanderbilt Law Review En Banc will be hosting a Roundtable discussion on the case that includes Robert Bone, Melissa Hart, the blog's own Alexandra Lahav, Greg Mitchell, Richard Nagareda, and Tobias Wolff. (Richard's essay, Common Answers for Class Certification is already on SSRN.)
To set the table for that discussion, I've written a short introduction to the case itself. To that end, I've tried to provide enough legal background on the class certification issues so that someone who's interested in the case but isn't a class action enthusiast can understand what's at stake. I've also raised more questions than answers, forsaken many of the more nuanced arguments in favor of clarity, and tried to refrain from engaging the case's merits--as tantalizing as they are. This short thirteen-page piece might also be of interest to those who haven't had time to wade through the Ninth Circuit's 130+ page opinion. Here's a link to the SSRN page for "Introducing Dukes v. Wal-Mart Stores, Inc." I'll post a link to the edited version in a few weeks.
Thursday, August 12, 2010
At the ABA annual meeting on Monday, Professor David Wilkins (Harvard) delivered a fascinating, far-reaching lecture on legal-profession trends, including globalization and technology. While he only briefly mentioned "tort," the changes he discussed are already appearing in the increase in cross-national mass tort litigation. In the United States, the growth of mass tort litigation stemmed from increasingly national products, national advertising, and nationally dispersed injured victims. As markets go global, so too do the problems that lead to mass torts. The rise of Western-style legal cultures and lawsuits in Asia will likely increasingly turn those mass torts into mass tort litigations -- which will in turn mean that plaintiffs' lawyers will coordinate not just nationally, but internationally; and companies will increasingly turn to defense lawyers as lead counsel not just nationally, but internationally. (For background, see my 2005 article on litigation networks in the U.S.) Here's Professor Wilkins' address:
Wednesday, August 11, 2010
Yesterday the Judicial Panel on Multidistrict Litigation issued its much awaited opinion sending the BP Oil Spill cases to New Orleans Judge Carl J. Barbier. These cases include 77 cases from Louisiana, Alabama, Florida, Mississippi, and Texas. As the Panel explained in its short opinion, "if there is a geographic and psychological 'center of gravity' in this docket, then the Eastern District of Louisiana is closest to it." (Op. at 3)
This decision makes it much easier for plaintiffs to participate in the litigation process. Participating in the court process and in any plaintiffs' group meetings is an important part of procedural justice. As Ken Feinberg explained in administering the September 11 Victim Compensation Fund, "[g]iving people the opportunity to be heard is very important in helping them cope and move on the best they can." (Tracy Breton, Payments Pending for Fire Victims, Providence J. Bull. Aug. 3, 2008, at 1) The same is true for the oil spill victims. Although people litigate for various reasons including money, I suspect that holding BP publicly accountable is certainly part of the motivation behind these suits.
The Panel sent the shareholder litigation cases to Judge Keith P. Ellison in Houston.
Tuesday, August 10, 2010
Today's National Law Journal has an article about the two new trustees named to BP's $20 million fund: Kent Syverud is currently the dean of Washington University School of Law and is a former dean of Vanderbilt University Law School; John Martin, Jr. is now a partner at Martin & Obermaier in New York and served as a judge in Southern District of New York from 1990-2003. Here's a link to BP's statement.
Friday, July 23, 2010
Next week, on July 29, the Multi-district Litigation Panel, a panel comprised of seven judges throughout the country, will gather to determine where to transfer the cases filed against BP arising from the oil spill. (In re: Oil Spill by the Oil Rig "Deepwater Horizon" in the Gulf of Mexico, on April 20, 2010, MDL No. 2179) The cases on the docket include around 24 from Alabama, 10 from Florida, 33 from Louisiana, 8 from Mississippi, and 2 from Texas.
Despite the spate of new articles, the story hasn't changed much in the past few months. Plaintiffs' attorneys are, by and large, pushing for New Orleans where they suspect that a potential jury pool would be hostile to the oil industry. And, not surprisingly, defendants are pushing for a Houston venue, in the heart of the oil industry. Much the same scenario plays out in less high-profile cases on a regular basis.
Plus, the MDL Panel doesn't always choose a side. For example, the MDL Panel in the In re Silicone Gel Breast Implant Products Liability Litigation in the early 1990s sent the cases to the Northern District of Alabama despite a push by plaintiffs for the Northern District of California or the District of Kansas and a push by defendants (and a few plaintiffs) for the Southern District of Ohio. Of course, just as in BP's case, the litigants in the Breast Implant litigation urged the Panel to appoint a particular judge (i.e., Judge Henderson or Patel in the Northern District of California or Judge Kelly from Kansas). Back then, the Panel noted in its order that either Ohio or California would be an appropriate forum, but it was "troubled" "by the volume and tone of the negative arguments with which opposing counsel have sought to denigrate each other's forum choices, litigation strategies, and underlying motives." 793 F. Supp. 1098 (JPML 1992).
The same logic seems to apply with equal force to the BP oil spill litigation, so it wouldn't come as a huge surprise if the Panel rejected Louisiana and Texas as a forum. That said, as someone who's written about the value of process and, in particular, about the value of participating in process as a vital component of procedural justice, I would hope that the Panel's forum selection wouldn't undermine the ability of those plaintiffs with fewer resources to participate. And by "plaintiffs" I do mean the plaintiffs themselves, not just their attorneys who will certainly participate regardless of where the lawsuits land.
Wednesday, June 16, 2010
The NYTimes reports that BP has agreed to set aside $20 billion for a compensation fund. Ken Feinberg will be the independent administrator. In the last ten years Feinberg has become the gold-standard of mediators and administrators.
If you're worried about whether BP can pay, its operations garnered $27.7 billion in cash last year. It had about $24 billion in debt with a debt to equity ratio of 20%.
The NYTimes feature Room for Debate addresses the oil spill today with entries by the following:
- Zygmunt Plater, environmental law professor
- Alice Schroeder, former regulator, Financial Accounting Standards Board
- Kate Gordon, Center for American Progress
- Richard Nagareda, law professor
- Alex Tabarrok, economics professor
- Noah Hall, environmental law professor
Monday, June 14, 2010
When the 9/11 Victim Compensation Fund was created it was widely considered a one time, unique institution responsive to the particular national tragedy (and the risk to the airline industry of catastrophic liability). It looks like the Obama administration is trying to negotiate the creation of a similar fund with BP to pay the victims of the oil spill.
It is still not clear whether the fund will happen, how much money will be available, and whether participants will have to give up their legal claims as the participants in the 9/11 Fund did. But some choice quotes from an AP report published today indicate that this is in the offing.
The NY Times also reports on the proposed fund. The Times reports that "Administration officials said that since last week, White House lawyers have been researching Mr. Obama’s legal authority to compel BP to set aside money for claims, based on the 1990 Oil Pollution Act." However, the President's authority is not clear. The desire for such a fund is driven by the concern about BP's 10+ billion dollar dividend. Joseph Grundfest (Stanford) is quoted in the Times: "“I’m not aware of any legal precedent that would give the government any authority that would preclude British Petroleum from paying dividends" especially because there isn't any evidence that BP lacks the funds to pay for the damages caused by the spill. The Times also quotes John Coffee (Columbia) stating that the courts may have the power to issue an injunction to prevent BP from paying the dividend under some circumstances.
Monday, May 17, 2010
Recent crises stemming from BP's oil spill and Toyota's acceleration problems have brought a swarm of media coverage, congressional hearings, regulatory agency activity, corporate news conferences, and lawsuits. Indeed, theories of liability may stem not only from the initial traumatic incident or incidents, but from the corporation's putative mishandling of the crisis once it unfolds. On the corporate side, what's called for is thoughtful and coherent crisis management that moves the corporation through the crisis in a way that resonates with corporate core values, thereby maintaining the value of the ongoing enterprise, and that is mindful of impending theories of liability.
Despite the great need for such a coherent approach to mass tort crisis management, what's remarkable is the apparent paucity of attention given the subject by legal scholars. That may be because crisis management involves public relations and communications, as well as management and leadership; hence crisis management has been the focus of public relations consultants and some professors in communications schools and business schools. But at the heart of corporate crises are frequently the law and liability, so law professors should not be absent. Lawyers and law firms already occasionally promote their ability to handle an emerging corporate crisis by quickly assembling a team of lawyers from a broad array of areas -- see, e.g., Skadden's Crisis Management; and lawyer practitioners have delivered various continuing education talks and papers on crisis management, as well as an interesting short symposium paper by Harvey L. Pitt and Karl A. Groskaufmanis, When Bad Things Happen to Good Companies: A Crisis Management Primer, 15 Cardozo L. Rev. 951 (1994). But while practitioners bring on-the-ground expertise, they may lack the theoretical depth and interdisciplinary zeal of law professors, and practitioners present a conflict-of-interest risk in preferring, for example, fee-heavy litigation over other methods of mass tort crisis management and resolution. A full academic account of mass tort crisis management would entail an awareness and integration of various legal areas -- tort, procedure, litigation, ethics, regulatory action, congressional investigations and activity (including possible compensation funds), and pertinent constitutional issues -- with public relations and management. I look forward to turning my attention increasingly to that task.
Where do you look for corporate crisis management expertise in mass torts? Books, articles, law firms, or consultants? Does your law firm market itself as offering corporate crisis management; if so, what's your approach? If you work at a consulting group that does crisis management, do you have in-house lawyers that assist you or do you work with the corporation's outside counsel? Feel free to post a resource or comment.
May 17, 2010 in Aggregate Litigation Procedures, Current Affairs, Environmental Torts, Ethics, Lawyers, Mass Disasters, Mass Tort Scholarship, Procedure, Regulation, Vehicles | Permalink | Comments (0) | TrackBack (0)
Tuesday, January 19, 2010
Back in November of 2008, England and Wales asked Lord Justice Jackson to review civil litigation costs and how those costs affected access to justice. He recently issued his final report (a hefty 584 pages). BBC News calls the report a "radical plan[ ] to shake up costs of civil cases." Here's an excerpt of the story:
Lord Justice Jackson's Review of Civil Litigation Costs is a result of a recognition that it is simply too expensive for many people and small companies to bring or defend civil cases.
"What I want to do is to focus the system so less money is paid to intermediaries and others in the process, and more money is paid to victims," he told the BBC.
"I am concerned about individuals, small businesses and others who need to use the courts."
His proposals are radical. He has looked at the factors forcing costs up in civil actions, and in particular he has focussed on Conditional Fee Agreements (CFAs), more commonly known as "no win, no fee" agreements.
Despite BBC's headline, the final report was ultimately less radical than the preliminary one, which leaned toward abolishing England's cost-shifting "loser pays" rule. The final report concludes that cost shifting should remain the norm (even in collective actions), but excepts personal injury claims from the norm. Whether personal injury claims are brought individually or collectively, the final report recommends "qualified one-way costs shifting" where winning claimants could recover their costs from the defendant, but generally do not have to pay the defendant's costs if they lose.
Of additional import, the final report recommends that solicitors and barristers should be allowed to enter into contingency fee arrangements, which are currently prohibited. Before entering into such an arrangement, the report recommends that claimants receive independent advice. It also suggests capping the fees at 25%.
Finally, the report recommends making third-party funding available to personal injury claimants (including those involved in collective actions). It defines third party funding as "The funding of litigation by a party who has no pre-existing interest in the litigation, usually on the basis that (i) the funder will be paid out of the proceeds of any amounts recovered as a consequence of the litigation, often as a percentage of the recovery sum; and (ii) the funder is not entitled to payment should the claim fail." (Final Report at p. 17). Very interesting.
Wednesday, October 7, 2009
The Sarasota Herald-Tribune reported yesterday that Florida's Senate Community Affairs Committee held a hearing to discuss both legislative and state agency action to prevent builders from using tainted Chinese drywall. The article reports that Florida is considering the following legislative action:
- Providing relief on mortgage payment for homeowners trying to rehabilitate their homes;
- Developing a standard for remediating homes and certifying them as being free from the drywall problems
- Allowing homeowners to receive a tax break to offset their rehabilitation costs; and
- Providing help to homeowners trying to deal with insurance companies over the cost of the home rehabilitation.
UPDATE: New York Times story can be found here.
Thursday, September 10, 2009
CNN reports this morning that Judge Keenan has "called for a daylong 'cooling off' period" in the Fosamax (an osteoporosis drug) litigation. Apparently jury deliberations became quite tense; the jurors have been deliberating for the last week over Shirley Boles's case. Boles is a 71-year old retired deputy sheriff that lives in Ft. Walton Beach, Florida. She claims that Fosamax caused her jawbone tissue to die. By itself, the case is relatively small. But, because Schering-Plough is looking to merge with Merck, all eyes are on the jury to see how vulnerable Merck is financially. According to the New York Times, there are roughly 900 state and federal Fosamax cases with around 1,280 plaintiffs.
One of the jurors in Boles's case claimed that she was being both intimidated and threatened. Judge Keenan has given the jury until 11:15 a.m. on Friday (tomorrow) to reach a decision before declaring a mistrial.