Friday, April 22, 2011
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.
Wednesday, April 20, 2011
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.”
Sunday, March 27, 2011
The Mississippi College Law Review has posted the video for its symposium, Beyond the Horizon: The Gulf Oil Spill Crisis -- Analyzing the Economic, Environmental, and Legal Implications of the Oil Spill.
Panel One included Ms. Trudy Fisher, Executive Director, Mississippi Department of Environmental Quality; Professor Kenneth Murchison, James E. & Betty M. Phillips Professor, Paul M. Herbert Law Center Louisiana State University; and Professor David Robertson, W. Page Keeton Chair in Tort Law University Distinguished Teaching Professor, University of Texas at Austin. The moderator for Panel One was Ms. Betty Ruth Fox, Of Counsel, Watkins & Eager.
Panel Two included Professor Jamison Colburn, Professor of Law, Penn State University; Professor Edward Sherman, W.R. Irby Chair & Moise S. Steef, Jr. Professor of Law, Tulane University; and myself. The moderator for Panel Two was Professor Jeffrey Jackson, Owen Cooper Professor of Law, Mississippi College School of Law.
Kenneth Feinberg, claims administrator for the Gulf Coast Claims Facility, delivered the symposium Keynote Presentation.
Papers from the symposium will published in the Mississippi College Law Review. Here's the abstract for my symposium talk and forthcoming article:
The Gulf Coast Claims Facility set up following the BP Gulf Oil Spill might be seen as creating a new category of claims fund that might be termed a quasi-public mass tort claims fund. Unlike purely public funds such as the 9/11 Victim Compensation Fund, or purely private funds such as are increasingly created for mass settlements as in Vioxx, the Gulf Coast Claims Facility is funded privately by BP, but bears the public imprimatur of having been initially negotiated by President Obama. Indeed, in an Oval Office Address, President Obama promised that claims would be "fairly" paid and that the fund would "not be controlled by BP," but would instead be administered by an "independent third party." While a quasi-public fund has the advantage of delivering swift compensation in response to an ongoing crisis, the quasi-public fund risks claimant confusion about claim-administrator independence and whether claimants should retain their own counsel to assist in evaluating fund settlement offers. In turn, that claimant confusion can jeopardize the fund's societal savings in attorney-fee transaction costs, and lower claimant participation in the fund. Accordingly, to minimize claimant confusion, a quasi-public fund should provide transparency in its fee structure for claims administrators, and seek a claims-administrator fee structure that minimizes bias, such as utilizing a fixed fee not subject to reevaluation or having defendant agree to a third-party panel's assessment of fees for claims administrators. With regard to the Gulf Coast Claim Facility, claimant participation would likely be enhanced by greater transparency and use of a third-party panel to determine claim-administrator fees.
Saturday, February 26, 2011
Thursday, February 17, 2011
John Schwartz of the NYTimes reports in an article entitled "BP Says Terms in Oil Spill Settlement Are Too Generous." The basic complaint is contained in a 25 page letter to Mr. Feinberg that basically says BP is unahppy over the valuation of future damages. The article points out that BP's letter seems to indicate that Feinberg is independent in his valuations. It raises an important question also raised by John CP Goldberg's memo to Feinberg. That is, what is and what ought to be the relationship between the law on the books and the decisions of a claims facility set up outside the legal system?
Wednesday, February 16, 2011
On this Friday, February 18, Mississippi College School of Law will be hosting a law review symposium, Beyond the Horizon: The Gulf Oil Spill Crisis -- Analyzing Economic, Environmental, and Legal Implications of the Oil Spill. Here's the short-form brochure: Download MC Law Review Symposium Brochure.
Speakers include Professors Jamison Colburn (Penn State), Kenneth Murchison (LSU), David Robertson (Texas), Edward Sherman (Tulane), and Trudy Fisher (Miss. Dep't Envt'l Quality). Moderators include Jeffrey Jackson (Mississippi College) and Betty Ruth Fox (Watkins & Eager). Papers will subsequently be published in the Mississippi College Law Review.
I will also be speaking at the symposium, discussing issues of claim-administrator compensation, transparency, and independence in connection with the Gulf Coast Claims Facility. My talk will expand upon my prior blog posts raising concerns (see here and here), which last summer triggered two articles in Forbes (see here and here), as well as a post from Legal Ethics Forum. Two weeks ago, the federal MDL court overseeing the BP litigation granted in part plaintiffs' motion to have the court oversee communications by the Gulf Coast Claims Facility, and the MDL court ordered that the Gulf Coast Claims Facility may not state that it is "neutral" or completely "independent" of BP. Here's the MDL opinion: Download Order - Mot to Supervise GCCF Doc 1098 2-2-2011. On the recent MDL opinion, see also this Reuters article from Moira Herbst, quoting David Logan (Roger WIlliams), Monroe Freedman (Hofstra), and me.
UPDATE -- Here's the full-length brochure for the symposium: Download MC Law BP Symposium Handout.
Tuesday, January 25, 2011
Here is what Robin Effron at the Civil Procedure & Federal Courts Blog has to say about it:
The Fifth Circuit rejected the $21 million settlement of a class action over damage caused by the levee breaches on the grounds that it did not grapple with the fairness of dispersal of funds and instead "punted" that job to the special master.
Here is a link to the opinion. ADL
Thursday, January 13, 2011
Southwestern Law School, in collaboration with the University of British Columbia (UBC) Law Faculty and the International Centre for Criminal Law Reform and Criminal Justice Policy, will host a four-week Summer Law Program in Vancouver, British Columbia, Canada, from May 29 to June 29, 2011. In its 19th year, the program draws upon the collegial relationship between UBC and Southwestern, and offers a variety of academic and social experiences through (1) courses taught by prominent U.S. and Canadian law professors; (2) Distinguished Guest Lecturer, the Honorable Justice Rosalie Silberman Abella of the Supreme Court of Canada; (3) Midday Lecture Series presented by leading international scholars; (4) a part-time externship program; and (5) field excursions to local courts and other legal agencies. Here is the brochure.
I look forward to teaching a course on Global Tort Litigation in the Vancouver program this summer. Here's the course description:
This course will examine tort and civil procedure issues arising in global tort litigation, with particular focus on mass tort litigation spanning multiple countries. Subjects will include comparative approaches to liability for defective products, responses to terrorism, governmental liability, class actions, attorneys’ fees, and civil litigation generally. The course will also discuss crisis management. Particular attention will be given to litigation pertaining to the 9/11 terrorist attacks, BP Gulf oil spill, Toyota automobile unintended acceleration, Agent Orange defoliant, Vioxx drug, Dalkon Shield intrauterine device, and DBCP pesticide.
Other professors teaching in the Vancouver summer program include Linda Carter (McGeorge), Bruce MacDougall (UBC), Caleb Mason (Southwestern), and Hari Osofsky (Minnesota). Professors Gowri Ramachandran and Caleb Mason (both of Southwestern) are co-directors of the program.
Wednesday, January 12, 2011
Tuesday, December 21, 2010
As this article on CNN notes, the United States Senate continues to consider the proposed 9/11 first-responder healthcare bill, championed particularly by Senator Schumer of New York.
Thursday, December 16, 2010
Monday, December 13, 2010
John Schwartz at the New York Times reports that Ken Feinberg is offering to pay additional sums to those recipients of emergency funding willing to release their claims. Apparently people whose emergency funding fully compensated them can get an additional $5,000 for individuals and $25,000 to release their claims, promising BP that they will not sue. Feinberg "suggested that the likeliest candidates for the payment might be those who had received emergency funds and had determined that their losses have already been fully covered by the BP fund, or who believe they will not be able to properly document further losses."
The article reports that the fund will provide free legal advice and perhaps additional help in filling out forms to claimants.
Wednesday, November 24, 2010
John Schwartz of the New York Times has an article in this morning's paper detailing the final settlement phase of the BP Oil Spill. The claims handling process includes a three-year program that requires anyone who agrees to a final settlement to give up the right to sue BP and other companies involved with the spill. Although the claims process is much quicker and, on the whole, has far fewer transaction costs than traditional litigation, we don't yet know what kind of long-term health effects the spill will have. As was the case in asbestos, it's hard to predict what the latent health effects might be.
Of note in the article is a link to the 12-page document laying out the claims process as well as a 48-page memo by John Goldberg (Harvard), which argues that claims from people and businesses near the beaches but not directly affected by the spill would not be entitled to recover through the traditional litigation process.
Monday, November 22, 2010
Moira Herbst of Reuters has a short, but thoughtful piece analyzing the issues at play for a private claims administrator running a quasi-public claims fund. It's easy to sympathize in the abstract with Ken Feinberg's difficult situation in exploring what's appropriate in his unprecedented role; but with his firm being compensated at an average of $1,000 per hour (according to Herbst's analysis), he's not ultimately likely to get much sympathy.
Saturday, November 20, 2010
Reading yesterday’s New York Times article on the 9/11 Workers Settlement, I couldn’t help but think of the other-regarding preferences and psychological influences that played a role in garnering the requisite 95.1% agreement. The two claimants quoted in the article, Jennifer McNamara (whose firefighter husband died of colon cancer last year) and Kenny Specht, a retired firefighter with thyroid cancer, both framed their ultimate decision to participate in the settlement in terms of helping others within the community of plaintiffs. As described by the N.Y. Times, McNamara “explained to friends in a letter that she did not want to delay the settlement for the many plaintiffs who needed it to pay mortgages and medical bills.” Specht said, “I am not sure that holding out for a better offer will ever be something that is attainable.”
I’ve written about this internal group pressure in the past and how claimants might be able to use it to their benefit as opposed to lawyers using it for theirs. It does appear that Napoli Bern Ripka LLP held at least one town hall meeting (video footage available below), but I’m not sure whether claimants were encouraged or given opportunities to discuss the deal with one another or whether the lawyers did most of the talking. Given the claimants geographical proximity to one another in the 9/11 Workers Settlement as well as the closeness of the firefighting and police officers’ communities, it appears that altruism, reciprocity, and a concern for others' well-being within their community played a significant role in members’ decision to approve the settlement (though the settlement did not receive the 100% approval rate that would have paid out $712 million). Others simply appeared to be exhausted by the protracted litigation and wanted finality. Still others, at least 520 of them, opted out (or did not respond by the deadline). A New York Times article last August described several plaintiffs' difficult decision-making process.
Although the House of Representatives has approved a bill that would reopen the 9/11 Victim’s Compensation Fund, the Senate has yet to approve it and those who have signed on to the 9/11 Workers Settlement will be ineligible for compensation.
Here's a link to Napoli Bern's press release (with the percentage of claimants signing-on in each tier).
Thursday, November 18, 2010
The results of how many plaintiffs signed on to the WTC Disaster Site Litigation Settlement, which required that 95% of the plaintiffs sign on for the settlement to go forward, will be announced at 1 PM tomorrow. Click here to see docket & documents online.
Interestingly, the allocation neutral overseeing this aspect of the settlement adminsitration is from Ohio - Matthew Garretson. His profile can be found here. Here is the description of the firm's work on allocating settlement proceedings to claimants:
Perhaps the hallmark of our settlement allocation service, GFRG helps ensure that similarly-situated claimants are treated the same under the methodology developed to allocate the settlement proceeds and to help ensure that every claimant is allocated a fair and equitable share of the settlement proceeds (taking into account the terms/conditions of the Settlement Agreement, the severity of the injury and the proof available).
The question of course is whether the terms of the settlement agreement - i.e. the matrix developed by the lawyers - fairly allocates funds and what data is used to make those determinations.
h/t Fred Mogul, WNYC.
Wednesday, November 10, 2010
The New York Times Sunday Magazine has a feature by Douglas McCollam about the lawyers suing BP. You can find it here: The Other Oil Cleanup. More analysis later.
Friday, October 29, 2010
The American Lawyer's D.M. Levine reports that the Fred Bartlit investigation into the Deepwater Horizon oil spill found that "despite multiple test results showing that a cement-foam mixture meant to seal the bottom of the well was unstable, Halliburton and BP used the flawed material anyway." The National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling asked Fred Bartlit, a named partner in a Chicago litigation boutique, to lead the investigation into the Deepwater probe. Bartlit's letter to the Commission is available here.
Saturday, October 9, 2010
Torts Prof Blog reports that Francis McGovern, a professor at Duke Law and accomplished special master, is likely to be appointed the special master in the In re Oil Spill MDL. Here is the opinion they link to: In re Oil Spill Notice.
For readers not familiar with McGovern's work, his insights have been critical to the development of the academic field of mass torts as well as in the real world in his work as a special master in various high profile litigations. McGovern coined the idea of a "mature" mass tort and an "elastic" mass tort, concepts that are key to understanding how this type of litigation works.
Monday, September 27, 2010
See the Wall Street Journal article, Spill Payments Irk Alabama Businesses, by Mike Esterl. In reaction, BP fund administrator Ken Feinberg stated, "In light of the criticism, I am accelerating payments and being more generous."