Friday, March 22, 2013
At Corporate Counsel, there's an interesting piece by journalist Michael Goldhaber entitled Kindergarten Lessons from Chevron in Ecuador. Goldhaber, who has been following this massive and messy litigation for years, offers what he sees as some of the true and false lessons from the ongoing litigation concerning Texaco-Chevron's involvement in oil drilling in Ecuador.
In a nutshell, the litigation involves claims that a Texaco subsidiary caused environmental damage to the Oriente region of Ecuador. Plaintiffs originally sued in the Southern District of New York, but their suit was dismissed on grounds of forum non conveniens. Plaintiffs then filed a lawsuit in Ecuador and won an $18 billion judgment. Chevron contends that the Ecuadorian judgment was obtained by fraud and corruption, and has resisted enforcement of the judgment. Chevron sued plaintiffs' attorney Stephen Donziger and others, asserting RICO and fraud claims. An international arbitration tribunal weighed in pursuant to the Ecuador-US bilateral investment treaty. Plaintiffs are seeking to enforce the judgment in Canada, Argentina, Brazil and elsewhere. This mess of a litigation has been going on for nearly 20 years.
Goldhaber, in prior work, has articulated a strong view that the Ecuadorian judgment was the product of fraud and corruption. In the new article, Goldhaber takes as his starting point the Stanford Journal of Complex Litigation symposium that took place in February. He goes through the basic lessons offered by the participants -- plaintiffs' lawyer Graham Erion, defense lawyer Theodore Boutros, and a host of scholars including myself.
The strongest lesson (and here I am in complete agreement with Goldhaber): "Be careful what you wish for." The irony of this litigation is overwhelming. Texaco fought to have the case dismissed on grounds of forum non conveniens, arguing that Ecuador was a more appropriate forum. The plaintiffs argued that the Ecuadorian courts could not handle the case and that it should remain in the U.S. Ever since the massive judgment, however, the positions have been flipped -- with the plaintiffs insisting that the judgment deserves respect and the defendant contending that the Ecuadorian courts were corrupt. Goldhaber has referred to this as "forum shopper's remorse."
But I do not agree with Goldhaber's next step. Noting that "the abuse of transnational litigation would never have happened had the U.S. held on to the case," he suggests that the doctrine of forum non conveniens be altered to take into account the stakes and political significance of a case:
The great blunder in this dispute was to ship it to Ecuador in the name of forum non conveniens. The U.S. courts could have saved everyone a lot of grief had they recognized that a case is more prone to abuse when the issues are (a) high-stakes or (b) politicized. I learned from Russia's Yukos affair that, even if a weak judicial system has made significant progress, it does not deserve trust in a hot-button case of great magnitude. It was reckless to expect Ecuador (even if it had just adopted a new set of corruption reforms) to handle a huge case pitting gringo oil companies against indigenous rights. My modest suggestion is to incorporate these factors into the FNC analysis.
The adequate alternative forum prong of the forum non conveniens analysis is a low threshold, and deliberately so. A lawsuit alleging environmental harm to Ecuadorian land and medical harm to Ecuadorian citizens, and involving control over Ecuadorian natural resources, belongs in Ecuador. That is the very point of forum non conveniens. A U.S. court should be loath to say that it will hear the case in the U.S. because it thinks the Ecuadorian courts just cannot handle it. A judgment obtained by fraud should not be enforceable elsewhere, but this is better addressed ex post, which is exactly what the current litigation -- albeit in a rather ugly fashion -- is doing. But to have said, ex ante, that the case should be heard in the United States despite all of the public and private interest factors that pointed to Ecuador, would have been a mistake.
Wednesday, March 20, 2013
Widener University School of Law and the Widener Law Journal are presenting a day-long symposium, Perspectives on Mass Tort Litigation, on Tuesday, April 16, 2013 in Harrisburg, Pennsylvania. The Honorable Eduardo Robreno of the Eastern District of Pennsylvania will present a luncheon address, Federal Asbestos Litigation: Black Hole or New Paradigm? Other participants include Hon. Thurbert Baker (McKenna Long); Mark Behrens (Shook Hardy); John Beisner (Skadden); S. Todd Brown (SUNY Buffalo); Scott Cooper (Schmidt Kramer); Amaris Elliot-Engel (Legal Intelligencer); Michael Green (Wake Forest); Deborah Hensler (Stanford); Mary Kate Kearney (Widener); Randy Lee (Widener); Bruce Mattock (Goldberg Persky); Tobias Millrood (Pogust Braslow); Linda Mullenix (Texas); Christopher Robinette (Widener); Susan Raeker-Jordan (Widener); Sheila Scheuerman (Charleston); Victor Schwartz (Shook Hardy); William Shelley (Gordon & Rees); Aaron Twerski (Brooklyn); Nicholas Vari (K&L Gates); and Nancy Winkler (Eisenberg Rothweiler). I will also participate via Skype videoconference. Here's the brochure: Download Widener 2013 MTL Symposiu Brochure
Tuesday, March 19, 2013
In an opinion by Justice Breyer, the Court unanimously rejected a stipulation by a proposed class representative to limit recovery for the putative class to less than $5 million, in an apparent attempt by plaintiffs to avoid removal to federal court unde the Class Action Fairness Act. See also SCOTUSblog.
Monday, January 21, 2013
Corporate Counsel has a short piece, Crafting a Defense in Food-Labeling Class Actions, by O'Melveny's Kelsey Larson and Carlos Lazatin.
Skadden has issued a useful analysis of upcoming cases to watch and potential developments for 2013 in class actions and product liability. The analysis includes contributes by Skadden's John Beisner, J. Russell Jackson, and Jessica Miller.
Friday, November 30, 2012
On November 26 the Supreme Court denied cert in RJ Reynold Tobacco Co. v. Clay, an appeal from a Florida state court decision to give the Engle court ruling preclusion effect.
Engle, recall, is the tobacco issue class action certified and upheld by the Florida Supreme Court. Does the denial of cert pave the way for issues class actions to flourish (at least for the moment) or is this just not the right vehicle?
See Scotusblog for a summary and links. ADL
Saturday, October 20, 2012
The conference will take place on October 24, 2012 in Washington, D.C., and includes panels on third-party litigation financing and global litigation (including the Chevron Ecuadoran litigation and the adoption of class actions in other countries).
Friday, October 19, 2012
Friday, October 12, 2012
Daniel Fisher at Forbes has an interesting article previewing three class-action cases being argued before the Supreme Court of the United States this fall: Class-Action Lawyers Face Triple Threat At Supreme Court.
Sunday, October 7, 2012
Friday, October 5, 2012
Those interested in a quick overview of many of the recent issues in global tort litigation might be interested in the following article from the Legal Intelligencer: Is Growth of Foreign Class, Mass Actions Changing Products Law?, by Amaris Elliot-Engel (registration required). I was happy to be quoted in the article along with leading practitioners, but even happier that my current Global Tort Litigation seminar course was mentioned.
The Supreme Court of the United States heard oral argument this week in Kiobel v. Royal Dutch Petroleum Co., which concerns corporate liability under the Alien Tort Statute. Today, the Court posted the audio from the argument. More generally on the case can be found at SCOTUSblog.
UPDATE -- The Economist reports on the Kiobel oral argument in Law's Long Arm: A Review of Extreme Extraterritoriality.
Thursday, August 16, 2012
This article argues that there is an unrecognized “anticommons” problem in aggregate litigation. An anticommons occurs when too many owners’ consent is needed to use a resource at its most efficient scale. When many plaintiffs have similar claims against a common defendant, those claims are often worth more if they can be packaged up and sold to the defendant (i.e., settled) as a single unit — that is, the defendant may be willing to pay a premium for total peace. But because the rights to control those claims are dispersed among the individual plaintiffs, transaction costs and strategic holdouts can make aggregation difficult, particularly in cases where class actions are impractical. Recently the American Law Institute has proposed to modify long-standing legal ethics rules governing non-class aggregate settlements to allow plaintiffs to agree in advance to be bound by a supermajority vote on a group settlement offer. By shifting from individual control over settlement decisions to collective decision making, the ALI proposal may offer a way out of the anticommons and allow the group to capture the peace premium. Critics, however, say that allowing plaintiffs to surrender their autonomy will leave them vulnerable to exploitation by the majority and by their lawyers. Viewed through the lens of the anticommons, these concerns are manageable. Similar anticommons problems arise in many areas of law, ranging from eminent domain to oil and gas to sovereign debt. But instead of slavishly preserving the autonomy of individual rights-holders, these areas of law have developed strategies for aggregating rights when doing so will result in joint gains. Drawing from these other contexts, this article argues that the legitimacy of compelling individuals to participate in a value-generating aggregation depends on the presence of governance procedures capable of protecting the interests of the individuals within the collective and ensuring that the gains from cooperation are fairly allocated. Governance is thus the key to legitimizing attempts to defeat the anticommons in mass litigation through aggregation, whether by regulatory means, such as the class action, or contractual precommitment, as in the ALI proposal.
Thursday, August 2, 2012
The saga continues with a 97 page opinion by Judge Kaplan denying the plaintiff Chevron's motion for partial summary judgment with leave to refile. I haven't read the opinion yet but the table of contents promises a lot of fodder for civil procedure mavens, especially summary judgment and personal jurisdiction.
You can find a copy of the opinon here.
You can find coverage of the opinion at these locations:
And a great story about this piece of the long-standing litigation at the New Yorker last year.
Wednesday, July 18, 2012
Thomas J. Donahue, President and CEO of the U.S. Chamber of Commerce, has an op-ed entitled, U.S. Firms Prone To 'Tort Tourism' In Foreign Courts, in Investor's Business Daily. The op-ed particularly discusses the Chevron case in Ecuador.
Walter Olson has an op-ed on recent New Hampshire tort reform involving early offers of settlement and loser pays. Although New Hampshire's new approach concerns medical malpractice, one could imagine such reforms subsequently spreading to other areas of tort, including perhaps products liability.
Thursday, May 17, 2012
The United States District Court for the District of Columbia has awarded $300 million in punitive damages to plaintiffs bringing tort claims against Syria and Iran in connection with their alleged role in a 2006 suicide bombing attack in Israel; the recovering plaintiffs were all U.S. citizens. The opinion is noteworthy not only for the size of the punitive-damages award, but also for the opinion's application of the terrorism exception to the Foreign Sovereign Immunities Act and the opinion's finding that the organization allegedly responsible for the attack was acting as an agent of Iran and Syria. The Jurist also has an article on the opinion.
Although executing on such a judgment is likely difficult and sensitive matters of foreign policy may be implicated, the use of tort law (here, the claims included battery and intentional infliction of emotional distress) seems promising as a way to hold foreign states responsible for terrorism. Indeed, multiple such claims have been litigated recently in the District of Columbia. Apart from general attempts to execute on assets of the defendants seized abroad, perhaps payment of such claims might be raised by the U.S. Department of State in connection with any future regime change and new government in the defendant countries.
Friday, April 27, 2012
Stanford has an exciting announcement: the creation of the first scholarly law journal devoted to complex litigation! Stanford law students interested in complex litigation and mass torts will now have the opportunity not only to study under Stanford's Deborah Hensler, but also to edit the Stanford Journal of Complex Litigation.
Below is a note from the journal's first editors-in-chief, Nick Landsman-Roos and Matt Woleske.
Re: Announcing the Stanford Journal of Complex Litigation!
Dear Authors: We are proud to announce the founding of the Stanford Journal of Complex Litigation (SJCL). Beginning in the 2012-2013 academic year, SJCL will publish articles and essays that are timely and make a significant, original contribution to the field of complex litigation. We are currently seeking article and essay manuscripts on a range of topics including the rules of civil procedure, aggregate litigation, mass torts, jurisdictional disputes, complex litigation reform, actions by private attorneys general, and transnational litigation.
We hope you will consider publishing with SJCL for a few reasons:
· Specialization: SJCL is the first student-edited journal devoted exclusively to topics relating to complex litigation. Publishing with SJCL will ensure your important contribution will be read within the broader field it is engaging. SJCL will serve as a forum for dialogue on complex litigation issues. We also expect that because SJCL is devoted exclusively to complex litigation, it will quickly become a source of guidance for courts and practitioners.
· Expedited publishing: Because we are currently accepting submissions for the first volume of SJCL, we will be able to publish many of the submissions we accept in our fall issue. That means you can expect your article with SJCL to be in print faster than almost any other journal. There will be no need to update through a lengthy editing process.
· Modified peer review: SJCL will follow a modified peer-review system. Meaning, after a first-level review by SJCL’s editorial staff, any submission that is a candidate for publication will be submitted to at least one scholar in the field of complex litigation or civil procedure who will review the piece. We will take any unanimous decision from our peer reviewers as a binding decision on publication. This will ensure that SJCL is publishing significant contributions to this field.
· “Light edit”: Our editorial policy is to afford substantial deference to authors, in both tone and substance. As a result, all articles must be well written, well cited, and completely argued at the time of submissions. SJCL will only edit to ensure readability and Bluebook compliance, which means that the editing process will be faster but also requires that authors vouch for the accuracy of their citations.
· Outreach: We are committed to generating interest in the articles published with SJCL. That is why we will actively promote all scholarship we publish at symposia and on the blogosphere. We are also committing to distributing hundreds of copies of our first issue to grow our readership base.
· Volume 1: There is something to be said for publishing in the very first volume of a journal. We hope you appreciate this significance and decide to submit your manuscript to SJCL.
We review and accept articles year-round on a rolling basis. SJCL strongly prefers electronic submissions through the ExpressO submission system, which can be found online at http://www.law.bepress.com/expresso. You may also e-mail your manuscript to email@example.com. We do not accept submissions in hard copy.
SJCL is also seeking faculty with expertise in areas such as civil procedure or complex litigation to serve as reviewers. If you are interested, please contact firstname.lastname@example.org.
A website with more information is forthcoming. For the time being please refer to our Stanford Law School site: http://www.law.stanford.edu/publications/journals/sjcl/.
Please contact us with any questions. We look forward to working with you.
Nick Landsman-Roos & Matt Woleske
Editors-in-Chief, Stanford Journal of Complex Litigation
Wednesday, April 11, 2012
Edward Cheng (Vanderbilt) has posted his paper, "When 10 Trials are Better than 1000: An Evidentiary Perspective on Trial Sampling," on SSRN. It's also available through Penn's website. Here's the intro on Penn's website:
In many mass tort cases, individual trials are simply impractical. Take, for example, Wal-Mart Stores, Inc. v. Dukes, a class action employment discrimination suit that the Supreme Court reviewed last Term. With over 1.5 million women potentially involved in the litigation, the notion of holding individual trials is fanciful. Other recent examples of the phenomenon include the In re World Trade Center Disaster Site Litigation and the fraud litigation against light cigarette manufacturers, in which Judge Weinstein colorfully noted that any “individualized process . . . would have to continue beyond all lives in being.”
Faced with an unserviceable number of plaintiffs, courts have proposed sampling trials: rather than litigating every case, courts would litigate a small subset and award the remaining plaintiffs statistically determined amounts based on the results. But while sampling is standard statistical practice and often accepted as evidence in other legal contexts, appellate courts have balked— based on due process concerns—at the notion of court-mandated, binding trial sampling.
Despite this appellate reluctance, the controversy continues unabated. Trial courts have soldiered on by using nonbinding sampled trials (dubbed “bellwether trials”) to induce settlement, and a few brave appellate courts, including the Ninth Circuit in Dukes, have even hinted at an increased receptivity to sampling. Given that trial courts have few practical alternatives, one wonders if it is just a matter of time before their appellate brethren recognize the necessity of sampling.
And here's the SSRN abstract:
In many mass tort cases, separately trying all individual claims is impractical, and thus a number of trial courts and commentators have explored the use of statistical sampling as a way of efficiently processing claims. Most discussions on the topic, however, implicitly assume that sampling is a “second best” solution: individual trials are preferred for accuracy, and sampling only justified under extraordinary circumstances. This Essay explores whether this assumption is really true. While intuitively one might think that individual trials would be more accurate at estimating liability than extrapolating from a subset of cases, the Essay offers three ways in which the “second best” assumption can be wrong. Under the right conditions, sampling can actually produce more accurate outcomes than individualized adjudication. Specifically, sampling’s advantages in averaging (reducing variability), shrinkage (borrowing strength across cases), and information gathering (through nonrandom sampling), can result in some instances in which ten trials are better than a thousand.
Saturday, March 3, 2012
John Schwartz at the New York Times reports that the litigation surrounding the BP Deepwater Horizon Oil Spill has settled for all of the litigants except the federal government. The Judge overseeing the litigation issued the order late Friday night and will review the settlement.
Here's the report from Bloomberg as well.
According to these reports, either the settlement will be paid by the $20 billion fund BP created to compensate victims or the fund will close and be replaced by a court overseen claims facility. In any event, the amount of the settlement is $7.8 billion that from these reports is not in addition to the $20 billion already set aside.
More to come. ADL