Thursday, October 7, 2010

Supreme Court to Hear Case on the Anti-Injunction Act's Relitigation Exception

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).

ECB 

October 7, 2010 in Class Actions, Current Affairs, Procedure, Products Liability | Permalink | Comments (0) | TrackBack (0)

Sunday, September 19, 2010

Toyota Settles Unintended Acceleration Lawsuit

According to an article in the Wall Street Journal, Toyota has settled, for an undisclosed amount, an unintended-acceleration lawsuit involving the deaths of four persons.  The accelerator appeared to have been caught in the floormat.  The article notes that Toyota faces about 200 unintended-acceleration lawsuits.

BGS

September 19, 2010 in Products Liability, Settlement, Travel, Vehicles | Permalink | Comments (0) | TrackBack (0)

Wednesday, May 5, 2010

Plaintiffs' Attorneys Jockey for Lead Position in Toyota Litigation

Today's Wall Street Journal has an article about the plaintiffs' attorneys jockeying for the lead position in the Toyota MDL.  The litigation has been consolidated in front of U.S. District Court Judge James Selna of Santa Ana, California.  The applicants listed qualifications range from receiving the key to the City of Miami to speaking to Japanese engineers 15 years ago to donating kidneys to inventing healthy doughnuts.  WSJ's Law Blog has a short post on it as well.

ECB

May 5, 2010 in Aggregate Litigation Procedures, Lawyers, Products Liability | Permalink | Comments (0) | TrackBack (0)

Wednesday, April 21, 2010

Remaining Pockets of Lead Poisoning

An article today in The New York Times discusses the remaining pockets of lead poisoning in urban areas, despite the nationwide trend of decreasing lead poisoning.

BGS

April 21, 2010 in Environmental Torts, Lead Paint, Products Liability | Permalink | Comments (0) | TrackBack (0)

Monday, April 19, 2010

ACI Conference on Chemical Products Liability and Environmental Litigation

American Conference Institute will be hosting a conference on Chemical Products Liability and Environmental Litigation on April 28-29, 2010 in Chicago, IL.  I will be speaking on mass torts and ethics, with particular attention to the ethics of mass settlements.  Here's the brochure (Download ACI Brochure).  

BGS

April 19, 2010 in Aggregate Litigation Procedures, Conferences, Environmental Torts, Informal Aggregation, Mass Tort Scholarship, Pharmaceuticals - Misc., Products Liability, Settlement | Permalink | Comments (0) | TrackBack (0)

Thursday, April 1, 2010

Mass Torts & Bankruptcy Teleconference

HB Litigation Conferences will be hosting a teleconference on Mass Torts & Bankruptcy on Wednesday, April 7, from 2:00 p.m. to 3:40 p.m. EST.  I'll be speaking along with Steven C. Bennett (Jones Day), Sander Esserman (Stutzman Bromberg), and Mark Plevin (Crowell & Moring).

BGS

April 1, 2010 in Aggregate Litigation Procedures, Asbestos, Conferences, Mass Tort Scholarship, Products Liability | Permalink | Comments (0) | TrackBack (0)

Monday, March 29, 2010

Panel on Pluralism in Tort Law and Litigation at Annual Conference of the Association for the Study of Law, Culture and the Humanities

As previously mentioned, I was part of a panel on Pluralism in Tort Law and Litigation at the annual conference of the Association for the Study of Law, Culture and the Humanities, which took place on Saturday, March 20 at Brown University.  Professor Alan Calnan (Southwestern) moderated the panel, and other participants included Professors Christopher Robinette (Widener) and Sheila Scheuerman (Charleston).  Below are the abstracts and links to audio from the presentations and Q&A.  Thanks to Alan Calnan for moderating and to all for participating.

***

I.  Prof. Alan Calnan -- Introduction (audio)

II.  Prof. Christopher Robinette -- "The Instrumentalism in Tort Reforms" (audio)

The traditional view among legal historians is that tort was largely deontic private law until the late nineteenth century.  Due to factors such as the Industrial Revolution and the advent of liability insurance, tort became (more) instrumentalist.  A survey of major tort reforms over the course of the last century provides evidence to support this view.  Each of the reforms--workers' compensation, no-fault automobile insurance, products liability, and "modern" tort reforms (such as damage caps)--is based in instrumentalism.  Furthermore, the reforms become increasingly integrated into tort law as time passed.  The earliest reform, workers' compensation, was a substitute for tort law.  By the time of the modern reforms, instrumentalism is operating within tort itself, and covers a multitude of tort cases.

III.  Prof. Byron Stier -- ""Examining Litigant Autonomy in Mass Torts: Insights from the Individualism of Ayn Rand" (audio)

Class actions and other aggregate procedural methods raise questions about the relationship of the individual to the group.  Litigant autonomy -- the litigant's interest in controlling his or her lawsuit -- has generally been considered merely one value among others in mass tort litigation, and only recently has a robust commitment to litigant autonomy been seen to call into question the entire structure of class action practice.  In looking for insight into the proper place for litigant autonomy in class actions or other management methods, we might fruitfully turn to political debates concerning the relationship of the citizen to the state, for both settings examine the rights of the individual against the perceived needs of the group or collective.  For discussion of that political question, I look to an unusual source -- outside law, to the literature of one known for her radical political individualism, Ayn Rand.  Her novel, "We The Living," which was published in 1936 and is set in the aftermath of the communist revolution in Russia, puts forth a moral argument for individualism stemming from the sanctity of one's own life, and of one's control of one's own life, for one's own ends, not the group's; she also argues that personal tragedy and systemic corruption accompany an approach that fails to respect individuals' lives and choices.  Turning back to mass tort litigation, I suggest that our notion of litigant autonomy can be informed by Rand's themes and that current class action rules show flaws similar to the collectivism that Rand critiques. Viewing litigant autonomy not merely as one value among others, but instead as an organizing principle that must be respected as a core right, I suggest that current class action rules regarding notice, opt-out, and settlement are problematic because they do not allow adequate expression of individual preference and they blunt each class member's individuality.  In addition, by avoiding individual control, the current class action rules create fertile ground for corruption and collusive settlements.

IV.  Prof. Sheila Scheuerman (audio)

In my presentation, I examine whether and when tort law should permit
"no injury" claims -- claims where the plaintiff's harm has not yet
materialized.  Examples of these suits include medical monitoring
actions, products liability claims where a known defect exists, but the
product has not yet malfunctioned, as well as consumer fraud claims
where the consumer's decision was not affected by the defendant's
alleged misrepresentation.  Recent years have seen an influx of these
suits under an array of tort and contract theories.  Traditionally,
however, tort doctrine has premised liability on an injury to an
identified party.  But is "injury" a necessary pre-requisite?  I address
whether tort values support these "no injury" causes of action.  In
other words, should "no injury" claims be actionable under the varied
rationales for the tort system and, if so, under what circumstances?

V.  Questions and Answers (audio)

***

BGS

March 29, 2010 in Aggregate Litigation Procedures, Books, Class Actions, Conferences, Informal Aggregation, Lawyers, Mass Tort Scholarship, Procedure, Products Liability, Regulation, Settlement | Permalink | Comments (0) | TrackBack (0)

Friday, March 26, 2010

Toyotal Lawsuits - behind the scenes at an MDL

Here is an interesting article about the JPMDL oral arguments in the Toyota lawsuits: Lawyers Play Speed-Date in Toyota Tussle.

The issue the article discusses (rather disdainfully) is who will be the lead lawyers in the Plaintiffs' Management Committee because those lawyers will lead the litigation, garner the most fees, etc.

More needs to be written about procedures to allocate power among plaintiffs attorneys as well as fees, a process that could use more process.

Note too the names raised in the article: Mark Lanier (Houston based) who tried the Vioxx cases, Mark P. Robinson Jr (who according to the article was involved in the Ford Pinto litigation in the 70's), and Mark Geragos (who is best known for representing Michael Jackson).

h/t Todd Gilbert

ADL

March 26, 2010 in Aggregate Litigation Procedures, Lawyers, Procedure, Products Liability, Vehicles | Permalink | Comments (0) | TrackBack (0)

Tuesday, March 23, 2010

Litigating Together: Social, Moral, and Legal Obligations

I have posted a draft of the last in a trilogy of articles on nonclass aggregation and thought I would provide a brief retrospective for the interested reader.  The first article in the trilogy is Procedural Justice in Nonclass Aggregation, which explains in-depth the problems and risks presented by nonclass aggregation.  It observes that systemic legitimacy and compliance with judicial decisions hinges on ensuring procedural justice, but that our current system for handling large-scale litigation fails to provide a number of key procedural-justice components including the preference for adversarial litigation, participation opportunities, impartiality, and error correction.  These institutional shortcomings are due in large part to the trade-offs inherent in large-scale litigation.  Those trade-offs include that "litigation is no longer adversarial despite litigants’ preferences, but effective individual litigation is too costly to pursue; aggregate settlements provide few participation opportunities and no avenues for appeal or error correction despite potential conflicts, but, without aggregate settlements, cost and delay could be staggering and the relief may come too late; mediators or special masters might afford claimants additional participation opportunities, but process is then less adversarial and may suffer from legitimacy problems."  Id. at 46. 

The second article in the trilogy is Litigating Groups. In Litigating Groups, I laid the theoretical groundwork for an alternative to our current approach by borrowing insights from other disciplines—social psychology, moral and political philosophy, and behavioral law and economics—and bringing those notions of commitment, community, and groups to bear on nonclass aggregation.  By relying on the other-regarding preferences that tend to form from group membership, I argued that groups of plaintiffs may have or could be encouraged to develop organic or indigenous origins such that they form moral obligations to one another that are reinforced by social and personal norms. (I have also summarized these contentions in a short response to Judge Weinstein - A New Way Forward: A Response to Judge Weinstein.)

The current (and latest) article is the third and final piece in the trilogy.  It's titled Litigating Together, Social, Moral, and Legal Obligations.  This Article translates the theoretical foundation laid in Litigating Groups into concrete, feasible procedures for litigating together.  Although Litigating Groups maintained that plaintiffs who form groups will likely develop other-regarding preferences toward their fellow group members, it did not fully formulate procedures for promoting cooperation and group formation; decide when, whether, or how to impose sanctions when norms and moral obligations fail; contemplate incentives to join the group; or determine when exiting the group is appropriate.  Accordingly, this Article takes up those hard questions as well as the challenge of determining whether and how substantive and procedural law should enforce moral obligations once a certain level of moral interconnectedness exists.  Here's the SSRN abstract:

In a post-Class Action Fairness Act world, the modern mass-tort class action is disappearing. Indeed, multi-district litigation and private aggregation through contracts with plaintiffs’ law firms are the new mass-tort frontier. But something’s amiss with this “nonclass aggregation.” These new procedures involve a fundamentally different dynamic than class actions: plaintiffs have names, faces, and something deeply personal at stake. Their claims are independently economically viable, which gives them autonomy expectations about being able to control the course of their litigation. Yet, they participate in a familiar, collective effort to establish the defendant’s liability. They litigate from both a personal and a collective standpoint.

Current scholarship overlooks this inter-personal dimension. It focuses instead on either touting the virtues of individual autonomy or streamlining mass litigation to maximize social welfare. Both approaches fail to solve the unique problems caused by these personal dimensions: temptations for plaintiffs to hold out and thus derail settlements demanding near unanimity, outliers who remain disengaged from the group but free-ride off of its efforts, and subgroups within the litigation whose members compete for resources and litigation dominance to the group’s detriment. Accordingly, this Article has two principal objectives: one diagnostic, one prescriptive. The diagnosis is this: current procedures for handling nonclass aggregation miss the mark. Process isn’t just an exercise in autonomy or a handy crutch for enforcing substantive laws. Procedures can serve as a means for bringing plaintiffs together, plugging their individual stories into a collective narrative, making sense of that narrative as a community, reasoning together about the right thing to do, and pursuing that end collectively. Thus, the prescription is litigating together.

Along the way, I've developed a few aspects of this overall project in greater detail for various symposia:

 In Aggregation, Community, and the Line Between, I provided a more detailed account of the moral and political theory animating this "litigating together" approach.  This article contends that encouraging plaintiffs to form groups and reach decisions through deliberation relies on a mix of individual consent and moral obligation. Allowing plaintiffs to exercise their free will when deciding whether to associate with others preserves the liberal tenet of self-determination and escapes the anti-democratic criticism leveled at class actions. Yet, a purely liberal approach fails to capture the obligatory aspect of reciprocal promises to cooperate and the communal obligations that attach. Although plaintiffs voluntarily enter into the group, once they are group members and have tied together their collective litigation fates, they should not be permitted to exit when doing so violates their commitments. Of course, the community itself determines the content of its members’ rights and obligations to one another. Thus, the article concludes by explaining the rationale for group autonomy in terms of pluralism and communitarianism. 

In Group Consensus, Individual Consent (which is still very much "in progress," as they say), I explore how this project relates to sections 3.17 and 3.18 of the American Law Institute’s Principles of the Law of Aggregate Litigation and use those principles as a lens for exploring thematic questions about the value of pluralism, group cohesion, governance, procedural justice, and legitimacy in nonclass aggregation.  Both this project and Litigating Together: Social, Moral, and Legal Obligations are still very much in progress, so, as always, I welcome your comments. 

I'm extremely grateful for all of the helpful comments and criticisms of so many scholars in the field along the way.  I'm also looking forward to tackling new and different projects that have been waiting in the wings for some time now.

ECB

March 23, 2010 in Aggregate Litigation Procedures, Class Actions, Informal Aggregation, Lawyers, Mass Tort Scholarship, Procedure, Products Liability, Resources - Publications, Settlement, Vioxx, Zyprexa | Permalink | Comments (0) | TrackBack (0)

Wednesday, March 17, 2010

ASLCH Annual Conference and Presentation on "Examining Litigant Autonomy in Mass Torts: Insights from the Individualism of Ayn Rand"

On Saturday, March 20, I'll be speaking as part of a panel on "Pluralism in Tort Law and Litigation" at the annual meeting of the Association for the Study of Law, Culture, and Humanities, at Brown University in Rhode Island.  The panel will be moderated by Professor Alan Calnan (Southwestern), and other presenting panelists are Professors Christopher Robinette (Widener) and Sheila Scheuerman (Charleston). A podcast of the panel may later be posted on this blog.  Given the conference's focus on culture and humanities, my talk draws upon literature and political theory.  Here's the abstract for my talk:

Byron Stier -- "Examining Litigant Autonomy in Mass Torts: Insights from the Individualism of Ayn Rand"

Class actions and other aggregate procedural methods raise questions about the relationship of the individual to the group.  Litigant autonomy -- the litigant's interest in controlling his or her lawsuit -- has generally been considered merely one value among others in mass tort litigation, and only recently has a robust commitment to litigant autonomy been seen to call into question the entire structure of class action practice.  In looking for insight into the proper place for litigant autonomy in class actions or other management methods, we might fruitfully turn to political debates concerning the relationship of the citizen to the state, for both settings examine the rights of the individual against the perceived needs of the group or collective.  For discussion of that political question, I look to an unusual source -- outside law, to the literature of one known for her radical political individualism, Ayn Rand.  Her novel, "We The Living," which was published in 1936 and is set in the aftermath of the communist revolution in Russia, puts forth a moral argument for individualism stemming from the sanctity of one's own life, and of one's control of one's own life, for one's own ends, not the group's; she also argues that personal tragedy and systemic corruption accompany an approach that fails to respect individuals' lives and choices.  Turning back to mass tort litigation, I suggest that our notion of litigant autonomy can be informed by Rand's themes and that current class action rules show flaws similar to the collectivism that Rand critiques. Viewing litigant autonomy not merely as one value among others, but instead as an organizing principle that must be respected as a core right, I suggest that current class action rules regarding notice, opt-out, and settlement are problematic because they do not allow adequate expression of individual preference and they blunt each class member's individuality.  In addition, by avoiding individual control, the current class action rules create fertile ground for corruption and collusive settlements.

BGS

March 17, 2010 in Aggregate Litigation Procedures, Class Actions, Conferences, Informal Aggregation, Lawyers, Mass Tort Scholarship, Procedure, Products Liability, Settlement | Permalink | Comments (0) | TrackBack (0)

Tuesday, March 16, 2010

Albany Law Journal Symposium Issue on Off-Label Drug Prescription

Monday, March 15, 2010

Walter Olson Attempts to Defuse the Toyota Panic

His article, Exorcising Toyota’s Demons, was published today in the National Review online.

BGS

March 15, 2010 in Lawyers, Products Liability, Regulation, Science, Travel, Vehicles | Permalink | Comments (0) | TrackBack (0)

Monday, 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.

BGS

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 aparrish@swlaw.edu, 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.

March 8, 2010 in Aggregate Litigation Procedures, Foreign, Procedure, Products Liability, Tobacco | Permalink | Comments (0) | TrackBack (0)

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?

ADL

March 8, 2010 in Products Liability, Regulation | Permalink | Comments (0) | TrackBack (0)

Monday, February 22, 2010

Array of Lawsuits Expected Against Toyota

Professor David Owen (South Carolina) and I are quoted in a report tonight on All Things Considered on National Public Radio; the audio report -- Toyota Seen Facing Multiple Lawsuits, by Wendy Kaufman -- will also be posted on the web tonight at 7:00 p.m. EST.

BGS

February 22, 2010 in Aggregate Litigation Procedures, Class Actions, Informal Aggregation, Lawyers, Procedure, Products Liability, Regulation, Resources - Federal Agencies, Travel, Vehicles | Permalink | Comments (0) | TrackBack (0)

Sunday, February 14, 2010

Crisis Prevention and Toyota's Corporate Culture

The Economist suggests a connection between Toyota's continuing manufacturing problems and a corporate culture that fails to raise problems because it is overly deferential.  I have separately heard that Asian airplane co-pilots have had to be specifically trained to overcome their traditional cultural deference and challenge the actions of pilots, if warranted, in emergency situations.  Here's an excerpt from article:

Toyota’s problems are its alone, but they highlight broader failings in Japanese corporate governance that make large companies particularly vulnerable to mishandling a crisis in this way. Such firms typically have a rigid system of seniority and hierarchy in which people are reluctant to pass bad news up the chain, thus keeping information from those who need to hear it in a misguided effort to protect them from losing face. In many firms, including Toyota, family ties make challenging the boss all but impossible. Any attempt to short-circuit the hierarchy is deemed an act of disloyalty and a violation of the traditional consensual corporate culture. Groupthink becomes entrenched because there is so little mobility between companies: hiring from outside is thought to disrupt a firm’s internal harmony, and an executive willing to move will be stained as a disloyal “job-hopper”. This further hinders firms’ ability to take bold, decisive action. The preference for harmony crowds out alternative viewpoints.

BGS

February 14, 2010 in Products Liability, Travel, Vehicles | Permalink | Comments (1) | TrackBack (0)

Thursday, February 4, 2010

Stream of Commerce Alive and Well in New Jersey

On Tuesday the New Jersey Supreme Court issued a decision exercising broad personal jurisdiction over a UK Manufacturer who distributed goods through an independent Ohio distributor sued by a resident of New Jersey.

The decision is Nicastro v. McIntyre Machinery, 2010 WL 343563 (NJ, Feb. 2, 2010).  The Court (a 5 justice majority) explained:

“Today, all the world is a market. In our contemporary international economy, trade knows few boundaries, and it is now commonplace that dangerous products will find their way, through purposeful marketing, to our nation's shores and into our State. The question before us is whether the jurisdictional law of this State will reflect this new reality. .... Due process permits this State to provide a judicial forum for its citizens who are injured by dangerous and defective products placed in the stream of commerce by a foreign manufacturer that has targeted a geographical market that includes New Jersey. See id. at 480-83, 508 A.2d 1127. The exercise of jurisdiction in this case comports with traditional notions of fair play and substantial justice.”

The Court articulated the rule that "A foreign manufacturer will be subject to this State's jurisdiction if it knows or reasonably should know that through its distribution scheme its products are being sold in New Jersey."

What were defendant's contacts with New Jersey?  It targeted the U.S. market.  The Court explains:

It did so by engaging McIntyre America, an Ohio-based company, as its exclusive United States distributor for an approximately seven-year period ending in 2001. J. McIntyre knew or reasonably should have known that the distribution system extended to the entire United States, because its company officials, along with McIntyre America officials, attended scrap metal trade shows and conventions in various American cities where its products were advertised. Indeed, J. McIntyre's president was present at the Las Vegas trade convention where his exclusive distributor introduced plaintiff's employer to the allegedly defective McIntyre Model 640 Shear that severed four of plaintiff's fingers.”

There were two forceful dissents in the case.  Here is a taste: 

“Repeated quotations and soaring language about the realities of the global marketplace might compel the casual reader to follow what appears to be the majority's relentless logic. But those rhetorical techniques cannot mask the fact that the majority today embarks on a path that stretches our notions about due process, and about what is fundamentally fair, beyond the breaking point.”

(h/t Mike Martin (Fordham)) 

ADL

(ETA: You can find the decision on the Rutgers-Camden Law Library website) (h/t John Beckerman (Rutgers)). 


February 4, 2010 in Procedure, Products Liability | Permalink | Comments (0) | TrackBack (0)

Friday, January 29, 2010

Toyota Recall Spurs Lawsuits and Talk of Lawsuits

The ABA Journal article is here.  Apparently class actions have already been filed by consumers who claim that their cars are now worthless.  The article quotes the Wall Street Journal quoting Richard Nagareda (Vanderbilt)

"Since it will be hard to represent a nationwide class," he said, "I don't think this litigation will be a big moneymaker for plaintiffs."

(H/T Abovethelaw.com)

ADL

January 29, 2010 in Products Liability, Vehicles | Permalink | Comments (0) | TrackBack (0)

Tuesday, January 26, 2010

"Fraud on the Market" Theories in Consumer Litigation

A very interesting post from the folks at Drug and Device Law Blog available here. Note that as everything they write, this is from the defense perspective.  As they note, fraud on the market theories allow class actions to be certified even in cases where reliance is an issue because reliance is presumed.  Should this doctrine be imported from securities law?  Apparently, most states say no.  But there is some contrary precedent.  They write:

We remind defense counsel to use this chart with appropriate caution.  In particular, there's some contrary precedent, maybe a dozen or two cases nationwide.  It mostly falls into two categories:  (1) interpretations of state securities law statutes, and (2) older federal cases, involving tag-along pendent state claims from the era of "certify first and worry later" that existed prior to the Supreme Court's crackdown on class actions in the mid-1990s.  Adhering to our policy of not doing the other side's research for them, we don't include it here.  Just be aware that there are some stray adverse cases out there, and research accordingly.

ADL

January 26, 2010 in Class Actions, Procedure, Products Liability | Permalink | Comments (0) | TrackBack (0)

Sunday, January 17, 2010

Tort Music

On a lighter note, I thought our readers might enjoy Weird Al's video and song for "I'll Sue Ya," in which he sets the joy of tort litigation to the sounds of Rage Against the Machine.  (Thanks to my son for playing all those Weird Al videos.)


BGS

January 17, 2010 in Lawyers, Music, Products Liability | Permalink | Comments (0) | TrackBack (0)