TortsProf Blog

Monthly Review on Tort Reform

An interesting piece by Michael Perelman:

Given the absence of criminal penalties for corporate misbehavior, society needs an alternative means to protect itself against corporate abuses.  Ideally, effective regulation might help to keep corporations in line, but the regulatory structure in the United States is embarrassingly weak.

Of course, it's not accurate to say there are no criminal penalties for corporate misbehavior, but the rest of the piece pulls together some useful data and includes a recognition of the resources that are wasted through litigation.

Asbestos Bill Comments

[Updated and moved to the top Friday 2/10 at 5 pm]

Like the SOTU post, I'll try to update this periodically.  The Post had this good story about the early back-and-forth on the bill, which provides decent background on both the bill and the battle to come.  "Under the measure, companies and their insurers would contribute $140 billion to a trust fund that would compensate victims of asbestos exposure. The measure would stop all asbestos-related court cases and spare defendants crippling jury awards."

Some posts:

• Alliance for Justice (letter to the Senate [PDF]): "S. 852 will leave a substantial number of seriously ill victims of asbestos-induced  diseases -- many of whom are dying -- uncompensated and worse off than they are under current law.  The Asbestos Trust Fund that S. 852 creates is unfair, unworkable and inadequately funded.  According to testimony presented to the Senate Judiciary Committee, the fund will rely on very substantial borrowing early on to pay hundreds of thousands of initial claims resulting in debt service costs over the life of the fund that could reduce the $140 billion intended to pay claims by as much as 40 percent or more.  Moreover S. 852 terminates the right of victims to seek redress in the civil justice system, which for all its challenges, has evolved to manage asbestos litigation with increasing efficiency.  An asbestos fund that fails to offer victims equal or better  protection and relief than they enjoy under the current civil justice system is completely unacceptable."
• Manufacturers' Blog (NAM): "We find that too many people really don't understand the crux of the disagreement on this issue. We find all too often when talking to people about it, they begin with the assumption that we somehow doubt that asbestos is a harmful substance. We don't doubt it. This issue isn't about whether asbestos is safe or not -- this has long since been established. The issue is how people injured by exposure to asbestos will be compensated. We want to make sure that all the money doesn't go to trial lawyers and healthy people."  [After some stats about percentage of recovery to lawyers, etc.]  "This, in short, is a national disgrace. There are sick people out there who deserve to be compensated. Only trouble is, there's a line of healthy people -- and trial lawyers -- in front of them."  See also their update today.
• People Over Profits (ATLA): "The Specter-Leahy bill asks asbestos victims to bear the risk of an inadequately funded, unfairly structured and untested new compensation program that is not even a "no fault" system. In fact, victims must surpass huge new hurdles to prove their asbestos exposure and that it is the cause of their illness. Based on the current version of the bill, it will be impossible for them to do so."  (Also lists "ten worst hurdles" established by the bill.)
• TownHall.com (via NAM): This one has a point-counterpoint which does a reasonable job of summarizing the views on either side.   
• WSJ's LawBlog links to a WSJ article (paid sub. req.) saying that the legislation appears DOA.
• The American Enterprise Institute hosted an event a couple of weeks ago discussing the bill; a video of the event is available as is a summary.  I think it is fair to summarize the summary (yikes) as ambivalent -- everyone wants something legislatively but nobody's certain this is good enough.
• The New York Times [free sub. req.] editorialized in favor of the legislation yesterday.  "No one can be sure that $140 billion would cover all current and future claims. But the bill would give victims the option of going to court should the trust fund run out. It would be a vast improvement over the present method of dealing with the claims of asbestos victims, which is to clog the courts and bankrupt companies while still depriving many victims a measure of justice."
• [New] WSJ LawBlog has a good update today (Thursday), including this entertaining snippet: "[N]oted plaintiffs’ class action lawyer Richard Scruggs apparently supports the bill: 'This bill stops companies from going bankrupt and prevents trial lawyers from going after these companies and bringing them down,' he told the paper. In response, a spokeswoman for the American Trial Lawyers Association 'noted that Mr. Scruggs appeared to be the only trial lawyer in the country who supported the legislation.'"
• [New] The Heritage Foundation: "Regrettably, the Senate bill as written may end up replacing one failed system with another. Lawmak ers can still remedy the problem if they focus on rules that will aid those truly wronged and nothing more. If they can do this, asbestos litigation reform could establish a positive precedent rather than another—albeit different—type of failure."  [via our neighbors at the Law Librarian Blog]
• [New] The Washington Post editorializes in favor: "The bill will be debated and amended, and it may face a second attempted filibuster before it gets a vote. Some amendment may be reasonable at the margins, but the bill's central idea -- to replace litigation with a $140 billion compensation fund to be financed by defendant companies and their insurers -- must be preserved. Democrats complain that the fund won't have enough money to compensate asbestos victims; Republicans complain that the fund will have too much money, the raising of which will constitute a burden on small and medium-size firms. The fact that the bill is being attacked from both directions suggests that its authors, Sens. Arlen Specter (R-Pa.) and Patrick J. Leahy (D-Vt.), have balanced competing interests in a reasonable manner."
• [New] 14 Republicans have rewritten the bill entirely: "A group of Republican senators on Thursday proposed completely rewriting an asbestos bill to allow lawsuits under strict medical criteria rather than create a $140 billion fund to pay victims of the mineral. . . .  Cornyn said his proposed amendment would establish a 'national floor' with respect to medical criteria. It would require physical impairment, to which exposure to asbestos was a substantial contributing factor, to bring an asbestos claim to court. Several states have passed similar legislation.  His proposal would also extend the statute of limitations for filing claims, so people who are not yet sick from asbestos can still have their cases heard if they fall ill in the future, Cornyn said. Further, the plan would attempt to limit fraud by medical screeners that vouch for claims."  Note: Comments reflect that this bill failed.

I did a little (mind-numbing) asbestos insurance litigation when I was in practice and have read a fair amount about various proposals.  I don't pretend to have a good solution in mind, though I do tend to think that legislation -- fair and cautious legislation -- is probably necessary, even if (as seems likely) the court system is getting better at dealing with the litigation.

While obviously it wasn't about the current bill (or any particular bill), Souter seemed pretty sensible here, writing for the Court: "The 'elephantine mass of asbestos cases' lodged in state and federal courts, we again recognize, 'defies customary judicial administration and calls for national legislation.'"

Please point me to any other posts you think should be included.

Impact of Tort Reform: Anecdotes in Missouri

The KC Star piece has some interesting bits.

With its cap on noneconomic damages in medical malpractice cases, the legislation has discouraged pursuit of otherwise worthy cases, particularly on behalf of the very young and the very old, plaintiffs’ lawyers say.

Because they’re not wage earners and typically haven’t lost income as a result of an accident, often the sole compensation of the very old and the very young when they’re injured is noneconomic damages — or damages for pain and suffering.

The law also substantially modified joint and several liability in Missouri:

Now plaintiffs can pursue a defendant for 100 percent of their damages only if the defendant was found to be more than 50 percent at fault. Defendants found less than 51 percent at fault are liable only for their percentage of blame.

* * *

The old law undoubtedly influenced the decision of drug makers Eli Lilly and Co. and Bristol-Myers Squibb Co. to settle out of court hundreds of cases filed against them several years ago in Kansas City after pharmacist Robert Courtney pleaded guilty to diluting their cancer medications. The suits alleged that the companies knew or should have known that Courtney was watering down their drugs but failed to stop him.

Eli Lilly and Bristol-Myers Squibb had to decide whether to risk being found even 1 percent at fault. Given that the jury assessed $2.2 billion in damages against Courtney in the one case that went to trial, it was a chance the companies decided they could not take. Ultimately they settled with the plaintiffs for $72.1 million.

Asbestos Reform: Who Opposes It?

In today's Post editorial (and most coverage), the main opponents of the asbestos bill are identified as trial lawyers: "But the truth is that the bill's main opponents are trial lawyers, who profit mightily from asbestos lawsuits and who constitute a powerful lobby in their own right."

While I'm certain that it's true that much public opposition comes from the plaintiffs' bar (see ATLA, for example), there's another interest group that may (quietly) oppose it: defense firms that make their money on these suits.

I spoke recently with a (non-asbestos) defense lawyer who mostly practices in various southern states typically identified as "judicial hellholes," and he said that in his region, the defense firms were possibly more upset about the reform bill than the plaintiffs' bar.  The plaintiffs' attorneys have already made a pile of money from asbestos, he suggested, and are perhaps better able to find a new area (as many of them did after the addition of arbitration provisions in credit agreements, for example), while the defense firms rely on the hourly defense work and may be less able to shift gears.  And, not incidentally, it's a lot of work to start a new area of law -- just like there are asbestos plaintiffs' "trials in a box," defense firms have no doubt put together stock discovery answers, examinations, etc., that make the work not that difficult.  It takes time -- and it might not be billable time.

Even if true, of course, the defense firms aren't going to go out and publicly lobby against their clients' interests (and it seems evident that this bill would generally benefit defendants).  And so perhaps pockets of opposition from defense firms don't make that big of a difference.  But it may at least be oversimplifying to say that the opposition is entirely from the plaintiffs' bar.

Chrysler President Estimates Costs of Lawsuits

...and it's $500.  (Per car.)

[CEO Thomas] LaSorda said the cost of lawsuits - including legal costs and insurance - adds 500 usd to every car and truck sold in the US.

'Perhaps a little 'blue-collar' grounding and manufacturing common sense could go a long way in making sense of the US legal system,' LaSorda told Agence France-Presse at the Chicago Auto Show.

'We need to set some reasonable and fair limits on damages. For every dollar awarded in tort liability, the typical injured party receives only about 46 cents to compensate them for injuries. That means the majority of every dollar goes elsewhere.'

He maintained that the US now spends about 2.23 pct of its gross domestic product on legal fees and other costs associated with litigation while countries such as France, Japan and Canada spend less than one pct of the GDP on litigation.

Defense Verdict for Benihana; Chefs Still Free To Distract From Overpriced Food By Tossing Seafood Products Around Table

AP story:

A jury took two hours Thursday to reject a widow's claim that her husband's death resulted from an injury he suffered while ducking a piece of flying shrimp at a Benihana steakhouse.

More to come.

Job: Visiting Position at Seattle

Seattle University School of Law invites applications for a visitor position to teach Torts in the fall and spring of 2006-2007.  We are seeking an experienced professor to teach this 5-credit first year course (2 credits in the fall, 3 in the spring); the other fall and spring course to be taught subject to mutual agreement between the visitor and the Law School.    

Seattle University School of Law, with 1,100 students and a current student-faculty ratio of 16-1, educates ethical lawyers who distinguish themselves through their outstanding professional skills and their dedication to law in the service of justice.  Faculty, students, and staff form a vibrant, diverse, and collaborative community that promotes leadership for a just and humane world. The Law School's commitment to academic distinction is grounded in its Jesuit Catholic tradition – one that encourages open inquiry, thoughtful reflection and concern for personal growth. Innovation, creativity and technological sophistication characterize our rigorous educational program, which prepares lawyers for a wide range of successful and rewarding careers in law, business and public service.

Seattle  University, founded in 1891, continues a 450-year tradition of Jesuit Catholic higher education.  The University’s Jesuit Catholic ideals underscore its commitment to the centrality of teaching, learning and scholarship, of values-based education grounded in the Jesuit and Catholic traditions, of service and social justice, of lifelong learning, and of educating the whole person.  Located in the heart of dynamic Seattle, the University enrolls approximately 6,000 undergraduate and graduate students in eight colleges and schools.  Students enjoy a university ethos characterized by individualized faculty attention, a strong sense of community, a commitment to diversity, and an outstanding faculty.

Seattle  University is an equal opportunity, affirmative action employer.  Finding prejudicial discrimination inconsistent with the mission of the University and the spirit of free academic inquiry, Seattle University does not discriminate in hiring on the basis of age, sex, race, religion, national origin, familial status, sexual orientation, or disability.  This policy complies with the spirit and the letter of applicable federal, state, and local laws.

Please send cover letter and curriculum vitae to:  Annette E. Clark, Associate Dean for Academic Affairs and Associate Professor of Law, Seattle University School of Law, 901 12th Ave,  Box 222000, Seattle, WA  98122.  Telephone:  (206) 398-4069; E-mail:  annclark@seattleu.edu.  Email applications are welcome.

BREAKING - Shrimp Case With Jury

Or so says a commenter.  Oh, and so does an AP story:

Benihana attorney Charles Connick suggested during his closing arguments to the jury in the civil trial Wednesday that it was inappropriate to hold the restaurant at fault.

"I scratch my head and I wonder, is it conceivable to you?" Connick asked.

Update: The NYT (free sub. req.) has coverage too, with coverage of the plaintiff's argument, taking causation issues head-on:

Andre L. Ferenzo, a lawyer in Roslyn representing the Colaitis estate, told the jury yesterday that "a flying piece of hot grilled shrimp" thrown by an irresponsible chef "set into motion an unbroken chain of interrelated events" leading to Mr. Colaitis's death 10 months later.

(Okay, perhaps it doesn't quite justify the all-caps BREAKING.  Previous posts here and here.)

Beware the Lettuce

An interesting salad bar slip-and-fall case argued in Connecticut recently.  The court is considering whether to abandon the requirement of actual knowledge in such cases.

The case in point revolves around a piece of lettuce, said to be the cause of dental hygienist Maureen Kelly's nasty fall while pivoting to get a lid for her salad tin at a Fairfield Stop & Shop salad bar on Nov. 2, 1999.

Kelly landed hard on her left shoulder, tearing her rotator cuff, and now suffers chronic pain. The attorney for Stop & Shop countered Tuesday that there was no firm evidence that the piece of lettuce apparent on the side of Kelly's shoe even caused the fall.

No Negligence Per Se for that Chop Block

Via Tuesday Morning Quarterback (pointed out to TMQ by Stephen Carter of Yale Law School), an excerpt from the 2005 Official Playing Rules of the National Football League:

Where the word 'illegal' appears in this rulebook, it is an institutional term of art pertaining strictly to violations of NFL rules. It is not meant to connote illegality under any public law ... The word 'flagrant,' when used here to describe an action by a player, is meant to indicate the degree of violation of the rules ... 'flagrant' in these rules does not necessarily imply malice on the part of the fouling player.

I'm sure the courts will be pleased to know that they, and not NFL referees, continue to determine what conduct is illegal under the law.

(Incidentally, that purported block below the waist wasn't.)

Conference: Emerging Issues in Tort Law (Canadian)

From the announcement:

June 9-10, 2006
The University of Western Ontario

On June 9-10, 2006 the Faculty of Law of the University of Western Ontario will be hosting a conference, the theme of which is “Emerging Issues in Tort Law”.  The purpose of the conference is to bring together academics, lawyers and judges to analyze and discuss undertheorized and underexplored areas of tort law that are likely to examined by the courts in the near future.

Over the coming years the number, and intellectual complexity, of tort actions is likely to increase. This conference is an excellent opportunity to learn the details of these emerging issues from leading academics and practitioners from Canada, the United Kingdom, the Commonwealth and the United States. Each panel will be moderated by an appellate judge with an interest in the area. The high quality of the presenters makes this a must-attend event for those teaching and writing in this area of the law.

Registration forms for the conference, as well as a complete programme of the event, can be found at the conference website.

Confirmed conference participants include:

Justice W. Ian C. Binnie (Supreme Court of Canada)
Chief Justice Lance Finch (British Columbia Court of Appeal)
Chief Justice Michael MacDonald (Nova Scotia Court of Appeal)
Chief Justice  Richard J. Scott (Manitoba Court of Appeal)
Chief Justice  Clyde K. Wells (Newfoundland Court of Appeal)
Justice Eleanore A. Cronk (Court of Appeal for Ontario)
Justice  Susan Lang (Court of Appeal for Ontario)         
Justice Allen Linden  (Federal Court of Appeal)
Justice  Kathryn Feldman (Court of Appeal for Ontario)
Justice Stephen Goudge  (Court of Appeal for Ontario)
Justice Robert Sharpe (Court of Appeal for Ontario)
Elizabeth Adjin-Tettey (Victoria)
Kumar Amirthalingam (National University of Singapore)
Peter Benson (Toronto)
Vaughan Black (Dalhousie)
Peter Cane (Australian National University)
Ken Cooper-Stephenson (Saskatchewan)
David Cheifetz (Bennett Best Burn LLP)
Israel Gilead (Hebrew University)
Paula Giliker (Oxford)
Michael Jones (Liverpool)
Lara Khoury (McGill)
Lewis Klar (Alberta)
Richard Lewis (Cardiff)          
Mayo Moran (Toronto)
John Murphy (Manchester)
Ken Oliphant (Cardiff)
David F. Partlett (Washington and Lee)
Stephen Perry (New York University)
Denise Réaume (Toronto)
Geneviève Saumier (McGill)
Lionel Smith (McGill)
Stephen Smith (McGill)
Robert Stevens (Oxford)
John Swan (Aird & Berlis LLP)
Andrew Tettenborn (Exeter)
Stephen Todd (Canterbury)
Shauna Van Praagh (McGill)
Stephen Waddams (Toronto)
David Wingfield (WeirFoulds LLP)
Richard Wright (Chicago-Kent)

The cost to attend the conference is C$150 for legal academics which includes a continental breakfast and lunch on both days.  A dinner will be held during the conference and the cost to attend is a further C$50.

The University of Western Ontario is located in London, Ontario, which is approximately 200 kilometres south-west of Toronto. London is well-served by frequent bus, rail and air connections from Toronto.
For further information contact:
Jason Neyers
Assistant Professor of Law
Phone:  (519) 661-2111 x. 88435
E-mail: jneyers@uwo.ca

Philip Morris to (Surprise!) Appeal $79.5 Million Punitives Verdict

(Here's my original post with some excerpts from the opinion.)

The AP story quotes torts prof Carl Tobias (Richmond) as suggesting that the Supremes will take the case.  I'm less certain of that, unless it's just to remand with directions to read State Farm, real slowly and carefully this time.

(I kid, I kid.  The Oregon court did read State Farm and Gore and so on, and just concluded that the facts here supported a huge ratio of punitives to actuals ("Philip Morris's conduct here was extraordinarily reprehensible, by any measure of which we are aware.").  If the Supremes do take it, it'll be an interesting test of just how definitive that single-digit-multiplier is.)

South Korea Considers Punitive Damages

...and the arguments seem rather familiar:

The Presidential Committee on Judicial Reform will soon introduce a punitive damages system. It could be way to deter antisocial crimes such as kidnapping, embezzlement, drunk driving and violent demonstrations. However, a pharmaceutical company, for instance, might be discouraged from developing new medicine, such as an AIDS vaccine, for fear of being sued. The committee should consider that consumers might be the ones to suffer damage.

The article also cites Erin Brockovich and O.J. Simpson for good measure.

Torts and the SOTU

[Some new entries below; also check out the comments.]

I'll try to update this throughout the day as I come across reactions to the State of the Union speech that are tort-related.  In case you missed it, the main (only?) reference in the speech was this:

And because lawsuits are driving many good doctors out of practice – leaving women in nearly 1,500 American counties without a single OB-GYN – I ask the Congress to pass medical liability reform this year.

Some (excerpted) reactions from around and about:

• Day on Torts: "How can anyone with a lick of sense suggest that OB-GYNs do not practice in rural American because of medical negligence lawsuits? Doctors practice medicine where there are patients and where there are hospitals."
• Federal Disability Claims Blog: "How much of the President’s claim [about problems of litigation] is supported in fact? [paragraph] Not much according to none other than the very people at the heart of the matter: the Judges in the Courts themselves."  [Note: Written before the SOTU, so not entirely on the mark about what Bush in fact said.]
• SOTU Drinking Game (Elfstar): Mentioning malpractice reform means take one drink.
• Talking Points Memo Cafe: "The effects of malpractice lawsuits on our medical system are way overblown.  Research shows that less than one half of one percent of medical spending goes toward defending lawsuits, paying premiums, and giving malpractice awards.  Tort reform can't control rising health costs. [paragraph] In terms of 1,500 U.S. counties without ob-gyns, that has to do with population distribution.  16.1% of counties have more than 100,000 inhabitants, while 83.9% of counties had less than 100,000 inhabitants.  There aren't enough doctors in rural practice, but that has nothing to do with malpractice, and tort reform won't solve that problem."  (Post by Kate Steadman)
•   ATLA Press Release: "In his State of the Union address tonight, President George W. Bush continued his habit of attacking the civil justice system to provide yet another giveaway to his corporate contributors. Specifically, Bush called for legislation that would do nothing to provide quality health care to the 45 million Americans who do not have access or lower health care costs but would pad the profits of his contributors in the insurance industry."
• NAM has provided the White House talking points [PDF]: "The President Calls On Congress To Make The Medical Liability System Fairer And More Predictable While Reducing Wasteful Costs.  Frivolous lawsuits and excessive jury awards limit access to health care by driving health care providers out of many communities and increase costs by forcing doctors to practice defensive medicine.  Because lawsuits are driving many good doctors out of practice, women in nearly 1,500 American counties are left without a single OB-GYN.   Medical liability reforms would secure an injured patient's ability to get quicker compensation for economic losses, while reducing frivolous lawsuits against doctors that raise the cost of health care for all.  [Ed. Note: presumably the lawsuits raise the costs, not the doctors.]  The President has proposed proven, common-sense reforms that reserve punitive damages for egregious cases where they are justified, limit non-economic damages to reasonable amounts, ensure that old cases cannot be brought to court years after an event, and provide that defendants pay judgments in proportion to their fault."
• [New] The Center for Justice & Democracy: "The medical malpractice legislation that Bush will advocate during the 2006 State of the Union would take away legal protections that have saved thousands of lives.  These laws have protected us from drugs and medical devices like Vioxx, the Dalkon Shield and Copper-7 IUDs, an antibiotic that caused cancer, a pregnancy test that led to false-positives for cancer, and many others.  [paragraph]  The Administration’s plan will result in Americans dying so that the drug companies can make even more money.  Moreover, arguing that limiting the legal rights of patients injured by medical malpractice will lower health care costs is a blatant misrepresentation of facts."  This press release also cites FactCheck.org on the costs of the current system (this search will get you all articles mentioning "malpractice").

Most of these include substantially more than what I've quoted above.  Send a note if you know a good one.  Folks like the Manufacturers Blog have been focusing on other aspects of the speech.

[Updated and moved to the top on Monday morning -- probably the last update of this post.]

Woeful Lack of Donut Shops

Funny.

(And please note that it is satire, but relevant satire.)