TortsProf Blog

Personal Injury Roundup No. 76

Reform, Legislation, Policy

• Vermont legislature considers whether doctors should disclose receipt of free drug samples. (Pharmalot)
• House committee investigates recall of childrens' Tylenol and other over-the-counter childrens' medicines.  (WaPo)

New Suits

• Lots of lawsuits filed over BP oil spill in the Gulf (About Lawsuits, National Law Journal/law.com), including several wrongful death suits on behalf of the workers killed in the original explosion.  (National Law Journal/law.com)
• Illiniois woman files suit against vacuum manufacturer alleging that defective vacuum sucked the hair out of her scalp. (Abnormal Use)
• "Tea is hot, too."   Suit against Starbucks for too hot tea.  (Overlawyered)
• Utah sues Johnson & Johnson and Astra Zeneca, alleging that both manufacturers failed to disclose side effects of their antipsychotic drugs.  (Pharmalot)

Appeals

• California appellate court revives Franklin Mint's malicious prosecution case against Manatt.  (The Recorder/law.com)

Damages 

• John Day points out the impact of the federal damages cap for oil spills on the BP suits.  (Day on Torts)

Trials, Settlements and Other Ends

• Links to WTC settlement and other documents (Mass Torts Profs)
• "Wyeth seeks new trial in Nevada Preempro case."  (AP/law.com)
• Comedian wins defamation suit based on mother-in-law jokes.  (ABA Journal)
• Merck wins second Fosamax trial.  (Pharmalot)
• Nevada jury finds drug manufacturer liable for hepatis-C transmission to plaintiff.  (CNBC/AP)

Miscellaneous

• Walter Olson leaves the Manhattan Institute and joins CATO.  Ted Frank replaces Olson as editor of Point of Law. (Overlawyered, Point of Law)

-SBS

AALS 2011: Vaccines and Drugs: A Brave New Tort World

Mike Rustad (Suffolk) has announced the program for the January 2011 AALS Torts and Compensation Section meeting:

 

The proliferation of vaccine and pharmaceutical drug-related injuries challenges our conceptions of how the tort system can best meet its compensatory and regulatory aims in the 21^st century.  In 1986, Congress created the National Childhood Vaccine Act, establishing a no-fault compensation scheme for vaccine-related injuries.  In 2010, the U.S. Supreme Court granted certiorari in Bruesewitz v. Wyeth, Inc. to decide whether design defect claims against vaccine manufacturers are preempted.  This follows closely on the heels of the U.S. Supreme Court’s decision in Wyeth v. Levine, finding that failure to warn claims against a drug manufacturer were not preempted.  Our panelists—who include two prominent torts and products liability scholars (Mary Davis and Bob Rabin), a seasoned litigator (Mal Wheeler), and a policy expert (James Copland)—will explore whether it makes sense to have separate legal regimes for vaccines and other pharmaceuticals.  They will also address issues at the core of tort law in the modern administrative state: the need for no-fault victim compensation and the respective roles of litigation and governmental regulation.

 

--CJR

Call for Papers: Disability and Tort Law

Call for Papers

AALS Section on Disability Law

 

Disability and Tort Law

 

The Section on  Disability Law will hold a program during the January, 2011 AALS  Annual Meeting in San Francisco, California, on Disability and Tort Law.  Disability Law embraces many crucial Tort Law issues, such as the measure of damages for incapacity and disfigurement, the reasonable-person standard as applied to people with physical and mental disabilities, duties of care relative to emotional and physical injuries, the validity of wrongful life claims, and liability standards for intentional infliction of emotional distress on people with disabilities.  Disability Law scholars have made important contributions to the development of the law on these questions, starting with Jacobus tenBroek, whose path-breaking article, The Right to Live in the World: The Disabled in the Law of Torts, 54 Cal. L. Rev. 841 (1966), was published 45 years ago this year.  Due in no small part to the intellectual groundwork of tenBroek and others, in the years since his writing a worldwide disability rights movement has emerged, challenging conventional assumptions about disability and the role of legal institutions as they relate to disability.  As tenBroek realized, disability rights ideas may entail reexamining the goals and operation of tort law in general and in specific application.  This session asks scholars chosen through a call for papers to discuss issues of disability and tort law in an era of disability rights.

 

The Section on Disability Law seeks proposals for presentations on disability and tort law for the AALS meeting in San Francisco January, 2011.  Proposals should include an abstract of 500 words or fewer, and may be accompanied by a working draft if the proposer chooses.  The section does not plan to publish the papers in a symposium, so presenters are free to seek publication where they wish, though work that will not be published before January 2011 will be strongly preferred..

 

Deadline for submission is August 31, 2010.  Please email proposals to Mark Weber at mweber@depaul.edu.  Selections will be made by late September by the Executive Committee of the Section.  Pursuant to AALS policy, presenters will have to cover their own travel expenses and registration fee for the annual meeting, and the Section is prohibited from reimbursing such expenses.  Under AALS rules, only faculty members of AALS member and fee-paid law schools are eligible to submit proposals.  Foreign, visiting and adjunct faculty members, graduate students, fellows and non-law school faculty are not eligible to submit.

 

Questions should be directed to Mark Weber, 312-362-8808, mweber@depaul.edu.

 

--CJR

Top 10 Recent SSRN Torts and Products Liability Downloads

Rank	Downloads	Paper Title
1	284	The Shadow of State Secrets Laura Donohue, Georgetown University Law Center, Date posted to database: March 8, 2010 Last Revised: April 27, 2010
2	190	Taxing Punitive Damages Gregg D. Polsky, Dan Markel, Florida State University - College of Law, Florida State University College of Law, Date posted to database: June 19, 2009 Last Revised: April 28, 2010
3	158	Traditional Versus Economic Analysis: Evidence from Cardozo and Posner Torts Opinions Lawrence A. Cunningham, George Washington University Law School, Date posted to database: March 19, 2010 Last Revised: March 19, 2010
4	146	The Right to Withdraw in Contract Law Omri Ben-Shahar, Eric A. Posner, University of Chicago Law School, University of Chicago - Law School, Date posted to database: March 14, 2010 Last Revised: March 14, 2010
5	142	Prosser's Privacy Law: A Mixed Legacy Neil M. Richards, Daniel J. Solove, Washington University School of Law, George Washington University Law School, Date posted to database: March 11, 2010 Last Revised: April 1, 2010
6	140	The Easy Case for Products Liability: A Response to Professors Polinsky and Shavell John C. P. Goldberg, Benjamin C. Zipursky, Harvard Law School, Fordham University - School of Law, Date posted to database: March 24, 2010 Last Revised: April 26, 2010
7	136	Attorney Deceit Statutes: Promoting Professionalism Through Criminal Prosecutions and Treble Damages Alex B. Long, University of Tennessee College of Law, Date posted to database: February 27, 2010 Last Revised: March 23, 2010
8	131	Punitive Damages, Forum Shopping, and the Conflict of Laws Patrick Joseph Borchers, Creighton University School of Law, Date posted to database: March 25, 2010 Last Revised: March 25, 2010
9	114	Database of State Tarasoff Laws Griffin Sims Edwards, Emory University, Department of Economics, Date posted to database: February 15, 2010 Last Revised: February 15, 2010
10	109	The International Dimension of Issuer Liability - Liability and Choice of Law from a Transatlantic Perspective Wolf-Georg Ringe, Alexander Hellgardt, University of Oxford - Faculty of Law, Max Planck Institute for Intellectual Property, Competition & Tax Law, Date posted to database: April 12, 2010 Last Revised: April 26, 2010 --CJR

Wm Mitchell Law Review Call for Papers - Restatement (Third) of Torts: Liability for Physical and Emotional Harm

The William Mitchell Law Review is proud to dedicate its third issue to the Restatement (Third) of Torts: Liability for Physical and Emotional Harm in its upcoming Volume 37 (Spring 2011).  Submissions may either take the form of shorter commentaries or longer law review articles. The initial deadline for submissions has been set for September 15, 2010.

The William Mitchell Law Review is highly regarded both regionally and nationally. Our Law Review recently ranked twenty-second in citations by judges and ranked fifty-seventh in citations by other law journals.  Over the years, the William Mitchell Law Review has featured the works of various scholars and practitioners such as Congressman Tim Penny, and former Vice President Walter Mondale. The William Mitchell Law Review has also published nationally known legal experts ranging from Philip Bruner, to Supreme Court Justices Sandra Day O'Connor, Byron White, and Harry Blackmun. Now, we would like to invite you to join us to publish in our upcoming volume.

Please direct inquiries to Executive Editor Jessica Klander at jessica.klander@wmitchell.edu. Please send submissions to lreview@wmitchell.edu or mail them to our Editorial Office. Please note that the Law Review prefers electronic submissions.

William Mitchell Law Review
William Mitchell College of Law
875 Summit Avenue, Suite 159
St. Paul, Minnesota 55105

- SBS

Geistfeld on "Tax breaks for bad behavior? On the relation between income taxes, punitive damages, and liability insurance"

 As the academic year winds down, I usually rearrange the piles on my desk in an effort to mark the onset of another summer full of promise and unrealistic expectations.  While rearranging the pile “tort-related things I’d like to read when I get a chance,” I came across the article by Gregg D. Polsky & Dan Markel, “Taxing Punitive Damages” (2010) (forthcoming Virginia Law Review).  Earlier this semester I had downloaded the manuscript and dutifully placed the printout in the appropriate pile. Since then, I’ve seen passing reference in the media to the apparent absurdity of federal tax rules that permit the deductibility of punitive damage awards—a deduction targeted for elimination in President Obama’s 2011 fiscal year budget.  How could punishment plausibly deserve a tax break?  The issue is more interesting than I had initially recognized, so I paused to peruse more closely the offerings of Polsky & Markel on the matter. 

They make the nice point that if punitive damages are not deductible, then plaintiffs and defendants have an incentive to “disguise punitive damages as compensatory damages in pre-trial settlements.” Doing so decreases the (after tax) cost of settlement for defendants, creating a gain that can then be shared by the settling parties.  By way of extended analysis, Polsky and Markel go on to conclude that the best way to solve the “under-punishment problem” created by deductibility is not to eliminate the tax break, as everyone had previously concluded, but instead to apprise juries of the deductibility issue so that they will “gross up” the punitive award to offset the tax break. 

Largely missing from the analysis, however, is discussion of how liability insurance affects the incidence of tort liability. Once this dimension of the problem has been recognized, it becomes apparent that there is a much stronger case against the deductibility of punitive damages.

Consider a world (largely like our own) in which every defendant worth suing has liability insurance covering at least a portion of a tort judgment (or any other form of civil liability that permits the award of punitive damages).  Suppose our insured defendant has incurred punitive damages liability.  Perhaps surprisingly, this form of liability is not expressly excluded from coverage under the standard-form liability-insurance contracts.  Whether the defendant can actually collect on the insurance, however, depends on whether the jurisdiction permits the insurability of punitive damages as a matter of public policy.

Nine or so jurisdictions, including California and New York, prohibit the insurance of punitive damages.  In these jurisdictions, any settlement between an insured defendant and the tort plaintiff presumably will allocate the appropriate amount to punitive damages. Regardless of how the defendant and plaintiff would otherwise like to characterize the proportion of compensatory and punitive damages covered by the settlement, the insurer is obligated to indemnify only the former category and accordingly will seek to maximize the portion of the settlement attributable to punitive damages (and excluded from coverage).  The insurer usually can police the terms of the settlement directly (the insurance contract gives the liability insurer the right to settle the case).  But if the insurer does not fully participate in the settlement, the terms of the settlement would not have preclusive effect in a subsequent coverage dispute with the tort defendant/policyholder regarding the amount of the settlement that is covered by the policy and properly allocable to compensatory damages.  The liability insurer, therefore, presumably will monitor the portion of the settlement allocable to punitive damages, effectively precluding plaintiffs and defendants from otherwise manipulating settlements in a manner that would thwart efforts to restore the full “sting” of punitive damages by making them nondeductible.

The argument against deductibility then largely generalizes to the remaining jurisdictions that permit the insurability of punitive damages.  The standard-form liability-insurance contracts do not cover liabilities for “expected or intended harms.”  In these cases, the insurer can deny coverage altogether—for both compensatory and punitive damages—and so it will not monitor the portion of any settlement properly allocable to punitive damages.  In light of the settlement problem identified by Polsky and Markel, the best approach would be to deny deductibility for the entire liability.  These instances of intentional wrongdoing clearly implicate the retributive concerns that would create a problem of “under punishment” in the event that the punitive award receives a tax break.  Rather than let the litigants manipulate settlements for tax reasons, why not eliminate the tax break altogether for liabilities of this type?  Why should these intentional wrongdoers be able to deduct any of their liabilities as a cost of doing business?

Regardless of how one answers this question, the case for nondeductibility remains intact.  The public policy concerns implicated by the insurability issue are substantively identical to those posed by the deductibility issue: each allows the tort defendant to distribute the cost of the punitive award to a wider group (other policyholders; other taxpayers).  In deciding to permit the insurance of punitive damages, a jurisdiction has concluded that the redistribution afforded by liability insurance does not create any public policy problem of “under punishment.” So, too, in these jurisdictions the redistribution afforded by the deductibility of punitive damages does not create any public policy problem of “under punishment.” Consequently, even if a tax rule of nondeductibility could be largely circumvented by the settling parties as Polsky and Markel conclude, there is no “under-punishment problem” created by the de facto deductibility of punitive damages.  This does not mean that the deductibility issue is largely irrelevant.  The tax rule against deductibility is still desirable as a federal matter because it furthers the public policy of those states that reject the insurability of punitive damages on the ground that wrongdoers should not be able to redistribute their punishment to others.

Admittedly, I live in a state where punitive damages are not insurable, and the analysis of Polsky and Markel has much more to offer than I have indicated.  They artfully unravel the surprising complexity of what appears to be a rather straightforward issue—whether bad behavior deserves a tax break.  Clearly, I should have put this article into my “read right away” pile (although that pile, of course, also ends up getting shuffled around at the close of the academic year).

 

- Mark Geistfeld

Sheila Lubetsky Birnbaum Professor of Civil Litigation

New York University School of Law