Friday, May 7, 2010
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)
- 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)
- California appellate court revives Franklin Mint's malicious prosecution case against Manatt. (The Recorder/law.com)
- 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)
- Walter Olson leaves the Manhattan Institute and joins CATO. Ted Frank replaces Olson as editor of Point of Law. (Overlawyered, Point of Law)
Thursday, May 6, 2010
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 21st 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.
Wednesday, May 5, 2010
|1||284||The Shadow of State Secrets |
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
The International Dimension of Issuer Liability - Liability and Choice of Law from a Transatlantic Perspective
Tuesday, May 4, 2010
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 [email protected]. Please send submissions to [email protected] 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
Monday, May 3, 2010
Geistfeld on "Tax breaks for bad behavior? On the relation between income taxes, punitive damages, and liability insurance"
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