Friday, August 6, 2010
Thursday, August 5, 2010
Over the weekend, the Michigan Supreme Court released its ruling in O'Neal v. St. John Hosp. & Med. Center. In an opinion by Justice Hathaway, the Court held that Michigan's statutory loss of opportunity provision (Section 2912a(2)) does not apply to medical malpractice cases. The majority opinion further rejected use of a differential subtraction analysis of the plaintiff's statistical risk to determine proximate causation.
That said, the case produced a plethora of opinions. Only Justice Weaver joined Justice Hathaway's opinion, though she also issued a separate concurring opinion. Justice Cavanaugh concurred in the result and issued a separate opinion, which Chief Justice Kelly joined. Justice Markman also issued a separate concurring opinion, which Justice Corrigan joined in part. Justice Corrigan also joined Justice Young's dissenting opinion.
Thanks to Jeffrey Pojanowski (Notre Dame) for the alert.
Wednesday, August 4, 2010
ALI-ABA on "The Third Restatement of Torts: Everything You Wanted To Know, But Didn't Know Whom To Ask"
ALI-ABA presents a one-hour telephone seminar on The Third Restatement of Torts. The course description provides:
Confused about the Third Restatement of Torts? You are not alone. The Third Restatement is different from its predecessors. Instead of consecutive provisions in a single multi-volume work as in the past, the Third Restatement is prepared in discrete, subject-specific topics. Products Liability was restated and published in 1998, but a new volume of the Third Restatement was published just this year. And another volume was published in 2000 – with several other volumes slated for future years.
Find out what you wanted to know about the Third Restatement, but didn't know whom to ask. Led by the co-Reporter of the Third Restatement, a federal court of appeals judge, and two prominent lawyers involved in the Restatement process, this in-depth and insightful program will examine the most recent volume, Liability for Physical and Emotional Harm, covering the core of tort doctrine for personal injury and property damage.
The distinguished faculty will outline this Restatement's significant modifications to the Second Restatement's provisions covering duty, negligence, factual cause, proximate cause, liability for emotional harm, and landowner obligations. Proof of causation in toxic substances litigation, a major area of contemporary tort litigation, will also be discussed.
Mike Green (Wake) is the planning chair for the seminar.
Tuesday, August 3, 2010
In an opinion released yesterday, the South Carolina Supreme Court held that the "Federal Motor Vehicle Safety Standard 205 (49 C.F.R. § 571.205 (1971)) preempts a state law products liability claim premised solely on a manufacturer's choice of tempered glass for a vehicle's side windows." South Carolina thus joins West Virginia and Tennessee in finding preemption in this context.
Thanks to William Gaskill for the alert.
Monday, August 2, 2010
Lester Brickman (Cardozo) has posted "Anatomy of an Aggregate Settlement: The Triumph of Temptation Over Ethics" on SSRN. The abstract provides:
In an aggregate settlement, usually of a mass tort claim, a defendant agrees to pay a specific dollar amount to be divided up by the lawyer among her multiple clients which may number in the hundreds and even thousands. Each client, therefore, is in competition with all of the lawyer’s other clients suing the same defendant for a share of the fixed sum. Rule 1.8(g) of the ABA Rules of Professional Conduct requires that each client give their informed consent to their allocation. To facilitate the settlement and the often quite substantial contingency fees to be earned, lawyers may mislead clients into believing that the amounts allocated to them were the result of individual bargains between their counsel and the defendant. Indeed, notorious examples of lawyers’ failures to abide by the rule abound in the literature.
At a recent conference to consider the ALI’s proposal to effectively amend Rule 1.8(g) and allow use of advance client waivers in non-class aggregative litigation (ALI, Principles of the Law of Aggregative Litigation, §3.17 (2010), the underlying assumption of most participants was that the problems being addressed were structural. The issue posed was whether, as proposed by the ALI, advance waivers allowing a supermajority of clients to bind the entire group, should get an ethical imprimatur.
While most of the commentators focused on efficiency, efficacy and autonomy, in this essay, I have set out on a different path. I reject the view that the defects in the ethical rule governing aggregate litigation are structural. For example, contrary to one panelist’s view, I do not agree that the all-or-nothing aggregate settlement -- which can empower hold-out clients to extract higher awards -- is the devil driving lawyers to violate Rule 1.8(g) with regard to securing aggregated clients’ informed consent to their allocated share. In my view, the issue posed is more fundamental. I contend that what drives lawyers to fail to comply with Rule 1.8(g) is the lucrative nature of this area of practice.
Given the lack of enforcement of ethics rules that purport to limit lawyers’ fees to “reasonable” amounts, contingency fees in many mass tort litigation have standardized at the 40% level. It strikes me as mind-boggling that commentators on non-class mass tort litigations ignore the 40% contingency fee that lawyers are increasingly charging in these litigations. If there are substantial economies of scale being realized by mass tort lawyers -- as I believe is the case -- they are being entirely claimed by the lawyers and not even partially being passed on to their clients except as mandated by a handful of judges. Moreover, while the use of Federal Rule 23 in mass tort litigation has been at least circumscribed by the U.S. Supreme Court, few, if any, commentators have noted that another reason why lawyers do not seek certification of certain mass tort litigations is that they can charge their clients fees that are 50% to 100% higher than what they would be awarded in class actions.
In my essay, I advance the view that lawyer adherence to ethical rules appears inversely related to the financial stakes for the lawyer. This is so, I argue, because fees of the magnitude obtained in non-class aggregate settlements simply overwhelm any proclivity of lawyers to adhere to ethical rules.
To put meat on the bones of my argument, I present a detailed examination of the aggregate settlement in the Phillips Petroleum explosion that occurred in October 1989 -- an aggregate settlement that ultimately resulted in the 1999 Texas Supreme Court decision in Burrow v. Arce, 997 S.W. 2d 229 (Tex.1999). The duplicitous actions by the attorneys for the 126 clients illustrate the powerful influence that a $65 million dollar fee offered in return for signed releases, had on a quintet of very wealthy lawyers and possibly the presiding judge. The implicit question posed -- whether their actions would have been any different if the ALI Principles were in force -- remains an open question.