Mass Tort Litigation Blog

Roche Pulls Accutane Off the Market

Roche notified the FDA today that it was pulling Acctane (an acne medicine) off the market.  The company faces at least $33 million damage award from jury trials and faces around 5,000 personal injury claims.  Michael Hook (an FSU grad who graciously spoke to my complex litigation class this past spring about the litigation) won a $10.5 million claim against Roche in April of 2008 is quoted as saying, "We've been winning the cases with the drug still on the market, but this move certainly isn't going to hurt us going forward."  Roche has already taken Accutane off the market in roughly 11 other countries.  For more information, here's a link to Bloomberg's report and to the Associated Press article.  

ECB

Cert denied in 9/11 Saudi Liability Case

The Supreme Court yesterday denied certiorari in Burnett v. Al Baraka, in which plaintiffs sought to hold Saudi Arabia and the Saudi royal family liable for the September 11 terrorist attacks.  The plaintiffs sought to establish liability by linking the Saudis to the financing of Al Qaeda.  The Second Circuit held that the claims were barred by the Foreign Sovereign Immunities Act, reasoning that terrorism claims against a foreign government required a state department designation of that government as a supporter of terrorism.

Here's an excerpt from today's article in the Philadelphia Inquirer:

In a decision that creates broad immunity for Saudi Arabia in terrorism lawsuits, the Supreme Court yesterday let stand lower-court rulings that the desert kingdom and senior members of the Saudi royal family are not liable for the 9/11 attacks.  ...

For the moment, the decision leaves untouched litigation against scores of Islamic charities, alleged terrorism financiers and financial institutions named as defendants in the case. But the Supreme Court's decision is a significant defeat for the 6,000 individual victims and family members along with insurers and other commercial interests seeking compensation. ...

The plaintiffs allege that Saudi Arabia funded and controlled Islamic charities that were used to launder money into al-Qaeda.  Absent that financial support, al-Qaeda never would have become a global terrorist threat and never would have been able to pull off the Sept. 11 attacks, they allege.

The Obama administration, concerned about the case's effect on U.S.-Saudi relations, weighed in with an amicus brief last month urging the Supreme Court to decline the case.

HME

Supreme Court Reaffirms Availability of Damages for Fear of Future Illness in Asbestos Cases

In CSX Transportation, Inc. v. Thurston Hensley, the Supreme Court addressed the question of whether a former railroad worker who contracted astestosis after long-term exposure to asbestos on the job could recover damages for pain and suffering under the Federal Employers' Liability Act (FELA) based on his fear of developing lung cancer in the future.  In its June 1 decision, the Court, per curiam, reaffirmed a prior requirement that such damages are available but are limited to plaintiffs who can prove that their fear of cancer is both genuine and serious; the Court thus found that the lower court erred by not utilizing a jury instruction embodying this standard.  The full text of the opinion can be found here.

WBR

The GM Reorganization and Product Liability Claims

Article in the Wall Street Journal -- Car Liability, Dealers Pose New Hurdles For GM Plan, by Mike Spector and Jeffrey McCraken.  Here's an excerpt:

The U.S. Treasury Department is negotiating with more than a dozen state attorneys general to roll back two key features of General Motors Corp.'s bankruptcy plan that would have wiped out billions of dollars in potential claims from car-accident victims and closed auto dealers.

The discussions show how the federal government's GM rescue is brushing up against the limits of its ambitious legal approach, which attempted to use the Bankruptcy Code to override many state legal contracts and protections.

This could ultimately expand the cost of GM's $60 billion bailout, though government officials say it
shouldn't delay the emergence of a "new GM" from bankruptcy protection.
.

BGS

NTSB Finds Identifies Two New Instances of Airbus-Sensor Problems

Article in the Wall Street Journal -- Safety Board Cites Two New Reports of Problems With Airbus Sensors, by Andy Pasztor.  Here's an excerpt:

U.S. air-crash investigators are looking into two recent incidents in which they believe Airbus A330 jetliners suffered airspeed sensor malfunctions similar to those being examined in the crash of Air France Flight 447 last month.

The National Transportation Safety Board on Thursday identified separate malfunctions on two different airlines that ended with safe landings over the past few weeks. They appear to describe the same type of malfunction -- triggering a loss of autopilot and automatic-throttle -- that investigators believe occurred on the Air France A330 shortly before it crashed May 31 en route from Rio de Janeiro to Paris in stormy weather.

Such airspeed issues aren't enough to bring down a jetliner. Investigators in the Air France crash suspect a combination of turbulent weather, possible computer glitches, pilot actions and perhaps other factors combined to put the jet into a fatal dive.

BGS

Nestle Not Completely Cooperative with FDA Inspections Prior to E. Coli Outbreak

Article in the Wall Street Journal -- Nestlé Unit Denied FDA Requests, by Jane Zhang.  Here's an excerpt:

The Nestlé USA plant at the center of a federal probe into an E. coli outbreak involving cookie dough refused to give inspectors access to pest-control records, environmental-testing programs and other information, according to newly released inspection reports covering the past five years.

In a September 2006 visit, for example, managers at the Danville, Va., plant refused to allow a Food and Drug Administration inspector to review consumer complaints or inspect its program designed to prevent food contamination. The inspector found dirty equipment and "three live ant-like insects" on a ledge but nothing severe enough to give the plant a failing grade.

A year earlier, officials at the Nestlé plant presented another FDA inspector with a list of things it wouldn't do. "Among these are the refusal to review the firm's consumer complaint file, refusal to permit photography, refusal to sign affidavits or receipts and refusal to provide specific information on interstate commerce," the inspector wrote.

BGS

Interesting Cases in this BNA Class Action Litigation Report Released Today

Some of the highlights include:

Class members may sue an attorney who altered a class settlement in a smokeless tobacco class action without first notifying class members, the Fourth Circuit held in an unpublished opinion (Martin v. Ball, 4th Cir., No. 08-1757, 6/12/09)

A CAFA jurisdictional ruling -- the Eleventh Circuit held (per curiam) that the plaintiff's pleadings must establish that the amount in controversy has been met.  Other Circuits had held that the defendant could produce evidence that the amount had been met through its own documentation. (Thomas v. Bank of America Corp., 11th Cir., No. 09-11143, 6/12/09).

A $30 million criminal fine in the case against two lawyers accused of bilking their clients in connection with the diet drugs litigation has been affirmed.  (U.S. v. Gallion, E.D. Ky., No. 2:07-39-S-DCR, 6/17/09).

ADL

Exxon to Bear Its Own Costs in Punitive Damages Case

BNA Law Week reports that the 9th Circuit has held that each party must bear its own costs in the Exxon punitive damages litigation. (Baker v. Exxon Mobil Corp. (In re Exxon Valdez), 9th Cir., No. 04-35182, 6/15/09).  The costs were substantial -- approximately $70 million -- mostly attributable to the bond the company had to put up.  The original award was $5 billion and it was reduced to approximately $500 million.  While the reduction was substantial, the 9th Circuit held that the results were sufficiently mixed that Exxon was not the "prevailing party" such that costs could be shifted under Fed. R. App. P. 39(a)(4) (stating that "if a judgment is affirmed in part, reversed in part, modified, or vacated, costs are taxed only as the court orders.")

ADL

President Obama Signs Tobacco Bill Giving FDA Oversight

Article on cnn.com -- Obama signs bill putting tobacco products under FDA oversight.  Here's an excerpt:

President Obama signed landmark legislation Monday giving the Food and Drug Administration new power to regulate the manufacturing, marketing and sale of tobacco.

The Family Smoking Prevention and Tobacco Control Act gives the FDA power to ban candy-flavored and fruit-flavored cigarettes, widely considered appealing to first-time smokers, including youths. It also prohibits tobacco companies from using terms such as "low tar," "light" or "mild," requires larger warning labels on packages, and restricts advertising of tobacco products.

It also requires tobacco companies to reduce levels of nicotine in cigarettes.

BGS

A Collective Solution to the Subprime Mortgage Disaster

Ray Brescia (Albany Law School) has posted an article entitled, Tainted Loans: The Value of a Mass Torts Approach in Subprime Mortgage Litigation, advocating the employment of techniques such as class actions, consolidation of related cases, and global settlements for litigation concerning subprime litigation.  The full abstract is presented below:

A poison has entered the financial bloodstream. The subprime mortgage crisis and the wider financial crisis it has spawned have caused the erosion of trillions of dollars in wealth, the destruction of whole communities and the dislocation of millions of homeowners. Yet, unlike in other situations where toxic products have caused widespread harm, to date, we have not seen an avalanche of litigation, large jury awards, massive settlements compensating victims and financial ruin for the distributors of those products. Some of this is changing, however. Litigation arising out of the present financial crisis is hitting the courts, including suits alleging discrimination in the proliferation of subprime mortgages, securities litigation, and claims under state unfair trade practices laws and common law fraud principles. Courts may soon be inundated with these cases and will need effective tools for handling them.

With some exceptions, the litigation presently underway is an incoherent collection of random cases, however. If we view the subprime mortgage crisis and the financial crisis that has followed as the result of the proliferation of toxic products, a mass tort approach to the subprime mortgage disaster would seem inevitable. Such an approach would include utilization of the following techniques: class actions; consolidation of related cases; global settlements; and aggregation of factual, liability and damages assessments. This article makes the case that subprime litigation should adopt the techniques utilized in mass torts cases to make the prosecution of such litigation more efficient, comprehensive and effective, while bringing those most responsible for the present financial crisis to justice. It is argued that these techniques are best suited to achieve what I identify as goals for a legal response to the financial crisis: reducing the number of foreclosures; correcting for past illegality in the mortgage market; uncovering and spreading information about the presence of such illegality; promoting the modification of outstanding mortgage loans; strengthening and expanding voluntary efforts to overcome past abuses in the market; preserving home values; and complementing legislative and regulatory efforts to improve oversight of financial markets. The article also concludes that a mass torts approach in the subprime litigation context is superior in terms of meeting these goals when compared to other potential legal responses: i.e., individual litigation, individual bankruptcy, regulation, voluntary efforts and social insurance.

WBR

Sherman on Aggregate Litigation

Edward Sherman (Tulane) one of the most experienced scholars in the area of complex litigation has posted "An MDL Model for Resolving Complex Litigation if a Class Action Is Not Possible" on SSRN.  The piece was published in Tulane Law Review (2008).  Here is the abstract:

This article reviews the origins and development of multidistrict litigation before proceeding to examine its ability to take the place of class actions for the resolution of complex litigation. After noting that class actions are increasingly unavailable, particularly in pharmaceutical products liability cases, the article explores the management of the In re Vioxx Products Liability Litigation MDL. The article concludes that the MDL model can allow for the efficient resolution of complex litigation where a class action is not available, but creative management by the MDL transferee court is crucial. Highlighted are the use bellwether trials and the global settlement across jurisdictional lines, crafted by counsel in both federal and state courts and blessed and overseen in its execution by the MDL court. Professional ethics issues regarding requiring opting-in plaintiffs' attorneys to urge their clients to participate in the global settlement and, if not, to withdraw, are discussed. The growing use of multidistrict transfers of discreet litigation to a single court in various states is examined. Finally, the article calls for Congress to enhance the powers of MDL courts and to learn from the experience of the states and district courts that have experimented, often on an ad hoc basis, with the MDL model.

ADL

Geistfeld on Products Liability and Consumer Choice

Mark Geistfeld (NYU) has posted an article entitled "The Value of Consumer Choice in Products Liability" on SSRN.  I always learn from his work.  Here is the abstract:

Tort law has always recognized the principle expressed by the Latin maxim volenti non fit injuria, or "a person is not wronged by that to which he or she consents." The absence of consent is part of the prima facie case for tort liability, distinguishing tortious behavior from socially acceptable behavior. Nevertheless, the value of consumer choice in strict products liability is surprisingly unclear. Consider the liability rules governing defects of product design or warning, the most important categories of product defect. According to the Restatement (Third) of Torts: Products Liability, "[t]he emphasis is on creating incentives for manufacturers to achieve optimal levels of safety in designing and marketing products." The optimal level of safety has no apparent connection to the amount of safety that would be chosen by consumers, because "consumer expectations do not play a determinative role in determining defectiveness." Whether a product is defective in these cases instead depends on "[a] broad range of factors," including "the nature and strength of consumer expectations regarding the product." In some cases, consumer expectations can be "ultimately determinative" of the liability question, but it is not apparent why the liability rules exclusively rely on consumer choice in only these cases but not others. Consumer choice could also limit liability under the assumed-risk rule, and yet assumption of risk is not an independent defense in products liability, deepening the impression that this body of tort law undervalues individual choice.

The impression is misleading. Strict products liability appropriately values consumer choice. The value of consumer choice, however, is obscured by the way in which the Restatement (Third) has de-emphasized the importance of consumer expectations. Properly understood, the value of consumer choice not only justifies the liability rules in the Restatement (Third), it also provides the key to understanding the important limitations of strict products liability, including those based on assumed risks.

ADL

Shell Settles Nigerian Human Rights Case for $15.5 Million

Article on cnnmoney.com -- Shell pays $15.5M in Nigeria suit: Oil company settles a claim that it violated human rights leading to the killings of a famous writer and other activists in 1995.  Here's an excerpt:

Shell has agreed to a $15.5 million settlement in a lawsuit that claimed the oil company supported civil rights abuses in Nigeria that led to the killings of a famous writer and other activists in 1995.

The family of writer Ken Saro-Wiwa and nine other people filed the suit in New York, alleging that Shell was partially responsible for the then-military regime's oppression of the Ogoni people in the Niger Delta. Saro-Wiwa and other activists were protesting what they saw as environmental abuses by Shell.

Shell, which said it "had no part in the violence that took place," called the settlement "a humanitarian gesture to set up a trust fund to benefit the Ogoni people."

BGS

Tobacco Bill Giving FDA Regulatory Authority Progresses in Senate

As a follow-up to Byron's earlier post on the pending bill to give the FDA regulatory authority over tobacco products, here's a link to the Associated Press story and to the bill itself.  The bill responds to the Supreme Court's opinion in FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (2000), which held that the Food, Drug, and Cosmetic Act did not give the FDA authority to regulate tobacco products.  Accordingly, the FDA could not promulgate regulations governing tobacco companies' advertising, labeling, or accessibility.  A similar bill passed in the House on April 2, 2009, and it is currently under consideration by the Senate.

ECB

NIH Study Questions Benefits of Stents and Diabetes Drugs Avandia and Actos

Article in the Wall Street Journal -- Diabetes Study Questions Expensive Treatments: NIH Finds Patients With Heart Disease Fare Equally Well Without Stents and Drugs Such as Avandia, Actos, by Keith J. Winstein.  Here's an excerpt:

Aggressive use of expensive diabetes drugs and medical devices called stents did no better than cheaper treatments at preventing deaths, heart attacks or strokes in a large study of diabetics with heart disease.

The study, sponsored by the National Institutes of Health and several drugmakers, is the latest to humble fancy new treatments by finding them no better than older medicines at preventing the deadly consequences of major diseases. The results add to a debate about alleged overuse of stents, made by companies including Abbott Laboratories, Boston Scientific Corp. and Johnson & Johnson, and controversial diabetes drugs from GlaxoSmithKline PLC and Takeda Pharmaceutical Co.

BGS

Tobacco, the FDA, and Preemption

Op-ed in today's Wall Street Journal -- Tobacco and the Tort Bar, by Mark H. Berlind.  Here's an excerpt:

Congress is on the verge of passing sweeping legislation that would empower the Food and Drug Administration (FDA) to regulate tobacco products. Antitobacco activists are cheering, while some tobacco companies are raising the specter of First Amendment violations. Lost in the debate is the fact that this bill will continue to allow consumers to sue manufacturers that fully comply with the FDA's content and labeling rules.

...

Today's legislation would impose strict limits on tobacco advertising and labeling, mandate stronger warning labels, and require advance FDA approval of any reduced-risk claims. It would also empower the FDA to change cigarettes' content to make them less addictive and lethal.

However, in a little-noticed provision, the bill also expressly provides that "no provision of this chapter . . . shall be construed to modify or otherwise affect . . . the liability of any person under the product liability law of any State." In other words, the regulatory regime that the legislation would establish can't protect companies from tort liability -- even if they rigorously follow every FDA rule.

BGS

Motion to Dismiss Denied In 9/11 First Responders Litigation

The motion was made by two defendants in reliance on Bell Atlantic v. Twombly.  Judge Hellerstein's denial of the motion can be found here.

Cert Granted in Jurisdiction Case

The Supreme Court granted cert today in Hertz v. Friend, No. 08-1107. The question presented is what test applies for purposes of determining a corporation's principal place of business for diversity jurisdiction citizenship under 28 U.S.C. § 1332: the "place of operations test" or the "nerve center" test, where the corporation does substantially more business in one state compared to others?  (From BNA Law Week's Supreme Court Today). 

ADL

Chemerinsky on Why Law Professors Write

Dean Erwin Chemerinsky (UC Irvine) has an interesting article entitled, Why Write?, 107 Mich. L. Rev. 881 (2009).  Here's the abstract:

What is the purpose of legal scholarship? The foreword to the University of Michigan Law Review's book review issue provides an excellent occasion for addressing this question. This in turn requires considering who are the audiences for legal scholarship and what should count as legal scholarship. This essay offers thoughts and suggestions on these important topics.

BGS

Dooley on National Juries

Laura Dooley (Valparaiso) has posted an article entitled National Juries for National Cases: Preserving Citizen Participation in Large Scale Litigation.  Here is the abstract:

Procedural evolution in complex cases seems to have left the civil jury behind. The trend toward centralization of cases pending on the same topic in one court results in cases of national scope being tried by local juries; this reality is a catalyst for forum shopping and a frequent justification for calls to eliminate jury trial in complex cases altogether. Yet the jury is at the heart of a uniquely American understanding of civil justice, and the Seventh Amendment still mandates its use in federal cases. This article makes a bold new proposal designed to preserve the constitutional and functional value of citizen participation in the civil justice system by aligning the jury assembly mechanism with the scope of the litigation. Thus, in cases of national scope, juries should be assembled from a national pool. This idea would eliminate incentives to forum-shop into local jury pools, and would make the decisionmaking body commensurate with the polity that will feel the effects of its decisions. We might also expect a higher level of legitimacy for decisions rendered by a national jury in national cases because they would not be subject to the criticism that a local jury is imposing its values on the rest of the country, and because geographical diversification of the jury would enhance the quality of decisionmaking.

ADL