Mass Tort Litigation Blog

Balducci Pleads Guilty; Scruggs Pleads Not Guilty

According to an article in the L.A. Times -- Lawyer admits bribing judge, from the Associated Press -- lawyer Timothy Balducci has pleaded guilty to attempting to bribe a Mississippi judge in the Katrina insurance litigation.  Dickie Scruggs, however, has pleaded not guilty.

BGS

Robles Sentenced to 15 Years

Plaintiffs' mass tort lawyer Louis Robles was sentenced yesterday to the maximum 15 years for stealing settlement money from clients he represented in asbestos litigation.  Here's an excerpt from the Sun Sentinel:

A Miami attorney who admitted stealing more than $13 million from thousands of clients suffering from asbestos-related illnesses was sentenced Tuesday in Miami federal court to 15 years in prison.

Louis Robles, 59, once known as the "King of Torts," pleaded guilty in September to three counts of mail fraud, each carrying a possible five year sentence. U.S. District Judge Alan Gold, who had rejected an earlier plea agreement he thought was too lax, sentenced Robles to the maximum prison term.

Between 1989 and 2002, Robles collected more than $164 million on behalf of roughly 7,000 clients suing asbestos companies. In the mid-1990s, he began dipping directly into settlement proceeds without his clients' knowledge to fund an extravagant lifestyle, prosecutors said.

For earlier proceedings, see posts on April 19,  Sept. 17, and Sept. 24.

HME

Plaintiff Verdict in Welding Fumes Trial

Jeff Tamraz, a plaintiff in the Welding Fume Product Liability Litigation MDL in the Northern District of Ohio, won a $20.5 million verdict today, according to this news release.  The litigation involves claims that manganese fumes from welding rods cause Parkinson's Disease.  Welding rod defendants had won the vast majority of cases to go to trial, and an August 2007 industry report on the litigation reported that the lawsuits were on the decline.  Whether today's verdict will reinvigorate the litigation or encourage settlement of other cases remains to be seen.

HME

Clarification:  The $20.5 million reflects total damages; the jury awarded $17.5 million to Tamraz plus $3 million to his wife.

FDA Preemption Cases

The Supreme Court heard oral arguments yesterday in Riegel v. Medtronic (06-179), the transcript is available on the Supreme Court’s website. Riegel presents the question of whether federal law preempts state lawsuits against FDA approved medical devices. The Riegels sued Medtronic, the manufacture of a balloon catheter, which burst during the dilation of Mr. Riegel’s coronary artery. The case raises federalism issues, asking whether federal agencies or state governments should make these types of health and safety decisions. Commenting on the case, the New York Times reports:

[I]n 2004, the Bush administration reversed the government’s position and began to take the manufacturers’ side, as it did before the justices on Tuesday in an argument by a deputy solicitor general, Edwin S. Kneedler. Explaining the change in policy, Mr. Kneedler said that in 2004, the F.D.A. "recognized that there would be a serious undermining of F.D.A.’s approval authority and its balancing of the risks and benefits if a state jury could reweigh those."

A question in this case, Riegel v. Medtronic Inc., No. 06-179, is whether the court will give the government’s position the usual deference it accords an agency’s interpretation of its basic statute.

The federal law at issue is the Medical Device Amendments of 1976, which in its section on preemption bars states from imposing on medical devices "any requirement which is different from, or in addition to, any requirement applicable under this chapter."

Beginning with a case in 1992 about warning labels on cigarette cartons, the Supreme Court has treated the word "requirement" as including not only obligations directly imposed by state laws and regulations, but also the award of damages by state tort systems.

For a jury to say, "Well, gee, it should have been done differently in this particular situation" is the equivalent of imposing a requirement in addition to federal approval, Theodore B. Olson, the lawyer representing Medtronic, told the justices.

"The F.D.A. is the right place for these decisions to be made and this balancing process to occur," Mr. Olson said, adding that while "nothing is perfectly safe," it would harm consumers to "discourage the marketing of products that might save our lives." Medtronic no longer makes the balloon catheter, called Evergreen, involved in the case.

In other FDA-related news, several amicus curiae filed their briefs in Warner-Lambert v. Kent (06-1498) on November 28, 2007. It doesn’t appear that the Supreme Court has scheduled oral argument yet. SCOTUSblog provides an overview:

Six years ago, in Buckman v. Plaintiffs’ Legal Committee, the Supreme Court held that state-law claims alleging that the manufacturer of orthopedic bone screws made fraudulent representations to the Food and Drug Administration ("FDA") were impliedly preempted by the Federal Food, Drug, and Cosmetic Act. On Tuesday, the Court granted certiorari in No. 06-1498, Warner-Lambert Co. v. Kent, to clarify the scope of its holding in Buckman: specifically, whether a state product liability statute that creates a general "safe harbor" from liability for FDA-approved drugs but carves out an exception for cases in which the approval was obtained through fraud is also preempted.

Under Michigan law, an FDA-approved drug cannot be deemed defective or unreasonably dangerous for product liability purposes unless the approval was obtained through fraud. Pursuant to this state statute, the respondents – all Michigan citizens – filed suit in Michigan state court, alleging that they were injured by Rezulin, a diabetes drug approved by the FDA but ultimately withdrawn from the market by Warner-Lambert. The case was removed to federal district court in Michigan and then subsequently transferred to the Southern District of New York by the Judicial Panel on Multidistrict Litigation. Warner-Lambert moved for judgment on the pleadings, arguing that under Buckman the claims were impliedly preempted, and the district court agreed.

ECB

More on Rejection of Lead-Paint Market-Share Liability

The Federalist Society's November 2007 State Court Docket Watch contains Missouri and New Jersey Courts Reject "Market Share" Liability for Lead Paint Manufacturers, by Brian Brooks, a partner at O'Melveny & Myers.

BGS

Bhopal Revisited

This week was the 23rd anniversary of the Union Carbide toxic gas leak in Bhopal, India.  The world's worst industrial disaster, it claimed thousands of lives and unsurprisingly spawned major litigation.

As often happens with multinational mass tort litigation, the doctrine of forum non conveniens played a central role.  One of the ironies of forum non conveniens is that the defendant-movant describes the doctrine as a kind of international venue transfer while actually hoping it will serve as a litigation death knell.  A related irony is that on the issue of "adequate alternative forum" (one of the requirements under Piper Aircraft v. Reyno), U.S. defendants sing the praises of foreign legal systems while foreign plaintiffs bash their home courts.  So it was in the Bhopal litigation, but with the embarrassing twist that the one bashing the Indian legal system was the Indian government itself.

On the Indian blog Churumuri, Alok Prasanna offers an angry and pessimistic two-part series from Bangalore on the Bhopal litigation.  Yesterday's post -- How the Rajiv government screwed up on Bhopal -- tells the sorry story:  the aggressive solicitation of Indian plaintiffs by U.S. lawyers, the Indian government's self-anointment as sole representative plaintiff, the filing of U.S. litigation, the forum non conveniens dismissal, and the subsequent lawsuit and settlement in India.  Here's an excerpt in which Prasanna describes the Indian government's bungling of the litigation:

As initial reports of the pending flood of litigation claims started to trickle through, the Indian government, fearing exploitation, and an opportunity to turn this into an emotive, electoral issue, instantly passed a law prohibiting all but itself from representing the victims in any forum anywhere in the world. Then it went ahead and made a mockery of the move.
It filed suit in the District Court of New York, USA. ...

Before even the first papers had even been filed, the then-Prime Minister Rajiv Gandhi started making grandiose claims of a $2 billion compensation that his government would be seeking from [Union Carbide Corporation ("UCC")].  Big mistake.

Any lawyer would connect this statement to the filing of the suit in the USA and ask the American court to dismiss the case since the Indian Government was “forum shopping”, or in lay terms, simply looking for the best bargain. American Courts since 1981 had stopped entertaining foreign claims that could be filed elsewhere, but had been filed in the USA with the sole motive of getting a better award of damages. ...

To counter this, the Indian government made an even more stupid move. It claimed that the Indian judicial system was incompetent and inefficient to deal with the problem. It got professors and experts to file affidavits running down the Indian judicial system before American courts.

Humiliatingly, it was upto the UCC lawyers to defend the Indian judicial system asking for the case to be moved to India. They also pointed out the simple logistical problem of having to haul thousands of documents, mountains of evidence and thousands of witnesses halfway across the world for a trial.

Naturally no American court wanted to be stuck with an expensive, unending case on its hands and the district court of New York threw out the case. The Indian government cut a pretty sorry figure as it dragged itself to the district court of Bhopal, Madhya Pradesh for the next round of litigation. Before the same judicial system and judges it claimed were incompetent and inefficient.

As the litigation dragged on in the Indian courts, Union Carbide eventually settled for $470 million on terms that included dismissal of criminal charges.  Prasanna then describes a painfully slow disbursement process, and suggests that the Indian government as plaintiff was burdened by a serious conflict of interest:

The saga doesn’t end there. The long and painful process of disbursing the amount began and took about 20 years after the settlement. Long slow and laborious the “tribunals” set up by the Government to hand out the awards functioned pretty much like Courts and one needed the help of numerous touts, lawyers and doctors before rightly deserved compensation was gotten. The net result was that the victims didn’t get as much money or as quickly as was promised.

All of this can possibly attributed to run-of-the-mill bungling by the government. Except in this case, the government was as liable as UCC for the Bhopal gas tragedy. Both UCC and the Indian government were shareholders in UCIL. UCIL alone was too small (all assets amounting to Rs 100 crore only) to be made wholly liable for the affair. Any attempt to make UCC liable as a shareholder would automatically make the Indian government liable on an equal footing.

Take a step back and look at it from a distance. One of the defendants in the case, by using its sovereign powers, has usurped the claimants’ rights and ensured that it has not been made liable. It has gone to the extent of settling the case for a far lesser claim than promised instead of fighting for every last penny and virtually let the offenders go scot free.

Today's post -- And how the legal system screwed up on Bhopal -- discusses problems with Indian tort law, evidence, corporate veil-piercing, court resources, and Indian lawyers.  Prasanna sadly agrees with the experts who testified for India (that is, against India) on the forum non conveniens motion:

Remember the stand taken by the Indian Government before the New York district court regarding the inefficiency and incompetence of Indian Courts and legal system? Remember all those esteemed professors of law and legal mavens filing lengthy affidavits detailing the faults and flaws of the Indian legal system and judiciary?

Guess what, it was all true. There was no way in hell that the victims of Bhopal would have seen a single rupee of compensation had the case gone to trial in India.  The reasons are manifold, ranging from the inadequacy of the law to the incompetence of the lawyers.

The author's cynicism, however, is reserved for India.  Prasanna puts on rose-colored glasses when viewing U.S. mass tort litigation, laughably referring to Grisham's King of Torts as an example of how things ought to be done, but understandably looking to the U.S. mass tort experience for ideas on how mass-disaster compensation might have been better handled than it was in Bhopal:

So, do victims of mass disasters have no remedy or relief? Not really. Lawyers in the US and elsewhere had been developing this field of “mass torts” for some years and had mastered the skill of getting relief for their victims quickly without engaging in protracted litigation. Those who have read “The King of Torts” and other John Grisham books would have some idea of how this works and what are the advantages and pitfalls of this technique. Indian lawyers had no clue what was going on.

Indian lawyers stood exposed in the Bhopal tragedy. With little or no specialization in the various fields of law, the bewildering complexity of the problem and multi-disciplinary approach it needed completely befuddled Indian lawyers. Long used to adversarial, lengthy proceedings before courts, the legal fraternity had no answer to the kind of problems the Bhopal tragedy failed. While judges did try to solve the problem with a proactive approach towards interim relief and a bit of legal creativity, they were about as effective as Band Aids on a compound fracture.

HME

New Study on Lead in Popular Toys Released

The Associated Press reports on a study released today that tested many popular toys (purchased at well known retailers such as Toys "R" Us, Wal-Mart, etc.) found that 35% contain lead, many above federally mandated limits.  The AP article is available here.  An excerpt:

[Tracey Easthope, director of the Ecology Center's Environmental Health Project] said 17 percent of the children's products tested had levels of lead above the 600 parts per million federal standard that would trigger a recall of lead paint. Jewelry products were the most likely to contain the high levels of lead, the center said, with 33.5 percent containing levels above 600 ppm. Among the toys that tested above that limit was a Hannah Montana Pop Star Card Game, whose case tested at 3,056 ppm.

The American Academy of Pediatrics recommends a level of 40 ppm of lead as the maximum that should be allowed in children's products. Lead poisoning can cause irreversible learning disabilities and behavioral problems and, at very high levels, seizures, coma, and even death.

The timing of the study is inspired, of course, as it comes in the height of the shopping season, although some will already have completed their holiday shopping by now.  It certainly points to a need to rethink regulation (or the lack thereof) on this matter - whether it be through voluntary labeling, third party safety inspections or direct government regulation.  Will consumers reward markets, such as the EU, that regulate levels of hazardous chemicals in toys this season after the summer recalls?

ADL

Supremes Grant Cert in Philippines v. Pimentel

Yesterday, the Supreme Court granted certiorari in Republic of the Philippines v. Pimentel, No. 06-1204.  The case is a proceduralist's dream and anyone else's nightmare:  the intersection of interpleader, class action, and compulsory party joinder.  The primary issue before the Supreme Court concerns Rule 19(b):  "Whether a foreign government that is a 'necessary' party to a lawsuit under Rule 19(a) and has successfully asserted sovereign immunity is, under Rule 19(b), an 'indispensable' party to an action brought in the courts of the United States to settle ownership of assets claimed by that government."

Pimentel is the class representative for a Rule 23(b)(3) class of 9,539 persons with claims against Ferdinand Marcos for human rights abuses; the class won a judgment of nearly $2 billion.  That was the case affirmed as Hilao v. Marcos (In re Estate of Marcos Human Rights Litigation (9th Cir. 1996), and notable to mass tort litigators not only as an example of a class action used to address human rights abuses, but also for its use of statistical sampling methods to award damages.

Then comes the interpleader.  Merrill Lynch was custodian of an account, opened by Ferdinand Marcos, containing $35 million.  The district court in the class action had awarded those assets to the plaintiff class.  But the Republic of the Philippines claimed ownership of the assets on the ground that Marcos had taken the money illegally.  Other claimants asserted an interest as well.  Perfect occasion for interpleader.  Merrill Lynch interpleads Pimentel as representative of the class, the Philippines, and other claimants.

The problem:  the Philippines successfully asserted sovereign immunity, gaining a dismissal.  The big question is whether, in the absence of the Philippines, the court must dismiss.  The court held that the country was a necessary party under Rule 19(a), but declined to dismiss under Rule 19(b).  The Philippines argues on appeal (another issue before the Supreme Court is whether a dismissed party has a right to appeal the Rule 19(b) decision) that in its absence the case must be dismissed.

More at Federal Civil Practice Bulletin and SCOTUSblog.

HME

Jennifer Wolsing on the Vioxx Litigation

Jennifer Wolsing, an associate at Blackwell Sanders in St. Louis, has posted a working paper to SSRN -- The Vioxx Litigation: Disincenting Good Corporate Citizenship Through Misdirected Tort Rules.  Here's the abstract:

Though many believe that the tort system incents manufacturers to promote and manufacture their products safely, the Vioxx litigation proves that, in fact, the tort system functions as a disincentive against manufacturer transparency, scientific curiosity, and public safety. This Article examines the differences between Merck's liability for the pain reliever Vioxx and Pfizer's liability for its competing pain reliever, Celebrex. It concludes that the reason for Merck's increased product liability arises from its diligent efforts to protect the public. When Merck published studies examining Vioxx's cardiovascular safety, Merck provided plaintiffs with a wealth of data. By voluntarily withdrawing Vioxx, Merck alerted lawyers and potential plaintiffs to Vioxx's potential for harm. This Article examines several solutions to these perverse incentives, including FDA preemption at the state and federal level, the pending FDA Revitalization Act and FACT Act, Wagner's Burden-Shifting Proposal, and two market-based solutions. The Article concludes with its own market-based solution, which encourages the rapid release of study data and attempts to mitigate the red flag effect that occurs when a manufacturer voluntarily withdraws a potentially dangerous product.

BGS

Judge Shopping

The New York Sun commented yesterday on Judge Jack Weinstein's popularity with mass tort plaintiffs and noted plaintiffs' tendencies for "judge shopping."  Here's an excerpt:

By and large, these suits, about 20 in all, against the tobacco and firearm industries didn't arrive on Judge  Weinstein's docket through a "spin of the wheel" — the random case assignment process by which suits are sent to judges. Instead, plaintiffs in the know have long used an administrative shortcut to maneuver lawsuits against the same set of defendants into the courtroom of their choice. Their choice is often Judge Weinstein.

In response, defense attorneys for the firearm and tobacco industries have alleged judge shopping and long tried to  get their cases yanked from Judge Weinstein's courtroom and reassigned, with mixed results. On Thursday, the issue  will come again to a head when a lawyer who has long represented the firearm industry, John Renzulli, will ask Judge Weinstein to recuse himself from a high-profile gun suit. The case was brought by New York City against out-of-state gun dealers who have sold handguns later recovered at crime scenes in the city.

It isn't the first time Mr. Renzulli has made this sort of motion — that was back in 1996. In the meantime, Judge  Weinstein's docket has drawn increasing scrutiny. There's even a judge on the 2nd Circuit, Jose Cabranes, who makes a  habit of quizzing lawyers about the matter when Judge Weinstein's rulings come up on appeal. "Is there a rule or practice in the Eastern District of New York that Judge Weinstein is assigned to all mega-cases?" the Judge Cabranes asked several years ago. The comments came during oral arguments reviewing Judge Weinstein's decision to try a case brought by Blue Cross and Blue Shield against the tobacco industry. The question has stuck with Judge Cabranes over the years. This September, he asked why the city's lawyers had taken a suit against firearm manufacturers "across the Brooklyn Bridge" to where Judge Weinstein sits, when the court in Manhattan was nearer to the city's law offices.

Judge Weinstein is known for his innovation in handling complex litigation matters.  Moreover, he's explicitly recognized the inherent commonalities between settling certified class actions and nonclass aggregation.  In the Zyprexa litigation, this led him to note that some conventions required for class litigation are likewise appropriate in nonclass aggregation. 

Of course, in the big picture post-CAFA scheme, we'll likely see an increase in judge shopping as plaintiffs attorneys' continue to adapt. 

ECB

More on the Scruggs Indictment for Allegedly Attempting to Bribe a Mississippi State Judge

The Wall Street Journal has more on the Dickie Scruggs indictment for allegedly attempting to bribe a Mississippi state judge in the Katrina insurance litigation -- It's Party Time for Mr. Scruggs, by Paulo Prada and Peter Lattman.  (Prior related posts are here and here.)  Some in the article who defend Mr. Scruggs speculate that perhaps Mr. Balducci, the less-well-known lawyer allegedly taped offering the bribe on behalf of him and Mr. Scruggs, was working on his own, trying to impress Mr. Scruggs.   

Interestingly, the best-selling author John Grisham, who is also a friend of Mr. Scruggs, defends Mr. Scruggs on the grounds of egregious plot:

"This doesn't sound like the Dickie Scruggs that I know," Mr. Grisham said yesterday. "When you know Dickie, and how successful he has been, you could not believe he would be involved in such a boneheaded bribery scam that is not in the least bit sophisticated."

We'll have to wait for Grisham's next novel to see how he can correct the plot to make it more convincing.  But as many a practicing lawyer knows, real law practice is often not as interesting as a Grisham novel.

BGS

Issacharoff and Nagareda on Class Action Settlements

Sam Issacharoff and Richard Nagareda have posted on SSRN their new paper, Class Action Settlements Under Attack.  They presented the paper at the symposium on CAFA held last week at the University of Pennsylvania (which, by the way, turned out to be a really interesting conference with enough good papers to prove that, as a topic for scholarship, CAFA hasn't become boring yet).  Here's the abstract:

Settlements dominate the landscape of class actions, and the value of claims so resolved corresponds directly to the finality that the settlement offers. The law of class actions remains surprisingly unsettled, however, on where judicial review of class settlements may take place, what that review encompasses, and how the parameters for review should be defined. This article offers a cohesive account of the "where," "what," and "how" questions surrounding class settlement review, with particular attention to the long-running debate over collateral attacks on such settlements.

The "where" questioned is informed by the recognition in the Class Action Fairness Act (CAFA) of the difficulties presented by what one might describe charitably as the anomalous court - for CAFA proponents, one inclined to certify a nationwide class action when the vast majority of other courts would not. Most of the class action commentary assumes the original certifying court to be suspect and the subsequent reviewing court to be virtuous. Our contention is that the problem of the anomalous court is not confined to the initial class certification. The same problem of outlier courts can arise when the parties agree to "park" a class settlement for approval and, later, where a class member might mount a collateral attack on its binding effect. In the first instance, we look to see whether the forum for the class action was congressionally mandated or subject to strategic behavior by the parties.

The "what" question calls for a distinction between structural conflicts of interest in the class representation and other defects in the nature of bad deals for some or all of the class members. Only the former kind of defect bespeaks a proceeding illegitimate from its outset in a manner akin to the sorts of "jurisdictional" deficiencies thought to warrant collateral attacks on judgments in ordinary litigation.

The "how" question is one of proper preclusion for class settlements. The term "collateral attack" has been used sloppily to encompass everything from appeal to relief from the judgment to outright circumvention by filing anew in a different jurisdiction. In this section, we disentangle the various forms of procedural challenge to class action settlements and propose that the level of preclusion be conditioned by where the original suit was filed, how the challenge is presented, and what is the basis of the asserted challenge. Greater preclusion against collateral attack should flow from use of the congressionally preferred forum, as delineated by CAFA, as compared to the potentially anomalous court selected simply by settling counsel. The scope of preclusion should correspond, moreover, to the nature of the defect alleged in the class representation. Structural conflicts of interest warrant an approach that asks whether the rendering court considered and rejected the conflict in question, though not necessarily at the behest of the class member now the proponent of a collateral attack. Bad deals, by contrast, warrant an approach that would ask simply whether there was a full and fair opportunity to challenge the fairness of the settlement in the rendering court, in keeping with the broadened approach to standing in that setting in the Supreme Court's 2002 decision in Devlin v. Scardelletti.

HME

Widener Law School Symposium on Crimtorts

On February 25, 2008, Widener University School of Law's Harrisburg, Pennsylvania campus is hosting a symposium entitled, Crimtorts.  Speakers include Deans Linda Ammons (Widener), Susan Raeker-Jordan (Widener), and Kenneth Simons (Boston U.); and Professors Martha Chamallas (Ohio State), Michael Dimino (Widener), Mark Geistfeld (NYU), Keith Hylton (Boston U.), Mary Kate Kearney (Widener), Thomas Koenig (Suffolk), Jeffrey O'Connell (Virginia), Christopher Robinette (Widener), Michael Rustad (Suffolk), Sheila Scheuerman (Charleston), Anthony Sebok (Cardozo), Catherine Sharkey (NYU), and Byron Stier (Southwestern).

The conference is being chaired by Professor Christopher Robinette at Widener, Harrisburg, and the Widener Law Journal will be publishing papers.  I'll be serving on the Crimtorts Applications panel.

BGS

History of U.S. Toy Safety Regulation

Article in the Wall Street Journal -- It Dawned on Adults After WWII: 'You'll Shoot Your Eye Out!', by Cynthia Crossen -- that discusses the history of toy safety regulation in the United States.  Here's an excerpt:

In late 1969, President Nixon signed into law the Toy Safety Act, the first national safety standard for playthings. The act authorized the Department of Health, Education and Welfare to test and ban hazardous toys. A year passed before the department ordered any toys removed from store shelves. On Dec. 22, 1970, it announced a ban on 39 toys, including several archery sets, some squeeze toys with easily removable squeakers, dolls with barely covered pins or wires and some breakable baby rattles.

By 1974, more than 1,500 toys had been banned by the newly established Consumer Product Safety Commission. Among them was a Smokey the Bear tent that was highly flammable; the popular clacker balls -- two plastic balls on a string -- that could shatter when banged together with enough force; several brands of xylophones, whose keys had sharp edges; and a Betsy Wetsy doll partly held together with a straight pin.

Some people thought the regulations were going too far. "I believe the decision as to whether or not Junior ought to be allowed to play with a sharp-eyes Sniffy Dog or a Talkie Tiger whose squeaker is removable is a decision that in a free society ought to be made by a child's parents and not the federal government," wrote a syndicated columnist, John Lofton, in 1973. "Why, pray tell, ban a battery-operated 'Cheerful Daschund No. 256' simply because it has a sharp pointed nose? Should it not be assumed that the average buyer will notice the shape of the nose and decide for himself whether or not it is too dangerously sharp?"

Both the government and the toy industry began to point to parents as part of the problem, charging they weren't always doing their jobs in protecting their children. Not all hazards came from poor design, a federal safety official said. Some came from the consumer's improper selection and use of toys. "Toys can never be designed or regulated with absolute safety," he said.

BGS

Vioxx Litigation Continues Abroad

Today’s National Law Journal reports "Vioxx Pact Isn’t the End—It’s a Beginning," (subscription required) and notes the number of foreign suits in Germany, Israel, and London. Here’s an excerpt:

While touted AS a virtual end to Vioxx litigation, the recent $4.85 billion settlement struck by Merck & Co. Inc. to resolve products liability claims does not get the pharmaceutical giant out of the woods. In reality, a number of lawsuits are still pending against Merck in both state and federal courts around the country. Other pending Vioxx actions include: suits brought by attorneys general in four states to recover Medicaid funds they paid for the drug; third-payor lawsuits filed by insurance companies; securities class actions brought against the directors on behalf of shareholders; and stock loss class actions on behalf of Merck's employees and unions. Houston-based plaintiffs' attorney Mark Lanier -- who has tried three major Vioxx cases in the United States -- noted that there are also foreign cases being filed in Germany, Israel and London. Lanier, of the W. Mark Lanier Law Firm in Houston, is a consultant on the German cases and estimates there could be several thousand.

If that wasn't enough, the settlement, which includes attorney fees, must be approved by 85% of stroke and heart attack victims -- and that's hardly a done deal.

ECB

Research Suggests Avandia May Increase Bone Thinning

Article on cnn.com -- Glaxo's Avandia may increase bone thinning.  Here's an excerpt:

The popular diabetes drug marketed as Avandia may increase bone thinning, a discovery that could help explain why diabetics can have an increased risk of fractures.

New research raises the possibility that long-term treatment with rosiglitazone, as Avandia is also called, could lead to osteoporosis. The diabetes drug is used to improve response to insulin.

While bones seem solid, they constantly are being broken down and rebuilt by the body. Researchers found that in mice, the drug increased the activity of the cells that degrade bones, according to a report in this week's online issue of Nature Medicine.

Avandia recently was labeled with warnings about the risk of heart failure in some patients. GlaxoSmithKline (Charts), which markets the drug, already has acknowledged that a study found a higher risk of fractures among women who take the drug. But this report is the first to attempt to explain the link between the drug and fractures.

BGS

Federalist Society Panel: "Is Overlawyering Overtaking Democracy?"

The Federalist Society has posted video for the panel, "Is Overlawerying Overtaking Democracy?," from the 2007 Federalist Society Annual National Lawyers Convention.  The panel, which discusses tort litigation, includes Dean David Schizer (Columbia), Professors Theodore Eisenberg (Cornell) and David Vladeck (Georgetown), Walter Olson (Manhattan Institute), and Victor Schwartz (Shook, Hardy).

BGS

Restyled Federal Rules of Civil Procedure Take Effect

Yesterday, the restyled federal rules of civil procedure took effect.  After a long drafting process by the Advisory Committee on Civil Rules with plenty of opportunity for public comment, the Supreme Court approved the rules in April 2007.  With Congress's tacit approval by inaction, the amendments became effective on December 1.  I think it's a change for the better, but I may be the only proceduralist who thinks so.  At the Civil Procedure Prof Blog (which earlier linked to some commentaries on the restyled rules), Rory Ryan gives it a seasonal "bah, humbug."  At PrawfsBlawg, Howard Wasserman wishes everyone a Happy Restyling Day, but the best he can muster is that he thinks "the changes were not worth the candle, but the results will not be particularly tragic."  What a lot of fuss there's been in the past year, with academics trying to gather signatures to petition Congress to step in because, horror of horrors, the new language may not leave meanings completely unchanged in the long run.  Where were all these critics for the past few years when the restyling project was underway?  To be fair, a number of academics -- notably a group assembled by Steve Burbank and Greg Joseph to examine the rules for unintended substantive impact, and Ed Hartnett in his article Against (Mere) Restyling -- offered serious and timely comments.  In any event, the new rules have arrived, with their modernized language and more clearly organized subparts, and I think that lawyers will learn to appreciate them.

HME

SDNY Dismisses Louisiana AG's Suit for Recovery On Medicaid Rezulin Prescriptions

On November 26, in the Southern District of New York, Judge Kaplan dismissed claims made by the Louisiana Attorney General’s office that the State would not have paid for Rezulin prescriptions filled by Medicaid recipients if it knew that information was withheld or misrepresented by Warner-Lambert.  The MDL Panel transferred the case to the court in September of 2005.  But in the two years since, the Louisiana Attorney General’s office did not initiate discovery requests and failed to submit a Rule 56(f) affidavit to counter defendants’ motion for summary judgment. Although one might dismiss the case as an anomaly, it does raise questions about institutional design.  Namely, who should bring enforcement actions—public governmental actors, private attorney’s generals, or some mix of the two.  This case suggests some value to having multiple, decentralized enforcers to circumnavigate potential agency inaction.  I’ve written about additional benefits to decentralization in an earlier piece that can be found here.

ECB

Balducci Cooperating with Government in Alleged Attempted Bribery Case?

The Wall Street Journal has an article -- In Scruggs Probe, Focus Turns to Another Lawyer, by Peter Lattman and Ashby Jones -- that suggests that Timothy Balducci is cooperating with the government prosecutors in connection with the alleged attempted bribery of a Mississippi state judge by Balducci, Dickie Scruggs, and others.  The alleged attempted bribery was supposedly meant to skew the judge's attorney-fee distribution in the Katrina insurance litigation.  From the article:

The indictment also cites several conversations held between Mr. Balducci and others named in the indictment that were held outside the judge's chambers. That, some defense lawyers say, suggests that, at some point in the investigation, Mr. Balducci began cooperating with the government.

"I would not be surprised at all if Balducci was cooperating," said Daniel Gitner, a defense attorney in New York and former federal prosecutor who isn't familiar with the case beyond the indictment and news reports. "There's a tremendous amount of detail relating to what he did in relation to the other defendants. It would appear that a good portion of that probably came from his mouth" because it happened outside of the judge's bugged office, said Mr. Gitner.

He added that while it is possible that there were several wiretaps outside the judge's chambers, "the odds of the government monitoring more than one phone are lower than the government monitoring a single phone. It's complicated for the government to use electronic survelliance."

Furthermore, Mr. Balducci hasn't been arraigned in court this week, while the other four defendants all pleaded not guilty.

BGS

Scruggs Indictment for Allegedly Attempting to Bribe a Judge in Katrina Insurance Litigation

Top plaintiffs' lawyer Dickie Scruggs, of tobacco and asbestos fame, has been indicted for alleged attempted bribing of a Mississippi state judge in connection with the distribution of fees from the Katrina insurance litigation.  As with the separate Milberg Weiss allegations about paying class representatives, the government appears to have much stronger evidence against a less-well known lawyer intermediary, who was allegedly working on behalf of the well-known plaintiffs' lawyer.  In the Katrina litigation, that intermediary is alleged to be Timothy Balducci, who was audiotaped offering the bribe and delivering the money, according to the government.  Scruggs denies the allegations.

The Wall Street Journal has details on the build up of the case in the article, How the Scruggs Case Came Together, by Ashby Jones and Peter Lattman.  In addition, an editorial in the Journal -- The Trial Bar on Trial -- celebrates the possible downfall of prominent tort lawyers who were indicted this year, including Bill Lerach, Dickie Scruggs, and others at Milberg Weiss including Melvyn Weiss. 

If true, all of these allegations suggest remarkable hubris in at least some of the top plaintiffs' lawyers.  One wonders about the effect of a lifestyle of private jets and multiple wins of multiple millions (or tens of millions) in fees.  One also wonders about the effect of high-risk, winner-take-all, contingency fee litigation.  Brash and aggressive personalities seem to thrive in such an environment -- but they too must keep in mind that lawyers ultimately serve the client (not the other way around) and that no one (especially not the lawyer) is above the law.

BGS

Rethinking Class Action Litigation in Britain

After a push toward class actions in Britain, the United Kingdom’s Office of Fair Trading has issued a report cautioning against American style litigation.  You can access Legal Week’s article here.  Currently, Britain permits only certain groups to bring aggregate litigation, including Which?, an organization promising to be independent source for information on consumer products.  Among other agenda items, it campaigns for safety in the cosmetic industry. 

Britain’s backlash surfaces against an increasing worldwide propensity for aggregate litigation.  Stanford and Oxford University are hosting a joint conference on the Globalization of Class Actions in Oxford from December 12-14.  Pending legislation and reports from roughly 35 countries can be found here. 

ECB

Welcome to New Blog Co-Editor Elizabeth Chamblee Burch

We extend a hearty welcome to our new blog co-editor, Professor Elizabeth Chamblee Burch of Cumberland School of Law, Samford University, in Birmingham, Alabama.  Welcome aboard!

BGS

Settlement Announced in Ford Explorer Rollover Class Actions

The Associated Press reports that Ford has agreed to settle class action suits covering plaintiffs in California, Connecticut, Illinois and Texas arising out of claims that Ford Explorer SUVs were prone to rolling over.  It is reported that plaintiffs will get transferable vouchers to buy new Explorers or other Ford or Lincoln Mercury cars.  This apparently settles all the suits against Ford arising out of the rollover accidents linked to Ford Explorers and Bridgestone/Firestone tires.  The Associated Press article can be accessed here.  Because the cases were brought in California State Court, the CAFA limitations on coupon settlements do not apply. 

ADL

Cato's James Dorn on Toxic Toys from China

James Dorn, a China specialist at the Cato Institute, has posted an op-ed article on the lead-paint problems with Chinese imports and possible Congressional response -- Toxic Toys: Congress Risks Making Things Worse.  Here's an excerpt:

The role of government is to safeguard private property rights and, thus, to protect people against fraud and violence. But an overzealous government that tries to keep all bad products off the market is likely to err by keeping too many good products off the market. It is increasingly costly for government to monitor every product. The only viable alternative is to allow private agencies to supplement government regulation to ensure the optimal amount of safety - that is, the amount that is worth what it costs.

Former FDA deputy commissioner Scott Gottlieb noted that "the FDA cannot be everywhere, every time a risk arises, especially as the supply chain for both food and drug products continues to grow more diverse and more global. Ultimately, (the) FDA needs to enable companies to be inspected by reputable private third parties that are certified by the agency."

The execution of Zheng Xiaoyu, former head of the Chinese State Food and Drug Administration, for taking bribes while approving deadly drugs and lead-tainted toys is a stark reminder that government oversight does not guarantee product safety. Even an advanced economy like the United States can fail to prevent hazardous products from entering the market.

Neither the government nor the market will lead to perfectly safe toys, pet food, toothpaste, seafood or drugs. Achieving 100% safety - zero risk - is not an option, and utopian solutions to socioeconomic problems have always proved to be disastrous.

The danger is that new legislation could be a veil for protectionism, as special interests try to gain advantage in the domestic market by restricting imports and also by handicapping smaller domestic firms by increasing their regulatory costs.

BGS

Liptak on Cy Pres

Adam Liptak as a column in today's New York Times about the use of cy pres distributions in class action settlements.   A cy pres distribution ordinarily occurs when the settlement funds have not been exhausted by payments to claimants and are redistributed to charities.  Sometimes these charities are related, sometimes not related, to the subject of the underlying litigation.  I think of cy pres as being a feature of consumer class actions only, but Liptak cites to a drug settlement that included cy pres distributions. He writes:

The Illinois Institute of Technology got $5 million from a settlement in a case involving a diabetes drug in Illinois, as did a Chicago hospital. A Hasidic Jewish group, Lubavitch Chabad of Illinois, picked up $2 million from the drug settlement.

As Sam Issacharoff (NYU) states in the article, the power to distribute such substantial funds has the potential to corrupt judges.  I wrote about these types of settlements in the consumer context in 2003 (the article is called Fundamental Principles for Class Action Governance, 37 Ind. L. Rev. 65 (2003)).  There I argue that the best medicine for the types of problems created by cy pres distributions is transparency.  I also note there another phenomenon, which is that defendants sometimes place restrictions on the types of organizations that can receive cy pres funds, excluding those that are likely to pursue more of the same type of consumer protective litigation.  The question of cy pres distributions raises a more fundamental question that plagues mass tort, consumer and all collective litigation: is the goal to deter wrongoing  (in which case all we ought to care about is that defendants pay out an optimal amount) or to compensate individuals wronged (in which case we should be deeply offended by the use of mechanisms such as cy pres distributions)?   Even if one thinks the answer is a little bit of both, there remains the difficult question of how that balance ought to be struck.

ADL

Federalist Society Publication Articles on Preemption, Learned Intermediary Rule, and Class Action Attorneys' Fees

The Federalist Society has posted the October 2007 issue of Engage.  Mass-tort related articles include the following: Catherine M. Sharkey, The Roberts Court Wades into Products Liability Preemption Waters: Riegel v. Medtronic, Inc.; James M. Beck & Theodore H. Frank, West Virginia Supreme Court Strikes Down Learned Intermediary Rule; and Jack Park, Attorneys' Fees in Class Actions: The Problem Remains.

BGS

FDA Questions Child Safety of Glaxo Asthma Drugs Serevent and Advair

Article in the Wall Street Journal -- Questions the Safety Of Asthma Drugs for Kids, by Jenifer Corbett Dooren and Anna Wilde Mathews.  Here's an excerpt:

Food and Drug Administration drug-safety reviewers questioned whether the GlaxoSmithKline PLC asthma drugs Serevent and Advair are appropriate for use in pediatric patients, and said the issue needs further review.

The asthma-drug findings came in documents posted Friday in advance of a meeting of the FDA's pediatric advisory committee. The session, which starts Tuesday, is expected to focus on the safety of a number of drugs, including the influenza medications Tamiflu, from Roche Holding AG, and Relenza, made by Glaxo.

Serevent and Advair, which both contain the active ingredient salmeterol, already carry a strong "black box" label warning about a risk of asthma-related death. The agency's reviewers said they hadn't identified side effects unique to children.

BGS

FDA Recommends Child Neurological Warnings for Flu Drugs Tamiflu and Relenza

Article on cnn.com -- FDA wants behavior warning on flu drugs.  Here's an excerpt:

Government health regulators recommended adding label precautions about neurological problems seen in children who have taken flu drugs made by Roche and GlaxoSmithKline.

The Food and Drug Administration on Friday released its safety review of Roche's Tamiflu and Glaxo's (Charts) Relenza. Next week, an outside group of pediatric experts is scheduled to review the safety of several such drugs when used in children.

BGS