November 2009 Archives

A sign of things to come? A Los Angeles jury has turned down an asbestos plaintiffs' lawyer's suggestion to award his clients $25 million in noneconomic damages and $1 million in economic damages.

Instead, the jury came back with a defense verdict in an asbestos case that lasted seven weeks and had started with eight defendants before five settled out, according to The Recorder legal newspaper's Kate Moser.

The plaintiffs, represented by Gary Paul of Waters, Kraus & Paul, had originally sought more than $9 million. The firm, formerly called Waters & Kraus, was mentioned in an opinion piece published recently in the Daily Journal legal newspaper about how out-of-state plaintiffs' firms that file high-dollar asbestos claims are opening offices in California. According to the op-ed, "Dallas' Waters & Kraus, which opened a small Los Angeles office in 2001, has been described by a Daily Journal reporter as having a 'prominent presence' since its 2006 merger with the plaintiffs' firm Paul & Janofsky." Gary Paul was installed over the summer as vice president of the national plaintiffs' lawyers' lobbying group.

The firm has also been criticized for tactics employed in some California cases. Los Angeles Superior Court Judge Aurelio Munoz has sharply criticized the firm for repeatedly filing cases in Texas, dismissing them, and then re-filing them in Los Angeles -- all in an apparent effort to play what he termed the "grisly game of asbestos litigation."

Meanwhile, according to the Recorder article, the plaintiffs in the asbestos case had asked the jury to make the three remaining defendants, Daimler Trucks North America, Ford Motor Co., and Kaiser Gypsum Company Inc., 35% responsible for the $25 million in noneconomic damages. The trio would have been jointly and severally liable for the economic damages.

The jury found that William James Goebel, who died at age 78, was exposed to asbestos from Kaiser Gypsum and Ford, but that there was no defect in the design of those defendants' products. The jurors concluded Goebel was not exposed to asbestos from Daimler Trucks.

Defense-side lawyer Eliot Jubelirer, also not involved in the case, wondered whether the plaintiff had asked too much.

"I think the plaintiff lawyers are testing to see how large an award they can ask for without the jury rejecting it," Jubelirer, a partner in the San Francisco office of Schiff Hardin, told the paper. "Perhaps they overstepped the line here and asked for too much and they may have soured the jurors."

A second federal bill backed by the plaintiffs' bar aims to change a U.S. Supreme Court ruling -- currently a much-needed standard that will reduce federal court caseloads and could help weed out weak or frivolous lawsuits.

The Court's 5-4 ruling in Ashcroft v. Iqbal threw out a claim that former Attorney General John Ashcroft and current FBI Director Robert Mueller violated the Constitutional rights of a detainee caught up in the Bush Administration's post-9/11 roundup, according to this story from AmLaw Litigation Daily.

But, as reported on The Wall Street Journal Law Blog, the Court essentially established heightened pleading standards under Rule 8 of the Federal Rules of Civil Procedure, which lays out the general rules for what the initial documents in a lawsuit -- the "pleadings" -- have to put forth.

"A wide range of cases have already been affected by Iqbal," noted a National Law Journal article.

The bill, H.R. 4115, would restore the pleading standards in federal cases to those prior to the Court's decision. A hearing on it will be held in the House Subcommittee on Courts and Competition Policy on December 16. It is the House version of Senator Arlen Specter's S. 1504, which was introduced in July.

J. Russell Jackson also has a take on the plaintiffs' bar "fix" on his Consumer Class Actions & Mass Torts blog.

"California state courts are reluctant to apply their Unfair Competition Law to a nationwide class. Perhaps it's because they recognize that theirs is one of the most liberal (and standardless) consumer fraud statutes in the nation. Whatever the cause, this reluctance made it all the more notable when Judge Christina A. Snyder held -- with little conflicts-of-law analysis whatsoever -- that the UCL could be applied to a nationwide class of advertisers suing Citysearch."

So writes J. Russell Jackson on his Consumer Class Actions & Mass Torts blog about a case, Menagerie Productions v. Citysearch, in which the plaintiffs claimed that CitySearch failed to identify fraudulent clicks on their online advertisements. The plaintiffs sought to represent a nationwide class of advertisers.

Jackson wrote that the court's entire analysis of whether the UCL can be applied to the nationwide class based on the California residence of defendant CitySearch is contained in one sentence:

"Furthermore, the Court agrees that California's UCL can be applied to the nationwide class, as CitySearch has not shown that any 'differences between California law and the law of other jurisdictions are material,' nor that 'other states have an interest in applying their laws to this case.' "

Jackson continued: "... there is no evidence of the differences between the California UCL and other states' UCLs being material? Really?!! How about the fact that every other state requires some sort of proof of actual deception that causes injury -- for each class member? Or the fact that some states, like South Carolina, do not even allow class actions under their consumer fraud statutes?"

As Jackson wrote, this case is rife for an appeal to the Ninth Circuit.

Out-of-state plaintiffs' firms that file high-dollar asbestos claims are opening offices in California. The state's plaintiff-friendly asbestos litigation rules, combined with recent legal reforms in other states, are drawing big-name asbestos firms to the Los Angeles and San Francisco courts, where big-dollar success beckons.

The issue of out-of-state firms, growing asbestos dockets, and "litigation tourists" was explored in an op-ed published in the Daily Journal legal newspaper by Mark Behrens and Phil Goldberg of Shook Hardy & Bacon in Washington, D.C.

What is happening in California stands in stark contrast to national trends: Unlike other states, California has not enacted reforms to stem abuses in asbestos litigation, Behrens and Goldberg wrote. Observers of asbestos litigation have noticed a surge in asbestos-related lawsuits.

They wrote:

"These firms are not setting up shop in California because they like the weather. Historically, lawyers who represent plaintiffs in asbestos-related lawsuits have strategically flocked to places they believe will give them a tactical advantage, rather than file where there is a logical and factual connection to a claim or claimant. Such claimants have been called 'litigation tourists' -- and they are many in California. A 2006 sample of 1,047 asbestos plaintiffs in California for whom address information was available showed that an astonishing 30% had home addresses outside of California."

Former defense lawyer Patrick Hanlon, now a lecturer at the University of California, Berkeley's Boalt Hall School of Law, noted that "plaintiffs' firms are steering cases to California, partly to the San Francisco-Oakland area, which is traditionally a tough venue for defendants, but also Los Angeles, which was an important asbestos venue in the 1980s but is only recently seeing an upsurge in asbestos cases."

The spike in asbestos litigation costs Californians tax dollars to administer the out-of-state claims and places a burden on the state's judicial system.

The piece can be found here (subscription only) or by clicking the link below.

Home of the Asbestos Litigation 'Gold Rush'.pdf

For his dedication to bringing fairness and balance to California's civil justice system, the Civil Justice Association of California has honored Senator John Benoit with its Civil Justice Leadership Award.

During this past legislative session, Benoit authored several bills that would improve California's legal climate and help businesses, consumers, and taxpayers.

For example, Senate Bill 39 was written in response to a California Supreme Court decision that stripped traditional liability protections from non-medical "Good Samaritans" and such volunteers providing non-medical help. The bill, which went into effect immediately, extends liability protections to any person providing help in good faith at the scene of an emergency.

Kim Stone, CJAC's vice president-legislation, said in a news release at the time: "Senator Benoit's constituents and all Californians are lucky to have him working in Sacramento to support the interests of consumers, businesses, and Good Samaritans, and to ease the burdens on our courts."

On November 4, Benoit was appointed by Governor Arnold Schwarzenegger to fill the 4th District Riverside County Supervisor seat. He will be sworn into that position on December 1.

Click here to learn more about the award and its previous recipients.

A pair of attorneys who drafted a California statute have collected or billed about $4.3 million in three cases arising from claims that minorities were shut out of local elections -- and could reap much more from two pending lawsuits and future litigation.

All of the cases have been initiated by the lawyers who drafted the statute -- Seattle law professor Joaquin Avila and Robert Rubin, legal director for the Lawyers' Committee for Civil Rights of the San Francisco Bay Area, as well as other lawyers working with them, an Associated Press investigation has found.

As the AP reports:

" ... it is unusual that after seven years all legal efforts are so narrowly focused, especially since Avila told lawmakers when he testified for the bill in 2002 that he expected other attorneys would take on cases because of favorable incentives written into the measure."

The law makes it easier for lawyers to sue and win financial judgments in cases arising from claims of voter discrimination, while shielding attorneys from liability if the claims are tossed out.

"It's a money grab," said John Stafford, superintendent of the Madera Unified School District, which was slapped with a $1.2 million attorneys' bill even though it never contested a lawsuit. To pay, he said the school district would have to slash money for books and lunches for its mostly Hispanic students -- an odd consequence for a law intended to aid Hispanics.

Officials in several California communities told the AP they never heard complaints of voter discrimination until the lawyers stepped forward. One case, which could go to trial as early as January, is being closely watched by communities around the state. If the law is upheld, it could lead to a massive recasting of local election district boundaries, or more lawsuits.

Avila wouldn't disclose his earnings from the lawsuits. He bills at $725 an hour, according to the AP. Rubin can bill his legal work at $700 an hour. Though he drafted "probably the whole" law, Avila told the wire service, "I don't think that should preclude me from enforcement."

Despite the fact that it was based on false facts, a Swedish filmmaker continues to shop his film "Bananas!*" at film festivals around the country and beyond.

Fredrik Gertten's film chronicling a 2007 lawsuit against Dole Food Company for the alleged misuse of a pesticide on banana plantations in Nicaragua was shown at the recent CMJ Film Festival in New York, according to The Wall Street Journal.

Gertten then headed to Sao Paolo to show the film at the Mostra Internacional de Cinema.

However, a statement from Dole explains how the film "promotes as fact a false story that was found to be a fraud on Dole and on U.S. courts," according to the Journal.

The lead plaintiffs' lawyer in the case, Juan J. Dominguez, is accused of defrauding Dole Food Company by training Nicaraguan men to make false claims that they were harmed by pesticides used on banana plantations in their country. Earlier this year, Los Angeles Superior Court Judge Victoria Chaney dismissed two tort cases, ruling that Dominguez and co-counsel in Nicaragua committed a "fraud on the court" and a "blatant extortion" of the defendants.

For more background, click here.

A Los Angeles Superior Court judge has stopped a class action lawsuit alleging that a retailer illegally failed to provide chairs for cashiers.

As reported in the Daily Journal (subscription only), the lawsuit is one in a series of suits filed by three plaintiffs firms based in California and Nevada against virtually every major retailer across the state, including Target Corp., The Home Depot Inc., Wal-Mart Stores Inc., Rite Aid Corp., and Blockbuster Inc.

In the Los Angeles case, a 99¢ Only Stores employee sued her employer, seeking civil penalties under California's Private Attorneys General Act, which her attorneys argued in court papers "requires employers to provide seats to their employees." According to the complaint, the defendant violated sections of the California Labor Code and Wage Order 7-2001 by "failing to provide suitable seats to plaintiff and current and former employees." The plaintiff, Eugina Bright, brought the suit as a class action and stated in her complaint that the class could include more than 1,000 people.

Judge Luis A. Lavin granted the company's motion to dismiss, ruling that the section of the statute on which Bright based her complaint did not have that requirement, but instead states, "all working employees shall be provided with suitable seats when the nature of the work reasonably permits" their use.

The firms "are seizing on the fact that checkout clerks are routinely not provided seats, a novel legal strategy in the world of employment law," wrote Daily Journal reporter Ciaran McEvoy. "It's unclear whether the strategy will prove successful."

Defendants and their lawyers -- and more and more judges -- aren't the only ones getting their fill of California's unpredictable, ungoverned surge of class action litigation.

Here's what plaintiffs' lawyer Brian S. Kabateck* said in part of a "Roundable" panel article on Consumer Class Actions published in the November California Lawyer magazine:

Recently there have been an awful lot of folks -- who don't understand class actions -- filing class actions and becoming overnight class action specialists. It's very disconcerting.

When I started doing class action cases more than a decade ago, judges were very respectful of the cases. They'd look at them very seriously. Now I'm seeing more and more judges raising their eyebrows, looking at cases as if, "Oh, another class action." You've got to almost start behind the line explaining to the court, "No, this is really a justifiable class action."

I've seen class actions being brought claiming medical injury, which we know you can't bring. It demonstrates to me a lack of knowledge and understanding. We have to be vigilant about these kinds of bad class actions. Half a dozen years ago, you'd hardly see a seminar in class actions. Today, I can't pick up my mail without getting a brochure or some sort of e-mail about educational seminars on class action cases.

You can link to the entire roundtable exchange of defense and plaintiffs' attorneys by clicking here.

*Kabetek is a partner at Kabateck Brown Kellner in Los Angeles.

San Francisco Superior Court has announced a proposal to create a single asbestos department that would, observers say, streamline the litigation process, result in more consistency, add accountability, and result in savings for defendants and plaintiffs.

It would also help to reduce the number of jury panels that are wasted when cases are settled before trial, according to a story by The Recorder's Kate Moser.

She cites a shocking number: In 2008, asbestos cases consumed almost half -- 45% -- of jurors summoned for civil trials.

The asbestos department would hear all discovery, law and motion and case management matters. Judge Harold Kahn has been tapped to oversee the department. A hearing on the proposal is scheduled for November 17.

Meanwhile, a number of opinion pieces published in statewide legal papers have examined problems with asbestos litigation in California.

They include:

• An op-ed that tells how simple changes in how courts handle asbestos cases might be able to help them carve a day or more from their workloads;
• A piece that examines how claims filed by out-of-state plaintiffs clog California courts;
• A look at how California has become a magnet jurisdiction for asbestos plaintiffs, in part because its courts have not dealt with the theory that "any exposure" to asbestos is a cause of the disease;
• A piece on how defendants with little or no involvement in causing harm can get hit with a multi-million dollar judgment;
• And a look at how a new generation of asbestos trusts tempts plaintiffs' lawyers to seek double recoveries by concealing their clients' trust recoveries from tort defendants.

In politics, just like in war, success comes not just from anticipating a direct response to your latest move, but also from looking far across the theater for your adversary's counter-measure.

So it was no surprise when, after getting the attention of federal policymakers on the benefits of putting some legal reform into a national health-care package, backers of reform found their own flanks attacked.

"Medical malpractice insurers . . . take advantage of [a federal] antitrust exemption to maximize their profits, to the detriment of doctors who buy their coverage," a group of personal injury lawyer-backed organizations recently told federal lawmakers. "Millions of consumers and their health-care providers would benefit if real competition were restored in the health insurance and medical malpractice insurance markets," a letter from the Consumer Federation of America and others told U.S. Rep. John Conyers (D-MI) in support of H.R. 3596.

What these lobbying groups conceal from their audience when attacking medical professional liability insurance providers, however, is that the overwhelming number of U.S. physicians get their liability protection from companies they themselves own and govern. In California, for example, four major doctor-owned companies actively compete for the bulk of private practice physicians in the state.

These companies, all staunch supporters of the state's landmark Medical Injury Compensation Reform Act, help account for physician liability protection rates that are as much as half of those found in comparable states not protected by MICRA.

Moreover, an analysis by the Congressional Budget Office refutes the lawyer-backed groups' contention that rates for the two types of insurance targeted -- health and medical professional liability -- would fall under H.R. 3596 and its Senate counterpart, S. 1681. "Enacting the legislation would have no significant effect on the premiums that private health insurers would charge," according to the CBO. "[S]tate laws already bar the activities that would be prohibited under federal law if this bill was enacted."

In "The Art of War," Sun Tzu promoted sowing division among one's adversaries. So when advocates of federal medical liability reform showed that a decline in defensive medicine would save billions of health care dollars, they likely knew better than to expect a response on the merits.

But in the end, the trial lawyers' weak attempt to drive a wedge between doctors and the companies that American physicians themselves own and direct betrays a further escalation of their tactics -- to outright deception.

***
Gordon Ownby is general counsel of the Cooperative of American Physicians, Inc., www.cap-mpt.com, and can be reached at gownby@cap-mpt.com.