issue: Judiciary

Goldberg for The Hill, “Climate change lawsuits are ineffective political stunts”

Posted on by The Progressive Policy Institute

Environmental activists are once again greeting a Republican administration’s resistance to setting carbon dioxide emission limits with lawsuits. In January, Mayor DeBlasio in New York City followed seven California cities that filed lawsuits over climate change last summer.

These lawsuits, though, miss the point and their target. They are not suing the Trump administration. They seek to circumvent the Trump administration by threatening massive liability against American businesses if they do not reduce their individual emissions.

Progressives should not reflexively cheer these lawsuits. For one thing, people on both sides of the aisle agree that these lawsuits have no foundation in the law and will not succeed. They are solely political stunts.

Continue reading at The Hill.

Happy Holidays from PPI

Posted on by The Progressive Policy Institute
It’s been a surreal political year, but PPI has much to celebrate this holiday season. Throughout 2017, we expanded our productive capacity and the scope of our political and media outreach significantly. For example, PPI organized 150 meetings with prominent elected officials; visited 10 state capitals and 10 foreign capitals, published an influential book and more than 40 original research papers, and hosted nearly 30 private salon dinners on a variety of topical issues.
Best of all, we saw PPI’s research, analysis, and innovative ideas breaking through the political static and changing the way people think about some critical issues, including how to revive U.S. economic dynamism, spread innovation and jobs to people and places left behind by economic growth, and modernize the ways we prepare young people for work and citizenship.
Let me give you some highlights:
  • This fall, David Osborne’s new book, Reinventing America’s Schools, was published on the 25th anniversary of the nation’s first charter school in Minnesota. David, who heads PPI’s Reinventing America’s Schools project, documents the emergence of a new “21st Century” model for organizing and modernizing our public school system around the principles of school autonomy, accountability, choice, and diversity. David is just winding up a remarkable 20-city book tour that drew wide attention from education, political, and civic leaders, as well as the media. Because David is a great storyteller, as well as analyst, it’s a highly readable book that offers a cogent picture of a K-12 school system geared to the demands of the knowledge economy. It makes a great holiday gift!
  • Dr. Michael Mandel’s pioneering research on e-commerce and job creation also upended conventional wisdom and caught the attention of top economic commentators. Dr. Mandel, PPI’s chief economic strategist, found that online commerce has actually created more jobs in retail than it destroys, and that these new jobs (many in fulfillment centers in outlying areas) pay considerably better than traditional ones. His research buttresses the main premise of PPI’s progressive pro-growth agenda: that spreading digital innovation to the physical economy will create new jobs and businesses, raise labor productivity, and reduce inequality.
  • PPI challenged the dubious panacea of “free college” and proposed a progressive alternative – a robust system of post-secondary learning and credentials for the roughly 70 percent of young Americans who don’t get college degrees. PPI Senior Fellow Harry Holzer developed a creative menu of ways to create more “hybrid learning” opportunities combining work-based and classroom instruction. And PPI Senior Fellow Anne Kim highlighted the inequity of current government policies that subsidize college-bound youth (e.g., Pell Grants), but provide no help for people earning credentials certifying skills that employers value.
  • Building on last year’s opening of a PPI office in Brussels, we expanded our overseas work considerably in 2017. In January, I endeavored to explain the outcome of the U.S. election to shell-shocked audiences in London, Brussels, and Berlin. In April, we led our annual Congressional senior staff delegation to Paris, Brussels, and Berlin to engage European policymakers on the French presidential election and other U.S-E.U. issues, including international taxation, competition policy, and trade. PPI also took its message of data-driven innovation and growth to Australia, Brazil, Japan and a number of other countries.
Other 2017 highlights included a strategy retreat in February with two dozen top elected leaders to explore ideas for a new, radically pragmatic agenda for progressives; a Washington conference with our longtime friend Janet Napolitano (now President of the University of California system) on how to update and preserve NAFTA; public forums in Washington on pricing carbon, infrastructure, tax reform, and other pressing issues; creative policy reports on varied subjects; and a robust output of articles, op-eds, blogs, and social media activity.
I’m also happy to report many terrific additions to PPI in 2017. Rob Keast joined to manage our external relations and new policy development; Paul Bledsoe assumed a new role as Strategic Adviser as well as guiding our work on energy and climate policy; and Emily Langhorne joined as Education Policy Analyst. We will also be adding a fiscal project next year.
All this leaves us poised for a high-impact year in 2018. In this midterm-election year, our top priority will be crafting and building support for a new progressive platform — a radically pragmatic alternative to the political tribalism throttling America’s progress. That starts with new and better ideas for solving peoples’ problems that look forward, not backward, and that speak to their hopes and aspirations, not their anger and mistrust.
It’s a tall order, and we cannot succeed without your help and support. Thanks for all you have done over past years, and we look forward to working with you in 2018.
Happy holidays and New Year!

New York’s Costly Tort Laws and How to Fix Them

Posted on by The Progressive Policy Institute

New York has long been a battleground over civil justice issues with progressives on both sides of the issues. A recent report by the non-partisan, non-profit think tank, the Empire Center for Public Policy, shows how many of New York’s laws, though, have been bent over the years to overly favor personal injury lawyers and their lawsuit industry.

Part of the problem the report notes is that the Empire State has more lawyers per capita than any other state in the nation – 1 in every 112 residents of New York is a lawyer, which is more than twice the national average. The overabundance of lawyers, which include both plaintiff and defense lawyers, shows no sign of leveling off. The report found that the state’s population of lawyers is growing at 10 times the rate of the overall citizenry. Litigation feeds the lawyers, and the laws have long been written to spur litigation.

There is a high cost to this excessive litigation for everyone else. The Empire Center’s report also found that the runaway growth of the lawsuit industry hurts New York’s overall economy, including the public sector. New York has some of the highest insurance costs, highest medical costs, and highest taxes in the nation, due in large part to the draconian and outdated liability laws put in place at the behest of the legal industry, and most notably, the plaintiff’s bar.

In the 1980s, Governor Mario Cuomo, who was no shrinking progressive, understood the negative effects the state’s liability laws even back then were having on his beloved state. In 1986, Cuomo created a bi-partisan commission, chaired by former Court of Appeals Justice Hugh R. Jones, to make recommendations on how to make the state’s civil justice rules more just.

The Jones’ Commission released a two-volume report filled with proposals to fix New York’s imbalanced legal system. Yesterday’s report from the Empire Center shows that many of the proposals recommended by the Jones’ Commission were never implemented, and sadly, many of the predictions of high auto insurance rates, high medical costs, and high taxes have all come to pass.

In addition to cataloging the myriad ways in which New York’s civil justice system stymies public and private sector growth, the Empire Center report identifies four areas of excessive liability in New York:

· Construction and real estate liability under the so-called “Scaffold Law”
· Unbounded medical liability due to plaintiff-friendly court rules
· Auto Insurance liability where accidents are down, but lawsuit filings are up
· Asbestos litigation and the ongoing travesty in the New York City asbestos court

After detailed analysis of each of the areas above, the report offers recommendations for reform, many of which echo the recommendations from the Jones’ report years before.

The current Governor, Andrew Cuomo, would be wise to champion the recommendations of the commission his father created. Saying that the “trial lawyers are the single most powerful political force in Albany,” as Andrew Cuomo did in 2014, should not be an excuse, but a call to action. New York cannot, and should not, be beholden to any special interests, particularly the trial lawyers. Mario Cuomo knew that, and his son Andrew Cuomo should aim to carry out his late father’s vision by enacting some of the mainstream reforms recommended thirty years ago.

Tom Stebbins, PPI Center for Civil Justice Advisory Board Member

Allergan’s Creative Patent Sale Generates Huge Debate

Posted on by The Progressive Policy Institute

Debate has erupted in the past week and a half over Allergan’s surprise move to transfer all of its intellectual property rights to its blockbuster drug Restasis to the Saint Regis Mohawk Indian Tribe.  Allergan’s CEO Brent Saunders said he sold Allergan’s intellectual property rights in Restatis to protect it from the “double jeopardy” of being challenged in two, separate and independent forums: the federal courts and the Patent Trial & Appeal Board.

Today, the Hill published our article discussing this maneuver and the brewing controversy it highlights over whether the Patent Trial & Appeal Board’s Inter Partes Review (IPR) process is appropriate for pharmaceutical patents.

From a legal perspective, Allergan is betting that the Board does not have jurisdiction over sovereign entities and that, by selling Restasis patents to a sovereign entity, the patents will be immune from IPR challenges.  Even Allergan agrees that its patents should still be subject to challenge in the courts under the Hatch-Waxman Act, which is the landmark 1984 legislation that established patent and approval rules for branded and generic drugs.

As our article explains, IPR is a recent congressional creation that was not intended to be a battleground over pharmaceutical patents.  Congress established the IPR in 2011 because “patent trolls” were using old, questionable patents to extort money from high-tech companies, even though these companies independently developed their own innovations.  We wrote an in-depth policy brief about patent troll litigation abuse several years ago.  By making it easier to get rid of the trolls’ old, over-broad patents, Congress was hoping to facilitate high-tech innovation.

To this end, IPR’s procedural rules and substantive standards are widely viewed as disfavoring patent holders.  In fact, IPR has invalidated almost 80 percent of the patents it reviews, whereas litigation over a patent’s validity generally results in upholding a patent 70 percent of the time.

As a result, IPR has quickly become a popular option for those seeking to invalidate patents of all kinds, including pharmaceutical patents.  For a robust discussion on tensions between the benefits IPR provides to high-tech and the concern Allergan and others have for its use in the pharmaceutical space, see “Apple Likes the Patent ‘Death Squad.’ Allergan Pays to Avoid It” in Bloomberg.  IPR also became subject to its own type of patent trolls, including a hedge fund that reportedlyshorted a company’s stock and filed IPR challenges to its patents to drive down its stock price, a problem for small companies whose value is based on a single patent or two.

No doubt, there is great drama and exciting legal wrangling for us law geeks.  Nevertheless, it is important that the coveragenot miss the key points.  The core issue here is not whether pharmaceutical patents should be immune from any challenge, but whether they can be challenged in both the courts and IPR.  Regardless of what side one is on, this concern is real.  As reported here, Novartis had two patents upheld in court, but found to be invalid through IPR.

Similarly, Allergan recently concluded a trial in Federal District Court in Marshall, Texas related to its Restasis patents.  If it reaches resolution on its patents’ validity in the courts, should it have to re-litigate the issue all over again in IPR?  Senator Schumer, for one, said in a 2015 hearing that “no one anticipated” that IPR would turn out to be “a run-around for Hatch-Waxman.”

Meanwhile, to add another wrinkle to this story, the U.S. Supreme Court is scheduled to hear a Petition this term challenging the constitutionality of IPR.  As explained here, the Court will decide whether the Patent Trial & Appeal Board, a government agency, has the constitutional authority to take away a privately held patent.  The case involves hydraulic fracking patents, and the Petition argues that a patent is a private property right, and like other property rights, can be extinguished only by the judiciary.

While patent law may sound geeky to some, how these issues get resolved will have a big impact on innovation, both in the high-tech and health care arenas.  Stay tuned . . .

Goldberg for The Hill, “Patent abuse is undermining American health care”

Posted on by The Progressive Policy Institute

The pharmaceutical company Allergan shocked the prescription drug market this month when it transferred its intellectual property rights to its blockbuster drug Restasis, a treatment for dry eyes that generated $1.5 billion in sales last year, to the Saint Regis Mohawk Indian Tribe in exchange for an exclusive licensing deal. This bold tactic was intended to avoid patent review panels that a former chief federal patent judge called “death squads” for patents.

In this never-seen-before move, Allergan is forcing policymakers to take notice of a brewing controversy over how our nation’s medicines are developed, marketed, and transitioned to less expensive generics. This cautionary tale is all about unintended consequences from the 2011 enactment of the American Invents Act (AIA). At that time, “patent trolls” were using old, questionable patents to extort money from high-tech companies that independently developed innovative products. Because patent litigation can be expensive, the trolls were able to generate settlements for less than the cost of defending their often specious claims.

To take away the troll’s leverage, Congress gave the Patent Trial and Appeal Board the authority to invalidate old, poorly constructed patents. This post-patent review process is called inter partes review (IPR). It could be used instead of, or in addition to litigation, and could be filed by anyone and at any time after the Patent & Trademark Office issues a patent. The targets here were dubious high-tech patents that were generally the result of little investment and written to be overly broad. Congress was hoping that, by removing these obstacles, it could achieve the social and economic benefit of facilitating the next generation of technology.

Read more at The Hill.

Goldberg for IADC Newsletter: “The U.S. Supreme Court Reins in Discovery Sanctions”

Posted on by The Progressive Policy Institute

Phil Goldberg and Kathryn Constance discuss the impact that a recent Supreme Court decision could have on sanctions over discovery and other litigation disputes.

The U.S. Supreme Court, in the little-known case Goodyear v. Haeger this past term, set important limits on a judge’s inherent authority sanctions, which could have significant implications in discovery disputes. The Court held that when imposing sanctions, a judge must determine which fees and costs would not have been borne “but for” the misconduct and can assess only “the fees the innocent party incurred solely because” of that misconduct. This ruling is important for defense lawyers because it should restrain judges from over-penalizing corporate defendants and provide a check on plaintiffs’ lawyers who seek to unfairly game the sanction system.

This particular case arose out of a discovery dispute, where the plaintiffs alleged that Goodyear failed to turn over a document they believed was responsive to their discovery requests. The judge agreed with the plaintiffs and fined Goodyear $2.7 million in sanctions, which represented all of the plaintiffs’ legal fees and costs incurred after the alleged discovery violation. The judge acknowledged that he did not draw any causal connection between the failure to produce this document and fees incurred. Rather, he found that the discovery failure tainted the entire litigation and assessed all of the subsequent fees and costs.

In a unanimous 8-0 decision, the Supreme Court vacated the sanction. See 581 US _ (2017). The Court explained that fee-shifting sanctions are constitutionally limited to reimbursing the aggrieved parties for costs they would not have incurred “but for” the alleged malfeasance. They are solely compensatory sanctions. If an award extends beyond the costs and fees caused by the alleged malfeasance, it crosses the boundary and becomes a punitive sanction. If the court seeks to impose punitive sanctions, the defendant is owed heightened due process protections such as those afforded in criminal proceedings, including a higher standard of proof.

While the opinion was fairly short, the ruling could have a large impact if properly implemented. Defense counsel could use it to ensure that there remains a semblance of balance between inherent authority and rulebased sanctions, and to impede plaintiffs’ lawyers from manipulating sanctions to generate money for cases, particularly those that lack substantive merit.

Continue reading…

About the Authors:
Phil Goldberg is the Managing Partner of Shook, Hardy & Bacon’s Washington, D.C. office and the Director of the Progressive Policy Institute’s Center for Civil Justice. He filed an amicus brief in Goodyear v. Haeger on behalf of the National Association of Manufacturers and serves on the IADC Civil Justice Response and Appellate Practice Committees. He can be reached at pgoldberg@shb.com.

Kathryn Constance is Senior Counsel to the Electronic Discovery Institute, a non-profit organization dedicated to resolving electronic discovery challenges.

Asbestos Litigation Reform That Helps Victims And Businesses

Posted on by The Progressive Policy Institute

In New York and around the country, we count on judges and juries to get things right, but there is no way they can do their jobs if they are blindfolded from the facts. In the past few years, judges have exposed a national trend of plaintiffs’ lawyers hiding critical facts when suing over asbestos injuries. These tactics must be stopped. They yield inflated damage awards, hurt the local businesses sued, and deprive future victims of access to justice.

Our court system is one of our greatest public goods, and we need to protect it from those who threaten its integrity. In asbestos litigation, this threat seems to come regularly from a few personal injury lawyers who look for ways to game the system. The opportunities for mischief are vast because decades ago construction, shipyard, and other industrial workers were exposed to many asbestos products. Some diseases take decades to develop, so people are still getting sick and suing today. When a few inventive lawyers started filing asbestos claims for people who were not even sick 15 years ago, courts and legislatures took corrective action.

The new trick is to withhold evidence from juries about the many different companies’ asbestos products a plaintiff was exposed to in order to inflate awards against only one or two of them. This gamesmanship is made possible by the fact that people who get sick from asbestos exposure can be compensated through two independent systems.

Continue reading at Forbes. 

Sweeney for Morning Consult, “Federal Agencies Should Stop, Not Facilitate, Litigation Abuse”

Posted on by The Progressive Policy Institute

By Rob Sweeney, PPI Center for Civil Justice Contributor 

As a small business owner, I often hear about abusive litigation threats but never thought they would affect me – until now. I own a small technology business based in Kansas City called TextCaster that provides text-messaging services for educational, civic, nonprofit and corporate organizations. Over the past 18 months, my company has been hit hard by plaintiffs’ lawyers who have mastered the art of the legal “shake down.” They demand money from our clients over their perfectly legal texting practices, and in return for a payoff promise not to file the threatened lawsuit.

The ammunition for these abusive litigation tactics is the Telephone Consumer Protection Act and the related regulations promulgated by the Federal Communications Commission, which are ostensibly intended to protect consumers from unsolicited texts. But TextCaster’s clients have no desire to text those who do not want to receive texts. They send only non-commercial alerts that people affirmatively sign up to receive. And unfortunately, instead of providing clarity about how people who have asked for texts can later opt out, the FCC’s actions of late have just created uncertainty.

Continue reading at Morning Consult. 

Gifford for The Hill: Why Trump’s Climate Order Might Backfire

Posted on by The Progressive Policy Institute

Here’s some friendly advice to U.S. business leaders who may be quietly cheering plans by President Trump and his new administrator of the Environmental Protection Agency (EPA), Scott Pruitt, to “drain the swamp” by gutting environmental regulations: Be careful what you wish for.

Not only will many Americans view such a rollback as radical, but it’s also likely to provoke a torrent of lawsuits, tempting federal and state courts to step into the policy vacuum created by a weakened regulatory regime.

Martha Coakley, the former Democratic attorney general of Massachusetts, predicts that even Republican state attorneys general will consider pairing with private plaintiffs’ attorneys to file tort actions to protect the environment in the absence of viable federal regulation. A new spate of public nuisance litigation — the tort du jour for environmental activists seeking “regulation through litigation” -— would likely result in a far more draconian and unstable set of environmental rules that what’s currently on the books.

Continue reading at The Hill. 

Flashback Friday: PPI in Hindsight

Posted on by The Progressive Policy Institute

Just over a year ago, PPI unveiled a big ideas blueprint with a prescient subtitle: Unleashing Innovation and Growth: A Progressive Alternative to Populism. We knew that progressives in the United States and Europe needed better answers to the economic and cultural grievances that have fueled the rise of a retrograde populism and nationalism around the world. We did not foresee that Democrats would fail to offer a forward-looking plan for jobs and shared growth, opening the door to Donald Trump’s improbable victory.

Which makes the themes and ideas in PPI’s sweeping policy blueprint more important than ever. Populism today thrives in the political vacuum left by center-left parties that offer no clear vision for reviving economic dynamism and hope. “Winning the economic argument will be essential to victory in the 2016 elections and it starts by getting the diagnosis right,” the blueprint noted. Instead, Democrats ran a campaign that leaned heavily on identity politics, wealth redistribution and centralized, small-bore solutions.

Unleashing argued that America (and Europe) are stuck in a slow-growth trap that holds down wages and living standards. And it offered bold prescriptions for building on America’s competitive advantage in technology and entrepreneurship to spread innovation – now concentrated in a vibrant digital sector — to the nation’s physical economy, which continues to suffer from low productivity. In addition, the document proposed creative ways to modernize the nation’s economic infrastructure, improve the regulatory environment for innovation, build middle class wealth and empower poor Americans to work, save and chart their own course to social mobility and inclusion.

Crucially, the blueprint also urged progressives to reject anger and victimhood and offer voters a confident account for how America can build a new, inclusive prosperity:

What America needs is a forward-looking plan to unleash innovation, stimulate productive investment, groom the world’s most talented workers, and put our economy back on a high-growth path, It’s time to banish fear and pessimism and trust instead in the liberal and individualist values and enterprising culture that have always made America great.

That was the road not taken in 2016. Now it’s the road to political relevance and success for progressives here and elsewhere.

 

Albany Times Union: Protect Consumers From Cash Advance Companies, Too

Posted on by The Progressive Policy Institute

New York Attorney General Eric Schneiderman last month filed a complaint against a lawsuit cash advance firm for allegedly engaging in predatory lending practices. RD Legal Funding stands accused of shamefully taking advantage of 9/11 first responders and brain-injured NFL players by offering high interest advances on expected payouts from legal settlements.

Schneiderman’s filing should be wake-up call to lawmakers in Albany. To ensure more New Yorkers do not fall victim, New York desperately needs to pass legislation to apply existing consumer protection laws to these cash advance companies.

The fact is, “crash cash” lawsuit lenders have operated in the shadows, outside the purview of New York’s consumer lending laws, for too long. These lenders skirt consumer protections by calling their products “investments” rather than “loans,” and this allows them to charge annual interest rates that would make a loan shark blush. The lawsuit cash advance industry should play by the same rules as every other company that lends money.

You may have seen the late-night ads promising “quick cash” for your lawsuit. These ads are careful never to say the word “loan,” so the lenders may continue their farce and sidestep New York law. These fast-cash offers take advantage of the most vulnerable consumers — people who have already been injured.

Take the case of Joseph Gill, a Brooklyn resident who borrowed $4,000 for medical bills while his lawsuit arising from alleged police brutality was in court. By the time the case settled five years later, Joseph owed $116,000 on his loan.

Or the situation highlighted in the complaint by the attorney general: a first responder on the ground on 9/11 was advanced $18,000 while she waited for her settlement. After six months, she owed $33,000 — an outrageous 83 percent increase in less than a year.

New York lawmakers cannot let this practice continue. New York is the financial capital of the world, and the unchecked practice of lawsuit lending is a stain on the state’s position as a steward of the world’s finances. It is an industry that thrives on the victims who are most in need of assistance. States across the country have subjected these predatory loans to existing lending laws, and New York should do the same.

Last year, the state Senate unanimously passed a bill subjecting lawsuit loans to existing consumer lending protections, and existing caps on interest rates. In a stunning illustration of rarely seen bipartisanship, senators on both sides of the aisle came together to close the lawsuit lending loophole. Unfortunately, the Assembly failed to pass the bill, and so another year has gone by and New Yorkers continue to be victimized by this practice.

The Assembly should follow Schneiderman’s lead, regulate lawsuit loans, and ensure that injured New Yorkers are not victimized again.

See full article. 

Thurbert Baker and Tom Stebbins serve on the advisory board of the Progressive Policy Institute’s Center for Civil Justice. Baker is a former Georgia attorney general. Stebbins is the executive director of the Lawsuit Reform Alliance of New York.

Legal Newsline: Justice Reform Groups Continue Push for Venue, Jurisdiction Bills in Missouri Legislature

Posted on by The Progressive Policy Institute

Phil Goldberg, director of the Progressive Policy Institute’s Center for Civil Justice and Don Gifford, a member of PPI’s Center for Civil Justice Advisory Board, were quoted in the Legal NewsLine about a recent Missouri Supreme Court ruling:

“The ruling offers some clarity on jurisdiction rules in Missouri—as in, courts don’t have jurisdiction over out-of-state claims—but it doesn’t completely settle the issue that’s been so controversial in the state, Phil Goldberg, director of the Progressive Policy Institute’s Center for Civil Justice, told the St. Louis Record.

If someone has been wrongfully injured and they want to bring a lawsuit, they should be able to do so—but only in the place that makes sense for that lawsuit,” Goldberg said.

Part of the problem is fraudulent joinders. Joinder refers to the occasion when multiple parties join a lawsuit as co-plaintiffs or co-defendants. In Missouri, frustrations arise when parties are allowed to join a case without meeting jurisdiction requirements. A lawsuit may originate with a plaintiff who meets proper jurisdiction requirements, but then out-of-state plaintiffs attach their claims in a joinder. Proposed rule changes address that issue.

“We think joinder was never meant to get around venue and jurisdiction laws,” Goldberg said. “Venue laws and jurisdiction laws should be clear that if you’re not from Missouri and you don’t have venue or jurisdiction in Missouri, you don’t get to bring your lawsuit in Missouri.”

Read the rest of the article at the Legal NewsLine.

Trump’s EPA Cuts: An Invitation to Litigation

Posted on by The Progressive Policy Institute

The bullseye of President Trump’s budget cuts is now clear. Unless Congress asserts itself, the budget of the EPA will be slashed thirty-one percent, more than any other agency. The budgets of the National Oceanographic and Atmospheric Administration and climate change programs within NASA will be similarly decimated.

These cuts should not come as a shock. During the campaign, President Trump reportedly said he’s like to abolish the EPA or “leave a little bit.” And he has famously asserted that “the concept of global warming was created by and for the Chinese in order to make U.S. manufacturing noncompetitive.”



			


	

			




			
				


	

		
Goldberg Testifies in Missouri for Venue and Joinder Legislation

				

			Posted on  by The Progressive Policy Institute		

			


	

		
Phil Goldberg, Director of the Progressive Policy Institute’s Center for Civil Justice, testified in the Missouri Legislature on Monday, January 30 to urge the House Special Committee on Litigation Reform to adopt a package of bills to address venue and joinder abuse in the state. The testimony, provided on behalf of the American Tort Reform Association, explained that ensuring that lawsuits are brought in the proper venue should not be partisan issue.


“Missouri has become America’s courtroom,” Goldberg told the legislators. “People who live outside of Missouri, are alleging injuries outside of Missouri, and are suing companies who are not from Missouri are nonetheless filing lawsuits in Missouri – and they are doing so by the thousands. Legislators from both parties have an interest in seeing that the Missouri courts provide even-handed justice and that litigation gamesmanship does not take over the courts.”


The most favored destination is the City of St. Louis, where out-of-state claims have skyrocketed in the past three years. The Office of State Courts Administrator’s statistics have found that filings in St. Louis from 2014 to 2015 jumped from 3,000 to more than 12,000. In 2016, there were 140 aggregated mass tort cases pending in St. Louis, with 8,400 plaintiffs in these cases having nothing to do with Missouri. Also, St. Louis is also now the 4th most active jurisdiction for asbestos filings, and most of the claims have nothing to do with Missouri or Missourians.


Generally, the proper place for a lawsuit is where the plaintiff lives, where he or she was injured, or where the defendant has its business. Those states have laws to govern these allegations. But, as Bloomberg News reported in September 2016, the claims are being filed in St. Louis because the city “has developed a reputation for fast trials, favorable rulings, and big awards.” In short, Goldberg continued, “They like the ballparks here rather than their ballparks at home.”


Consider the major St. Louis verdicts grabbing national attention. The plaintiffs were from Alabama, Alaska, South Dakota, California, Michigan, Minnesota and Oklahoma – none from Missouri. They all involved allegations of injuries outside of Missouri. None of the defendants were local to the City of St. Louis, and all three trials ended in awards for tens of millions of dollars.   By contrast, comparable claims in other states resulted in dismissals or defense verdicts. It was for this reason that St. Louis was named the worst “Judicial Hellhole” in the nation.


The legislation addresses this problem by clarifying that each plaintiff must independently establish that St. Louis is the proper venue for his or her lawsuit. He or she cannot, as is being done now, hitch his or her out-of-state claim to a local St. Louis plaintiff’s case in an effort to get around the state’s venue laws. The ability to join claims can make sense when family members are injured in a single accident, but not when plaintiffs have nothing to do with each other.


In addition to creating an undue burden on Missouri taxpayers, “the current situation sacrifices the ability of the courts to dispense justice,” Goldberg testified. “St. Louis residents, who may have a car accident case, a medical malpractice or employment matter, will have to wait behind the earlier filed out-of-state plaintiffs. Also, even the best judges may take shortcuts in an effort to process thousands of claims. Rather than make sure each claim is resolved on its own merits, they may consolidate claims or encourage mass settlement even when not warranted.”


The Committee is expected to vote on this package of bills over the next couple of weeks.


 


			


	

			




			
				


	

		
Northern California Record: California PCB Cases Could Expose Businesses Everywhere

				

			Posted on  by The Progressive Policy Institute		

			


	

		
By W.J Kennedy




SACRAMENTO – Legal actions taken by ten governments on the West Coast against the chemical giant Monsanto could eventually ensnare thousands of other manufacturers (even of discontinued products) in the same types of these highly speculative, virtually defenseless actions, legal experts warn.


“Any business that makes anything could face the threat of enormous liability exposure if these lawsuits are allowed by the courts,” said Phil Goldberg of Shook, Hardy & Bacon, and director of the new Progressive Policy Institute’s Center for Civil Justice. “Businesses around the country, especially manufacturers, need to be following these cases very closely.”


The lawsuits by the cities of San Diego, Long Beach, Portland, Ore., the state of Washington, and others, claim that Monsanto, the maker of polychlorinated biphenyl (PCB), an insulation used in electronic equipment from 1935 though 1977, should cover cleanup costs of waterways contaminated by the synthetic material, now believed by some to be a carcinogen. Even though the company had manufactured a lawful product at the time, and had nothing to do with how or where the products that contained PCBs were disposed, the lawsuits have managed to gain traction in several courts.


The two plaintiffs’ firms engineering the cases, Baron & Budd and Gomez Trial Attorneys, are working together under the banner “EcoLawyers.” In their arguments for the governments, they are relying on the centuries-old, but still vague, public nuisance tort. It carries with it no statute of limitations.


In its traditional sense, the public nuisance tort has been employed by governments to stop the conduct of an individual interfering with the public good – blocking a road or other public right of way is one example. Over the years there have been attempts to stretch the law’s application well beyond that original intent.


“It’s been the fall back when an action doesn’t meet the criteria for strict liability or negligence,” said Donald G. Gifford, the Jacob A. France professor of torts at the University of Maryland Carey School of Law. “So over the years there have been some weird applications of the (public nuisance) law, but it has been only marginally successful.”


The trouble for businesses is that success in any one of the ten California cases (before eight judges) will almost certainly encourage other plaintiffs’ firms to approach governments all over the country to pursue product manufacturers, especially if the products were improperly disposed of or improperly applied by the end user.


“The sheer number of cases is cause for concern,” said one attorney familiar with the cases, who asked not to be identified. “It only takes one to gain some traction. What to watch for as these cases move along is how many other plaintiffs firms start reaching out to governments seducing them with the same legal argument.”


A successful case for the plaintiffs’ attorneys, moreover, could undermine the very law itself. Products liability law with its strict evidentiary requirements, including causation, could be “laid waste” by these actions, Gifford said.


On the side of the plaintiffs is a 2013 case brought by ten California counties where the judge ruled that the presence of lead paint in residences constituted a public nuisance, and that the companies who manufactured lead pigment and paints more than a half century ago must be responsible now for removing them. The ruling amounted to a $1.15 billion judgment against a few pigment and paint manufacturers still in business today.


The state court judge’s decision, in effect, labeled all residential properties built before 1981 a public nuisance. The Los Angeles County Boards of Real Estate said this precedent “could precipitate the worst plunge in California home values since the housing crash of 2007.”


The case is on appeal at the California Supreme Court.


So far five of the ten Monsanto cases have been dismissed (all in California), but none has been dismissed with prejudice (final judgment); they are still permitted to amend their complaints. Two cases in Oregon and two in Washington have yet to the be ruled on, but in late October, in a case brought by the city of Spokane, the judge rejected Monsanto’s argument for initial dismissal. There will be another opportunity to dismiss after discovery in a summary judgment motion. If that is denied, then the case will be set for trial.


In San Diego, the cases have the government entities turning on one another. The San Diego Airport Authority is now pointing to the City’s case against Monsanto as evidence of why the city should be named by the state of California as an additional responsible party.


Scott Barnett, executive director of San Diego Taxpayers Advocate, calls the litigation a “circular firing squad.”


“Everyone stands to lose here,” Barnett said. “The city’s largest employer, the Navy, and bio medical and high tech companies that call the city home.”


The business community, behind the National Association of Manufacturers and National Federation of Independent Business, joined against the California lead paint case and a similar case in Rhode Island. There, in 2008, the Supreme Court unanimously threw out a 2006 jury decision against three paint manufacturers, saying the lawsuit should have been dismissed at the outset because “public nuisance law simply does not provide a remedy for this harm.”


The paint manufactures weren’t so lucky in California, and the economic consequences could be dire.


An amicus filed in the California lead paint case by the business community stated in part: “Tort liability is a significant factor in a business’ consideration of whether to expand its operations, create new jobs, or provide goods and services in a given market. If …sellers of a legal product may be held liable for causing a public nuisance decades after engaging in an activity that was lawful at the time, businesses will face constant uncertainty and a disincentive to operate in California.”


Phil Goldberg, the director of PPI’s Center for Civil Justice, is a partner at Shook Hardy & Bacon LLP. Donald G. Gifford is on PPI’s Center for Civil Justice Advisory Board.




			


	

			




			
				


	

		
San Diego Union-Tribune: Public Nuisance Lawsuits Out of Control

				

			Posted on  by The Progressive Policy Institute		

			


	

		
This past year, public nuisance lawsuits have spiraled out of control in California. Cities like San Diego, Berkeley and Los Angeles have been convinced to sue U.S. companies for enormous sums. Trial lawyers, looking to win big, scour the state and the nation for potential plaintiffs and then recruit municipalities to partner with them to file suits against businesses.


Pandora was let out of the box in 2002 when Santa Clara County and Orange County, using private plaintiff’s lawyers to bring the charge, sued lead paint manufacturers under a public nuisance theory – even though the paint manufacturers didn’t know about problems with lead paint at the time they sold it. After that, the Orange County District Attorney’s Office used public nuisance theory to sue drug manufacturers for the costs of unemployment, emergency room visits and other social services. The idea was that people took prescription painkillers, then got addicted, then the prescription ran out, then they switched to heroin, then they lost their jobs and ended up in the emergency room without insurance, so the drugmakers should pay for the county’s unemployment and ER costs. The judge dismissed the case because the FDA regulates prescription drugs, because some patients really do need painkillers and because it’s not appropriate for local prosecutors partnering with private plaintiff’s lawyers to do the oversight and regulation that appropriately belongs to the federal government.


Along with other cities, San Diego has entered the fray. By partnering with a plaintiff’s firm, the city doesn’t have to pay for the expense of investigating and prosecuting the case – those costs are fronted by the trial lawyer firm. But this partnership is ethically suspect.


Continue reading at the San Diego Union-Tribune.