Lawsuit Abuse Fortnightly #2-4
Victory for Common Sense
In a major victory for common sense, the U.S. Supreme Court on April 7 issued a ruling saying a $145 million punitive damages award against State Farm Insurance Cos. was excessive and violated constitutional principles. It was only the second time the Court has overturned a jury award as unconstitutionally excessive. The jury award was 145 times greater than the $1 million in damages State Farm paid the plaintiff for alleged mental anguish following the companies “bad-faith” failure to settle a $50,000 accident claim. The Court said punitive damages are usually capped at 10 times the compensatory damages. The case has been remanded to a Utah court, which will decide how much in punitive damages can be awarded. From Crain’s Chicago Business and other news sources.
Clueless in Rhode Island
A Rhode Island judge recently denied motions by both sides in the now infamous state lead paint trial to summarily decide the case. (You may recall a jury deadlocked on the case last October, resulting in a mistrial.) The new state Attorney General has decided to go forward with another trial, seemingly unaware that over a dozen plus years of litigation, the lead paint industry has never lost a case. Even more interestingly, The Providence Journal reports the AG may decide to use the same hired-gun team of contingency-fee lawyers who bungled the first case, including tobacco super-litigator Ron Motley’s firm, which convinced Rhode Island to file the suit in the first place.
Lawyers Don’t Give Up in Mississippi
When “60 Minutes” labeled Mississippi a “judicial hellhole” in a scathing report last fall, the state legislature was quick to adopt some Band-Aid-sized tort reform measures to save what was left of the state’s dwindling legal reputation. One bill, which took effect January 1 of this year, sets an initial cap of $500,000 for pain and suffering damages in medical malpractice cases, limits “venue shopping” within the state, and reforms how multiple defendants have to share judgements against them. Reportedly, in late December trial lawyers werelined up around the block at state court houses in plaintiff-friendly counties throughout the state filing thousands of new suits in order to beat the January 1 deadline. From The Biloxi Sun Herald, National Law Journal, and AP, among others
The Judges of Madison County Redux
Perhaps “60 Minutes” should take a close look at another “judicial hellhole,” Madison County, Illinois, which has been eviscerated by the liberal New York Times and conservative Manhattan Institute (not to mention this newsletter), all to no avail. This March, Circuit Judge Nicholas Byron found Philip Morris USA liable in a non-jury class-action consumer fraud lawsuit and ordered the company to pay $10.1 billion for failing to inform consumers its “light” cigarettes were more, not less, harmful than full-tar cigarettes. The plaintiffs’ attorneys were awarded a stunning $1.8 billion out of the total pot. The company says Byron “rubber-stamped the plaintiffs’ view of the evidence and the law.” It plans to appeal, but Illinois law requires the company to post the entire amount of the judgement in order to appeal, an amount spokespersons for Philip Morris USA say would bankrupt the company. The stock market and bonding companies apparently agree. From The New York Times and St. Louis Post Dispatch.
Physician, Sue Thyself
President Bush, the American Medical Association, and many advocates of tort reform blame frivolous lawsuits and greedy plaintiffs’ attorneys for the nation’s medical malpractice insurance crisis. Trial lawyers and the “consumer groups” they help finance blame investment losses by insurance companies and the scope and damage caused by genuine malpractice. Nearly lost in the debate is the fact that a tiny percentage of doctors account for the lion’s share of malpractice awards, and little is being done to bring these docs to heel. Why not? According to an op-ed by Dr. Devra Marcus in the March 16 Washington Post, one reason is doctors who serve on medical society disciplinary committees are afraid to remove such doctors from practice because they fear being sued by those under scrutiny!
Get a Horse, Commuter
If you are thinking of leasing a car in New York, Connecticut, or Rhode Island, you may shortly find it nearly impossible to do, or it will cost you a ton more, thanks to your friendly local trial lawyer and the idiocy of state legislators. These three states are the only ones that still have on the books “vicarious liability” laws which say the vehicle owner (i.e. the leasing company), not the driver, is responsible for any monetary damages caused by an accident. GM alone spent $50 million settling such cases in New York last year. Ford has announced it will stop leasing vehicles in New York, and GM said it will end its leasing business in the state as of May 1 if the laws are not changed. From The Wall Street Journal and Syracuse Post-Standard
Double-Dipping in the Asbestos Muck
The New York Times reports Joseph F. Rice, a leading class-action lawyer (and partner of Ron Motley) agreed to accept a $20 million fee from the Swiss company ABB to convince lawyers suing its subsidiary, Combustion Engineering, to accept $1.1 to $1.3 billion to settle some 220,000 asbestos claims against the company. What is weird about this deal is Rice is one of the lawyers suing Combustion Engineering and will therefore receive his contingency fee share of the billion dollar settlement from his clients, as well as collecting his $20 million fee from ABB. If that’s confusing to you, it isn’t to the legal ethicists The Times talked to. One called it a clear conflict of interest.
Let’s Just Stand in a Circle and Kick Smokers Again and Again and Again . . .
New York – the same state that recently increased its cigarette taxes over 1000 percent and then for good measure banned smoking in restaurants and bars in New York City – has become the most recent financially troubled state to dip into its tobacco settlement windfall to help address a budget deficit. The New York Times reported in late March an agreement had been reached between the leaders of the state Senate and House (one a Republican, the other a Democrat) to borrow $4.2 billion, $700 million immediately, against money expected from New York’s share of the tobacco settlement to help ease the state’s expected $11.5 billion budget shortfall. Can someone please tell us again who the Master Settlement Agreement was supposed to punish, and who it was supposed to benefit?
Yeah, but God Doesn’t Have Deep Pockets
New York City settled out of court for $1 million with a 57-year-old teachers’ aide who was hit in the head by a falling tree limb in the city’s Fort Tryon Park. The woman claimed the city failed to maintain the park’s trees and had improperly pruned the tree in the past. The city had planned to argue that 50 mile-per-hour winds that day might have had something to do with the accident, but apparently decided jurors were more apt to blame the city than God for the accident. From The National Law Journal
Published by The Heartland Institute,
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Publisher: Joseph L. Bast
Editors: Diane Carol Bast, Paul Fisher, Dan Hales