Your Cheerios Prescription Is Ready
March 10, 2010
Today’s Washington Times has kindly published an op-ed I authored, “Your Cheerios Prescription.” The FDA is cracking down on product label claims it considers misleading and has threatened to force some products to go through the agency’s drug-approval process.
Legal Reform Victory in SC
March 4, 2010
Carter Wood, once again, is on top of the latest legal reform news - this time with his ShopFloor hat on. Yesterday legislators in the South Carolina House overwhelmingly passed legal reform legislation in an effort to attract more business and capital investment to the state.
For more on the state of legal reform efforts in South Carolina, check out the South Carolina Civil Justice Coalition headed up by Cam Crawford. Cam and his team have been fighting the good fight in SC for some years now and aim to make the Palmetto State one of the nation’s top 25 states based on legal climate. Yesterday’s action by the state legislature is a step in that direction.
The Rise and Fall of Lerach
March 2, 2010
The New York Times Deal Blog has a good, extensive review of a brand new book that describes the rise and fall of trial lawyer titan, Bill Lerach. The book’s title: Circle of Greed.
An excerpt from the review describing how Lerach began his rise to fame:
“’…Mr. Dillon and Mr. Cannon trace how…Milberg Weiss Bershad Hynes & Lerach, began paying secret fees to people who agreed to serve as the representative plaintiff in their cases. In those days, securities class actions were a race to the courthouse, with the first to file often controlling the litigation. Called ‘pets,’ these plaintiffs were lapdogs willing to serve Milberg Weiss while taking a cut of any settlement in the case, while telling the court that they had received nothing more than what any other class member got from the case.’”
And how his tremendous fall began:
“[F]ederal prosecutors in Los Angeles in late 1999 began the painstaking task of putting together a criminal case against the firm and four of its name partners for making secret payments to plaintiffs and an expert witness. The criminal case began almost by accident when one of the “pet” plaintiffs, trying to avoid a substantial prison term, spilled what he knew about Milberg Weiss. Over the next nine years, prosecutors painstakingly pulled together a case that resulted in the conviction of four of the named partners in Milberg Weiss and the firm itself.”
Unfortunately the reviewer, Peter Henning, misses the point of what Bill Lerach represented when he writes:
“But was his crime all that significant? In one sense, the answer is ‘No’ because it is hard to identify any real victims from making the secret payments. But the answer is ‘Yes’ because Mr. Lerach showed an utter disregard for the legal system, and any defense of the Milberg Weiss payments devolves into an argument that ‘the end justifies the means.’”
Yes, Lerach represents unchecked arrogance and the utter disregard for our legal system. But his crimes were far from “victimless.”
Those of us who have been fighting in the trenches for many years against unscrupulous trial lawyers know all too well that Bill Lerach stood as the singular example of jackpot justice and trial lawyer greed. The abusive actions of Lerach and dozens of others like him have cost every one of us very dearly. Many American Courthouse readers know the stats well - but here’s just one: according to the 2008 Towers Perrin study on US tort costs, every man, woman and child in the U.S. pays a “lawsuit tax” of $835 per year. That’s more than $3300 a year for a family of four. We pay this tax through higher prices for products and services due to the ever-increasing costs of litigation…all brought to you by the likes of sleazy Bill Lerach.
Illinois Supreme Court Turns Back Tort Reform
February 5, 2010
In a disappointing and tortured decision, the Illinois Supreme Court threw out limits on noneconomic damages in medical liability cases yesterday, overturning bipartisan legislation passed in 2005 that enjoyed broad public support. Ed Murnane, President of the Illinois Civil Justice League, blasted the court for “siding once again with the trial lawyers” over patients and doctors.
According to American Medical Association President James Rohack (who is quoted in today’s Chicago Tribune), when the Illinois Supreme Court overruled the state’s previous damage cap in 1997:
“Severe problems with patient access to care emerged as the unrestrained excesses of the state’s legal system forced Illinois physicians to limit services, retire early, or move to other states where liability premiums are more stable. Without a cap on noneconomic damages from 1997 to 2005, Chicago physicians saw their liability premiums increase an average of 10 to 12 percent each year. When the cap was reinstated in 2005, premiums for Chicago physicians stabilized and even began to shrink.”
This is the third time the Illinois high court has struck down medical liability limits, demonstrating that it “simply will not be bound by the duly enacted acts of the legislature when certain issues important to its lawyer constituency are at stake,” writes Walter Olson in a post at PointofLaw.com that picks apart the court’s legal analysis.
The Illinois court’s “lawless” decision (Olson) demonstrates beyond any doubt that the best tort reform is getting the right judges on the bench.
ATRA Releases Annual “Judicial Hellholes” Report
December 15, 2009
It’s that time of year again — today the American Tort Reform Association (ATRA) released its yearly Judicial Hellholes report. Topping the list this year:
- South Florida
- West Virginia
- Cook County, IL
- Atlantic County, NJ
- New Mexico Appellate Courts
- New York City
On ATRA’s “Watch List”
- California
- Alabama
- Gulf Coast and Rio Grande Valley, TX
- Jefferson County, MS
- And our perennial favorite: Madison County, IL
ATRA’s president, Tiger Joyce, had a good reminder for policymakers looking for ways to boost the economy and create jobs:
Every dollar spent defending against a groundless lawsuit is a dollar that won’t be spent on research and development, capital investment, worker training or job creation.
The report isn’t all bad news - included are “Points of Light” highlighting parts of the country where good reforms have been enacted and where attempts to roll-back improvements to the legal system have been beaten back, including Arizona, California, Ohio, Oklahoma and Texas.
Congratulations to Tiger Joyce and his team for putting out yet another well-researched, hard-hitting report — and for reminding us of the need to keep fighting for legal reform.
Democrats vs. Michigan Health Care Jobs
December 3, 2009
Today’s Detroit News ran a commentary piece I wrote, putting the spotlight on Michigan Democrats’ efforts to help their trial lawyer buddies at the expense of Michigan jobs. You can find the piece here.
New Report: An Empire Disaster
November 20, 2009
Earlier this week the New York Daily News ran a great op-ed co-authored by Lawrence McQuillan of the Pacific Research Institute and Mark Kriss, head of New Yorkers for Lawsuit Reform. The piece describes how lawsuit abuse is harming New York state’s economy and how trial lawyers and their friends in the state legislature are blocking attempts to stop the abuse.
Just what would legal reform mean for New York? Money quote:
…if such reforms were put in place, New York would create at least 86,000 new jobs, increase state output $17 billion annually, boost state tax revenues by more than $1 billion a year, raise the income of every New Yorker by more than $2,600 a year, attract new customers and entrepreneurs to the state and cut insurance premiums up to 16% per annum.
For more, read the terrific report that PRI just released, “An Empire Disaster.”
A Gift to the Trial Bar
November 13, 2009
A Wall Street Journal editorial uncovers a golden nugget for the Trial Lawyers Inc. in Senator Chris Dodd’s new financial regulatory bill.
The Dodd bill “would create new civil liability for anyone ‘aiding and abetting’ those who violate the securities law, making these new defendants just as liable as people who actually commit a fraud.” This provision “would essentially overturn the Supreme Court’s 2008 ruling in Stonebridge v. Scientific-Atlanta” and allow companies that acted legally to be sued merely for doing business with another company that committed fraud.
The most recent Quinnipiac poll shows Dodd trailing his 2010 election opponent by 11 points. According to The Center for Responsive Politics’ invaluable opensecrets.org, lawyers/law firms are the #2 contributors to Dodd’s campaign, having funneled over $1.7 million into his re-election campaign. Is this most recent sop to the trial bar a plea for more $$$? Draw your own conclusions.
Update on Trial Lawyer Protection in Health Care Bill
November 6, 2009
Earlier this week I reported on the effort underway in Congress to punish states that have solved the medical liability crisis by enacting caps on non-economic damages. Now, Congressman Henry Cuellar – a Blue Dog Democrat from Texas – won a “pre-emption” provision that would allow states with caps already on the books to keep those reforms in place and remain eligible for incentive payments under the House health care reform bill.
Great … but what about states that are looking to follow the lead of Texas, California and others who have reduced medical liability premiums and improved access to health care through tort reform?
This “sweetener” may win a few extra votes, but it slams the door on any further, meaningful action to curb frivolous medical liability lawsuits in states that haven’t enacted caps. It also shows the outsized influence that $100 million in campaign contributions can win in Congress.
South Carolina Decision Highlights Need to Act On Punitive Damages
October 20, 2009
A recent South Carolina lawsuit highlights the problem of allowing emotionally-charged juries to award punitive damages with no guideposts. The case involved a man who claimed his medical insurance was wrongly rescinded. The jury originally awarded $186,000 for actual damages and a bad faith rescission claim. Sounds reasonable. But the jury tacked on an additional $15 million in punitive damages.
The South Carolina Supreme Court stepped in and reduced the punitive damages to $10 million, which it claimed was 9.2 times the “potential harm” the plaintiff suffered. But the punitive damages need to bear some relation to the actual harm, not some back-of-the-envelope calculation. Even using the Court’s absurdly high 9.2 ratio, the punitive damage award should have been no higher than $1.7 million.
Even more ominously, in a footnote the Court concluded that although punitive damage awards in South Carolina “have been on the low end of the single-digit-ratio spectrum…that does not mean the constitution requires this to be so.” In other words, the Court practically invited aggressive trial lawyers to shoot for ridiculously high punitive awards down the road.
All of which makes it even more urgent for South Carolina’s legislature to enact a pair of bills that would limit punitive damages to three times compensatory damages or $250,000. This would give runaway juries (and judges) the guidance they need to make reasonable determinations in awarding punitive damages.