Saturday, December 5, 2009

Stanford Law School Global Class Action Exchange - Online Source for Global Class Action Research

Stanford Law School and Professor Deborah Hensler offer a significant online resource with numerous papers on class action practice around the globe. The resource is titled the Global Class Action Exchange. The website is here. The text of the "About" section is pasted below because it provides an overview.

"About

The Global Class Actions Exchange is an outgrowth of an international conference on the worldwide spread of class actions, group proceedings and other forms of collective litigation that was held in Oxford, England in December 2007. The conference was co-sponsored by Stanford Law School and the Oxford Centre for Socio-Legal Studies and funded by the American Academy of Political and Social Sciences and Stanford Law School, with additional support from individuals, law firms and the business sector in the US and Europe. Participants in the conference were eager to share information about developments in their countries and to establish a network of academicians, judges and lawyers interested in class actions and group litigation to whom they and others could turn for advice on these developments. We established this Clearinghouse in response. The Clearinghouse is directed by Prof. Deborah Hensler of Stanford Law School, who co-organized the 2007 conference with Dr. Christopher Hodges of the Oxford Centre for Socio-Legal Studies.

The Global Class Actions Exchange currently includes country reports and other materials prepared for the 2007 conference; statutes, rules and important cases related to class actions and group litigation; academic and other commentary on global developments regarding class actions; contact information for legal analysts and practitioners who research or practice in the class action or group litigation area; and news of conferences and other events of interest to scholars and practitioners.

If you would like to contribute material for the Global Class Actions Exchange, please contact Deborah Hensler at dhensler@stanford.edu.

Friday, December 4, 2009

Litigation Stays and Overseas "Bankruptcy" Proceedings

Using bankruptcy code chapters 11 and 15 to avoid litigation is not quite as easy as some might think, as illustrated by an order that is here and is described in the LAW 360 article below.

Law360, New York (December 03, 2009) -- A federal judge has ruled that a London-based fur broker that filed the equivalent of bankruptcy in the U.K. can't stay a bid-rigging suit in the U.S. without first petitioning for recognition of the U.K. insolvency proceedings under Chapter 15.

Judge Ricardo S. Martinez of the U.S. District Court for the Western District of Washington rejected Fein & Co.'s motion to stay the putative antitrust class action Wednesday, saying the fur broker hasn't shown that it can't file Chapter 15.

The fur broker had argued in a Nov. 3 motion that comity necessitated the district court to stay the antitrust suit against Fein as it would have if the company had filed for bankruptcy in the U.S.

Meanwhile, the two mink fur producers who filed the action accusing Fein and other fur brokers of bid-rigging said an entity going through insolvency proceedings outside the U.S. can obtain relief here only through Chapter 15.

Siding with the plaintiffs, Judge Martinez said Chapter 15 "has provided a specific structure for addressing cross-border insolvencies, together with appropriate remedies."

The Washington court will consider granting Fein relief if it receives Chapter 15 relief in the U.S., he added. "Until that time," he said, "the court declines to stay these proceedings."

The plaintiffs, Wanechek Mink Ranch and Smith Mink Ranch Corp., alleged that between 2000 and 2004, the defendants engaged in a bid-rigging scheme that depressed the prices the plaintiffs and other mink fur producers were paid for their furs at auctions.

In addition to Fein, some of the other fur brokers named in the case include Delta Trading Corp., Klondike International Furs Ltd. and Alaska Brokerage International Inc.

The defendants moved to dismiss the case in November 2008, but Judge Martinez refused to do so in early May.

Following the U.S. Supreme Court's landmark ruling in Iqbal v. Ashcroft in May, the brokers asked the court to dismiss the action again, this time saying it didn't meet the heightened pleading standard laid out by the high court.

The brokers noted that in the court's May 5 order declining to dismiss the case, it pointed to repeated statements in the complaint that the defendants “agreed” to a bid-rigging scheme as well-pleaded allegations.

“The Ashcroft case puts to rest any lingering notion after Twombly that such allegations are sufficient,” the defendants said. “If all it takes to state an antitrust claim is to write the words 'they agreed,' no claim would fail under Rule 8.”

The U.S. Department of Justice launched an investigation into anti-competitive practices among fur brokers in 2004. In 2006 Alaska Brokerage was indicted, and an individual broker pleaded guilty to a conspiracy charge. The company was fined $30,000.

Attorneys for both sides didn't immediately return calls for comment Thursday.

Plaintiffs are represented by Hagens Berman Sobol Shapiro LLP, Kohn Swift & Graf PC, Preti Flaherty Beliveau & Pachios LLP, Barrack Rodos & Bacine, Berger & Montague PC, Weinstein Kitchenoff & Asher LLC and Langer & Grogan PC.

Defendants are represented by Byrnes & Keller LLP, Wilson Smith Cochran Dickerson, Stoel Rives LLP and Yarmuth Wilsdon Calfo PLLC.

The case is Wanechek Mink Ranch and Smith Mink Ranch Corp., on behalf of themselves and all others similarly situated, v. Alaska Brokerage International Inc., case number 06-cv-00089, in the U.S. District Court for the Western District of Washington.

New Science, TSCA, and Chemical Regulation

Here's a pop quiz. Out of 83,000 or so chemicals, how many chemicals or chemical classes has EPA regulated under TSCA ?

1,103 ?

5,279?

9,867 ?

Drum roll please -the answer is:

5 ( I did not forget any numbers).

Surprised ? Me too. But that's what you learn when you read this post on the Mass Tort Defense blog and/or then go read the December 2, 2009 testimony of John Stephenson, GAO, Director, Natural Resources and Environment . He said, at 9, " In fact, since Congress passed TSCA in 1976—over 33 years
ago—EPA has issued TSCA regulations on only five existing chemicals or chemical classes."
)
That result seems especially pathetic when one considers that the EU is busy implementing its comprehensive REACH program of chemical regulation, explained here by the EU.

Will things change here ? That's not my area of expertise, so I will not offer a prediction. But, the testimony also is noteworthy for its focus on how science is now focused on cellular level events and so the dependence on epidemiology is lessening. The topic was covered by Linda Birnbaum, Ph.D., Director, National Institute of Environmental Health Sciences, National Institutes of Health, andDirector, National Toxicology Program, U.S. Department of Health and Human Services. Pasted below are some key excerpts from her testimony, beginning with the conclusion:

"We are poised to move forward into an era of a new kind of toxicological testing that is less expensive and also gives us an improved understanding of the actual effects on humans. Toxicology is advancing from a mostly observational science using disease-specific models to a better predictive science focused upon a broad inclusion of target-specific, mechanism-based, biological observations. This means using alternative assays targeting the key pathways, molecular events, or processes linked to disease or injury, and incorporating them into a research and testing framework. The NTP is laying the foundation for this testing paradigm in partnership with the National Human Genome Research Institute and the EPA. They are using quantitative high throughput screening assays to test a large number of chemicals. The resulting data are being deposited into publicly accessible relational databases. Analyses of these results will set the stage for a new framework for toxicity testing. (emphasis added)

She also said:

"Environmental health science has made tremendous strides since the original passage of the Toxic Substances Control Act, or TSCA. Our understanding of chemical toxicity has been challenged by the new science of epigenetics, which is the study of changes to the packaging of the DNA molecules that influence the expression of genes, and hence the risks of diseases and altered development. Studies indicate that exposures that cause epigenetic changes can affect several generations. This new understanding heightens the need to protect people at critical times in their development when they are most vulnerable to this kind of toxicity. (emphasis added)

The concept of “windows of susceptibility” is an important area. Research has revealed the heightened vulnerability of fetal, infant and child developmental processes to disruption from relatively low doses of certain chemicals. Established first for neurodevelopmental toxicants like PCBs, and lead and other metals, this concept also applies to hormonally active agents (endocrine disrupting chemicals). In our NIEHS Breast Cancer and Environment Research Program, co-funded with the National Cancer Institute, researchers are investigating whether periods of susceptibility exist in the development of the mammary gland, when exposures to environmental agents may impact the breast and endocrine systems that can influence breast cancer risk in adulthood.
***
There are other susceptibilities to consider. For some types of chemicals and health effects, there may be excess risk from specific genes or chronic diseases. For example, the level of a person’s risk of bladder cancer from smoking has been shown to depend in part on whether or not that individual’s genome contains variants in specific detoxification enzymes. The existence of these subtle variations in susceptibility must be factored into overall toxicity assessments.

Scientists believe that other chemicals such as some PCBs and furans may cause cancer in a similar manner. The question for public health officials was how health standards could be adjusted to take into account the fact that people are always exposed to mixtures of dioxin-like compounds, not just one at a time.
To address this problem, a large body of work led to the development of a method to estimate toxicity of mixtures of dioxin-like compounds based upon toxic equivalency factors, or TEFs. To estimate the overall toxicity of a mixture, the contaminants’ weighted contributions are added together, adjusting for the fact that some compounds are more toxic than others. The additive methodology has been tested and confirmed by studies done by the NTP, EPA, and others. TEF methodology has also been extended to other health endpoints, including reproductive and developmental, immune, and neurological.

Differences in routes of exposure must also be considered. For example, hexavalent chromium compounds have been shown to cause lung cancer in humans when inhaled, but it was not known how these compounds behaved when ingested. Hexavalent chromium was tested by the NTP because of concerns over its presence in drinking water. The NTP studies showed that a compound containing hexavalent chromium causes cancer in laboratory animals following oral administration in drinking water, confirming the need to protect people from oral routes of exposure."

Interesting Posts at Nudge, Including Old Tobacco Ad

One of the best books I read last year was Nudge by Profs. Thaler and Sunstein, so I try to follow their ongoing Nudge blog. A post this week includes links to some interesting wesbsite on "greenwashing," "and a picture of a priceless old tobacco ad. Ads of that sort matter in some law suits today because some young jurors today have no idea why people ever smoked.

Thursday, December 3, 2009

Risk Analysis Symposium - Topics Include "Sponsored Research," Nanoparticle Risks, and Carcinogen Issues

A hat tip to David Zaring at The Conglomerate for this post that covers some interesting ground regarding "risk" issue, including regulatory issues and issues regarding product liability and other tort claims. One part of the post also covers a new book on the safety - or lack of safety - of imports into the US

Of perhaps greatest interest, the post educated me to an upcoming (Dec. 6-9) seminar in Baltimore by The Society for Risk Analysis. The conference agenda is here. If you see an interesting item on the agenda, you can click through links on the left side to see detailed abstracts of presentations. Some are of potential global note as they address issues regarding the use of "sponsored" research, risks of nanoparticles (some are said to be be more toxic than asbestos fibers in some settings) and on whether formaldehyde is a carcinogen. To whet your interest, pasted below is the text of one abstract regarding sponsored research:


"M2-E 10:30 AM-Noon Research Funding and Scientific Integrity: Conflicts and Criteria


M2-E.1 10:30 Proposed consensus criteria for assessing the reliability of scientific work. Conrad, Jr. JW*; Conrad Law & Policy Counsel jamie@conradcounsel.com

Abstract: Ultimately, the merits of scientific research findings are judged by the extent to which they are reproduced by other scientists. Such replication can take years, and what constitutes replication in a given case may be disputable for some time. Consequently, the scientific community has developed a variety of shorter-term approaches for assessing scientific work. Some of these approaches are designed to evaluate the validity and significance of the work, particularly in comparison to other studies addressing the same question. (These approaches are frequently termed “weight of evidence” approaches.) Other approaches are addressed to the more limited, but still vitally important, task of evaluating the reliability of the work against concerns that the results may be the product of error or may have been consciously or unconsciously influenced by conflicting interests or biases of the investigator. Some of these latter approaches have become well-established (e.g., peer review, disclosure of competing interests); others are not yet widely accepted (e.g., public registries of proposed research, free access to underlying data). This presentation will survey the approaches being suggested and will propose a set of criteria that, if they became conventionally accepted, would allow all concerned to have confidence in the reliability of scientific work regardless of who conducted or funded it. "

Wednesday, December 2, 2009

Supreme Court Grants Cert in F-Cubed Securities Litigation

This post offers a brief comment arising from the now widely reported fact (see, for example, SCOTUSblog and many others) that the U. S. Supreme Court granted certiorari from the 2d Circuit's opinion in the so-called foreign-cubed (a/k/a f- cubed) Rule 10b-5 securities case titled Morrison, et al., v. National Australia Bank, et al. (08-1191), which is sometimes called the NAB case. For the uninitiated, f-cubed refers to 1) "foreign" plaintiffs suing in the US under US law regarding a 2)"foreign" issuer of securities that resulted in the buying and selling of stock in 3) "foreign" countries.

The comment is that one hopes that briefing in the Supreme Court will cover in some depth the scope of class action litigation in countries outside the US. I say that because the 2d Circuit's opinion, slip op at 14 -15, refers to arguments that seem to me both dated and incorrect as to the extent of class action remedies outside the US. On the topic of the growing availability of class actions or class like remedies outside the US, I once again commend to readers a fairly new article titled "Global Litigation Trends." The authors are Mark Behrens, Gregory Fowler and Silvia Kim, who are all Shook Hardy lawyers. The article was published at 17 Michigan State Journal of International Law 166 (2008-09). You can download it here from the TortsProf blog.

Pasted below are the 2d Circuit's statements about class actions outside the US:

"In support of their position, Appellees and amici point to a parade of horribles that they claim
would result if American courts exercised subject matter jurisdiction over such actions. They
contend that this would, among other things, undermine the competitive and effective operation of American securities markets, discourage cross-border economic activity, and cause duplicative
litigation. Their principal objection, though, is that entertaining such actions here would bring our securities laws into conflict with those of other jurisdictions. For instance, in Switzerland, no
comprehensive federal legislation governs securities fraud, and private remedies are the only ones
available. In Canada, securities class actions are recognized, but most provinces do not recognize
the fraud on the market doctrine. In various other countries, class actions are either not available
or the ability of class actions to preclude further litigation is problematic. See, e.g., David A. Skeel, Jr., Can Majority Voting Provisions Do It All?, 52 Emory L.J. 417, 423 (2003) (noting that “most other countries do not have procedural devices that are even remotely similar to the U.S. class action”); Gerhard Walter, Mass Tort Litigation in Germany and Switzerland, 11 Duke J. Comp. & 3 Int'l L. 369, 372 (2001) (observing that “class actions do not exist in Germany, Switzerland, and most other countries of the civil law system”). In essence, Appellees argue that other countries have carefully crafted their own, individual responses to securities litigation based on national policies and priorities and that opening American courts to such actions would disrupt and impair these carefully constructed local arrangements...." (emphasis added)


It's hard to say where this all will end up since the Court apparently is continuing to pursue Chief Justice Roberts' agenda to decide "business cases," and there are so many interested constituencies. For more background, note that insurance side commentary on NAB was noted in this prior post which, in turn, links to another blog with commentary and links back to the 2d Circuit opinion and briefs. In addition, as SCOTUSblog points out, note that review was granted " even though the U.S. Solicitor General had urged it to bypass the case. Even while arguing that the case was not a proper one to address the issue, Sol. Gen. Elena Kagan filed a brief extensively outlining the government’s views on the question, suggesting that the key law against securities fraud should sometimes apply to international dealings. (Justice Sotomayor took no part in the order granting review; it was not immediately apparent why she was recused. She did not vote on this case while on the Second Circuit.)"




Tuesday, December 1, 2009

Whocanisue.com Founder Provides a Comment/Information on its Structure

When reading other blogs, I tend to miss comments on the posts, so te purposed of this post is to highlight a "comment" provided yesterday by Mr. Wolfe, of whocanisue.com. See the comment below yesterday's post or the full text is pasted below:

Curtis Wolfe said...

I'm the founder of whocanisue.com. I want to clarify something, lawyers do not pay referral fees on wcis, they pay to advertise (like the Google model) to wcis users. Most importantly, wcis does not decide which counsel is recommended for a particular case, the user decides. The site supplies the users as much information as possible so that the user can make an educated decision on which counsel is best for them. The user can contact one or more lawyers or firms to ask case specific questions, and then decide if and when the user wants to hire a firm. There is no other site that allows the users to control the entire process like whocanisue.com. In fact, our site has technology that would allow the user to chat with someone from each firm before making a decision. Unfortunately, the law firms are not quite ready to use this technology, so it is disabled until some future date when we hope the firms will be ready to use all of the site's functionality.

Curtis Wolfe

Monday, November 30, 2009

More Lung Cancer Claims in Asbestos Litigation ?

Here is the Madison County Record's weekly report on new asbestos claims filings. The article lists fourteen new claims. Five of the claims are for lung cancer.

I've not done a meaningful analysis comparing the rate of lung cancer filings, but my gut is telling me that there is a developing uptick in the rate of lung cancer claims in asbestos litigation.

Whocanisue.com.com - Another Step in Tort Claim Marketing

The Internet is an amazing thing for marketing related to actual or potential legal claims. Here is a Madison County Record article that educated me to the existence of Whocanisue.com. It is in essence a referral source for plaintiffs, but also includes a button to hire defense counsel. The site seems to be limited to claims in the US.

It would be fascinating to know the pricing and structure for referral fees and the criteria that determine which counsel is recommended for a particular, serious case.

Readers - does anyone know of a similar website outside of the US?

Sunday, November 29, 2009

Update on China's Tainted Milk Scandal - Bankruptcy, Executions and Civil Court Hearings

Milk intentionally altered with melamine sickened around 300,000 thousand children in China The aftermath includes civil suits in China and criminal convictions.

The NYT reported yesterday that civil trial is underway against one of the producers and the retailer. Earlier this year, about 20 involved persons were convicted of criminal charges. Two of them were executed, as reported here. The primary seller went into bankruptcy and was sold at auction, as reported here. Ultimately a compensation fund was set up by the government.

As pointed out by the NYT, more details and news stories are available from an English language paper, China Daily. Some recent stories are here, and here.

A China Daily reporter, Cui Xiaohuo provided the following account of the first hearing:

"A lawsuit filed by a family that was a victim of the melamine-tainted milk scandal saw its day in court on Friday - the first trial for the families suing the milk company since the incident broke out more than one year ago.

Several courts nationwide have previously accepted compensation cases from parents of sickened children who were not satisfied with the government-led compensation, but no court has ever held a public hearing against the company until Friday.

Ma Xuexin, father of a 20-month-old boy from Henan province, requested compensation totaling 55,184 yuan ($8,080) from collapsed dairy maker Sanlu Group in Hebei province and a Beijing-based supermarket, where he bought the Sanlu-brand infant formula milk powder before the scandal went public last year.

The 30-year-old also requested that the medical costs for his son, until he reaches adulthood, be covered by the 1.1 billion yuan State-run compensation fund, of which 900 million was paid by Sanlu Group last December.

"Since my son was born last March, he has suffered from a stone in his left kidney after consuming hundreds of packages of Sanlu-brand infant formula milk powder," Ma said in the hearing.

The two defendants, the bankrupted Sanlu Group and the Longhua supermarket in the Shunyi district, both said they should not be held responsible for the plaintiff's requests because the central government has already set up the fund for victim families.

"There is no official document from the hospitals showing the direct link between melamine-tainted milk powder and the child's kidney problem," said Zhou Xiaolong, a lawyer with the Jimin Law Firm from Hebei province, where Sanlu Group was formerly located.

The hearing came just three days after two criminals were executed by injection in Hebei for their roles in producing and selling toxic milk, which killed six children and made more than 300,000 sick nationwide.

There was not a flurry of media attention at the hearing on Friday. Only representatives from the plaintiff and the defendants were sitting in the small No 9 courtroom at the Shunyi district court, about 30 km northeast of downtown Beijing.

"Being the first case held by a Chinese court, more such cases may have a chance to be heard in the near future," said Xu Zhiyong, a Beijing-based law scholar.

The hearing lasted just two hours without a verdict. The judge, Zhang Nan, said that both sides need to bring more evidence when the trial continues on Dec 9.