Mass Tort Claiming and Resolution - Lots of Great Posts and Links at the Mass Tort Litigation Blog

I'd love to take a few days to read and write about interesting thinking on mass torts and claims resolution issues. But that's not possible right now. I do, however, have time to urge readers to spend some time on the November and December posts at the Mass Tort Litigation Blog.

At the blog, you will find lots of interesting thinking and writing, including open-minded thinking on where we are and what's ahead. Specifically, lots of defense side people today are busy praising and/or asking for the demise of tort-related class actions. That may be a great outcome to preclude "greenmail" settlements forced simply by the size of an aggregated risk, as Judge Posner explained years ago in the Rhone-Poulenc litigation. But as a couple of the posts point out, the world outside class actions may be worse as companies take repeated, major hits in individual cases. Thus, smoking verdicts post-Engle and two recent Prempro verdicts are examples presented in recent posts. On the human side, real people face horrible diseases that can bring intense suffering, mental and physical disability, and death.

What about individual trials - is that the answer ? Not really, for many reasons for both sides. Indeed, the individual trial process drives Wall Street and companies crazy because they want predictable cash flow, but they cannot obtain consistency with myriad trials. The result ? Stock price goes way down, and so management looks for a way to get back to cash flow certainty. Chapter 11 often becomes the answer, and that's a mixed bag at best. Today, all sides (plaintiffs, futures representatives, defendants, and insurers, plus judges) are involved in creating some real public policy travesties in chapter 11 asbestos bankruptcies. Why ?Because for many reasons, the various sides mainly take short-term views and do what's expedient to get to a resolution "for this case."

Huge new issues are ahead. Why ? For one, tort litigation is exploding around the globe, and will continue to do so as nations develop. Meanwhile, as science continues to move at a blistering pace, more and more causes and effects can be proven at the cellular level. Tragically, many cancer rates (not cancer death rates, but rates of disease) are soaring here in the US and around the globe. In addition, scientists are finding more problems, such as chemical-induced endocrine system disruption, and chemical-induced genomic changes that cause harms across multiple generations of humans and animals. Over time, there will be many more succesful claims for medical monitoring. And, now that science is exploding with new tools and new answers, the monitoring claims will result in requests for funds to pay for new research, and/or to pay for individual genomic therapy. Those payments will be large, but may less expensive than paying for intense suffering followed by disability or death. In short, over the next 20 years, there will be massive claims for massive injuries, and courts will be asked to resolve issues regarding whether there is "liability" (however that is defined), and will be asked to decide what to do when liability is proven or claims are settled.

So, that takes this all back to where this post started. If you want to look ahead in the world of mass torts, spend some time pondering some of the great posts and links at the Mass Tort blog. The blog is here. Enjoy.

Eternit Trial Has Opened in Italy - Civil and Criminal Charges Related to Asbestos-Cement Manufacturing

Trial is now underway in Italy on combined civil and criminal charges regarding senior corporate officials of Eternit allegedly having recklessly disregarded health risks related to asbestos. The charges and claims involve injuries or premature deaths suffered by about 2.200 employees or former employees. Eternit entities manufactured a range of asbestos-cement products.
A BBC article is here. Swiss articles are here and here.



For prior posts on the topic, look to the left to the topic line for "Eternit."

Non-Obvious Issues Arising from Corporate Problems and Subsequent Statements About the Scope/Impact of the Problem

Risk managers and lawyes have to think even more about divergent types of fallout from a corporate problems. The point is illustrated by this great post from Kevin LaCroix at D & O Diary. in the post, he airs various non-obvious liability, risk and D & O issues rising from Siemen's problems with corporate bribery. One of the non-obvious problems is a subsequent securities suit that arose from later statements by Siemens about the revenue impacts that would or would not follow from stopping the use of bribery.

Propensity to Claim - By the Government - What's Ahead ?

Lawyers thinking about mass tort policy and legal issues inevitably end up thinking and talking about private claimants and their propensity to claim. A growing topic today is the federal government's propensity to claim.

During the Bush II years, much of corporate America had little fear regarding civil or criminal claims from the US government. Now, however, that is changing, and one might well wonder about the larger implications for tort and other claims. Look for example at the federal government's activities this week, and consider the implications for future civil claims.


On Monday, the SEC continued its assault on the business methods of subprime mortgage lenders. It charged "three former top officers of New Century Financial Corporation with securities fraud for misleading investors as New Century's subprime mortgage business was collapsing in 2006. At the time of the fraud, New Century was one of the largest subprime lenders in the nation." The SEC's press release and teh charges are here.


On Tuesday, as reported here by Ben Hallman from AmLAw, the goverment made plain that it has problem with the business model for "a lot of hedge funds." Specifically, a securities litigation conference included the following comments by David Rosenfeld, the associate regional director of the SEC's New York office:

Rosenfeld said that insider trading, after a downturn over the past two decades, "has come back in force." Rosenfeld described what his agency was seeing as more than one-off, opportunistic activity, but a "determined business" based upon collecting information from corporate insiders. He said his agency is "aggressively pursuing" these bad actors, and he specifically singled out hedge funds. "A lot of hedge funds have been making huge returns because they were cheating," he said. (emphasis added)


How many future civil suits will result from these charges and investigations? I'm sure I don't know. I'm also sure that I would be looking afresh at my litigation and regulatory risks if I were a general counsel working in those industries.

Multinational Product Liability Defendant Must Search Broadly or Move for Protective Order

Here is a paper from Perkins Coie on a Washington Supreme Court opinion approving an $ 8 million judgment entered against Hyundai as a discovery sanction for failing to reveal prior claims involving the same seat at issue in this case. (The link is to Mondaq - registration required; the article does not yet seem to be on the Perkins Coie website). The case name is Magana v. Hyundai Motor Am. The majority opinion is here, and a dissent is here.


Set out below are the paper's summary of the key points from the opinion - note especially the first and second bullet points.

"At least three things are worth noting about this decision.

• First, the Court held that Hyundai was required to search more than just its legal department's records for information responsive to the plaintiff's discovery requests. (In the trial court, Hyundai had tried to defend its limited initial search for responsive information on the ground that searching beyond the legal department "would have taken an extensive computer search.") The trial court, in fact, held that, as "a sophisticated multinational corporation, experienced in litigation," Hyundai "had the obligation not only to diligently and in good faith respond to discovery efforts, but to maintain a document retrieval system that would enable the corporation to respond to plaintiff's requests." (Emphasis added.)
  
• Second, the Court held that Hyundai's objections to the plaintiff's discovery requests did not entitle Hyundai to respond only to the limited extent that the company did respond. Instead, the Court held, Hyundai was required to ask the trial court for a protective order excusing the company from responding to the plaintiffs' discovery requests as written. The civil rules have required this step for some time, unless the parties have agreed to narrow the applicable discovery requests. Magana shows that failing to comply with the requirement can have very serious consequences.
  
• Finally, a default judgment would not always be appropriate for failure to respond fully to discovery. In upholding this extreme sanction in the Magana case, the Court referred to the "unique facts and circumstances" of the case, and two dissenting justices argued that even on these facts, a lesser sanction was more appropriate. All of the justices agreed, however, that Hyundai's conduct merited sanctions. The decision thus serves as a dramatic reminder that trying to "game" the discovery process is a decidedly perilous undertaking in Washington"

Watch on Monday for A. M. Best Findings and Projections on Asbestos and Environmental Losses

This article from Business Insurance overviews points from an A.M. Best study to be released on Monday with data and projections on losses from asbestos and pollution claims. Here are some excerpts from the Business Insurance advance article:

"Best estimates the industry’s ultimate asbestos and environmental losses will reach $117 billion, down from a previous estimate of $121 billion. Asbestos exposures, however, are projected to reach $75 billion, up $10 billion from a previous estimate; environmental exposures are projected to drop to $42 billion from a previously estimated $55 billion. (emphasis added)

“The increase in asbestos estimates reflects ongoing, elevated levels of annual incurred losses, as well as a subtle shift of losses away from product liability claims to more costly nonproducts claims against more peripheral defendants,” according to the report. “Also affecting asbestos losses is a growing proportion of settlements in more serious cases, principally related to mesothelioma, which is increasing the average values of such claims.