5th Circuit Weighs in on Rocket Dockets, Venue and Forum Shopping

A new en banc 5th Circuit opinion from a strongly divided court grants the extraordinary remedy of mandamus to overturn perceived forum shopping related to a "rocket docket" in the Eastern District of Texas. Much is being made of this opinion in many contexts, including patent law and product liability cases.

Opinions on venues and "rocket dockets" are taking on even more importance as litigants seek fast outcomes and ROI. That said, the Illinois Supreme Court has been issuing rulings since 1983 trying to stop perceived forum shopping in Illinois with respect to Madison and St. Clair counties (and other venues) but those counties remain extraordinarily active venues.

UK Litigation Rising

Litigation is rising in the UK as litigation becomes a truly global industry. An October 8, 2008 online story from Global Reinsurance advises that the current fiscal fiasco of course will spawn lots of litigation, and then states the following specifics regarding increased litigation in the UK :

"UK Government figures for 2007 saw the highest number of actions being commenced in the Queens Bench Division for five years and statistics released by the Ministry of Justice last week also show that the number of defended claims is on the increase with a 16% rise on 2006."

Courts Are Indeed Making Changes to the Law for Information-Related Tort Claims and New Article on Additional Changes and Impacts

For some time now, I've been writing about potential changes in product liability law due to rapid changes in communication and science. In a February, 2007 article for Corporate Counsel, I addressed various changes, including the widespread availability of scientific information and its impact on information-related tort claims. The article included my prediction that "sophisticated intermediary" types of defenses would change in light of all the available information. I'll pat myself on the back and note that I was right - in a drug case in 2007, the West Virginia Supreme Court cast aside the "learned intermediary defense due to the wide availability of information to consumers. See Johnson and Johnson v. Karl, 220 W.Va. 463, 647 S.E.2d 899 (2007). The Court there said many things, including the following:

"When the learned intermediary doctrine was developed, direct-to-consumer advertising of prescription drugs was utterly unknown . . . Since the 1997 proliferation of drug advertising, only four high courts have adopted the learned intermediary doctrine . . . None of those courts gave thorough consideration to the changes that have occurred in the prescription drug industry with respect to direct-to-consumer advertising. We however, find such changes to be a significant factor in deciding this issue . . "

So, with that as background, I particularly enjoyed reading an excellent new article by Sarah (Sally) Olson of Wildman regarding the Johnson case and other additional specific examples of the Internet's effect on tort claiming. The article is titled: Net's Impact on Strict Product Laibility Law. The effects she describes include increased numbers of public consumer complaints of defects, consumer input into design, whether a company needs to monitor blogs, whether a company run blog or website will produce its own liability if a company is not accurate in what it says publicly, and various other points. Ms. Olson's article is well worth reading in full and considering how it might apply in your context.

After that, think also about reading a 2008 book titled: Stop The Presses: The Crisis and Litigation PR Desk Reference. Written by Richard Levick and Larry Smith of Levick Strategic Communications, the book's chapters 7 and * deal with blog strategies and lots of other "crisis" issues that did not exist 5 years ago in any material way. Then I'd suggest reading their chapter 9 on the impacts of media as related to increased prosecutorial activity. That's a topic I've also covered in a more limited context in a 2006 Corporate Counsel article focused on "toxic torts" and criminal prosecutions.

Offtopic - Lawyers and Voters' Rights 2008 - Get Involved

The 2008 elections in the US are hard fought and important. Indeed, the President of the American Bar Association has issued a call to lawyers to get involved in 2008 elections to ensure that voting rights are honored. http://www.abanet.org/op/2008elections/%22%3Ehttp://www.abanet.org/op/2008elections/

For those who would like to get involved with voters rights issues, the following describes both nonpartisan and partisan groups focused on voters' rights.

The web pages referred to below are embedded in links, and the link addresses also are spelled out for anyone who wishes to copy and paste the information.

1) The American Bar Association has a website page specific to 2008 voting rights issues. http://www.abanet.org/2008election/
The page includes links to sign up for various different types of activities ranging from state-specific efforts to staffing a national hot line for voters with questions.

2) The National Campaign for Fair Elections is an initiative of the Voting Rights Project of the Lawyers' Committee for Civil Rights Under Law, and its website is here. http://nationalcampaignforfairelections.org/pages/about_us

That group and its efforts have been praised by the New York Times, among others, in editorials addressing some of the significant voting problems that marred the last two presidential elections. http://www.nytimes.com/2008/08/09/opinion/09sat1.html
The sign up page is located at: http://www.nationalcampaignforfairelections.org/page/s/volunteer

3) Vote Trust USA is a subgroup for the Verified Voting Foundation, which was founded by a Stanford law professor concerned about preserving an audit trail that enables meaningful recounts in the age of electronic voting. http://www.verifiedvotingfoundation.org/article.php?list=type&type=52

The Vote Trust website is at a different page, and includes substantive information and links to state-specific voting rights news and some groups involved in local voters' rights projects.
http://votetrustusa.org/index.php?option=com_content&task=blogsection&id=8&Itemid=113

4) The Brennan Center for Justice at New York University School of Law is not involved in poll watching per se, but does provides a wide-range of substantive information on voters right issues, and engages in some specific advocacy efforts in particular states.
http://www.brennancenter.org/

5) For partisan efforts, the Obama campaign is actively seeking lawyers and law students for election day poll watching and other voters rights efforts. The voters' rights sign up page is located at: http://my.barackobama.com/page/content/vrachome

6) A ten minute search of the McCain campaign website did not reveal a subgroup aimed at enlisting poll watchers. However, the website did include a September 15, 2008 press release yesterday promoting a voters' rights initiative by the campaign. http://www.johnmccain.com/Informing/News/PressReleases/Read.aspx?guid=90c928f6-38c7-4dc3-86c6-15149dbb8e07.
The press release directs readers to a website that lists various persons involved in the effort and presumably they can be contacted for further information.
http://www.johnmccain.com/honest/

Update on Entrepreneurial Claiming, Global Tort Litigation and Contingent Fees

There is renewed interest in and attention to the changes being wrought around the globe by entrepreneurial litigation claiming. I say that for many reasons, one of which is that it was a lively topic of discussion at meetings I attended the last few days in Europe with lawyers from around the world who belong to the International Business Law Consortium, commonly known as the IBLC. (Disclaimer/caveat - my law firm belongs to the group. The group's website is http://www.iblc.com/, which is here. )The topic also is currently in the news because of some $ 800 million of attorneys' fees awarded in Enron litigation, as is further described below.

The bottom line, in my view, is that entrepreneurial claiming is clearly growing all around the world and will continue to cause many changes. An interesting summer 2008 article from SJ Berwin LLP (an EU law firm with offices in several cities) explains the latest, claimant friendly ruling on UK "uplift" fees, and notes that Allianz has announced plans to raise a fund to commercial litigation cases. Also educational is a 2002 article by Professor Herbert Kritzer on myths related to contingent fees. In fact, contingent fees are permitted in many countries outside the US (including Luxembourg), as Prof. Kritzer describes in his detailed article, which is online in full text at this link.

Global litigation plainly is being fueled by claim buying, contingent fees and other entrepreneurial activities of trial lawyers. My partner, Karen Borg, and I described some of these developments in a recent article available here. The third and fourth sections include citations to find a German entity which buys antitrust claims, and describes an Illinois law firm which is pursuing tobacco litigation in Nigeria with the Nigerian government.

How well can it pay? This week news is out on attorneys' fees awards for the lawyers who helped to obtain the over $ 7 billion of recoveries from 3 major banks. A Law.com article by Amanda Bronstad states that the awards include "$688 million in attorney fees to San Diego's Coughlin, Stoia, Geller, Rudman & Robbins, lead counsel in the case. "The Court finds that in the face of extraordinary obstacles, the skills, expertise, commitment, and tenacity of Lead Counsel in this litigation cannot be overstated," wrote U.S. District Judge Melinda Harman, for the Southern District of Houston, who, in her ruling on Monday, referred to Coughlin Stoia as "a lion" in the securities bar. "Not to be overlooked are the unparalleled results, $7.2 billion in settlement funds, which demonstrate counsel's clearly superlative litigating and negotiating skills." The award gives Coughlin Stoia, which represents the lead plaintiff, the Regents of the University of California, its requested amount, which is about 9.52% of the net recovery of the settlement, the largest ever in a single class action. The firm stated that its lawyers and co-counsel, 13 firms, had spent nearly 290,000 hours on the litigation at a blended rate of $456 per hour. Coughlin Stoia was responsible for more than 85% of the time expended."


This award is hardly unique. A prior post here reviewed some other recent large awards in contingent fee litigation.

Where will it all end? I am sure I do not know, but plainly there is much more to come in this area.

Summer Break About Over

I took about 3 weeks off to enjoy the out of doors when not in the office - some golf and a week on a lake with our 11 and 13 year old daughters who love to wakeboard, tube and swim. Now, however, it's almost back to school for them, and I'm getting back into blogging mode. So, new stuff ahead !

Lawsuit Dismissed as Sanction for Breach of Confidentiality Order - Papers Leaked to Wikileaks.org

There's lots of room for debate about whether and how confidentiality orders can and should be used in tort and other litigation. That debate now includes an interesting opinion from the Northern District of Illinois by our well-respected Judge Milton I. Shadur. In the opinion, Judge Shadur dismisses a lawsuit as a sanction for apparently unquestionable leaking to Wikileaks.org of material that was subject to a confidentiality order, with that problem emerging after many deadlines were missed. The posted doceument is a "guarantee services agreement," a contract with Sallie Mae.

The opinion is summarized below in an article from the Chicago Daily Law Bulletin. The text of the article is set out below as a fair use. I've posted the opinion here.

http://www.chicagolawbulletin.com/news/gettoctext.cfm?TOCUID=22701641&SessionID=714319


Judge slams lawyer for leaks, dismisses suit
By Patricia Manson Law Bulletin staff writerCiting the need to protect the integrity of the justice system, a federal judge has thrown out a lawsuit as a sanction for the leak of confidential documents obtained during discovery.
U.S. District Judge Milton I. Shadur on Monday dismissed with prejudice a suit that Rhonda Salmeron filed under the False Claims Act against certain players in the student loan industry.
Shadur said an attorney for Salmeron, Jorge Sanchez of Depres, Schwartz & Geoghegan in Chicago, admitted that he provided to unauthorized individuals documents produced on a limited-disclosure basis.
Those individuals included Salmeron and a reporter for The Chronicle of Higher Education, Shadur said.
Shadur blamed Sanchez for the appearance of one of the documents — complete with identifying numbers that Shadur said ''unequivocally'' demonstrated its source — on the Web site Wikileaks.org.
That document was a 51-page contract between Sallie Mae Inc. and United States Aid Funds Inc., Shadur said.
He said a link to the Wikileaks article and the documents later was posted on Yahoo's finance message board.
The disclosure of the documents came after Sanchez had engaged in ''a virtually unbroken pattern of dilatory and irresponsible conduct'' during the course of the litigation, Shadur said.
He said the conduct included repeatedly missing deadlines, skipping status conferences and breaking promises to file documents in a more timely manner.
And the lawyer's argument at a hearing last month on defense motions to dismiss ''plainly evidenced his failure to appreciate the seriousness of his actions,'' Shadur said.
Shadur did note that the lead attorney for Salmeron, John Thomas Moran Jr. of Moran Law Group in Chicago, had appeared in court in her case occasionally.
And Shadur said he had not listened to tape recordings of proceedings on the dates set for hearings in the case to determine ''if any of those dates involved Moran's presence and Sanchez' absence.''
But Shadur added, ''[T]here is not the slightest question that virtually all (if not all) of the appearances that involved claimed explanations of and excuses for delayed filings were by Sanchez.''
Shadur conceded that dismissing a suit on the basis of a lawyer's behavior without deciding the merits of the case is an extreme step.
But Shadur said he did not need to decide whether the attorney's ''persistent flouting of court deadlines, coupled with periodic no-shows at scheduled status dates'' warranted throwing out Salmeron's suit.
Instead, Shadur said, Sanchez' release of confidential documents was enough by itself to support dismissal of the action.
''It is truly inexcusable, no real explanation has been offered, and its damaging effect cannot be quantified in the same way that looking at defense counsel's time charges and compelling Salmeron to pay them might provide a remedy for the earlier procedural violations,'' Shadur wrote in a 23-page opinion.
Shadur said the U.S. Supreme Court's ruling in National Hockey League v. Metropolitan Hockey Club Inc., 427 U.S. 639 (1976), left no question that he had the authority ''to order the ultimate sanction of dismissal in the face of such egregious conduct.''
And in Wade v. Soo Line Railroad Corp., 500 F.3d 559 (7th Cir. 2007), the 7th U.S. Circuit Court of Appeals affirmed ''the propriety of visiting a lawyer's sins upon the client,'' Shadur said.


The case is U.S. ex rel. Rhonda Salmeron v. Enterprise Recovery Systems Inc., et al., No. 05 C 4453.




Sanchez and Moran could not be reached for comment.
But in a filing opposing motions to dismiss, attorneys for Salmeron argued that throwing out the suit would be ''disproportionate'' to the alleged wrongdoing.
Salmeron's attorneys also contended that the defendants had not demonstrated that the contract posted on Wikileaks was confidential or would have been covered by a protective order.
And the attorneys argued that the protective order that was in place related only to defendant Enterprise Recovery Systems Inc.
''To dismiss a case for publication of a document that was not under a protective order nor even marked 'confidential' would be unprecedented,'' the attorneys said.