Wednesday, April 22, 2009
James Hardie Judgment Due Today Regarding Criminal Prosecution and Asbestos Expense Disclosures - AU Time
Press reports indicate that a judgment is due out later today regarding the Australian "SEC"s criminal prosecution of directors of James Hardie regarding disclosures with respect to its asbestos-laibilities and the private trust it created to seek to resolve personal injury claims.
UK Pleural Plaques - Developments in Scotland and London
The battle over pleural plaques claiming is continuing to evolve in the UK
With respect to the Scottish legislation allowing renewed pleural plaques claiming, an April 21, 2009 Business Insurance article by Sarah Veysey reports that four insurers have now filed the promised lawsuit challenging the pleural plaques legislation in Scotland. The article states: "the four insurers challenging the law represent more than half of the U.K. employers’ liability market. They are Aviva P.L.C.; AXA Insurance, the U.K. arm of AXA S.A., RSA Insurance Group P.L.C.; and Zurich Financial Services Group." Much the same information is found on the website for the Association of British Insurers.
Meanwhile, the Brtish government still has not announced its position on pleural plaques. An April 8 article said that London is supposed to provide its answer on plaques "after Easter." The article states in pertinent part:
"Prime Minister (Gordon Brown) has issued a statement that a decision on pleural plaques will be made when Parliament resumes after the Easter recess.
During Prime Minister’s Questions Brown was asked (by Jarrow MP Stephen Hepburn) what he planned to do to end the compensation injustice for pleural plaques sufferers. Brown replied: “Asbestosis is a terrible disease, and all those who suffer from it deserve the best of help from the public authorities. It is right that we look again at this as a result of legal actions that have been taken about the obligations of insurance companies. “The Justice Secretary will make a statement on this when we return after Easter.”
I previously submitted to the government in London a detailed opposition the the pleural plaques claiming. You can see it here.
With respect to the Scottish legislation allowing renewed pleural plaques claiming, an April 21, 2009 Business Insurance article by Sarah Veysey reports that four insurers have now filed the promised lawsuit challenging the pleural plaques legislation in Scotland. The article states: "the four insurers challenging the law represent more than half of the U.K. employers’ liability market. They are Aviva P.L.C.; AXA Insurance, the U.K. arm of AXA S.A., RSA Insurance Group P.L.C.; and Zurich Financial Services Group." Much the same information is found on the website for the Association of British Insurers.
Meanwhile, the Brtish government still has not announced its position on pleural plaques. An April 8 article said that London is supposed to provide its answer on plaques "after Easter." The article states in pertinent part:
"Prime Minister (Gordon Brown) has issued a statement that a decision on pleural plaques will be made when Parliament resumes after the Easter recess.
During Prime Minister’s Questions Brown was asked (by Jarrow MP Stephen Hepburn) what he planned to do to end the compensation injustice for pleural plaques sufferers. Brown replied: “Asbestosis is a terrible disease, and all those who suffer from it deserve the best of help from the public authorities. It is right that we look again at this as a result of legal actions that have been taken about the obligations of insurance companies. “The Justice Secretary will make a statement on this when we return after Easter.”
I previously submitted to the government in London a detailed opposition the the pleural plaques claiming. You can see it here.
Monday, April 20, 2009
Grace Libby Trial
U.S. v. W.R. Grace trial started February 19 in Missoula MT. The WSJ Law Blog notes that the case seems to be flying under the radar without a lot of news coverage.
The WSJ Law Blog also provides a link to a great resource about the trial - the Grace Case blog, a joint project of the law school and the school of journalism of the University of Montana. The Grace Case blog has been covering the trial - from both a legal and a journalistic perspective - since the trial started.
The WSJ Law Blog also provides a link to a great resource about the trial - the Grace Case blog, a joint project of the law school and the school of journalism of the University of Montana. The Grace Case blog has been covering the trial - from both a legal and a journalistic perspective - since the trial started.
Update on International Corporate Aiding and Abetting Liability Risks and the Alien Tort Statute
When is a multinational at risk for "aiding and abetting" human rights violations?
The answer is evolving. One case on the issue is Khulumani v. Barclay National Bank Ltd., 504 F.3d 254 (2d Cir. 2007). Recent developments are described in an interesting law.com article online as of today and written by Professor Georgene Vairo of Loyola Law School in Los Angeles; the article is available here
Much of the article focuses on an April 8, 2009 opinion by Judge Scheindlin that analyzes the issues in depth on a motion to dismiss in a case known as In re South African Apartheid Litigation. The opinion dismissed some claims but sustained others. The opinion by Judge Scheindlin is here, and seems well worth reading. Of note, the opinion allows American Pipe tolling of statutes of limitation in favor of the plaintiffs. That's a powerful incentive to the filing of class actions. It's also a weapon against governments - I may have been the first to apply it against the U.S. government, which we did successfully when representing businesses seeking to recoup taxes paid under an unconstitutional "Harbor Maintenance" tax. See Stone Container Corp. v. U.S., 229 F.3d 1345 (Fed. Cir. 2000).
The following excerpt from Professor Vairo's article provides a summary of some but not all of the "aiding and abetting" and conspiracy issues evaluated by Judge Scheindlin:
"On the other hand, she refused to dismiss claims that Ford Motor Co., General Motors Corp., International Business Machines Corp. and other companies aided and abetted torture and other atrocities committed by the regime, such as arbitrary denationalization by a state actor and cruel, inhumane and degrading treatment because such torts are well established in the community of nations.
Scheindlin's opinion is important because she takes a careful look at the standards for imposing liability, noting that the 2d Circuit had not left her with precise standards on a number of issues. Having established that aiding and abetting may violate the ATS does not answer the question of the type of mens rea required by nonstate actors. She rejected the defendants' argument that specific intent be required, holding instead that international law "requires that an aider and abettor know that its actions will substantially assist the perpetrator in the commission of a crime or tort in violation of the law of nations."She noted that the 2d Circuit had not addressed the question of whether conspiratorial liability was a tort cognizable under the ATS, but found that there was no consensus among nations and therefore refused to recognize conspiracy as a tort. According to Scheindlin, the defendants' political-question and international-comity arguments were largely eviscerated by her rulings on each of the classes of claims raised in the case. She noted the U.S. State Department's opposition to the litigation, as well as that of the current government of South Africa. She dismissed the State Department's arguments because they were vague, on the one hand, and irrelevant to the remaining claims. The political-question doctrine argument would have merit had the case impacted U.S. foreign policy, but she failed to see how litigating the remaining claims would have any impact on it at all."
The answer is evolving. One case on the issue is Khulumani v. Barclay National Bank Ltd., 504 F.3d 254 (2d Cir. 2007). Recent developments are described in an interesting law.com article online as of today and written by Professor Georgene Vairo of Loyola Law School in Los Angeles; the article is available here
Much of the article focuses on an April 8, 2009 opinion by Judge Scheindlin that analyzes the issues in depth on a motion to dismiss in a case known as In re South African Apartheid Litigation. The opinion dismissed some claims but sustained others. The opinion by Judge Scheindlin is here, and seems well worth reading. Of note, the opinion allows American Pipe tolling of statutes of limitation in favor of the plaintiffs. That's a powerful incentive to the filing of class actions. It's also a weapon against governments - I may have been the first to apply it against the U.S. government, which we did successfully when representing businesses seeking to recoup taxes paid under an unconstitutional "Harbor Maintenance" tax. See Stone Container Corp. v. U.S., 229 F.3d 1345 (Fed. Cir. 2000).
The following excerpt from Professor Vairo's article provides a summary of some but not all of the "aiding and abetting" and conspiracy issues evaluated by Judge Scheindlin:
"On the other hand, she refused to dismiss claims that Ford Motor Co., General Motors Corp., International Business Machines Corp. and other companies aided and abetted torture and other atrocities committed by the regime, such as arbitrary denationalization by a state actor and cruel, inhumane and degrading treatment because such torts are well established in the community of nations.
Scheindlin's opinion is important because she takes a careful look at the standards for imposing liability, noting that the 2d Circuit had not left her with precise standards on a number of issues. Having established that aiding and abetting may violate the ATS does not answer the question of the type of mens rea required by nonstate actors. She rejected the defendants' argument that specific intent be required, holding instead that international law "requires that an aider and abettor know that its actions will substantially assist the perpetrator in the commission of a crime or tort in violation of the law of nations."She noted that the 2d Circuit had not addressed the question of whether conspiratorial liability was a tort cognizable under the ATS, but found that there was no consensus among nations and therefore refused to recognize conspiracy as a tort. According to Scheindlin, the defendants' political-question and international-comity arguments were largely eviscerated by her rulings on each of the classes of claims raised in the case. She noted the U.S. State Department's opposition to the litigation, as well as that of the current government of South Africa. She dismissed the State Department's arguments because they were vague, on the one hand, and irrelevant to the remaining claims. The political-question doctrine argument would have merit had the case impacted U.S. foreign policy, but she failed to see how litigating the remaining claims would have any impact on it at all."
Friday, April 17, 2009
More On Nolan Opinion Regarding the "Lipke" Issue in Illinois Asbestos Litigation
Lawyers are starting to react publicly to the Illinois Supreme Court's ruling on the Lipke issue. One article is pasted below, and quotes a well-respected and veteran Chicago lawyer, Ed McCambridge, 'as saying:
'It's probably the biggest asbestos opinion in the history of the state,'' McCambridge said. ''It is clearly going to have a huge effect on how cases will be tried in this state."
Ed is more than correct. Indeed, the opinion has national implications.
Why? Under (misinterpretations) of the Lipke case decided decades ago, the absurd result was that the last few defendants left in cases in Illinois were under enormous pressure to settle. Why? Because Lipke was construed to say that the jury could only hear evidence of the alleged exposure to the products of the defendant(s) in trial. For example, assume a plaintiff with mesothelioma who spent 10 years working at the old Manville plant in Waukegan, a suburb north of Chicago. Assume he spent his 10 years shoveling the especially lethal mphibole asbestos fibers that Manvilleused in some of its products. Assume also that outside of work, he once changed car brakes and once changed a gasket on a pump. Under Lipke as misconstrued, the plaintiff could take the brake lining maker and gasket maker to trial, but the defendants could not put in evidence to prove up his work at the Manville work as the sole cause of his mesothelioma. Does that make for an absurd trial and an absurd result? You bet, but trial judges in Illinois applied the law that way for decades, thus making Illinois a favored forum for plaintiff's to bring cases against defendants with little or no actual role in causing mesothelioma.
As Ed said, the implications are huge for the trial of cases in Illinois. The implication also are national because "Illinois values" should now fall for many defendants. That matters nationally because asbestos bankruptcy "liability estimates" have for years been artificially inflated by "Illinois values." Indeed, I was personally involved in proving in a bankruptcy that the settlement values for one defendant were 8x higher in Illinois than anywhere else in the nation.
So, so long as defendants and insurers do not blow this win with bad trial tactics, Illinois values should drop. The ruling also will be germane to choice of law issues, a topic of increasing importance in asbestos litigation.
Two other observations. One wonders why it took the Illinois Supreme Court almost tow years to issue this fairly simple opinion. One also wonders why it took insurers and defendants decades to take up an asbestos verdict and get Lipke reversed. During those years, literally billions of dollars were paid out for asbestos claims filed in Illinois.
http://www.chicagolawbulletin.com/news/get_story_text.cfm?id=100003346&SessionID=2516884
Ruling aids exposure defense on asbestos
By Bethany Krajelis Law Bulletin staff writerSPRINGFIELD — The defendant in an asbestos case should not have been barred from presenting evidence of the decedent's other exposures to the material, the Illinois Supreme Court held Thursday.
In a 5-1 ruling, the high court remanded the matter of Sally Nolan v. Weil-McLain to the Circuit Court for a new trial and overturned two appellate decisions, saying the lower courts had misinterpreted a rule created in Lipke v. Celotex Corp., 153 Ill. App. 3d (1987), to prevent defendants from introducing evidence of other exposure.
Justice Robert R.Thomas did not take part in the decision and, while Justice Thomas L. Kilbride agreed with the majority that it was an error to exclude such evidence, he disagreed that the error requires a new trial.
Nolan sued 12 defendants, including Weil-McLain, in 2001, claiming that her husband's death from mesothelioma was caused from asbestos exposure at work. The other defendants settled, leaving Weil-McLain, a manufactorer of cast-iron boilers, the only defendant at trial.
A Vermilion County jury awarded Nolan $2.3 million in 2004. The 4th District Appellate Court affirmed the lower court's ruling, relying on Lipke, Kochan v. Owens-Corning Fiberglass Corp., 242 Ill. App. 3d (1993), and Spain v. Owens-Corning Fiberglass Corp., 304 Ill. App. 3d (1999).
The Lipke court acknowledged there can be more than one proximate cause of an injury, but noted that ''the fact that plaintiff used a variety of asbestos products does not relieve defendant of liability for his injuries. Evidence of such exposure is not relevant.''
In a 26-page opinion on Nolan's claim written by Justice Charles E. Freeman, the court agreed with Weil-McClain's argument that the trial court misinteprepated Lipke in barring the defense from preventing evidence of other sources of asbestos exposure that Clarence Nolan had encountered.
''Lipke simply determined that evidence of the plaintiff's other exposures was not relevant to the specific defense raised, i.e., that the plaintiff did not have an asbestos-related disease,'' Freeman wrote. ''In the matter at bar, however, defendant wishes to offer evidence of decedent's other exposures for different purposes: to contest causation through the use of the sole proximate cause defense, which was not raised by the Lipke defendant.''
Because the Kochan court extended the Lipke rule to say that evidence of other exposure is always irrelevant, which the justices acknowledged basically makes it impossible for asbestos defendants to argue a sole proximate cause defense, the high court overruled that portion of the Kochan decision.
In overruling Kochan and Spain, the high court also relied on its decisions in Thacker v. UNR Industries Inc., 151 Ill. 2d (1992), and Leonardi v. Loyola University of Chicago, 168 Ill. 2d (1995).
And while Kilbride agreed with most of the majority opinion, he said in his dissent that the error of not allowing evidence of other exposure at trial does not merit a new trial. He noted that other evidence that was admitted did provide Weil-McLain grounds for a sole proximate cause defense.
''[A] new trial is not warranted because Weil-McLain was able to receive a fair, albeit not perfect, trial in spite of the trial court's ruling,'' Kilbride wrote.
Nolan's attorney, David A. Novoselsky, said Kilbride's dissent says it all.
''In my opinion, the defendant got a fair trial here,'' Novoselsky said. ''This jury heard all of the evidence. It's as simple as that.''
Novoselsky said he plans to recommend that his client petition for a rehearing before the high court. He said he would ask the justices to consider Kilbride's dissent.
Richard P. Godfrey, who represented Weil-McLain at oral argument, said he was pleased with Thursday's opinion and believes the ruling will have an impact on a number of other cases.
Edward J. McCambridge, the national coordinating counsel for Weil-McLain, said Thursday's opinion is not only huge for the company, but for asbestos litigation in general.
''It's probably the biggest asbestos opinion in the history of the state,'' McCambridge said. ''It is clearly going to have a huge effect on how cases will be tried in this state.''
Edward Murnane, president of the Illinois Civil Justice League, and Gregory L. Cochran, the president of the Illinois Association of Defense Trial Counsel, both said they welcome the long-awaited decision with open arms.
'It's probably the biggest asbestos opinion in the history of the state,'' McCambridge said. ''It is clearly going to have a huge effect on how cases will be tried in this state."
Ed is more than correct. Indeed, the opinion has national implications.
Why? Under (misinterpretations) of the Lipke case decided decades ago, the absurd result was that the last few defendants left in cases in Illinois were under enormous pressure to settle. Why? Because Lipke was construed to say that the jury could only hear evidence of the alleged exposure to the products of the defendant(s) in trial. For example, assume a plaintiff with mesothelioma who spent 10 years working at the old Manville plant in Waukegan, a suburb north of Chicago. Assume he spent his 10 years shoveling the especially lethal mphibole asbestos fibers that Manvilleused in some of its products. Assume also that outside of work, he once changed car brakes and once changed a gasket on a pump. Under Lipke as misconstrued, the plaintiff could take the brake lining maker and gasket maker to trial, but the defendants could not put in evidence to prove up his work at the Manville work as the sole cause of his mesothelioma. Does that make for an absurd trial and an absurd result? You bet, but trial judges in Illinois applied the law that way for decades, thus making Illinois a favored forum for plaintiff's to bring cases against defendants with little or no actual role in causing mesothelioma.
As Ed said, the implications are huge for the trial of cases in Illinois. The implication also are national because "Illinois values" should now fall for many defendants. That matters nationally because asbestos bankruptcy "liability estimates" have for years been artificially inflated by "Illinois values." Indeed, I was personally involved in proving in a bankruptcy that the settlement values for one defendant were 8x higher in Illinois than anywhere else in the nation.
So, so long as defendants and insurers do not blow this win with bad trial tactics, Illinois values should drop. The ruling also will be germane to choice of law issues, a topic of increasing importance in asbestos litigation.
Two other observations. One wonders why it took the Illinois Supreme Court almost tow years to issue this fairly simple opinion. One also wonders why it took insurers and defendants decades to take up an asbestos verdict and get Lipke reversed. During those years, literally billions of dollars were paid out for asbestos claims filed in Illinois.
http://www.chicagolawbulletin.com/news/get_story_text.cfm?id=100003346&SessionID=2516884
Ruling aids exposure defense on asbestos
By Bethany Krajelis Law Bulletin staff writerSPRINGFIELD — The defendant in an asbestos case should not have been barred from presenting evidence of the decedent's other exposures to the material, the Illinois Supreme Court held Thursday.
In a 5-1 ruling, the high court remanded the matter of Sally Nolan v. Weil-McLain to the Circuit Court for a new trial and overturned two appellate decisions, saying the lower courts had misinterpreted a rule created in Lipke v. Celotex Corp., 153 Ill. App. 3d (1987), to prevent defendants from introducing evidence of other exposure.
Justice Robert R.Thomas did not take part in the decision and, while Justice Thomas L. Kilbride agreed with the majority that it was an error to exclude such evidence, he disagreed that the error requires a new trial.
Nolan sued 12 defendants, including Weil-McLain, in 2001, claiming that her husband's death from mesothelioma was caused from asbestos exposure at work. The other defendants settled, leaving Weil-McLain, a manufactorer of cast-iron boilers, the only defendant at trial.
A Vermilion County jury awarded Nolan $2.3 million in 2004. The 4th District Appellate Court affirmed the lower court's ruling, relying on Lipke, Kochan v. Owens-Corning Fiberglass Corp., 242 Ill. App. 3d (1993), and Spain v. Owens-Corning Fiberglass Corp., 304 Ill. App. 3d (1999).
The Lipke court acknowledged there can be more than one proximate cause of an injury, but noted that ''the fact that plaintiff used a variety of asbestos products does not relieve defendant of liability for his injuries. Evidence of such exposure is not relevant.''
In a 26-page opinion on Nolan's claim written by Justice Charles E. Freeman, the court agreed with Weil-McClain's argument that the trial court misinteprepated Lipke in barring the defense from preventing evidence of other sources of asbestos exposure that Clarence Nolan had encountered.
''Lipke simply determined that evidence of the plaintiff's other exposures was not relevant to the specific defense raised, i.e., that the plaintiff did not have an asbestos-related disease,'' Freeman wrote. ''In the matter at bar, however, defendant wishes to offer evidence of decedent's other exposures for different purposes: to contest causation through the use of the sole proximate cause defense, which was not raised by the Lipke defendant.''
Because the Kochan court extended the Lipke rule to say that evidence of other exposure is always irrelevant, which the justices acknowledged basically makes it impossible for asbestos defendants to argue a sole proximate cause defense, the high court overruled that portion of the Kochan decision.
In overruling Kochan and Spain, the high court also relied on its decisions in Thacker v. UNR Industries Inc., 151 Ill. 2d (1992), and Leonardi v. Loyola University of Chicago, 168 Ill. 2d (1995).
And while Kilbride agreed with most of the majority opinion, he said in his dissent that the error of not allowing evidence of other exposure at trial does not merit a new trial. He noted that other evidence that was admitted did provide Weil-McLain grounds for a sole proximate cause defense.
''[A] new trial is not warranted because Weil-McLain was able to receive a fair, albeit not perfect, trial in spite of the trial court's ruling,'' Kilbride wrote.
Nolan's attorney, David A. Novoselsky, said Kilbride's dissent says it all.
''In my opinion, the defendant got a fair trial here,'' Novoselsky said. ''This jury heard all of the evidence. It's as simple as that.''
Novoselsky said he plans to recommend that his client petition for a rehearing before the high court. He said he would ask the justices to consider Kilbride's dissent.
Richard P. Godfrey, who represented Weil-McLain at oral argument, said he was pleased with Thursday's opinion and believes the ruling will have an impact on a number of other cases.
Edward J. McCambridge, the national coordinating counsel for Weil-McLain, said Thursday's opinion is not only huge for the company, but for asbestos litigation in general.
''It's probably the biggest asbestos opinion in the history of the state,'' McCambridge said. ''It is clearly going to have a huge effect on how cases will be tried in this state.''
Edward Murnane, president of the Illinois Civil Justice League, and Gregory L. Cochran, the president of the Illinois Association of Defense Trial Counsel, both said they welcome the long-awaited decision with open arms.
Thursday, April 16, 2009
Illinois Supreme Court Rules for Asbestos Defendants on the "Lipke" issue
Defense lawyers, defendants and insurers all are smiling today because the Illinois Supreme Court today issued a ruling that favors defendants in asbestos litigation. Specifically, the court made plain today that the so-called Lipke rule no longer applies if it ever did. The opinion is available from the Illinois Supreme Court's website or here. Within the world of asbestos litigation, much will be said about this opinion over the next few days.
Back from Spring Break Vacation - Will Respond to Comments as Soon As I Can
I owe responses to some commenters. I'm now back from spring break and will get to those as soon as I can.
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