Thursday, September 3, 2009

The Tort Claim Industry - Seminar on Allocation of Losses Among Insurers and Insureds for "Nonproducts" Asbestos Cases and Environmental Cases

As noted before, substantive seminars are now a standard part of litigation industry and are indeed a driver of the industry. Today, for example, snail mail brought me brochures for seminars on drug and medical device litigation, automotive product liability litigation and food-borne illness litigation. The seminars usually are interesting because they bring the opposing sides together and force some dialog between the various constituencies. The participants of course do not put all of their cards on the table, but most seminars do produce some new insights and sometimes valuable data on a given substantive area if only because trial lawyers usually are competitive.

The tort litigation industry of course is driven by money. So, another significant part of the seminar industry is devoted to seminars and other educational forums in which the attendees focus on the distribution of financial responsibility for the underlying claims. Seminars of this sort run the gamut, including seminars regarding how to seek out insurance coverage, seminars on when insurers properly deny coverage, and issues between and among insureds, insurers and reinsurers. All of the issues of course must arise from some underlying set of facts, and then a variety of arguments regarding how the facts and attendant financial losses would or should be allocated between or among the various actors in the underlying facts, and their insurers and reinsurers. An example of this sort of seminar landed in my email in-box again this week and prompts this excursus. Specifically, Bates White and Environ will next week host a Chicago conference in which they will talk about the ways in which science and economics come together with respect to allocations of underlying losses from certain types of asbestos cases and "environmental cases."

The link for seminar registration is here, and attendance is free. See below for key excerpts from the description.
__________________________________________________________________

Qualifying & Estimating Environmental Damages:How and when are policies triggered?

Losses to businesses or insurers from asbestos, environmental, and health hazards are inherently uncertain due to the long-term nature of such potential exposures. However the uncertainty can be mitigated by better understanding the damages and by understanding when and how much insurance will be triggered. This is accomplished through site evaluations, identifying all potential damages, and estimating future damages. For example, ongoing screening is done during site evaluations to determine when environmental damage (both historic and potential future) meets the definition of recoverability. These actions will ensure that companies and insurers alike know what potential costs will be and how they will be allocated.

Our experts from Bates White and Environ will demonstrate that for the typical policyholder facing potential environmental damages, our process and experience allows the insurer or policy holder to manage their risk moving forward. Quantifying Nonproduct Losses: How and when were claimants exposed?Which claimants’ exposure to asbestos occurred during business operations and which claimants’ exposure occurred afterwards? The answer to this question may determine if the policyholder’s insurers owe tens of millions, hundreds of millions, or billions.

If a claim is determined to be a “products” claim, such that exposure did not occur during the policyholder’s contracting operations, then insurance recoveries will be subject to the explicit aggregate limit specified in each insurance policy’s products and completed exclusion clauses. In contrast, if a claimant claims exposure during the policyholder’s operations, then the claim may fall outside exclusion clauses (such as a “non-products” claim) and the amount of insurance recovery may not be subject to an aggregate limit.

Our experts from Bates White and Environ will demonstrate that for the typical policyholder with contracting activities, a minority of its claimants were exposed while contracting activities were ongoing; the majority of claimants were exposed long after the contracting activities were completed. They will provide concrete examples. CLE accreditation of this program is approved in Illinois.

CLICK HERE BY SEP. 4 TO RESERVE YOUR SEAT

Wednesday, September 2, 2009

More on Bankuptcy Court Powers and Cutting Off Claims in Tort Cases

Today, more on the amazing world of bankruptcy where some say bankruptcy code section 105 may be used to issue an injunction to solve pretty much any and all problems of a debtor parent,including issuing injunctions to protect solvent subsidiaries.


Courtesy of LAW360, here's the link to an amazing adversary complaint filed in the Lyondell bankruptcy. There, the debtor seeks to enjoin creditors from suing 94 affiliated entities not yet in bankruptcy regarding a paltry $ 650 million. So, rather like the Tribune seeking to give the Cubs the benefit of bankruptcy without all the annoying hassles of being bankrupt, we now see yet another debtor seeking the benefits of bankruptcy without having to undergo the hassles of bankruptcy, all on the theory that issuing an injunction would in some way help the debtor. (Actually, Lyondell has done much the same thing before - this is just a new example.) I used to be impressed by the awesome power of federal district judges, but they may be pikers next to a bankruptcy judges wielding bankruptcy code section 105 powers.

Think about how this same principle could play out in the context of product laibility or other tort claims against uninsured subsidiaries of a debtor. For example,the next case may be a debtor asking the court to enjoin inconvenient things like co-defendants in tort suits bringing cross-claims against debtor entities not in bankruptcy. Thus, Parent Co. could file for chapter 11 but not put sits ubsidiaries into chapter 11. Parent Co. could then go to bankruptcy court to ask for an injunction barring cross-claims or tort claims against subsidiaries on the grounds it could be inconvenient to Parent Co.

Bad policy? Giving debtors that kind of power surely gets rids of some of the incentives to do responsible things like buying adequate insurance, carefully manufacturing well-designed products or otherwise acting responsibly. That outcome is bad news for responsible entities left as targets in the tort system. And, how do good lawyers craft meaningful warranty and indemnification agreements for sales of products between entities if tort and contract risks and obligations can all be terminated just by filing a petition for a parent entity.


Can you imagine the howls of "unfairness" and "bad policy" if a Chinese bankruptcy court issued such an order to protect non-bankrupt subsidiaries of a Parent Co. maker of defective cars that killed or maimed many people ?


__________________________________________________________________
Here's a key quote from the complaint:

NATURE OF ACTION
1. This is an adversary proceeding brought pursuant to Rules 7001 and 7003
of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”).

2. The Plaintiff-Debtors assert this complaint for a preliminary injunction
pursuant to section 105(a) of title 11 of the United States Code (the “Bankruptcy Code”), Rule
65 of the Federal Rules of Civil Procedure, and Rules 7001(7) and 7065 of the Federal Rules of
Bankruptcy Procedure (the “Bankruptcy Rules”) to enjoin until at least January 31, 2010 any
attempts to enforce any rights or exercise any remedy under the $615,000,000 and
€00,000,000 8.375% senior notes due August 15, 2015 (collectively, the “2015 Notes”) against
guarantors of the 2015 Notes that have not filed a petition for chapter 11 protection (the “Non-
Debtor-Guarantors”).

Saturday, August 29, 2009

One MDL Magistrate Judge Says Narrow Discovery May Be Taken Regarding Prefiling Investigation in a Mass Tort MDL Situation

How much pre-filing inquiry is needed for a "mass tort" product laibility claim, and when must be it done ? A recent opinion in the Digitek MDL is related to those issues, but is limited to a narrow discovery issue. Digitek is a drug. The claims in essence are that a batch of the drug was mismanfucatured, resulting in sales of doses more potent than usual, with the more potent doses caapable of causing material physical harm.

The discovery requests at issue are defendants' requests for admissons. The requests seek admissions that medical and pharmacy records had not been obtained by plaintiff's counsel when 39 particular claims were filed. The defendants acknowledged the obvious reality that the discovery requests are aimed at generating evidence to support Rule 11 motions that defendants might seek to file in the future. That's important because some opinions have warned against Rule 11 motions spawning "satellite litigation."

A Magistrate Judge's opinion approves the discovery requests over plaintiff's objections. The opinion is a basic work a day paper with limited analysis, and a weak discussion of legal privilege issues (although the outcome seems correct. That said, there are precious few opinions out there on precisely these issues, so the opinion is worth reading and tucking away for persons commonly involved with mass tort litigation. The opinion is here.


________________________________________________________________

Hat tip to LAW360 for publishing an article on the opinion and including the opinion with the article.

Friday, August 28, 2009

Sanford CFO Guilty Plea Implicates Lawyer A and then Proskauer and Partner Sued in Class Action

Talk about a global tort. While waiting to transport one of my daughters this evening, I spent a few minutes reading the guilty plea (thanks, NYT) by Sanford's CFO, James Davis. What raw fraud and greed. Hard to imagine why it was so hard for regulators to figure it out.

Reading the plea, it seemed to me plain that "Lawyer A" will be soon charged with being a central part of the fraud over at least the last two or three years of the scheme. So, I ran a quick Google search to see who might be lawyer A. The search turned up a late Friday AmLaw blog post that provides lots of reminders about past stories on Sanford, and reports in this post that an investor class action was filed late Friday afternoon against the Proskauer law firm and Thomas Sjoblom, saying he is "Lawyer A."

Not a good year for the legal profession.

New Science - Creating a Test to Find People with Specific Genetic Defects to Create a Unique Cohort for a Clinical Trial

This August 27 press release from Abbott and Pfizer exemplifies another way science is changing and will over time create new legal issues as to remedies for tort claims. The pertinent part of the press release is quoted below; the gist is that the two are undertaking a joint effort to create a diagnostic test to find persons with a specific genetic defect so that a clinical trial can be then undertaken only with patients with that particular genetic defect. Soon enough, plaintiffs will be able to have good science behind requests asking courts to order a risk -creator to pay for much more than just a traditional annual check-up.

________________________________________________________________


Des Plaines, Illinois and New York — Abbott (NYSE: ABT) announced today that it has entered into an agreement with Pfizer Inc to develop a molecular diagnostic test intended to screen non-small cell lung cancer (NSCLC) tumors for the presence of gene rearrangements. Pfizer has developed a novel investigational agent that selectively targets cancer-causing genes implicated in the progress of many cancers. To be eligible to receive Pfizer's oral therapy, a particular genetic translocation (rearrangement) known to be found in NSCLC tumors and a wide variety of other cancers, but not in normal cells, must be present.

Under terms of the agreement, Abbott will develop a companion diagnostic test that will determine a patient's genetic status and will be used in patient selection for future clinical trials of PF-02341066.

"We are very pleased to partner with Abbott to develop a companion diagnostic test for non-small cell lung cancer and ensure its global availability for patients and physicians who need this information to make the best treatment decisions," said Garry Nicholson, General Manager, Pfizer Oncology Business Unit. "This test will allow us to focus on the patient population most likely to benefit from our NSCLC candidate. Working in close partnership with the experienced Abbott team, we are confident that we will deliver yet another application of personalized medicine to address a currently unmet medical need in NSCLC."

"Pfizer's novel compound for treating non-small cell lung cancer appears to be ideally suited to individualized therapy," said Stafford O'Kelly, head of Abbott's molecular diagnostics business. "Abbott is a leader in the development and commercialization of companion diagnostics and we're delighted to collaborate with Pfizer, a leader in cancer therapeutics, on the development of a test to identify patients who might benefit from this important compound."

Thursday, August 27, 2009

The Evolving Litigation Industry - Real and Mock Jurors Now Part of Litigation Seminars

The litigation industry continues to evolve. Starting a couple of years back, it became far more more common for judges in repetitive types of litigation (e.g. asbestos, medical malpractice) to appear on panels at litigation seminars. Now things are going the next step and jurors are appearing at seminars in various ways.



Here are two examples. First, HB Litigation Seminars issued this press release to further advertise that a panel of an upcoming asbestos litigation seminar will include two former jurors from asbestos trials. According to the press release:



"SAN FRANCISCO, Aug. 24 /PRNewswire/ -- Sharon Boothe, partner and head of programming at HB Litigation Conferences LLC, announced today that she has added to the faculty of HB's Sept. 23-25 "National Asbestos Litigation Conference" individuals who served on juries at trials of two high profile California asbestos cases.
"These jurors will join 11 judges and a phalanx of experienced asbestos attorneys and experts, plus more than two dozen in-house counsel at what promises to be the most informative asbestos litigation program we have produced since we started running these events in 1992," Boothe said.


The jurors come from Haupt v. A.W. Chesterton and Woodard v. Alfa Laval, both of which involved mesothelioma claims that resulted in large verdicts where the U.S. Navy was held responsible for the bulk of the awards. The Haupt case resulted in a $1.45 million award. The jury in the Woodard case returned a nearly $17 million award, thought to be the largest asbestos mesothelioma verdict returned in Los Angeles County."



The second example of jurors in seminars comes from a rival litigation industry service provider, HarrisMartin. Last June, that litigation seminar firm ran this asbestos litigation seminar that consisted of a mock trial with jurors wired up to provide real time reactions to arguments and questions. I attended a similar prior seminar from the same firm and it was quite good because it allows many people to obtain the benefit of mock jury studies all at one time. That's helpful because mock jury studies are not cheap, and so insurers and clients sometimes make short-sighed decisions not to undertake the expense or effort, sometimes leading to trial disasters.

Tuesday, August 25, 2009

The Litigation Industry - 1 Lung Cancer and 17 Mesothelioma Lawsuits - A Week's Worth of Madison County New Asbestos Case Filings

Many words have been written and said about asbestos litigation and class action litigation in Madison County. Disturbingly, academics and many others lack meaningful access to many concrete facts regarding the day in, day out events in Madison County and other courts that are very active in tort litigation. Instead, war stories and antecdotes - often but not always extreme - tend to dominate the media and academic exchanges, and produce many disputes about what really is and is not happening. In that light, the points of this post are 1) to provide an example of one week of asbestos claims filed in Madison County and 2) also to point out that the litigation industry now includes free news sources focused on providing a continuing flow of information regarding some of the active forums for tort litigation.

One group of sources for data consist of "the Record" publications that focus on Illinois' Madison and St. Clair counties, Southeast Texas and West Virginia. Specific to Illinois are the Madison and St. Clair County Records. All are free online publications, with paid print versions. The publications are run by private ownership, with an investment from the U.S. Chamber of Commerce. The Chamber of course has a view but that does not change the facts nor the reality that these publications provide by far the best real time, free and easy windows in to the goings on in these active venues that are so much a part of the litigation industry.

Free email subscriptions bring readers the news each week as defined by the Record; subscription sign up is available at the Ma,dison Record's home page (here). More or less each week the Record publishes a summary of the new asbstos case filings ( I keep bugging them to also put the complaints online, but so far that has not happened.) Set out below is the weekly summary for the week July 27-31.

As you read the case summaries, note how few of the cases appear to have a meaningful connection to Illinois. And, beyond considering the litigation industry view, consider also the widespread impact of cancer. Imagine what these families have been through or are going through as they try to cope with the devastion caused by these 18 of the 1.4 million cancers that will be diagnosed this year in the United Sates according to this detailed Powerpoint presentation for 2009 from from the American Cancer Society.

_________________________________________________________________


18 new asbestos cases filed July 27-31


8/20/2009 8:39 AM
By Kelly Holleran

A total of 18 new asbestos lawsuits were filed in Madison County during the week of July 27 through July 31.

The following claims were filed:

--Norbert and Marjorie Bossen of Iowa allege Norbert Bossen developed mesothelioma after his work in the United States Navy from 1944 until 1946; as a boilermaker in the late 1940s and early 1950s; with Gilbert and Bossen Farm Implements from the early 1950s until 1967; as a pipe fitter from 1967 until 1982; and performing home remodeling work to his homes in the mid 1970s. The Bossens are represented by Robert Rowland and Elizabeth V. Heller of Goldenberg, Heller, Antognoli and Rowland in Edwardsville. Sean P. Worsey of Levin, Simes, Kaiser and Gornick in San Francisco will serve of counsel. Madison County Circuit Court case number: 09-L-795.

--Walter Derby of Colorado, an aviation mechanic, consulting engineer, police officer, security guard, laborer, tree trimmer and contractor/construction worker at various locations throughout Illinois, California, Colorado and Oklahoma from 1967 until 2007 claims mesothelioma. Derby is represented by Timothy F. Thompson Jr. and Ryan J. Kiwala of Simmons, Browder, Gianaris, Angelides and Barnerd in East Alton. Madison County Circuit Court case number: 09-L-789.

--Catherine Fridmanski claims her recently deceased cousin, Andrew Mulato, developed mesothelioma after his work as a bricklayer and steelworker at various locations from 1940 until 1980. Fridmanski is represented by Andrew O'Brien, Christopher Thoron, Christina J. Nielson, Bartholomew J. Baumstark and Gerald J. FitzGerald of the O'Brien Law Firm in St. Louis. Madison County Circuit Court case number: 09-L-792.

--Josie Gonzales of Texas claims her recently deceased husband, Eulalio Gonzales, developed mesothelioma after his work as a laborer and foreman at various locations throughout Illinois, Missouri, Colorado, Kansas, New Mexico and Texas from 1958 until 1985. Josie Gonzales is represented by Amy E. Garrett and W. Brent Copple of Simmons, Browder, Gianaris, Angelides and Barnerd in East Alton. Madison County Circuit Court case number: 09-L-798.

--Joseph and Sandra Goudreau of Michigan claim Joseph Goudreau developed mesothelioma after his work as a laborer, painter, operator and engineer at various locations in Illinois, Michigan, Alabama and Wisconsin from 1950 until 2000. The Goudreaus are represented by Timothy F. Thompson Jr. and Ryan J. Kiwala of Simmons, Browder, Gianaris, Angelides and Barnerd in East Alton. Madison County Circuit Court case number: 09-L-801.

--Julie Hied of Montana claims her recently deceased husband, Lyle Woolston,developed mesothelioma after his work as a rancher and mechanic at various locations from 1968 until 1978. Hied is represented by Robert Phillips, Perry J. Browder and Rosalind M. Robertson of Simmons, Browder, Gianaris, Angelides and Barnerd in East Alton. Madison County Circuit Court case number: 09-L-775.

--Betty Hughes of Virginia claims her recently deceased husband, Cecil Hughes, developed mesothelioma after his work as a laborer and carpenter from 1970 until 1979. Hughes is represented by Robert Phillips, Perry J. Browder and Rosalind M. Robertson of Simmons, Browder, Gianaris, Angelisdes and Barnerd in East Alton. Madison County Circuit Court case number: 09-L-776.

--Robert and Barbara Krupp of Illinois allege Robert Krupp developed lung cancer after his work in the U.S. Coast Guard from 1952 until 1955; as a laborer at Mallinckrodt Chemical Company from 1955 until 1957; as a laborer at The New York, New Haven and Hartford Railroad Company from 1957 until 1961; as a laborer at Stickland Trucklines from 1962 until 1965; and as a laborer at Manufacturers Railway Company from 1965 until 1991. The Krupps are represented by Randy L. Gori and Barry Julian of Gori, Julian and Associates in Edwardsville. Madison County Circuit Court case number: 09-L-777.

--John Lappin of Missouri, a machinist and steelworker from 1947 until 1992, claims mesothelioma. Lappin is represented by Andrew O'Brien, Christopher Thoron, Christina J. Nielson, Bartholomew J. Baumstark and Gerald J. FitzGerald of O'Brien Law Firm in St. Louis. Madison County Circuit Court case number: 09-L-772.

--Ronald H. and Karen L. Larson claim Ronald H. Larson developed mesothelioma after his work as a field lineman with the United States Army from 1960 until 1963 and as a steel plate inspector at Bethlehem Steel from 1963 until 1987. The Larsons are represented by Randy L. Gori of Gori, Julian and Associates in Edwardsville. W. Mark Lanier, Patrick N. Haines, C. Taylor Campbell, J.D. McMullen and William H. Barfield of The Lanier Law Firm in Houston will serve of counsel. Madison County Circuit Court case number: 09-L-781.

--Christopher Morelli of New Jersey claims his recently deceased wife, Michelle Morelli, developed mesothelioma after her work as a laborer at Lockheed Martin in 1982. She was also exposed to asbestos fibers while doing abatement work during the late 1990s and was secondarily exposed through her husband, who owned a painting, drywall and texture company from 1982 until now, according to the complaint. Christopher Morelli is represented by Randy L. Gori and Barry Julian of Gori, Julian and Associates in Edwardsville. Madison County Circuit Court case number: 09-L-782.

--Jimmy E. and Rosalee Murphy of Arkansas claim Jimmy Murphy developed mesothelioma after his work as a manufacturer from 1967 until 1971 at Tucker Duck and Rubber Company, Fort Smith Table and Chairs and Bowmen and Company; as a laborer for Capco from 1971 until 1976; as a welder for Structural Steel in 1976; as a forklift operator for Farmland Feed Mill from 1976 until 1980; as a welder for Branham Industries from 1980 until 1981; as a welder for Interstate Electric from 1983 until 1986; and as an assembly line worker for Trane from 1986 until 2000. The Murphys are represented by Elizabeth V. Heller and Robert Rowland of Goldenberg, Heller, Antognoli and Rowland in Edwardsville. Madison County Circuit Court case number: 09-L-793.

--Shirley Jo Peeler of Ohio, a cashier for Liberal Markets from 1953 until 1956 and an employee at Revco and a press operator at Stanhope Products from 1956 until 1958, claims mesothelioma. Peeler is represented by Elizabeth V. Heller and Robert Rowland of Goldenberg, Heller, Antognoli and Rowland in Edwardsville. Madison County Circuit Court case number: 09-L-794.

--Larry C. and Bettye M. Sims claim Larry C. Sims developed mesothelioma after his work as an engineer and machinist mate while in the U.S. Navy from 1962 until 1987; as a maintenance man at Dorchester School District in South Carolina from 1987 until 1998; as a home remodeler at his house from 1960 until 1970; and as a shadetree mechanic from 1959 until 1979. The Sims are represented by Randy L. Gori of Gori, Julian and Associates in Alton. W. Mark Lanier, Patrick N. Haines, Angela B. Greenberg, Sam T. Richard, Bridget B. Truxillo and Lauren H. Ware of The Lanier Law Firm in Houston will serve of counsel. Madison County Circuit Court case number: 09-L-779.

--Toni Solano of Texas claims her recently deceased husband, John M. Solano, developed mesothelioma after his work as a laborer and division engineer for Burlington Northern Santa Fe Rail Road from 1975 until 2005. Toni Solano is represented by Elizabeth V. Heller and Robert Rowland of Goldenberg, Heller, Antognoli and Rowland in Edwardsville. Madison County Circuit Court case number: 09-L-796.

--Robert A. and Darlene M. Switzer claim Robert A. Switzer developed mesothelioma after his work as a service representative, products liability specialist, maintenance, expert claims witness for Caterpillar Tractor Company from 1953 until 1988; while being enrolled in officer's candidate school where he learned and performed duties on Navy ship from 1944 until 1946; while working for a road equipment contractor and on welded metal tracks from 1949 until 1953; as a farmer at Norvel Switzer Farm from 1926 until 1944; as a shadetree mechanic from the 1950s until 1980; and in residential construction from the 1950s until 1980. The Switzers are represented by Randy L. Gori of Gori, Julian and Associates in Edwardsville. W. Mark Lanier, Patrick N. Haines, R. Craig Bullock and J. Kyle Beane of Houston will serve of counsel. Madison County Circuit Court case number: 09-L-780.

--Leo J. and Ruth A. Vietmeier claim Leo J. Vietmeier developed mesothelioma after his work as a laborer, assembly line worker and maintenance man at American Vitrified in the 1950s; as a laborer while in the AFL-CIO Union in the 1960s; as a mine worker at Pegg's Run Coal Mill in Pennsylvania in the 1970s; as a meat cutter at Giant Eagle from 1980 until 1996; as a home remodeler at his home from 1967 until 1990; and as a shadetree mechanic on his automobiles from 1950 until 1980. The Vietmeiers are represented by Randy L. Gori of Gori, Julian and Associates in Alton. W. Mark Lanier, Patrick N. Haines, Angela B. Greenburg, Sam T. Richard, Bridget Baragona and Lauren H. Ware of The Lanier Law Firm in Houston will serve of counsel. Madison County Circuit Court case number: 09-L-778.

--Mary Ellen White of New Hampshire claims her recently deceased husband, John Grohosky, developed mesothelioma after his work in the U.S. Navy from 1944 until 1964 and as a forklift driver from the early 1970s until 1988. White is represented by Randy L. Gori and Barry Julian of Gori, Julian and Associates in Edwardsville. Madison County Circuit Court case number: 09-L-784.

--Fred Young of Wisconsin, who served in the British Navy from August 1940 until August 1954 and who worked as a mechanical researcher from 1954 until 1956; as a mechanical researcher at AV Roc from 1956 until 1958; as a design engineer for Pratt and Whitney from 1958 until 1960; as a design engineer at the GE Nuclear Power Demonstration Plant from 1960 until 1963; as a senior reactor operator at Ontario Hydro from 1963 until 1965; as a maintenance supervisor at Thunder Bay Generating Plant from 1965 until 1967; as a maintenance supervisor at Wisconsin Electric Point Beach Plant from 1968 until 1972; as a laborer at Bechtel from 1972 until 1984; and as a consultant at Wisconsin Electric Point Beach Plant from 1984 until 1989, claims mesothelioma. Young is represented by Randy L. Gori and Barry Julian of Gori, Julian and Associates in Edwardsville. Madison County Circuit Court case number: 09-L-797.