Public Nuisance Wire

Our watchdog press enabled the global warming hoax

2010-02-09T19:46:22Z

Chris Horner, senior fellow at the Competitive Enterprise Institute and author of Red Hot Lies: How Global Warming Alarmists Use Threats, Fraud, and Deception to Keep You Misinformed, spoke to Public Nuisance Wire about the implications of Climategate.

PNW: What effect will Climategate have on global warming lawsuits?

Horner: Clearly this is not helpful to the argument that the science is reliable.

PNW: Wasn’t much of this information already known to the thinking public?

Horner: It was, with some gaps in the details, but largely understood. The importance of the leaked emails is that they represent those at the highest levels of "climate science" admitting -- in their own words, in full context -- that they cannot make their case (as we have detailed), and what they are doing to fudge their case (as we have also detailed). Most damning for them is that it publicly puts the lie, through private admissions, to their defenses against criticism.

PNW: What effect will this have on climate-change litigation?

Horner: The greens already plan to file early and often. What this does is embolden defendants, lawmakers, and even judges. It certainly will play a role in our upcoming litigation against NASA and some agencies whose identities shall become well known in the near future as we continue scratching.

PNW: Why have global warming suits not attracted more attention?

Horner: The press have largely gone along and even been active enablers and cheerleaders for the related agenda. Drawing attention to meaningful consequences, however, would be to serve a bit of a warning to the other side -- I'm just reading minds or possibly subconsciousnesses here -- and they saw little need to bang the drum too loudly.

Climategate takes steam out of global warming litigation

2010-02-02T19:47:21Z

The "Climategate" emails reveal organized efforts to subvert transparency laws and keep the public misinformed about the state of climate science, which influences trillion-dollar policy decisions and critical issues of energy sovereignty and security.

Chris Horner, a senior fellow at the Competitive Enterprise Institute and author of Red Hot Lies: How Global Warming Alarmists Use Threats, Fraud, and Deception to Keep You Misinformed, says these revelations may prompt courts to refuse to take judicial notice of any claims attributed to the IPCC.

“The cumulative and inescapable message is that those at the highest levels of 'climate science' admit -- in their own words, in full context, desperate spin to the contrary notwithstanding -- that they cannot make their case, and the lengths to which they are willing to go in the face of this,” Horner said. “Clearly, this is not helpful to the argument that the science is reliable.”

Horner emphasizes that the science must now be debated before proceeding, which doesn’t bode well for plaintiffs and the legal strategy of the alarmist industry in general.

“Bureaucrats in the U.S. have to defend their case to the courts after acting, but are granted an unusual standard of deference,” he says. “Plaintiffs, however -- in, for example the absurd series of 'nuisance' litigation proceeding through the courts -- must make their case, were counting on de facto or de jure judicial notice that the science is sound, and now have a lot of explaining to do. And they will be no more able to do it successfully than the alarmists outed in Climategate are shown to be able.”

Global warming litigation is already underway and likely to continue, but the burden of proof has shifted.

“The greens already plan to file early and often,” Horner observes. “What this does is embolden defendants, lawmakers, and even judges. It certainly will play a role in our upcoming litigation against NASA and some agencies.”

In November, CEI filed three Notices of Intent to File Suit against NASA and its Goddard Institute for Space Studies (GISS), for refusing to provide documents requested under the Freedom of Information Act. According to the CEI notices, “The information sought is directly relevant to the exploding 'Climategate' scandal revealing document destruction, coordinated efforts in the U.S. and UK to avoid complying with both countries' freedom of information laws, and apparent and widespread intent to defraud at the highest levels of international climate science bodies."

Courts rule against cities in subprime mortgage suits

2010-01-27T18:05:15Z

Given the subprime mortgage debacle and the spate of foreclosures around the country, it’s no surprise that city governments are looking for someone to blame. But our nation's courts are refusing to validate this scapegoating effort and are instead rejecting the claim that banks have engaged in discriminatory lending practices.

Andrew Sandler, a partner in SandlerBuckley, spent most of 2009 representing financial institutions in litigation and regulatory actions involving subprime lending practices -- first in Cleveland, then Birmingham, then Buffalo, and most recently Baltimore. In each case, his clients triumphed over the cities’ attempts to settle blame on them.

“We have had three cases in a row — Cleveland, Birmingham, and now Baltimore, where the cities are trying to sue individualized lenders for generalized problems of the city,” said Sandler, who represented the lenders in all three victories. “The combination of these three decisions says that city government doesn’t have standing to do that and should not be pursuing such cases.”

None of the cases brought by cities has survived a motion to dismiss. Last month, Baltimore Federal District Court Judge J. Frederick Motz dismissed Baltimore's suit against Wells Fargo bank.

“The city’s allegations . . . of a causal connection between Wells Fargo’s alleged misconduct and the damages the city claims are not plausible,” Judge Motz wrote in his six-page ruling.

“Lawyers in this case and other cases, who are running around the country trying to convince other cities to file these kinds of cases, they have no legal basis and hopefully this decision coupled with the other two decisions will help cities to understand they are being led astray by lawyers who are trying to talk them into filing these sort of cases,” Sandler said. “The cities are having trouble with tax revenues, and so they are looking to find ways to bring money in and that’s what this is about.”

Sandler believes the perfect record of vindicated defendants sends a strong message to municipalities contemplating predatory lending litigation.

“At some point, when enough of these cases gets dismissed, it becomes bad-faith litigation for these cities to pursue them -- and we’re getting very close to that point,” he said. “What the city should be doing is turning its attention to the many problems that the city has, rather than try to figure out ways to litigate and blame individual lenders for the city’s problems.”

Utah manufacturers protest EPA action

2010-01-20T16:13:29Z

Is it fair for the EPA to change its air-quality policies in a state without input from the citizens who will be affected by them? That's the question many in Utah are asking as a lawsuit filed against the EPA by a group called the "WildEarth Guardians" goes to trial.

The Guardians are calling for an interstate commission to address elevated ozone levels in the West. Their lawsuit alleges that the EPA failed to issue timely federal implementation plans in the absence of individual plans from California, Colorado, Idaho, New Mexico, North Dakota, Oklahoma, and Oregon.

WildEarth Guardians is challenging the failure of the EPA to force western states to limit interstate transport of pollution. The Clean Air Act required the EPA to adopt regulations to force these states to limit interstate transport of pollution by 2007. AS of 2010, the EPA has yet to take action to clear the air.

“It’s very alarming to us that when we have a [state implementation plan] for air quality in the state of Utah and they have proposed to do something and haven’t involved our state agency in that process at all, that’s just absolutely wrong,” said Thomas Bingham, president of the Utah Manufacturers Association. “We are very concerned that they haven’t even contacted them to find out what their response is to these allegations. It appears they are looking to approve the thing without any input from the state of Utah.”

The UMA Air Quality Subcommittee has reviewed the proposed consent decree from the EPA and found several serious issues for Utah manufacturers in the civil action and EPA proposal to consent.

“Basically it appears the EPA is assuming they have a legal responsibility or liability to approve this consent decree when we think they clearly do not,” said Binghan. “They assume some things in there that we don’t believe have been demonstrated.”

The proposed Consent Decree is intended to resolve the suit brought in federal court in Colorado, and to challenge the provisions of Utah’s approved SIP concerning excess emissions resulting from the breakdown of pollution control equipment.

“It is our understanding that, notwithstanding the federal Clean Air Act’s emphasis on a partnership between EPA and the states in administering and enforcing the Act, the State of Utah was neither brought in as a party to the litigation nor was the State included in the negotiations leading to the proposed Consent Decree,” Bingham said. “We think that all the affected stake holders should have an opportunity for input before they make a decision on this. Just because there is a lawsuit out there doesn’t mean they have to panic and do something.”

Memphis jumps on the subprime suit bandwagon

2010-01-13T16:48:49Z

At the end of December, Memphis Mayor A.C. Wharton Jr and other city and county officials filed suit against Wells Fargo for allegedly targeting black homeowners for high-interest subprime mortgages.

Similar suits have been filed against the bank in the past two years for so-called “irresponsible” lending practices.

“I think this lawsuit is just as questionable as the other similar suits that have been filed against Wells Fargo making similar claims,” said Hans von Spakovsky, senior legal fellow at the Heritage Foundation and manager of their Civil Justice Reform Initiative. “Cities apparently are trying to use frivolous lawsuits to make up for the fact that their property tax revenues have decreased because of the general decline in property values.”

A case in Baltimore argues that Wells Fargo’s lending practices tipped hundreds of homeowners into foreclosure and cost the city millions of dollars in taxes. Last summer, Illinois AG Lisa Madigan brought a lawsuit against the bank, accusing them of marketing high-cost mortgage loans to black and Latino customers, while offering lower-cost loans to white borrowers with similar incomes.

“There is no real evidence that bankers were discriminating on the base of race in their lending,” von Spakovsky said.

The Memphis suit contends that one of every eight Wells Fargo loans in predominantly black neighborhoods in Shelby County resulted in foreclosure, compared with only one in 59 such loans in white neighborhoods. Mayor Wharton concluded that Wells Fargo offered one loan option for whites and another for blacks, and that many black homeowners could have qualified for prime-rate mortgages, thereby saving themselves tens of thousands of dollars over the life of their mortgages.

“I would question the reliability of the statistics cited, given that similar studies over the past two decades that were produced as ‘evidence’ that bankers were supposedly discriminating in mortgage lending have turned out to be based on faulty methodology and faulty data,” von Spakovsky said. “I also seriously doubt that the studies being relied on in this case take into account all of the factors used to analyze the creditworthiness of potential borrowers.”

The case for scrapping product liability

2010-01-07T22:44:55Z

"Tens of thousands of product liability cases are filed annually in state and federal courts, including some as class actions that involve hundreds of thousands or even millions of individuals as plaintiffs,” observe Mitchell Polinsky and Steven Shavell of the National Bureau of Economic Research in a forthcoming contribution to the Harvard Law Review. “The legal bases for product liability suits are expansive,” they emphasize, “comprising liability for manufacturing defect, design defect, and failure to warn.”

Polinsky and Shavell argue that “the case for product liability is problematic for a wide range of products,” because its benefits are “likely to be outweighed by the litigation and related costs.”

Product liability may be overkill for large firms responsive to market forces and subject to governmental regulation. “Even though product liability would lower product risk in the absence of market forces and regulation, it will turn out to be superfluous if a desirable safety precaution has already been taken because of these two factors,” say Polinsky and Shavell. In that case, product liability may be “socially undesirable, at least for widely sold products.”

The two analysts argue that “market forces and regulation are likely to be particularly important for products sold in high volume, considerably reducing the need for product liability to encourage safety. Moreover,” they add, “the available empirical evidence indicates that product liability has not in fact measurably enhanced product safety for such products.”

Polinsky and Shavell also cite “the price distortions caused by litigation costs and awards for nonmonetary losses” and note that the compensation to which victims may be entitled is “already achieved to a significant extent through private and public insurance.” In addition, “the product liability system generates high legal expenses, equaling or exceeding the payments received by plaintiffs.”

Polinsky and Shavell conclude that “serious consideration should be given to curtailing such liability” and recommend that courts “reduce the scope of product liability when such liability would be unlikely to significantly promote product safety or compensation.”

The two analysts also suggest legislation to “limit or eliminate product liability in certain industries or for certain widely sold products,” as has been done “for general aviation aircraft and for vaccines.” But why stop there? “Reducing or abolishing product liability might even make sense for the majority of widely sold products,” they affirm.

Facts fudged in smoking ban campaigns

2010-01-05T22:37:35Z

While a number of recent studies suggest that smoking bans cut down on heart attacks, critics argue that the data they rely on have been skewed or misinterpreted.

“It’s never a true reflective sample,” says Bill Hannegan, director of Keep St. Louis Free, which fights to protect the freedom and property rights of St. Louisians. “They do studies looking at communities where heart attack rates fell when bans were imposed, but we always ask, ‘Why not do a national study? Why single out a community like Bowling Green, Kentucky?' If you looked at every place, you would see that smoking bans don’t really have that effect.”

Hannegan cites a countervailing study by the National Bureau of Economic Research that found that heart attack rates were just as likely to increase after the imposition of smoking bans.

“What this study shows is that smoking bans do not reduce heart attacks in communities,” Hannegan summarizes. “What it also shows is that anti-smoking groups or tobacco-control groups have been cherry-picking cities to try and prove that smoking bans cause heart attack rates to fall.”

Keep St. Louis Free has protected the freedom and property rights of St. Louis business owners against smoking bans and other governmental usurpations for the past four years.

“We made sure that lawmakers in St. Louis were aware of all the studies,” Hannegan emphasizes. “What happened with smoking is that tobacco companies no longer contest any of these claims or fight the anti-smoking groups, so the only people fighting are private citizens, and we don’t have the resources that Big Tobacco has.”

Smoking bans, Hannegan believes, violate the rights and personal freedoms of American citizens and businessmen.

“I do believe that the business owner has the right to have a legal product on his property, if he is willing and able to take measures to reduce whatever health concerns there are to the greatest extent possible,” he affirms. “Business owners are willing to put in fans and ventilation and filtration and are acting in good faith, but public officials are not responding to this.”

Hannegan worries that the public acceptance of smoking bans could lead to other restrictions on our freedoms.

“If this was just about smoking, it wouldn’t be as great a concern, but what really concerns me is when the ends start to justify the means,” he explains. “Particularly when a group can be scapegoated using a manipulated science. The same thing being used against smokers can be used against other people later on and that should be of concern.”

Public nuisance highlights

2009-12-30T22:00:03Z

In January U.S. District Judge Lacy Thornburg ruled that coal-fired plants in neighboring states create a public nuisance for North Carolina and ordered the Tennessee Valley Authority to reduce emissions by a specified deadline, at a cost of roughly $1 billion. The decision was seen as likely to spur additional public nuisance suits against coal-fired power plants and lay the groundwork for establishing global warming as a litigable tort.

The U.S. Chamber of Commerce filed an amicus brief in the appeal, asserting that the previous ruling violated existing federal air pollution provisions.

The Washington Legal Foundation urged the Environmental Protection Agency to clarify that any Endangerment Finding it might issue with regard to greenhouse gases (GHG) "is not intended to encourage, or to be used as evidence in, tort lawsuits seeking to enjoin or penalize GHG emissions.” The Foundation expressed concern that "EPA's proposal may have the unintended consequence of encouraging tort lawsuits against companies that emit GHGs, and particularly the hundreds of thousands of businesses whose operations result in the emission of CO2."

The U.S. Court of Appeals for the Second Circuit ruled that five of the nation’s largest electric utility companies could be sued for creating a public nuisance by emitting greenhouse gases (GHG) that allegedly contribute to global warming. Previously, courts had ruled that such claims present non-justiciable political questions. The Second Circuit explicitly rejected the political question doctrine and found that the plaintiffs have standing to sue and present common law nuisance claims.

In dismissing a global warming suit filed by an Alaskan native village against Exxon Mobil, U.S. District Court Judge Saundra Brown in San Francisco argued that the issue was a political one best handled by lawmakers, not judges.

In October, the U.S. Court of Appeals for the Fifth Circuit reversed a trial court decision rejecting a climate change lawsuit as a nonjusticiable political question. In Comer v. Murphy Oil USA, Gulf Coast property owners sued a myriad of energy, fossil fuel, and chemical companies, alleging that their greenhouse gas emissions exacerbated the ferocity of Hurricane Katrina and thereby contributed to property damage.

Cash-strapped states and cities set their sights on another unpopular industry, adapting the public-nuisance attack against subprime mortgage lenders. Nuisance was also one of the weapons used by New York City lawyers trying to convince a District Court jury in Manhattan that Exxon Mobil knew 20 years ago that a gasoline additive (MTBE) would eventually contaminate groundwater.

Contingency contracts between law firms and governments raised eyebrows throughout the year, especially when political contributions came into play. Janssen Pharmaceutica, a subsidiary of Johnson & Johnson, was sued by the state of Pennsylvania for allegedly promoting off-label uses for Risperdal, an antipsychotic drug. The state’s case was handled by Houston law firm Bailey, Perrin & Bailey, whose founder contributed thousands of dollars to the reelection fund of Pennsylvania Governor Ed Rendell.

2009 paint litigation roundup

2009-12-29T22:58:09Z

Here’s a summary of paint-related stories published in Public Nuisance Wire in 2009:

The June nomination of trial attorney Jack McConnell to a federal judgeship in Rhode Island prompted the Public Nuisance Fairness Coalition to ask U.S. Attorney General Eric Holder to investigate his relationship with former State Attorney General Sheldon Whitehouse. Concerns arose from the 1999 hiring of McConnell and his law firm, Motley Rice, for a no-bid, contingent-fee contract to sue companies that manufactured lead paint sold in Rhode Island.

In July, the Supreme Court of Rhode Island held that the state “cannot allege” facts sufficient to state a claim for common law public nuisance against lead pigment manufacturers and ordered the state to reimburse special litigation costs to three defendants. Although the manufacturers placed lead pigment into the stream of commerce, the court held that they did not control it at the time of the alleged harm and thus did not interfere with a public right for purposes of a common law public nuisance.

After a setback in Mississippi, the paint industry earned another victory when the Wisconsin Supreme Court affirmed a Court of Appeals decision dismissing Ruben Baez Godoy's defective design claim against four defendants.

In August the National Paint & Coatings Association filed an amicus brief in Pennsylvania v. Janssen Pharmaceutica, arguing that flaws inherent in the contingent fee arrangement "threaten the government's ability to properly insure that justice is done, and they undermine public trust in the proper functioning of the government in all areas of our society."

The Public Nuisance Fairness Coalition and associated groups also filed an amici curiae brief in support of the defendant, expressing concern about legal and ethical issues raised by the trial, such as governmental authorities offering outside attorneys a financial interest in cases involving the Commonwealth's police powers.

In November, Sherwin-William filed notice of intent to appeal the $7 million verdict favoring former Mississippi high school sports star Trellvion Gaines, who allegedly suffered neurological illness and cognitive delays as a result of ingesting lead paint chips as a child. After the verdict, questions arose about the veracity of testimony regarding Gaines' deficits.

Also in November, Public Nuisance Wire reported that trial lawyer Jack McConnell, over a 10-year period, contributed to the campaigns of 13 current U.S. senators who may eventually help make him a federal judge. Sens. Jack Reed and Sheldon Whitehouse, the biggest beneficiaries of McConnell's generosity, recommended McDonnell for the judgeship. McConnell represented the State of Rhode Island in unsuccessful litigation against former manufacturers of lead paint. Whitehouse, then the attorney general, hired the firm to file suit in 1999. McConnell was also a member of the litigation team that brought suit against tobacco companies and helped secure the $246-billion, 46-state Tobacco Master Settlement Agreement of 1998.

Damage caps were an essential piece of tort reform

2009-12-28T21:48:46Z

“The statutory cap on non-economic damages was an essential piece of the 2004 tort reform spearheaded by the Governor and passed with an overwhelming bipartisan majority of the Legislature,” Mississippi Governor Haley Barbour argued in an amicus brief recently filed in the case of Double Quick Inc. v. Ronnie Lee Lymas.

Shot while leaving a Double Quick in 2007, Ronnie Lee Lymas successfully sued the Indianola-based convenience store chain for failing to ensure his safety. A circuit court judge lowered the jury award for medical costs and non-economic damages from $4 million to the state cap of $1 million, prompting Lymas to challenge the constitutionality of the cap. Barbour’s brief asks the state supreme court to affirm its constitutionality.

“The cap was partly a response to the multitude of outrageous and unpredictable damage awards being handed to plaintiffs in civil suits,” Barbour explained in his brief. “Its aim was to restore predictability and fairness to the system by setting a reasonable limit on non-economic damages, which are inherently difficult to quantify. Predictability and fairness were needed for the protection of the public welfare to prevent doctors from closing their practices, to stop insurance companies from not issuing policies, and to keep new business enterprises from choosing other states over Mississippi.”

Recalling that the state had been ranked as the “worst litigation environment in the country” and labeled a “judicial hellhole” and “lawsuit capital of the world,” Barbour attributed its bad reputation “in large part to unconscionably high awards to personal injury litigants with little, if any, identifiable injuries or medical expenses.” He emphasized that “the awards had little or no connection to Mississippi or the county where the cases were filed.”

Barbour lamented that “business, industry, and health care providers faced sky-rocketing and, in many instances, unaffordable liability insurance premiums. More than 70 insurance companies stopped writing insurance coverage in Mississippi,” he noted. “The legal climate was so bad and malpractice insurance rates were so high that many physicians had to stop practicing in certain specialties. The State also lost jobs and economic development opportunities as a result of the legal climate.”

The governor and the legislature “addressed the crisis with reasonable and meaningful reforms such as the damage cap in issue. These reforms were desperately needed then and are now essential to the continued growth of Mississippi and the preservation of thousands of Mississippi jobs.”

According to Barbour, “The 2004 reforms ensured fairness and predictability for all litigants by addressing damage caps and other serious problems such as changing venue law to require (in most cases) that trial be held in the county where the event in question occurred, abolishing joint and several liability except for cases where defendants acted together, and protecting sellers of products who had no involvement in the design and no reason to know about alleged defects in product liability suits.”

Brabour described the cap on non-economic damages as “the only one of these reforms that directly guards against the unpredictable and unconscionably high awards for pain and suffering and similar damages that had become common and that continue in the State. By providing a clear and reasonable limit for these damages,” he argued, “the cap promotes predictability and fairness in the civil justice system.”

Barbour concluded his brief with a recitation of the “tangible success of tort reform,” which included a 90-percent drop in medical malpractice lawsuits, the creation of “thousands of new jobs,” the return to the state of “several major insurance companies,” and, last but not least, a distinct improvement in the state’s tarnished reputation.

Barbour urges court to uphold cap on non-economic damages

2009-12-24T20:04:25Z

Mississippi Governor Haley Barbour has filed an amicus brief in the case of Double Quick Inc. v. Ronnie Lee Lymas, asking the state supreme court to affirm the constitutionality of a tort reform cap enacted by the state legislature in 2004.

Shot while leaving a Double Quick in 2007, Ronnie Lee Lymas successfully sued the Indianola-based convenience store chain for failing to ensure his safety. A circuit court judge lowered the jury award for medical costs and non-economic damages from $4 million to the state cap of $1 million, prompting Lymas to challenge the constitutionality of the cap.

“The Mississippi Legislature has the right to establish laws protecting Mississippians from frivolous lawsuits,” Governor Barbour said in the brief, urging the court to affirm the constitutionality of Mississippi statute 11-1-60(2). According to Barbour, the state’s tort reform measures have reduced insurance premiums for doctors and attracted new business to the state.

”Judicial repeal of the non-economic damages cap would have horrendous consequences for the State,” Barbour warned. “Insurance premiums for Mississippi businesses and healthcare providers would dramatically increase due to the added uncertainty of exposure to outrageous awards. Further, the State’s ability to attract and retain new businesses that create jobs and economic opportunity would be significantly hindered.”

Barbour emphasized that the statute challenged by Lymas “was an integral component of bipartisan tort reform legislation enacted into law by an overwhelming majority of the Mississippi Legislature in 2004. Exercising its police powers to protect the health and welfare of the State’s citizens and promote economic development, the Legislature’s tort reform measures were intended to, and have accomplished, an important state interest,” he continued. “The non-economic damage caps and other tort reform measures leveled the playing field for all litigants, ensured fair and predictable results; averted a health care crisis and attracted new businesses to the State.”

Barbour expressed concern that “any judicial repeal of the noneconomic damage caps or other tort reform measures would destroy the positive progress made in recent years, crush current economic development and drive away desperately needed jobs in one of the gravest economic times in the Nation's history.”

Barbour concluded that the non-economic damage cap is “unquestionably constitutional” and that the state legislature “plainly has the constitutional authority to enact prospective limitations on remedies such as the subject limit on non-economic damages.”

Describing the cap as “a public policy decision supported by an overwhelming majority of the State’s elected representatives” Barbour insisted that it was “necessary to ensure predictability and fairness in the civil justice system.”

Mississippi's tort reform brings relief to doctors

2009-12-22T15:53:04Z

Mississippi's tort reform, passed in 2004, has helped reduce medical malpractice claims by as much as 90 percent.

Reform booster Dr. Kenneth Stubbs believes that more can be done statewide and nationwide.

“We need to see tort reform across the board, and unless there is uniform tort reform, there will never be a complete impact,” said Stubbs, who won the Natchezian of the Year award in 2008 for his tort reform efforts. “The whole nation must subscribe to this.”

Gov. Haley Barbour called pre-reform Mississippi the “judicial hellhole for jackpot jury verdicts.” The hellhole within the hellhole was Jefferson County, where a pharmacist was named in more than 1,000 lawsuits. In one case, a Jefferson County jury awarded $1 billion to the family of a woman who had taken the drug Pondimin, a weight loss remedy known as fen-phen that is now off the market.

Five years ago, Mississippi legislators put a $500,000 cap on pain and suffering or non-economic damage awards in medical malpractice cases. Stubbs laments that the change has gone unheralded.

“When the Federal government talks about tort reform, they never say what happened in Mississippi. The national leaders never mention we’ve reformed our laws,” Stubbs said. “I don’t know why our federal politicians haven’t thrown our name in the hat as a state that has amended our laws.”

Many in the medical field believe that Mississippi's old reputation for litigiousness still keeps doctors away.

“When you talk to residents and students at distant medical schools, they don’t want to come to Mississippi, and part of what they mention is tort reform,” Stubbs said. “You tell (the students) about the tort reform legislation, but the preconceived notion is, ‘Mississippi is a bad tort reform state, and you’re still the poorest state in the union. I don’t want to go there.’”

A recent Congressional Budget Office analysis concludes tort reform lowers health care expenditures, and that a national tort reform package would reduce national health care spending by about 0.5 percent, or $11 billion in 2009.

Stubbs is feverishly promoting a national tort reform package

Relaxed pleading standards could have dire consequences

2009-12-18T20:13:00Z

“However one characterizes the Twombly and Iqbal decisions, it is clear that they have not led to the wholesale dismissal of complaints,” said former U.S. Solicitor General Gregory Garre in testimony before the Senate Judiciary Committee earlier this month. “Indeed, despite the dire predictions of some of the decision’s critics, the fact remains that courts have denied motions to dismiss for failure to state a claim after Twombly and Iqbal in cases involving claims against government officials for actions undertaken in defending the country against terrorist attack, as well as in cases involving commercial claims and motive-based constitutional claims.”

Garre argued that, “at this point, less than six months after Iqbal was decided by the Supreme Court, it is simply too early to say what impact Twombly and Iqbal have had on civil litigation in general in the United States.”

Garre encouraged the members of the Committee “to consider the alternative – i.e., a system in which courts permitted conclusory and implausible claims to go forward, at least for the purpose of allowing plaintiffs an opportunity to attempt to develop claims through discovery ‘fishing expeditions.’ The potential adverse consequences of such a regime are enormous,” he emphasized.

According to Garre, “The consequences of relaxing the pleading standards recognized in Twombly and Iqbal would be particularly harmful for government officials who face suit for actions allegedly carried out in the course of their duties. Indeed, in the Iqbal case,” he noted, “a bipartisan group of former Attorneys General and a former Director of the FBI who served in five different Administrations – William P. Barr, Griffin Bell, Benjamin Civiletti, Edwin Meese, William Sessions, and Richard Thornburgh – filed a brief urging the Court to hold that the complaint failed to state a claim against the former Attorney General and FBI Director, and explaining the ‘disruptive effects’ that allowing conclusory allegations to proceed would ‘have on the ability of high-level officials to carry out their missions effectively.’

“If allegations like those at issue in Iqbal were allowed to proceed to discovery against the Attorney General and other high-ranking officials,” Garre warned, “then there would be virtually no limit on the type of conclusory and bare-bone allegations that could subject such officials to the burdens of civil litigation.”

The implications of lax pleading standards are troubling for the private sector as well, said Garre. “Allowing conclusory and implausible claims to proceed to discovery would also impose added costs on civil defendants and society at large,” he predicted. “As the Supreme Court recognized in Twombly, it has been reported that ‘discovery accounts for as much as 90 percent of litigation costs when discovery is actively employed.’”

In lieu of legislative efforts to tamper with pleading standards, Garre recommended “a superior process for addressing the matter: the judicial rulemaking process established by Congress in the Rules Enabling Act, 28 U.S.C. §§ 2072-2074. The Rules Enabling Act,” he reminded Committee members, “establishes a procedure for amending the Federal Rules of Civil Procedure that ensures that any changes to the Federal Rules take place in an orderly and measured fashion by those who have expert knowledge of the Federal Rules.”

Twombly and Iqbal not “bolts from the blue”

2009-12-18T19:18:19Z

“While unquestionably important, the Supreme Court’s decisions in Twombly and Iqbal were hardly bolts from the blue,” said former U.S. Solicitor General Gregory Garre in testimony before the Senate Judiciary Committee earlier this month. “To the contrary, they are firmly grounded in decades of prior precedent at both the Supreme Court and federal appellate court level concerning the pleading standards under Rule 8 of the Federal Rules of Civil Procedure.”

An antitrust case, Twombly involved “a putative class action brought by consumers against major telecommunications providers alleging that the providers had conspired to restrain trade in violation of Section 1 of the Sherman Act by engaging in parallel conduct intended to prevent the growth of upstart providers and by agreeing to refrain from competing against one another,” Garre explained. “By a 7-2 vote, the Supreme Court – in an opinion written by Justice Souter -- held that the complaint failed to state a claim upon which relief could be granted.”

A national security case, Iqbal involved "a constitutional tort action brought by a Pakistani, Iqbal, who was arrested in New York in the wake of the September 11 attacks on criminal charges to which he pleaded guilty and held in a special federal detention facility after he was determined by the FBI to be ‘of high interest’ to the investigation into the September 11 attacks. After Iqbal was cleared of involvement in the attacks and had returned to his country of origin, he brought suit against 34 current and former federal officials ranging from the prison guards with whom he had day-to-day contact all the way up the chain to the Director of the FBI and the Attorney General of the United States, alleging that he was discriminated against on the basis of race, religion, and national origin," recalled Garre, who argued the case before the Supreme Court on behalf of former Attorney General John Ashcroft and FBI Director Robert Mueller. "The only question before the Supreme Court,” Garre emphasized, “was whether Iqbal had adequately pleaded claims against former Attorney General Ashcroft and Director Mueller, who asserted qualified immunity from suit.”

Twombly and Iqbal “clarify the gateway standards for pleading an adequate claim under the Federal Rules of Civil Procedure,” Garre affirmed. “The Supreme Court has on a number of prior occasions emphasized that, while the notice-pleading regime established by the Federal Rules of Civil Procedure is generous, it is not without limit. The Court has been particularly sensitive to ensuring that the pleading requirements are met before discovery is allowed in complex civil actions where proceeding beyond the Rule 12(b)(6) stage can have enormous practical and financial consequences for litigants given the burdens typically imposed by the discovery process in such cases.”

According to Garre, the Twombly and Iqbal decisions “fit comfortably within that deeply-rooted body of precedent and represent a natural application of existing law. To be sure, the cases clarified the applicable pleading standards under the Federal Rules of Civil Procedure and provide important guidance to the lower courts in evaluating the sufficiency of pleadings. But they represent a natural outgrowth of decades’ worth of settled pleading law.”

Garre concluded that “the Twombly and Iqbal decisions are unquestionably important and in line with decades’ worth of precedent at both the Supreme Court and appellate level. It is too soon to say what impact they will have on civil litigation in the federal courts,” he conceded, “but they have yet to lead to the wholesale dismissal of claims and are more likely to have an effect on a case-by-case basis. Any legislative effort to override these decisions at this time would be precipitous and unwise,” Garre warned. “The sounder course is to permit the Judicial Conference of the United States to continue to monitor the situation and respond if need be through the time-honored judicial rulemaking process established by Congress.”

Turning hellholes into points of light

2009-12-17T18:10:40Z

Although the focus of its current edition of Judicial Hellholes is, as always, on the “places where judges systematically apply laws and court procedures in an unfair and unbalanced manner,” the American Tort Reform Foundation (ATRF) also highlights “jurisdictions where judges, legislators, the electorate and the media intervened to stem abusive judicial practices.”

West Virginia, for instance, shows signs of wanting to shed its hellhole image. “Delivering on a promise made in his 2009 State-of-the-State address, Gov. Joe Manchin signed an Executive Order in April establishing an Independent Commission on Judicial Reform to consider ‘broad systematic reforms,’ including establishment of an intermediate appellate court,” ATRF notes in its “Points of Light” section. The foundation credits Manchin for creating the commission and urges the governor and the legislature to follow through on its recommendations.

ATRF sees another point of light in jurisdictions that are placing limits on damage awards for emotional harm. “Huge pain and suffering awards are of fairly recent vintage,” the foundation observes. “Historically, pain and suffering damages were modest in amount and often had a close relationship to a plaintiff ’s actual pecuniary loss, such as medical expenses. That is not necessarily so today.”

The report cites Maryland, New Jersey, Wisconsin, Vermont, California, and the U.S. Supreme Court as jurisdictions that “addressed the issue from a variety of angles by faithfully applying statutory limits on noneconomic damage awards, rejecting bias leading to inflated awards, prohibiting new forms of emotional-harm damages, and requiring proof of harm.”

ATRF sees other points of light in Arizona, Oklahoma, Ohio, and Texas. The foundation praises all three branches of the Arizona government for “addressing rising health care costs by controlling medical-malpractice lawsuits.” It cites Oklahoma for passing “the most comprehensive lawsuit reform bill of any state in 2009” and credits a unanimous Ohio Supreme Court for applying “a rule that ensures stability, predictability, and enforceability of consumer contracts.” The Texas legislature is lauded for rejecting “the litigation industry’s bills,” designed to roll back the salutary 2003 reforms, and “moving forward to increase access to healthcare and make the state a good place to do business.”

The American Tort Reform Foundation offers several recommendations for transforming judicial hellholes into points of light, “including stopping ‘litigation tourism,’ enforcing consequences for bringing frivolous lawsuits, stemming abuse of consumer laws, ensuring that pain and suffering awards serve a compensatory purpose, strengthening rules to promote sound science, protecting access to health care by addressing medical-liability issues, and prioritizing the asbestos and silica claims of those who are actually sick.”

The foundation also notes that “constructive media attention can encourage change, trial court judges can engage in self-correction, appellate courts can overturn improper lower court decisions and confine future judicial malfeasance, legislatures can enact statutory reforms, and voters can reject lawsuit-friendly judges or enact ballot referenda to address particular problems.”

Judicial hellholes receive due recognition

2009-12-15T17:18:34Z

Most judges do a diligent and fair job for modest pay,” says the American Tort Reform Foundation in the preface to its eighth annual edition of Judicial Hellholes. “But their good reputation and goal of providing balanced justice in America are undermined by the small number of jurists who do not dispense justice fairly and impartially.”

The report defines judicial hellholes as “places where judges systematically apply laws and court procedures in an unfair and unbalanced manner, generally against defendants in civil lawsuits,” and bestows the title on six jurisdictions: South Florida, West Virginia, Cook County (Illinois), Atlantic County (New Jersey), New Mexico Appellate Courts, and New York City.

South Florida is “known for its medical malpractice claims, never-ending tobacco lawsuits and generous verdicts” and is “developing a reputation as the place to bring slip-and-fall lawsuits due to its lower burden of proof compared to other states.” Florida is also “one of the few states that allow those who drive under the influence of alcohol or drugs to sue the automobile manufacturer for failing to prevent their injuries.”

West Virginia earns the hellhole title because of its “unique lack of appellate review; the home court advantage provided by locally elected judges to in-state plaintiffs against out-of-state corporations; unfair trial practices; and the novel, liability-expanding decisions of
its high court.” The state is “also known for its close relationships between the plaintiffs’ bar and its long-serving state attorney general.”

Cook County merits inclusion on the list because of its status as “Illinois’ center of litigation, hosting 65 percent of the state’s lawsuits while serving as home to just 41 percent of its population.”

Atlantic County “serves as a center for mass tort actions, often directed at one of the state’s own economic generators, pharmaceutical manufacturers. Ninety-three percent of plaintiffs in New Jersey’s pharmaceutical mass torts come from outside the state.”

Described as “a hotbed for insurance class-action litigation,” New Mexico’s judicial system is “appropriately criticized for a series of decisions that have made it the state’s ad hoc regulator of the insurance industry, often expanding coverage beyond what is provided for by contracts.”

New York City’s designation as a judicial hellhole stems from its having “spent more settling slip and falls, medical malpractice, car accident and school-related claims than the next five largest American cities combined.”

Though not bad enough to be classified as hellholes, California, Alabama, Madison County (Illinois), Jefferson County (Mississippi), and the Gulf Coast/Rio Grande Valley (Texas) did make the list of “jurisdictions that also bear watching for suspicious or negative developments in litigation or histories of abuse.”

Lawsuit reform would jump-start economy, create jobs

2009-12-11T18:25:58Z

“New Yorkers shoulder the burden of an excessively expensive and inefficient tort liability system through higher product prices, higher insurance premiums, higher taxes, lower wages, lower returns on investments in capital and land, reduced access to health care, and less innovation,” says Lawrence J. McQuillan of the Pacific Research Institute.

Noting that “the costs are buried in the price of every purchase or the costs are ‘foregone benefits’ that are not tangible or transparent,” McQuillan argues that “everyone can benefit from lawsuit reform -- except perhaps personal-injury lawyers.”

In a new study entitled An Empire Disaster: Why New York’s Tort System Is Broken and How to Fix It, McQuillan points out that a state’s legal system is one of the most important concerns for entrepreneurs considering start-ups or expansions. “Is it a secure legal system that is fair and predictable? Does it protect private-property rights and render timely court decisions? If the answers are yes, the state will attract entrepreneurs and capital, foster competition, experience greater job growth and faster overall economic growth.”

McQuillan contends that “lawsuit reform in New York State would create jobs; increase output and lower prices; expand the tax base and increase tax revenues; boost productivity and personal incomes; attract new customers, employees, entrepreneurs, investors, and taxpayers; lower health care costs while increasing the number of doctors and improving access to health care; save lives; increase stock market returns; and cut insurance premiums and liability losses.”

According to McQuillan, “The benefits from lawsuit reform add up to real economic stimulus that does not cost a single taxpayer dollar -- in fact, it would generate greater state and local tax revenue. But personal-injury lawyers don't want New Yorkers to have these multi-billion-dollar benefits,” he laments, “because lawsuit reform threatens their exorbitant fees and privileged status.”

McQuillan concedes that “New York's self-interested and politically generous litigation-industry titans have succeeded in using their political clout to block needed lawsuit reform in Albany. But as personal-injury lawyers are laughing all the way to the bank, the price tag for their obstruction is a damaged state economy. It is time,” he concludes, “that ordinary workers, taxpayers, and voters recognize this multibillion-dollar damage and take back Albany.”

New study shows "why New York's tort system is broken"

2009-12-10T22:41:49Z

“Because of the enormous political influence of personal-injury lawyers in New York, the state now faces a perfect storm of high tort costs, high tort-litigation risks, clogged courthouses, and nearly no tort reforms to balance a lopsided civil justice system,” says Lawrence J. McQuillan of the Pacific Research Institute. “Its excessive costs and risks negatively impact individuals and businesses both in New York State and across the country. The climate of fear is forcing people and jobs from New York.”

In a new study entitled An Empire Disaster: Why New York’s Tort System Is Broken and How to Fix It, McQuillan argues that “lawsuit abuse and the accompanying excessive litigation and damage awards act as a destructive and excessive ‘tort tax,’ which drags down the economy of a state or country. Excessive tort burdens divert resources to the lawsuit industry and away from more productive activities such as R&D or expanding access to health care.”

Freeing up the resources now consumed by tort abuse “would enable the creation of new innovative products, new companies, and new jobs at higher wages and with better health care benefits,” says McQuillan. “U.S. businesses would be in a better position to compete in global markets. The standard of living for ordinary Americans would rise more rapidly. The U.S. economy would approach its full productive potential.”

According to McQuillan, “the U.S. tort system is the most expensive in the world. Excess U.S. tort costs due to lawsuit abuse waste resources each year ($589 billion) equal to the annual output of Illinois or about $2,000 a year for every American,” he notes. “The system is also a very inefficient method of compensating injured victims -- the people that the system is intended to help. And truly injured people often wait years for compensation due to clogged courthouses and endless red tape.”

McQuillan points out that New York has “the second-highest direct tort losses, the fourth-worst relative tort losses, the fourth-worst relative tort-litigation risks, the third-worst tort system overall, and the third-worst tort rules and reforms on the books.”

Celebrating Twombly and Iqbal

2009-12-09T19:49:14Z

Noting that “out-of-control litigation prompted the Supreme Court in Twombly to adjust the threshold pleading requirements for unleashing the legal process,” legal bloggers Mark Herrmann and James Beck applaud that 2007 decision and the Iqbal ruling that followed and “made clear that the adjusted pleadings standard applied to all complaints, not just to the antitrust claims involved in Twombly.”

In an online debate with a critic of the two decisions, hosted at PENNumbra, Herrmann and Beck argue that Twombly and Iqbal are “proper exercises of judicial power. One of the Supreme Court’s jobs is to interpret the Federal Rules,” they assert. “It is a reasonable choice to emphasize less that a complaint should be ‘short’ and more that it must include a ‘showing that the pleader is entitled to relief.’”

Herrmann and Beck also contend that Twombly and Iqbal are “right on the law. The rules should require ‘plausible’ allegations,” they insist. “Why should implausible litigation be allowed? Likewise, claims should have to pass a ‘more than speculative’ test. Anything less simply invites expensive fishing expeditions.”

Seeing “nothing unreasonable about the pleading requirements that the Court articulated,” Herrmann and Beck recommend celebrating “a standard that permits only ‘plausible,’ non-‘speculative’ claims with a ‘reasonable expectation’ of success to inflict on defendants the enormous cost of discovery and the other collateral damages of litigation.”

Herrmann and Beck argue further that Twombly and Iqbal are “the right policy. All fair observers acknowledge the skyrocketing cost of discovery,” they affirm. “Some argue that the nature of the judicial process guarantees that judges cannot control discovery costs once litigation has commenced.” According to the two attorneys, “Every incentive exists for plaintiffs to abuse discovery because many defendants choose settlement when faced with its high cost. It is entirely proper,” they say, “to prevent plaintiffs who cannot state even ‘plausible’ claims from inflicting massive discovery costs on defendants -- and on society.”

Herrmann and Beck maintain that “courts have no legitimate basis for favoring plaintiffs when interpreting pleading standards. A just system does not pick sides in advance, but instead establishes neutral rules,” they contend, rejecting “the normative view that it is somehow ‘better’ to let unmeritorious cases proceed than to risk that meritorious cases will be dismissed. Either way represents error, and neither error is inherently better than the other.”

Herrmann and Beck have no desire to deny justice to the aggrieved. “Potentially meritorious claims by plaintiffs should not lightly be dismissed,” they affirm. “But implausible claims, unsupported by facts, should be screened out to avoid inflicting massive costs on innocent parties with essentially no procedural protection at all.”

Herrmann and Beck conclude that “Congress should endorse the recent decisions in Twombly and Iqbal; it should not undo them.”

The lost opportunity costs of defensive medicine

2009-12-04T18:35:09Z

In a recent commentary in the Washington Times, Jason Fodeman, an internal medicine resident at the University of Connecticut, echoes the commonly held view among doctors that “unpredictable jury awards result in lawyers flooding the system with often frivolous lawsuits,” which results in “escalating malpractice premiums, a cost eventually passed on to the patient.”

A former health policy fellow at the Heritage Foundation, Dr. Fodeman affirms that fear of litigation “forces doctors to resort to a process known as defensive medicine -- ordering tests, procedures and specialty consults that patients may not need, simply to protect themselves from lawsuits.” Fodeman cites a Massachusetts Medical Society survey that found 83 percent of responding doctors had engaged in such defensive practices, with up to 28 percent of orders and consultations they requested deemed by them to be medically unwarranted.

Fodeman also cites estimates of the cost of defensive medicine ranging from $60 billion to $200 billion annually.

“Perhaps the greatest price associated with our litigious society is not the cost per se of these unnecessary medical interventions, but their cost in opportunity,” Fodeman emphasizes. “Medical resources are scarce,” he explains. “In a hospital, there are only so many CT scan machines and only so many radiologists to read them. When fear of lawyers causes practically every patient with a bump or bruise who enters the emergency room to get a CT scan, whether it's clinically warranted or not, critically ill patients who need the scan inevitably must wait their turn.

“While radiologists read unneeded tests, precious minutes tick by, with patients suffering from possibly fatal conditions such as subarachnoid hemorrhage (bleeding in the brain) or septic shock (overwhelming infection) waiting quietly in the queue.”

Fodeman also laments the effect that “jackpot justice” has “on the time doctors can spend with patients. Patients often may wonder why doctors spend so little time with them in the hospital. Doctors are not out playing golf or eating bon bons,” he insists. “They are in back rooms writing notes, documenting everything they have done and everything they plan to do.

“Every day, a detailed assessment and plan is needed to outline all actions and the reasoning behind them to protect doctors from lawsuits, acknowledging every lab value, test, consult. If nothing changes from one day to the next, doctors must take the time to write the same thing again.”

Such “valuable physician time” could be “better spent actually seeing patients,” Fodeman argues, and the diversion of it to unnecessary recordkeeping “can be counterproductive to a patient’s well-being.”

Anaheim seeks back taxes from online travel companies

2009-12-04T16:20:11Z

Several Texas cities recently triumphed over online travel companies in court, obtaining a $20 million award for allegedly delinquent hotel taxes. But city officials in Anaheim, Calif. pursuing a similar course may not be so lucky, says attorney David Axelrad.

“The case is different because it involves tax collection rather than a public nuisance claim, as was the case in the State Supreme Court's Clancy decision,” said Axelrad, a partner with Encino-based Horvitz & Levy and blogger at Nuisance Law. “The case was argued on October 19, and is under submission awaiting the court's decision.”

In Priceline.com Inc. v. City of Anaheim, an independent hearing officer ordered several online travel companies to pay the city $21 million in back taxes.

“However cut and dried tax collection may seem, there is always an element of prosecutorial discretion involved in deciding whom to target for tax collection (especially where, as here, there is a real question whether the tax even applies), whether to settle, and for how much,” Axelrad said. “If the profit motive of contingent fee counsel is allowed to skew these results in favor of aggressively pushing for the largest possible recovery, whether or not it is warranted by a fair reading of the law, public confidence in the neutrality of prosecutorial discretion will be eroded, precisely the result that the Clancy decision is designed to prevent.”

The superior court allowed contingent fee counsel to proceed in the name of the City on the ground that the California Supreme Court’s prohibition against contingent fee counsel in Clancy bars government hiring of outside contingency counsel only in the prosecution of eminent domain and nuisance abatement actions.

“As far as the resolution of the Priceline case, I would like to see a decision that upholds the California Supreme Court's decision in Clancy,” Axelrad said. “I believe there should be a bright line rule against the use of contingent fee counsel to prosecute public enforcement actions. Otherwise, no matter how much ‘control’ the prosecutor claims to assert, the profit motivation of contingent fee counsel will erode public confidence in the neutrality and impartiality of law enforcement decisions.”

The case is currently before the appellate court, with a ruling expected before the end of the year.

Philip Morris verdict wrong on three counts

2009-12-02T17:05:04Z

A South Florida jury has ordered Richmond, Virginia-based Philip Morris USA to pay $300 million to a former smoker, finding that the tobacco company's negligence was the cause of her emphysema.

The award included $56 million in compensatory and $244 million in punitive damages for 61-year-old Cindy Naugle and is the largest to date among thousands of lawsuits filed in the state against tobacco companies.

The smokers' lawsuits have been working their way through Florida courts since the state Supreme Court in 2006 voided a $145 billion class-action jury award against tobacco companies. The court said each smoker's case had to be decided individually, but let stand that jury's findings that tobacco companies knowingly sold dangerous products and hid risks from the public.

Critics say the verdict represents a politically correct determination to vilify tobacco companies and ignore smokers' assumption of risks.

“I believe this verdict is entirely improper,” said Maureen Martin, senior fellow for legal affairs at the Heartland Institute. “The Florida Supreme Court voided a verdict in the 2006 class action case and ruled each case had to be tried individually. But Philip Morris is barred from relitigating, in the individual cases, the finding in the 2006 case that it knowingly sold tobacco products that were dangerous without disclosing the risks.”

Attorneys for Philip Morris agree, stating that the case was marked by a fundamentally unfair and unconstitutional trial plan.

"That allowed the jury to rely on findings by a prior jury that have no connection to the plaintiff," said Murray Garnick, senior vice president for Altria client services and associate general counsel.

Naugle says her 24-year habit caused her to require 24-hour oxygen and travel in a wheelchair because walking leaves her exhausted.

Martin cites three problems with the case. First, she says, it’s incorrect to say there was failure to warn customers about the dangers of cigarettes when packages have carried warning labels since 1966.

“Second, Ms. Naugle didn't start smoking until 1968, two years later, so she surely had notice of health risks on every single package of cigarettes she bought,” Martin said. “Third, the prior finding that Philip Morris hid those dangers means that Philip Morris could not submit evidence Ms. Naugle knew of the risks.”

Philip Morris is expected to appeal the decision.

McDonald decision expected to build upon Heller

2009-11-30T19:26:55Z

CHICAGO -- Second Amendment advocacy groups say McDonald v. Chicago could be a bigger landmark case than last year’s Heller.

A ruling in favor of gun rights could block future lawsuits by gun-control advocates, while an unfavorable ruling would be a serious setback.

Maureen Martin, senior fellow for legal affairs with the Heartland Institute, believes this year’s ruling will build upon the Heller precedent, extending the application of the Second Amendment to the states.

“In the Heller case, the District of Columbia (federal) ordinance, very similar to Chicago's, was declared unconstitutional," Martin recalled. "The Court said, however, that some reasonable regulation is constitutionally permissible but not a total ban. Since that 2008 ruling, the District has been pushing the boundaries, trying to continue a ban.”

DC's determination to vitiate Heller may prompt future lawsuits, Martin said.

Although gun advocates anticipate a victory in McDonald, many fear a leftward shift in the Court if another vacancy occurs during the Obama administration.

If the Court again rules in favor of gun rights, however, future revisions are unlikely even with a liberal majority, said Martin.

“Under the doctrine of stare decisis, the Court's holdings are binding precedent, absent extreme reasons for revision,” she explained.

“The two Justices viewed as likely to be replaced by Obama are Justice Ginsburg and Justice Stevens. These two justices dissented in Heller, so replacing them would not change the votes on the court (5-4 in the Heller case).”

The Heartland Institute has filed an amicus brief in McDonald, pointing out that the purpose of the ban was to reduce violent crime committed with handguns. However, more murders were committed with handguns in 2008 than in 1983, the first full year of the ban.

California tax dollars wasted on litigation

2009-11-27T19:29:45Z

California taxpayers learned that their state has a huge problem when California Citizens Against Lawsuit Abuse (CALA) released a report revealing that eight of the state’s largest cities and nine of its largest counties spent $504.1 million to deal with lawsuits over the course of fiscal years 2006-2008. CALA director Tom Scott estimates that the statewide figure would be in the billions. Scott talked to Public Nuisance Wire about these startling figures.

PNW: What prompted you to compile this report?

Scott: I have a master’s in public administration and have been involved with this project for 14 years. Over time there has always been so much focus on private sector issues, yet I always felt that there was very little discussion on public ones. So, back in 2007, CALA decided to take a look at some key counties, did a report on school districts, and looked at verdict settlements and how much was paid out.

PNW: What did you expect to discover?

Scott: It wasn’t about frivolous lawsuits or lawsuit abuse necessarily; it was about the cost of litigation. What are taxpayers paying out and not knowing, and how is it affecting services?

PNW: What were the initial findings?

Scott: Our report is saying, this is just the tip of the iceberg. We looked at a very small sampling in the state of California; and, if this is the situation going on in California, just think about the dollars being lost to city services — sheriff, parks, fire department. It has to be in the billions. Ours had $500,000 in just the small sample.

PNW: Can you give us an example of the impact?

Scott: Los Angeles County spent $190 million in verdicts, settlements, and outside counsel, and the City of Los Angeles spent $136.9 million. The money spent by the city in just one year could have paid for the starting base salaries for 1,271 police officers. How's that for an economic stimulus?

PNW: What's the solution?

Scott: CALA is calling for greater disclosure, more public oversight, and the adoption of aggressive risk management procedures to protect our public coffers. The days of public entities being viewed as deep pockets need to end. The public has every right to know that the cities and counties are spending the amount of money they are.

PNW: Will the report be updated regularly?

Scott: We will pick it up and do it on a 2-year basis, and off years look at school districts. They are faced with the same situation. I don’t know a parent who isn’t concerned about their kid’s education. When schools and teachers associations and all the various unions and boards are screaming about money for education, somebody has to think about the cost we are paying for this.

Lawsuits carry high price tag for California taxpayers

2009-11-25T15:08:00Z

A new report from California Citizens Against Lawsuit Abuse shows that eight of the state’s largest cities and nine of its largest counties spent $504.1 million to deal with lawsuits over the course of fiscal years 2006-2008.

CALA Director Tom Scott considers these numbers are especially alarming, given that they are based on a small sampling from around the state.

“I think the problem is so much bigger than what our report shows,” Scott said. “We just took a little glimpse. We have 58 counties and 480 cities in the state and we measured half a billion in our sampling. That’s staggering and, to me, a massive problem.”

The taxpayer money was spent on verdicts, settlements and outside legal counsel. Scott said he had a particular interest in the public sector when formulating the report.

“It never occurs to people that some of their hard-earned dollars are paying litigation costs,” Scott said. “With devastating budget cuts hitting cities and counties up and down the state, there are countless other ways this money could have been spent.”

While some of these lawsuits have merit, many do not, Scott insisted, and are costing taxpayers a great deal of money.

“Very few people pay attention to public lawsuits, and I believe this has a huge impact on taxpayers. The public needs to engage and ask more questions,” Scott said. “When they’re electing local county leaders, they need to make litigation as prominent an issue as taxes and regulation. The litigation climate is just as big and has just as big an impact as the other two.”

Knowing that there are approximately 50,000 lawsuits against the state of California, Scott and CALA sought to determine the financial impact. The data were hard to come by, however, so they settled for only a sampling.

“Trying to find those numbers is really overwhelming,” Scott said. “I would have thought they would have been readily available, but they don’t keep track of them. It was tough enough getting the numbers from a county or city.”

The CALA report examined legal expenditures in the counties of Alameda, Fresno, Kern, Los Angeles, Orange, Sacramento, San Diego, San Francisco, and Santa Clara; and the cities of Anaheim, Bakersfield, Fresno, Los Angeles, Oakland, Sacramento, San Diego, and San Jose.

“The one thing we have called for in the report is certainly more transparency and better risk management,” Scott said. “A lot of counties have done a lot better job at posting this information. The fact that city attorneys are making this information more public is good.”

Sherwin-Williams appeals Mississippi millions award

2009-11-24T16:27:10Z

MISSISSIPPI - Sherwin-William has filed notice of intent to appeal a $7 million verdict favoring a former Mississippi high school sports star who blames the paint company for lead poisoning.

Trellvion Gaines, who allegedly suffered neurologial illness and cognitive delays as a result of ingesting lead paint chips as a child, was awarded $7 million by a Jefferson County Circuit Court jury in July. Recently, Judge Lamar Pickard denied Sherwin-Williams' request for a new trial and judgment not withstanding the verdict. After the verdict, questions arose about the veracity of testimony about Gaines' deficits.

"If the Mississippi Supreme Court does not overturn this case, then all of the repairs to their reputation that they have made with the tort reforms they have implemented will be severely damaged," said Hans von Spakovski of the Heritage Foundation. "If they do the right thing and look at and evaluate the evidence in this case, they should overturn it.

"If they don't overturn this, they will be damaging Mississippi's reputation. Before they implemented their tort reform rules, Mississippi was known as one of the worst judicial spots in the country. Local juries would make big awards not based on any real evidence of wrongdoing."

The case hinges on the damage Gaines claims to have suffered from ingestion of lead paint, allegedly produced by Sherwin-Williams. At trial, Gaines' mother, Shermeker Pollard, said that her son could not attend college, and witnesses testified that Gaines' deficits would prevent his attendance.

The $7 million damage calculation was based upon those statements.

After the verdict, Gaines announced plans to attend Southwest Mississippi Community College and play football there on a scholarship. Sherwin-Williams says that Gaines' enrollment undermines testimony that he would never be able to attend college.

"This seems like a totally bogus case," Spakovski said. "If this case isn't overturned, it's going to warn big companies that they should perhaps not do business in Mississippi, which economically would not be very helpful."

Spakovski said Sherwin-Williams needs to come up with grounds to appeal the case in federal court, to get it removed from state court.

"I'm not sure what those grounds would be," Spakovski said. "It's not east to appeal a state verdict to a federal court. Sherwin-Williams should appeal this as far as they can, though. Once a company starts giving in and settling, these kinds of frivolous claims make them a target for more."

The case has already been before the state Supreme Court once, when a summary judgment in favor of Sherwin-Williams was overturned by the court.

The loss by Sherwin-Williams in this case is a rarity for the industry, which has previously seen victories in Rhode Island, Missouri, Wisconsin and New Jersey and is currently battling the contingent-fee agreements government entities enter into with private law firms in California.

Will McDonald be another victory for gun rights?

2009-11-23T18:11:12Z

The Second Amendment Foundation (SAF) has filed a brief in the Supreme Court case of McDonald v. Chicago and expects a decision favoring gun rights. SAF President Alan Gottlieb spoke to Public Nuisance Wire about the ramifications of such a victory.

PNW: After the victory in Heller, why is this case so important?

Gottlieb: The McDonald case not only challenges the Chicago ban, but also brings up the question of the application of the right to keep and bear arms to the states through the 14th Amendment.

PNW: What does the presence of new Supreme Court Justice Sonia Sotomayor mean for gun rights advocates?

Gottlieb: She replaces a judge that didn’t support our position to begin with, so we haven’t lost a vote, but it’s not like we’ve gained one either. The bottom line here is that it will be interesting to see what Sotomayor says, because, given her prejudice against guns, we’ve given her an awful lot to chew on.

PNW: Why have Second Amendment issues gained momentum in recent years?

Gottlieb: It’s a combination of things. One, because of groups like ours filing lawsuits to change policy. Also, some grave threats to privacy both on the national level and international level. A lot of gun owners are very sensitized that their rights are under attack. It’s not just Heller in DC. We overturned the ban on handguns in San Francisco, overturned the ban on guns at public housing units, and some other victories. What’s happening is that people who are looking at the issue on both sides are seeing movement. Our people are really excited because it’s giving rights back. The bottom line is, there’s a tension that raises to the surface and that makes it much more of a public issue.

PNW: What other efforts are you engaged in to support gun rights in America?

Gottlieb: Legal action is one of the major themes we have been doing in the last year or two on the issue. This all started decades ago when we would get articles in law review journals and were getting the academic background to be able to bring these cases to court. We spent a couple of decades getting this issue ripe enough and having enough legal scholarship behind it to be able to get these court cases moving. It’s been a rather long, planned-out process that’s first come to fruition starting last year with the Heller case. We do a lot of research and public education on the issue and hold conferences.

PNW: What are the most important cases after McDonald?

Gottlieb: Some of the next important cases are already filed, but some are on hold, waiting to see what happens in McDonald v. Chicago. In particular, two of them in California. One has a handgun roster, a list of approved guns you can own as opposed to those you can’t own. We challenge the roster. Part of that criteria is the manufacturer has to pay to keep their gun on the list -- and if they don’t, the gun license expires. We don’t think that will stand. In the future, the state of Illinois is the only state that doesn’t allow any form of concealed carry or open carry. Washington DC has a case like that now and that will be moving up after McDonald v. Chicago.

PNW: If you do achieve a victory in McDonald, what's next for you?

Gottlieb: If we were to win the Chicago case, the cases that would come up next would probably not have anything to do with taxes on guns, but more to do with denying people an absolute right to be able to carry for protection. We would be looking at what we call "low hanging fruit" that can be taken off the trees easily. I’m not expecting to overturn every gun law in the country, but there are a number of them that are really stupid. In New York City, it takes nine months to get a permit to have a gun in your own home. We would challenge that process, as nine months is a bit ridiculous.

PNW: What are the implications if the Supreme Court were to rule for the other side?

Gottlieb: Obviously, what it would mean is that a significant part of the Constitution -- the Second Amendment and the Bill of Rights -- only applies to the Federal Government and not to the states infringing on people’s rights. The precedent for that would be ugly, and I can’t see that happening. You would be taking a step backwards.

Chevron files suit against environmental plaintiff’s lawyer

2009-11-20T15:55:57Z

SAN FRANCISCO – Chevron has filed a malicious conduct lawsuit against an attorney who took the oil giant to court in 2006.

The lawsuit alleges Cristobal Bonifaz, who once represented Amazon Defense Coalition (ADC), knowingly put witnesses on the stand who falsely claimed they had contracted cancer from oil contamination.

Chevron is the defendant in a huge lawsuit that seeks to hold the company responsible for alleged environmental damage to the Ecuador rain forest allegedly caused by oil spills from Texaco, Inc.

Bonifaz’s courtroom showdown with Chevron dates back to 1993 and includes two cases thrown out of court as late as 2001 and 2007.

Hans Von Spakovsky, senior legal fellow for the Heritage Foundation, said Chevron’s case against Cristobal Bonifaz is compelling.

“His original lawsuit against Chevron claiming that his clients had incurred cancer fell apart when they admitted in depositions that they had never suffered from cancer and had no physical injuries of any kind,” Spakovsky said.

“The judge in that case specifically said that 'this was not the first evidence of possible misconduct by plaintiffs’ counsel in this case' and that the case 'was manufactured' by Bonifaz as part of a larger scheme against Chevron.”

In September 2007, a U.S. district court in San Francisco dismissed nine cancer allegations against Chevron. The judge termed the claims "baseless,” declaring the evidence "was so minimal as to be unreasonable and incompetent."

During that trial, two of the claimants admitted they'd never contracted the illness they claimed as a result of contaminated water.

As a result, Bonifaz was ordered to pay Chevron $45,000 in fines.

Spakovsky said a ruling in favor of Chevron will send a message to lawyers who target businesses for financial gains.

“Hopefully, Chevron will obtain a judgment against Bonifaz, because this kind of aggressive action by companies that are the targets of abusive litigation is needed in order to stop lawyers like Bonifaz from abusing our legal system and filing meritless claims,” Spakovsky said.

ADC, which represents over 30,000 Ecuadorians, severed ties with the embattled Bonifaz in February 2006.

Must states abide by the Second Amendment?

2009-11-19T22:46:40Z

On November 16, the Second Amendment Foundation filed a brief in the U.S. Supreme Court case of McDonald v. Chicago, challenging the constitutionality of the city’s ban on handguns.

“The brief really is aimed more at the center left of the court, because I believe we’ve got the political right of the court on our side based on the Heller decision,” said Alan Gottlieb, founder of the Second Amendment Foundation. “I think our brief at minimum will make some of the liberals a little uncomfortable, because, while they may not be for guns, they’re for rights -- and what we’re looking to do is really expand the Bill of Rights in general in its interpretation as it’s applied to the states.”

In last year’s District of Columbia v. Heller case, the Supreme Court ruled 5-4 in favor of gun rights as they relate to the federal government. This time around, the Court will be ruling on whether or not state and local governments have the right to enforce strict gun control laws and bans.

“The case is important in a couple of areas. One in particular, of course, is the Supreme Court ruling in Heller, recognizing the Second Amendment as an individual right only applied to the federal government. In order to make the Second Amendment apply to the whole country, this McDonald case is extremely important,” Gottlieb said. “Not only would it wipe out the Chicago gun ban; it would knock out a bunch of other laws as well.”

The McDonald case brings up the question of whether or not the right to keep and bear arms can be applied to the states through the 14th Amendment.

“We’re giving the courts an opportunity here to revisit the privileges and amenities clause of the 14th Amendment,” Gottlieb said. “Based on the number of justices that have made comments that the 14th should be revisited, we’re giving them a chance to do that, which could make this case one of the most important cases in constitution law history.”

In the city of Chicago, gun rights advocates are angered by the level of local government intrusion. Guns need to be re-registered every year, there is a tax on individual gun owners, and handgun ownership within the city is banned.

“One of the things that Chicago has that a number of places have as well is the re-registration scheme, where you have to re-register your gun every year,” Gottlieb said. “In Chicago’s case, it’s on long guns -- and. if you don’t get it registered in the time period, the gun becomes contraband. Laws like that we feel should be taken down, and we believe the court’s ruling will allow us to do that.”

Attorney Alan Gura, who successfully argued the landmark Heller case before the high court in 2008, will be lead attorney for McDonald v. Chicago as well.

“I really believe we are going to win,” Gottlieb said. “My firm belief is that the Court would have never taken this case if they didn’t want to reverse what’s out there now.”

Baucus bill threatens gun rights

2009-11-18T22:17:23Z

Gun owners believe their Second Amendment rights will be compromised if the health care bill sponsored by Senate Finance Committee Chairman Max Baucus is passed.

The Baucus bill dovetails on a provision in President' Obama’s $787 billion stimulus package last spring that requires all gun-related medical data to be funneled into a national health database.

“This is going through because the hard left and the Democratic Party are intent on a government takeover of medicine, and that’s what Baucus’ bill will do,” says Larry Pratt, executive director of Gun Owners of America. “It’s certainly not something that gun owners want to see at all, because the privacy invasion that this will compel is a danger to gun owners in terms of registration and in terms of people having medical records used as a flag to deny their right to keep and bear arms.”

The Baucus bill doesn’t mention guns, but the omission leaves room for subsequent "interpretation."

“The very fact that the word gun is not in the bill should give us all concern, because there’s nothing to stop them. They really intend on controlling a lot,” Pratt says. “This is a control bill; this is not a health bill.”

A provision in the bill would allow Americans to decline the government plan, subject to a fine of up to $3,800.

“Let me get this straight. If you choose to exercise your Second Amendment rights under Senator Baucus' proposed healthcare law, you have to buy your right to medical privacy?” Pratt asked.

Pratt's GOA is lobbying to stop the bill.

“We have had a staccato of legislative alerts going out, and people can go to gunowners.org and they can target what exactly is before the Senate and what needs to be requested,” Pratt says. “This is one way we try to counteract the enormous pressure being put on these so-called moderate Senators, because really the success or failure is going to depend on whether or not one Senator from the Democrat side is willing to hang tough and break from their party. People can help us keep the heat on.”

Disincentives for effective malpractice reform

2009-11-17T22:32:40Z

In its recent analysis of tort reform, the Congressional Budget Office concluded that limiting medical malpractice lawsuits would reduce the federal deficit by $54 billion over the next 10 years.

The CBO says that tort reform would cut costs by limiting the use of diagnostic tests and other services health care providers and doctors use to reduce exposure to lawsuits.

The recent health care bill passed by the House specifically prohibits financial incentives for states that implement caps or limits on malpractice awards and attorneys fees.

“These are two of the most effective remedies that states have implemented to stop abusive malpractice cases,” said Hans von Spakovsky, senior legal fellow for the Heritage Foundation. “The results have been reduced malpractice premiums, reduced malpractice direct and indirect costs, and reductions in the costs of defensive medicine practiced by doctors.”

CBO Director Douglas Elmendorf told lawmakers that recent research has shown that lowering the cost of medical malpractice tends to reduce the use of health care services.

The analysis was not tied to specific legislation, but cited reform ideas such as limiting pain-and-suffering awards to $250,000, capping punitive damage awards at $500,000, limiting attorneys fees, and implementing a one- to three-year statute of limitation.

“The CBO study very much underestimated the savings from effective malpractice reform,” von Spakovsky said. “The estimates for the costs of defensive medicine alone range from $191 billion to $239 billion in 2008.”

The CBO found that health care providers will spend about $35 billion on malpractice liability this year alone, including premiums and awards. The CBO believes their proposals would reduce national health care spending by about 0.5 percent, or $11 billion in 2009. That includes the reduction in malpractice premiums, as well as a 0.3 percent reduction in spending from providers ordering procedures to avert lawsuits.

“The disincentive for effective malpractice reform contained in the health care bill will do the exact opposite of what the sponsors are claiming the bill is intended to achieve — it will lead to increased health care costs,” von Spakovsky said. “It has terrible implications for discouraging states from implementing tort reform and is just another sign of how beholden Democrats are to the trial lawyers’ lobby.”

Minnesotans anticipate legislative battle over statute of limitations

2009-11-16T20:55:31Z

"When state laws allow too many lawsuits that don't have merit, you pay for it through higher taxes to cover the court system's costs," warns the nonprofit group Minnesotans Against Lawsuit Abuse (MALA). "But you also pay for it through higher prices for the things you buy when businesses are forced to pay out unfair settlements and verdicts."

MALA emphasizes that "personal injury lawyers get a large percentage of the take, which comes indirectly out of your pocket."

MALA predicts that the state's statute of limitations is likely to be a major issue in the 2010 Minnesota Legislative Session.

"While most states have a two- or three-year general tort statute of limitations (there are even a few states with just a one-year SOL), Minnesota has a six-year time in which to file a lawsuit," the group notes. "Having such a long time between the time the alleged injury occurred and the filing of the lawsuit benefits the plaintiff, because it is much harder to defend yourself.

"Shortening the length of time between the injury and the filing of the lawsuit makes it more fair to all parties, because people will better remember important details about the case," MALA argues. "A longer statute of limitations leads to more cases being settled because of the hassle, even cases that shouldn't have been brought in the first place."

The result is "more costs both for the courts and the people being sued. When a business pays out for these worthless lawsuits, you have to pay more for the goods and services these buisnesses provide."

MALA adds that a recent Minnesota Supreme Court case allows out-of-staters to take advantage of this longer limitation period, suing out-of-state companies for injuries that occurred elsewhere.

"There have been more than ten thousand out-of-state lawsuits filed in Minnesota in the last few years," MALA reports. "Guess whose taxes get to pay for all the court-related expenses of these lawsuits?"

MALA describes itself as "a grassroots group of consumers, business trade associations, and other organizations that are united in trying to highlight how unfair Minnesota's civil justice system is for its impact on consumers."

Tort reform opponents in denial, says Tiger Joyce

2009-11-14T18:29:41Z

"Though commonsense Americans repeatedly raised the issue of tort reform while discussing health care legislation with members of Congress during town hall meetings this past summer, too many lawmakers and analysts still stubbornly insist that medical liability lawsuits do not contribute significantly to rising health care costs," notes Tiger Joyce of the American Tort Reform Association. "These lawmakers and analysts are wrong," he insists.

In a commentary for The Metropolitan Corporate Counsel, Joyce cites a 2006 Harvard School of Public Health finding "that four out of every 10 medical malpractice lawsuits filed in America each year are groundless, and that the 'overhead costs of malpractice litigation are exorbitant.' These costs, of course, are imposed on doctors, hospitals and insurers," he observes, "and then ultimately passed on to health care consumers."

Joyce also draws attention to the "more subtle costs related to the practice of defensive medicine," motivated by the desire to avoid litigation and estimated to be as high as $200 billion annually.

The cost of litigation and medical malpractice insurance has driven doctors to give up their practice and inhibited young people from entering the field of medicine. The problem is likely to get worse, says Joyce, as "the Association of American Medical Colleges predicts that the overall shortage of doctors practicing both primary care and high-risk specialties may grow to nearly 125,000 by 2025."

Joyce argues that "medical schools will find it easier to persuade bright young men and women to pursue careers in medicine if the costly threat of medical liability lawsuits is reined in. The experience of states that have enacted tort reforms bears this out," he affirms.

Besides "limiting non-economic damages in medical liability litigation," Joyce recommends "additional liability reforms, such as health courts, administrative compensation programs, 'early offers,' and 'safe harbors' for physicians who practice in compliance with evidenced-based clinical guidelines."

Joyce also recommends reining in "speculative state lawsuits that often unfairly target the makers of federally regulated prescription drugs and medical devices and technologies."

Noting that such measures could reduce health care spending "by at least several hundred billion dollars each year," Joyce concludes that "public policy must discourage litigation that abuses our civil justice system and makes health care less accessible and more expensive."

State legislatures resist federal usurpation

2009-11-13T22:07:53Z

In recent postings on its website, the National Conference of State Legislatures (NCSL) outlines its position on medical malpractice, product liability, and tort reform.

With regard to medical malpractice, NCSL "recognizes the importance of permitting aggrieved parties to seek full and fair redress in state courts for physical harm done to them due to the negligence of others" and "understands the importance of having clear rules to govern the means and methods by which people can seek such redress. Our American federalism contemplates diversity among the states in establishing these rules," NCSL emphasizes, "and respects the ability of the states to act in their own best interests in matters pertaining to civil liability due to negligence."

Against that background, NCSL announces that it "regards the regulation of medical professionals as a purely state matter, not meriting federal intervention or preemption of state laws. All fifty states have statutes of limitations in place stating the timeframe during which it is appropriate for an action to be brought in negligence cases, and many states have established limitations on the amount of noneconomic damages that may be awarded in such cases," the group affirms. "All states have evidentiary processes in place that provide for the full and fair adjudication of lawsuits."

NCSL reports that "most states have taken up the issues surrounding medical malpractice and continue to handle the issues surrounding the filing and processing of these cases in ways that are consistent with existing state law, giving due consideration to factors that may be unique to a particular state."

The group "opposes federal efforts to preempt existing state laws or state constitutional provisions in the area of medical malpractice lawsuits," specifically those governing "the applicable statute of limitations in such cases . . . the awarding of damages by mandating a mandatory uniform amount of damages of any kind . . . the drafting of pleadings and introduction of evidence in such cases [and] the awarding of attorney's fees."

On the subject of product liability, NCSL notes that Congress periodically "seeks to pass legislation which severely restricts the rights of persons injured by defective products to seek recovery in state courts. Such legislation," the group asserts, "fails to meet the standards necessary for federal preemption.

NCSL insists that "no comprehensive evidence exists demonstrating either that state product liability laws have created a problem of such dimension that a federal solution is warranted or that federal legislation would achieve its stated goals." The group contends that "this type of legislation would create serious new problems in the field of product liability by dictating a single set of rules controlling the timeliness of claims and the admissibility of evidence. It would conflict with long-standing state laws governing tort liability, workers' compensation and insurance regulations."

Concluding that "such proposals would place state legislatures and state courts in an intolerable legal straightjacket," NCSL "strongly opposes all legislation before Congress that would have the effect of preempting state laws regulating recovery for injuries caused by defective products."

NCSL takes a similar stance against "attempts to set uniform federal standards for state civil tort actions." The group "strongly opposes federal legislation which would preempt state personal injury and tort laws."

Contingency arrangements undermine governmental neutrality

2009-11-12T22:58:14Z

The amicus brief submitted in August by the National Paint & Coatings Association (NPCA) in Pennsylvania v. Janssen Pharmaceutica is an excellent companion piece to Janssen’s January application for extraordinary relief.

"Over the past decade, a number of private attorney law firms have been aggressively soliciting state and local governments to sign on to 'no-cost' contingent fee lawsuits against NPCA member companies, alleging that their lawful sale of lead-containing paints many decades ago constitutes a public nuisance," the NPCA brief begins, in explanation of the association's interest in the case.

"These private attorneys have pursued this public nuisance theory despite the fact that the health risks associated with lead paint arise only through the intervening negligence of property owners who fail to maintain their premises in lead-safe condition and despite undisputed evidence that existing regulatory and public-private initiatives -- including nationally recognized programs sponsored by NPCA and its member companies -- have resulted in dramatic reductions in blood lead levels nationwide over the past thirty years," the brief continues.

"The vast majority of state and local governments properly rejected these private attorney solicitations, continuing instead with their successful efforts to reduce blood lead levels through proper governmental actions, and those governments who did respond to the private attorneys' siren song have seen their lawsuits uniformly rejected by every court to finally address the issue. But, nonetheless,the costs imposed on NPCA members from the private attorneys' entrepreneurial litigation campaign have been significant."

NPCA points out that its members have been "compelled to expend scores of millions of dollars in defense costs, and they have been improperly stigmatized for the historic sale of lawful products over thirty years ago."

The brief supports "the constitutional principles underlying the need for neutrality and balanced government decision making in parens patriae litigation, principles that are directly undermined by the transfer of parens patriae authority to contingent fee private plaintiffs' counsel."

NPCA argues that flaws inherent in the contingent fee arrangement "threaten the government's ability to properly insure that justice is done, and they undermine public trust in the proper functioning of the government in all areas of our society."

The association focuses on "the distorting impacts of contingent fee agreements not only on the decision-making of the retained private attorneys, but also on the decision-making of the government attorneys who retained them and on the proper balancing of governmental authority exercised by the legislative, executive, and judicial branches in connection with its quasi-sovereign parens patriae interests. This distortion arises because contingent fee agreements create improper financial incentives for both parties to the contract, the private attorney and the government."

NPCA argues that contingent fee agreements "tip the scales of government decision-making away from the required neutrality."

For one thing, it removes "the vital counterweight of fiscal responsibility that should inform all government action."

The contingency arrangement also encourages the government entity "to continue to pursue a monetary damages award that will make the representation worth the private attorneys' time. Thus," NPCA concludes, "the government has an artificial incentive to forego alternative approaches -- such as seeking purely equitable or injunctive litigation relief or electing to suspend the litigation in preference for other government action -- not because those alternatives fail to protect the public interest, but because they will not allow for the potential financial payout the government now needs to retain its legal team."

Hopi Council declares environmentalists unwelcome

2009-11-09T21:31:32Z

Last month the Hopi Tribe issued a resolution declaring local and national environmental groups unwelcome on Hopi land. The Hopi Tribal Council unanimously approved a resolution stating that environmentalists have worked to deprive the tribe of markets for its coal resources and the revenue it brings to sustain governmental services, provide jobs for Hopis, and secure the survival of Hopi culture and tradition.

The Hopi Council announced that the Sierra Club, the Natural Resources Defense Council, the National Parks Conservation Association, the Grand Canyon Trust, and organizations affiliated with them are no longer welcome on Hopi land.

The Council believes that these organizations have acted without regard for the tribe’s right to determine how best to develop and manage the natural resources on its land, and without concern for the future welfare of the tribe and its people.

They cited the closure of the Mohave Generating Station, which used coal exclusively from the Black Mesa Mine, resulting in a loss of $6.5 to $8.5 million in tribal revenues per year.

Navajo Nation President Joe Shirley, Jr. strongly supports the Hopi Tribe’s resolution.

“Unlike ever before, environmental activists and organizations are among the greatest threat to tribal sovereignty, tribal self-determination, and our quest for independence,” Shirley said. “By their actions, environmentalists would have tribes remain dependent on the federal government, and that is not our choice. I want the leaders of all Native American nations to know this is our position, and I would ask for their support of our solidarity with the Hopi Nation in the protection of their sovereignty and self-determination, as well as ours.”

Although Shirley is currently on administrative leave, his words carry weight throughout the Navajo Nation.

Shirley believes some Navajo environmentalists and the non-Navajo environmental groups that support them work to the detriment of the Navajo people and Navajo Nation.

“Environmentalists are good at identifying problems, but poor at identifying feasible solutions,” he said. “Most often they don’t try to work with us but against us, giving aid and comfort to those opposed to the sovereign decision-making of tribes. They support tribes only when tribes are aligned with their agenda, such as our opposition to renewed uranium mining in the Grand Canyon and on Native land.”

Shirley cited recent environmental actions that led to the demise of Navajo logging and the closure of the Navajo sawmill in New Mexico, the closure of the Mohave Generating Station, and the shutdown of the Black Mesa Mine.

A spokesperson for the Navajo Nation said that Shirley’s remarks were his alone and not representative of the Navajo Nation. He noted that the Navajo Nation passed the Natural Resources Protection Act in 2005, which strongly supports the positive goals of many environmental organizations.

Possible federal judge opened checkbook for 13 senators

2009-11-06T01:57:25Z

PROVIDENCE, R.I. - Since 2000, trial lawyer Jack McConnell has contributed to the campaigns of 13 current U.S. senators who may eventually help make him a federal judge.

All totaled, McConnell and his wife Sarah have given $46,500 to Democratic senators this century, not counting donations to national party organizations that helped Democrats get elected to federal positions.

Sens. Jack Reed and Sheldon Whitehouse, the biggest beneficiaries of McConnell's generosity, have recommended to President Barack Obama that McDonnell, who works at Motley Rice's Providence office, be nominated a federal judge. They also recommended Superior Court Justice Ojetta Rogeriee Thompson.

"We believe that Justice Thompson and Mr. McConnell are highly qualified and will make Rhode Island proud. They both possess strong legal backgrounds, a commitment to justice, and the intellect, temperament, and integrity to serve as federal judges," the senators said in April.

"They both come from working, middle-class families and share a profound respect for the rule of law.

"We look forward to working with the President and our colleagues in the Senate to see these nominations through the confirmation process."

If Obama chooses to nominate McConnell, he must be confirmed by the Senate.

McConnell represented the State of Rhode Island in unsuccessful litigation against the former manufacturers of lead paint. Whitehouse, then the attorney general, hired the firm to file suit in 1999.

McConnell was also a member of the litigation team that brought suit against tobacco companies on behalf of states, resulting in the $246-billion, 46-state Tobacco Master Settlement Agreement of 1998.

After Whitehouse left the Attorney General's Office, the McConnells pumped $12,600 into his campaign fund. Whitehouse took office in 2007.

Since 2001, the McConnels have given Reed $13,200, including $8,800 for his 2008 re-election campaign.

Outside of Rhode Island, the McConnells have supported 11 other senators since 2000. They are:

-Minnesota's Al Franken, who received $1,000 for the Franken Recount Fund in 2008;

-New Mexico's Tom Udall, to whom the McConnells gave $3,000;

-Washington's Maria Cantwell, to whom the McConnells gave $4,200;

-Connecticut's Chris Dodd, to whom the McConnells gave $1,000;

-Pennsylvania's Bob Casey, to whom the McConnells gave $500;

-Florida's Bill Nelson, to whom the McConnells gave $3,000;

-Washington's Patty Murray, to whom the McConnells gave $2,000;

-Nevada's Harry Reid, to whom the McConnells gave $1,000;

-Indiana's Evan Bayh, to whom the McConnells gave $1,000;

-New York's Chuck Schumer, to whom the McConnells gave $1,000; and

-Michigan's Debbie Stabenow, to whom the McConnells gave $3,000.

Sara McConnell also gave $10,000 to the Democratic Senatorial Campaign Committee in 2008.

Among members of the Obama administration, the McConnells gave $12,000 to Secretary of the Interior Ken Salazar in 2004 for his Senate campaign, as well as $8,000 to Chief of Staff and former Congressman Rahm Emanuel in 2003.

The McConnells gave Obama more than $4,000 last year. They have given more than $650,000 for federal races.

Campaign contribution figures from the Center for Responsive Politics.

San Francisco proposes new policies for asbestos caseload

2009-11-04T23:06:17Z

With a plethora of new asbestos cases coming to fruition, San Francisco County Superior Court is proposing the creation of a single asbestos department where all discovery, law and motion and case management matters will be heard. Judge Harold Kahn has been tapped to oversee the department.

“A single, unified court will be better able to distinguish frivolous from real asbestos claims, resulting in greater justice for both defendants and plaintiffs,” said Alex Tabarrok, director of research for The Independent Institute. “Moreover, more than half of the awards in asbestos cases have traditionally gone to the lawyers. By speeding up trials and reducing costs, a greater share of awards may flow to truly injured plaintiffs.”

The goal of such a department, according to presiding judge James McBride, is to ensure that cases aren’t endlessly trailing for trial and that they attempt to have cases settle before they use up a jury panel. Wasting jury panels is a concern for San Francisco -- in 2008, asbestos cases consumed 45 percent of jurors summoned for civil trials, according to the court's latest biennial report.

“The sheer volume of asbestos claims is overwhelming many courts,” said Tabarrok. “Moreover, if you watch late night TV, you cannot fail to notice the legions of plaintiffs lawyers trolling for even more mesothelioma cases.”

This has led to an abundance of cases that eat up the court’s time and can be a nuisance to many.

“Asbestos disease can take 30-40 years to manifest, and asbestos was so commonly used in the past that almost anyone can claim contact with it at some point in time,” Tabarrok said. “Moreover, the conditions for establishing disease have been weak to non-existent.”

Having a judge and commissioner managing all the cases, McBride added, will mean the court will be more involved in bringing cases to trial readiness. It also is designed to streamline litigation and would add accountability.

“The only problem with this centralization is that the asbestos issue is national and plaintiffs lawyers have found it easy to forum shop, so when one jurisdiction cottons on to the problems in these cases the lawyers move on to the next jurisdiction,” Tabarrok said. “Thus, San Francisco's reforms may simply end up pushing these cases somewhere else — good for San Francisco, but not a true solution for the U.S. as a whole.”

Association has beef with federal regulators

2009-11-03T15:18:27Z

The National Cattlemen’s Beef Association (NCBA) is in a policy showdown with the federal government over issues ranging from air quality to using poultry litter as a source of nutrients for cattle.

Last week, the association sent a letter urging President Obama’s Environmental Protection Agency (EPA) to halt tougher regulations on agriculture that might restrict the raising of livestock.

Tamara Thies, NCBA’s Chief Environmental Council, criticized a recent EPA study that claimed dust from cattle creates a health hazard.

“Coarse particulate matter is nothing more than the dust kicked up by cars or trucks traveling on dirt roads, a tractor tilling a field, or cattle moving around on dirt,” Thies said in a statement.

“Studies do not show that rural dust is a health concern.”

She added that the evidence of health effects from this level of coarse particulate matter is inconclusive.

If EPA were to set the air standards at the proposed level, much of the country would be over the limit. “Cattle producers are concerned about this because it would limit our ability to raise livestock, who kick up dust as they walk around,” she said.

Thies said if more regulations are put into place individual states would be required to impose “extreme” control requirements on businesses.

Tougher air quality regulations are not the only issue facing the NCBA.

This week, a handful of consumer advocacy groups, including the Consumers Union (CU) and the Center for Science in the Public Interest (CSPI), are urging Food and Drug Administration (FDA) officials to ban the feeding of poultry litter to farm cattle.

Last week, an article in the Los Angeles Times signaled a looming showdown between the agriculture industry and the federal government.

Even McDonalds Corp. is among those calling for an end to the feeding of poultry litter cattle.

Bethany Shively, spokeswoman for NCBA, said food safety and animal health are top priorities for cattle producers; any regulations affecting these or other important issues must be based on sound science.

In 1997, the FDA began studying the possible impact of poultry litter on human health and considering a ban on the nutrient.

In his testimony to the House of Representatives’ Subcommittee on Human Resources and Intergovernmental Relations on January 29, 1997, Clarence Gibbs claimed harmful bacteria were present in poultry litter which could be spread to vegetables.

Since Gibb’s testimony was a hypothesis and not scientific fact, the agency dropped the investigation until 2005.

That year, the FDA concluded: "Because poultry feed may contain mammalian meat and bone meal currently prohibited in ruminant feed, there is a risk that cattle fed poultry litter containing spilled poultry feed may be exposed to prohibited meat and bone meal through that spilled poultry feed. This alternative would ban the use of poultry litter in all ruminant feed."

In April 2008, FDA officials amended a final feed ban rule in accordance with a 2001 WHO report recommending that digestive contents and fecal material from livestock or poultry being fed meat and bone meal (MBM) potentially contaminated with BSE should not be used as an ingredient in animal feed.

“The FDA has examined the issue of poultry litter in cattle feed on several occasions, and has found no science to indicate that there are any associated risks to animal or human health,” Shively said.

“As of current, harmful bacteria that may, or may not, have been found is eliminated from all animal feed.”

Ramifications of Comer v. Murphy Oil

2009-10-28T19:25:18Z

In Comer v. Murphy Oil, the U.S. Court of Appeals for the Fifth Circuit reinstated the suit alleging global warming exacerbated damage caused by Hurricane Katrina.The court ruled that plaintiffs do have standing to assert cnuisance, trespass and negligence claims and that these claims did not represent nonjusticiable political questions. J. Russell Jackson, a partner with Skadden Law who defends companies’ products and advertising in trial and appellate courts, spoke to Public Nuisance Wire about the ramifications of this decision.

PNW: Why is the Comer decision important?

Jackson: This case is important because it is a class action for compensatory and punitive damages brought by private property owners. It was less surprising when the Second Circuit in AEP found that governments and municipalities had standing to sue to reduce emission levels of greenhouse gases. But the Fifth Circuit's Comer decision would seem to throw the courthouse doors wide open to suits brought by almost anyone to seek money from entities that they allege contributed to global warming.

PNW: What does the reversal mean for future cases dealing with climate change?

Jackson: If the Comer decision is allowed to stand -- and that's a big "if," since a petition for rehearing en banc is likely and the Fifth Circuit is renowned to be a pretty conservative court -- then further lawsuits for compensatory and punitive damages seem likely. People should note, however, that merely because a litigant is held to have "standing" to sue in federal court does not mean that he will be successful. These climate change cases present extraordinarily difficult issues of causation. As the federal district court in the recent Village of Kivalina decision noted, these greenhouse gases are alleged to have built up over hundreds of years from a wide variety of sources across the globe. That makes it awfully difficult to pin causation in fact and legal (or "proximate") cause on some arbitrarily-selected group of present-day defendants. Plaintiffs' counsel may have succeeded in getting a toe in the door to the federal courthouse, but they are right to be concerned that they may be thrown out of court on a motion to dismiss or a motion for summary judgment.

PNW: What other concerns do you have?

Jackson: One of my biggest concerns is that we appear poised to use the judicial system -- the most inefficient, expensive, and undemocratic regulatory tool of all -- as the primary means of retroactively deciding what should have been done decades ago, and yet no damage award will actually do anything to prevent the impacts of climate change that plaintiffs keep saying are coming. To have a court retroactively "tax" greenhouse gas emissions when they were perfectly legal at the time is fundamentally unfair and ultimately will impose on future American consumers extrarodinary burdens that they presently are unprepared to face. Moreover, the discovery costs, lawyers' fees, and wasted productivity associated with litigating these cases are unnecessary and will do nothing to solve the alleged problem. And they do nothing to deal with the responsibility that each consumer bears for his or her own historic "carbon footprint," as certain activists would term it. America's climate change policy should not be forged in closed chambers by men and women in black robes wielding wooden gavels; it should be publicly debated, analyzed, and adopted by the politcally-accountable branches of government.

PNW: What do you think was the court's motivation for this decision?

Jackson: I think the Fifth Circuit panel felt unduly hamstrung by the Supreme Court's discussion of the causal chain alleged in Massachusetts v. EPA. The plaintiffs here are not governmental entitites and, as private plaintiffs suing for damages, they merit no lenient standard. The district court in Village of Kivalina demonstrated that even in public nuisance cases involving alleged water pollution, if the sources of pollution are too diffuse or the plaintiffs live too far downstream, they lack the sort of causal connection that makes their injury "fairly traceable" to the defendant's conduct, and thus they have no standing. That certainly is the case here, where the defendants' greenhouse gas emissions are alleged to have combined with other gases from other sources across the globe and over time to combine to trap heat in the atmosphere, which then allegedly impacted the strenth or ferocity of a hurricane. Just to say it is to show how convoluted the causation theory is.

PNW: Any last thoughts?

Jackson: Regardless of whether the Fifth Circuit rehears Comer en banc or not, it's important to note that the panel's opinion mentioned in more than one place that its conclusion that the "fairly traceable" requirement for standing had been met in no way meant that the complaint could survive a proximate cause challenge in a motion to dismiss or motion for summary judgment. Indeed, Judge Dennis made it plain that he would have affirmed a dismissal on such grounds. So anyone who tells you that the decisions in AEP and Comer mean that climate change cases will actually make it all the way to trial is incredibly naive or optimistic.

One other thing. I think it's important that the Fifth Circuit held that the private property owners had no standing to bring claims for damages based on so-called civil conspiracy to "conceal" the alleged dangers of global warming. These civil conspiracy and fraud claims are even further causally removed from the challenged conduct than the nuisance claims, and it was important to see the court recognize that and eliminate them from the litigation.

Fifth Circuit Reverses Dismissal of Climate Change Class Action

2009-10-28T19:05:26Z

On October 16, the U.S. Court of Appeals for the Fifth Circuit became the second federal appeals court in less than a month to reverse a trial court decision that had thrown out a climate change lawsuit for presenting a nonjusticiable political question.

The case, Comer v. Murphy Oil USA, is a private class action for compensatory and punitive damages, not a suit brought by states or municipalities for injunctive relief.

The plaintiffs in Comer were property owners on Mississippi's Gulf Coast who had suffered property damage in Hurricane Katrina. They sued a myriad of energy, fossil fuel, and chemical companies, alleging that their greenhouse gas emissions contributed to an increase in air and water temperatures, causing a rise in sea levels and adding to the ferocity of Hurricane Katrina, which blew water and debris onto plaintiffs' property, thereby causing property damage.

The Fifth Circuit reversed the district court’s ruling from the bench that plaintiffs lacked Article III standing to bring such claims, and that the tort claims presented non-justiciable political questions. The Fifth Circuit only reversed in part, however, agreeing that plaintiffs’ “unjust enrichment, fraudulent misrepresentation, and civil conspiracy claims must be dismissed for prudential standing reasons.”

Under Mississippi common law, the plaintiffs asserted a variety of theories, including public nuisance, private nuisance, trespass, negligence, unjust enrichment, fraudulent misrepresentation, and civil conspiracy.

“The Fifth Circuit's Comer decision would seem to throw the courthouse doors wide open to suits brought by almost anyone to seek money from entities that they allege contributed to global warming,” said Skadden partner J. Russell Jackson, who defends companies’ products and advertising in trial and appellate courts. “If the Comer decision is allowed to stand — and that's a big ‘if’ since a petition for rehearing en banc is likely and the Fifth Circuit is renowned to be a pretty conservative court — then further lawsuits for compensatory and punitive damages seem likely.”

The Fifth Circuit held that plaintiffs lacked standing to bring their claims for unjust enrichment, fraudulent misrepresentation, and civil conspiracy, but that they had standing to assert their claims for public and private nuisance, trespass and negligence. The court further held that this latter group of claims did not present a non-justiciable political question.

“People should note, however, that merely because a litigant is held to have ‘standing’ to sue in federal court does not mean that he will be successful,” Jackson said. “These climate change cases present extraordinarily difficult issues of causation.”

As the federal district court in the recent Village of Kivalina decision noted, these greenhouse gases are alleged to have built up over hundreds of years from a wide variety of sources across the globe.

“That makes it awfully difficult to pin causation in fact and legal (or 'proximate') cause on some arbitrarily-selected group of present-day defendants,” Jackson said. “Plaintiffs' counsel may have succeeded in getting a toe in the door to the federal courthouse, but they are right to be concerned that they may be thrown out of court on a motion to dismiss or a motion for summary judgment.”

Public nuisance suits can have negative consequences

2009-10-23T16:01:05Z

Lisa Perrochet is a partner with the nation’s largest appellate law firm, Horvitz & Levy. She frequently represents business interests in toxic tort and product liability cases and will do so again in Santa Clara v. ARCO. In an exclusive interview with Public Nuisance Wire, Perrochet explains some of the negative consequences of public nuisance suits.

PNW: Why do you oppose state governments pursuing public nuisance suits?

Perrochet: For one thing, the economic burden of this kind of claim -- with largely standardless liability -- is ruinous to the U.S. business climate, and furthers the image (especially abroad) that this is a dangerous place to do business, and that our courts are capricious and arbitrary in assigning liability. I’ve seriously had out-of-state and out-of-country clients say this. I get lots of "only in California" comments.

PNW: What are the other negative effects?

Perrochet: On another level, I'm personally concerned that there's already such a pervasive attitude of distrust about the government, and if people get the idea that the government farms out the pursuit of sovereign rights to attorneys looking to make a personal profit, without seeing advancement of the public interest as their primary job, that just won't help matters.

PNW: What can be done to curtail these suits?

Perrochet: If the courts won't act, I suppose the government will eventually step in to legislate to stop social engineering via public nuisance litigation, but a lot of harm can be done in the meantime. But I'm hoping the first and last stop for these suits will be the courts.

PNW: How widespread is the opposition to this type of litigation?

Perrochet: Plenty of folks in government circles actually agree with the defendant manufacturers that government entities should not be partnering up with for-profit private lawyers to pursue this kind of action.

Will Santa Clara learn from Rhode Island?

2009-10-22T22:45:11Z

Last July, in Rhode Island v. Lead Industries Association, the Supreme Court of Rhode Island held that the state “cannot allege” facts sufficient to state a claim for common law public nuisance against lead pigment manufacturers and ordered that the state reimburse some $242,000 in special litigation costs to three lead paint/pigment defendants: NL Industries, Inc., the Sherwin-Williams Company, and Millennium Holdings, Inc.

The court based its decision on two factors: 1) although the manufacturers placed lead pigment into the stream of commerce, they did not control it at the time it harmed the children; and 2) that harm did not constitute an interference with a public right for purposes of a common law public nuisance.

In the upcoming Santa Clara v. ARCO case, in which cities and counties are pursuing a nuisance complaint against various paint and pigment manufacturers, the same rules may apply.

“The claims they're making really are in the nature of product liability claims -- that the manufacturers shouldn't have included lead in their products, basically,” said Lisa Perrochet of Horvitz & Levy, one of the defense counsels in the Santa Clara litigation. “But since there are so many reasons why ‘normal’ theories can't be brought (these are products that were completely legal when sold, and that were phased out of use back in the 1970s), the government plaintiffs have gotten creative to shoehorn their claims into a nuisance theory, which doesn't afford the manufacturers the same defenses.”

Perrochet believes that the best course of action for the government plaintiffs in the case would be to end the litigation.

“Well, for reasons stated by the court in the Rhode Island litigation, I honestly think the government plaintiffs should drop their claims entirely,” said Perrochet, “But if they can't stomach that, then they should either pursue the litigation using in-house resources, or hire outside counsel with specific expertise as necessary on an hourly basis.”

She also wonders whether the Rhode Island litigation would have gotten so far out of hand if the case had not been farmed out to private counsel working on a contingency fee basis.

That’s important, she said, to avoid a decision-making process tainted by inappropriate considerations -- or advice from attorneys motivated not exclusively by the public good, but in part by their private interest in obtaining a monetary recovery that will maximize their contingent fees.

“At least as importantly, avoiding the contingency fee model they've embarked on helps preserve public confidence in the government maintaining real prosecutorial independence and impartiality when going after public rights,” Perrochet said.

Utility giant says court should stay out of global warming debate

2009-10-21T15:10:34Z

ATLANTA – A spokeswoman for Atlanta-based Southern Company on Friday said any issue regarding environmental regulations should be left up to lawmakers and not the court system.

Last month, the U.S. Court of Appeals for the Second Circuit ruled that utility companies can be sued for creating a public nuisance by emitting greenhouse gases (GHG) that allegedly contribute to global warming.

Valerie Hendrickson said company officials believe that only a thorough legislative process will result in legislation the company and environmentalists can agree on.

“The three previous courts ruled that the court should not hear these types of global warming claims. They ruled that it is the elective branch of the government that ultimately decides what to regulate,” she said.

Although she isn’t sure when Georgia state lawmakers will address environmental regulations, Hendrickson feels comfortable with the company’s fate being decided by lawmakers.

“They will be working on a plan soon, we hope. This will get the process worked out in a way that is more justifiable and that is through legislators, not judges.”

Southern Company, which owns several of the nation’s top carbon-emitting coal plants, currently serves over 4 million customers in Alabama, Georgia, Florida and Mississippi.

Supporters of the coal industry say coal is one of the best ways to provide power to consumers inexpensively.

Virginia Galloway, state director for the Georgia chapter of Americans for Prosperity (AFP), says 60 percent of the state’s electricity is coal-generated, and access to reliable sources of electricity is key to the state's economic success and its standard of living.

Galloway believes that coal companies are already doing enough to abide by environmental regulations and that adding more would create major problems for consumers.

“While on vacation in Wyoming, our family visited a coal mining site near Wright, which is part of the basin that supplies nearly all coal for power plants. We were impressed with the extent, cost, and success of their efforts to extract the coal and then rebuild the landscape as they found it, as well as the difference in clean coal and the processes used in times past,” she affirms.

Although her non-profit organization has not officially taken a stance, Galloway says members are concerned that this recent court ruling could open the door for massive litigation against the coal industry.

“For a court to take a position on a scientific issue that continues to be the subject of heated debate is inappropriate," she asserts. "AFP is concerned that millions of American families who rely on electricity generated by coal-burning plants will incur potentially devastating cost without so much as a vote from their elected representatives.”

According to Galloway, AFP is busy educating the public on global warming issues and continuing to oppose cap & trade legislation, which she believes will impose “outlandish” cost increases on ordinary citizens and small businesses that may not have the choice of moving operations overseas.

“The 'science' promoting global warming theory has been called into question by thousands of notable environmental scientists, but this whole issue is more about politics and control of the populace than it is about science or environmental concern," Galloway insists. "In general, lawsuits against the 'big business bogeyman' end up costing the consumers every time."

McConnell tapped tobacco war chest to fund 9-year lead paint battle

2009-10-20T21:54:29Z

PROVIDENCE, R.I. - For nine years prospective federal judge nominee Jack McConnell battled paint makers with boundless powers he received from attorneys general he helped elect.

As he awaits the nomination process, McConnell, of the Motley Rice firm in Providence, continues in his role as Rhode Island Democratic Party treasurer.

Had he been successful in carrying out the mammoth lead paint
abatement plan he devised in 1999, and which fell apart last year,
McConnell and other lawyers would have shared hundreds of millions in
fees, maybe billions.

According to court records, the abatement plan would have bulldozed
Rhode Island from end to end. State and federal housing laws and
regulations that would forbid entering properties without warrants
would have been suspended. And while abatement crews took over
approximately 250,000 properties, families would have been displaced.
Crews would have wrapped their furniture in plastic, stripped walls,
and repainted. Dusty debris would have been hauled away by an awesome fleet of trucks.

McConnell and Providence County Judge Michael Silverstein had already
hired four public health professionals to start the abatement when the
Rhode Island Supreme Court stopped it last year.

The Justices found that the paint makers didn't interfere with public
rights. They also made sure no attorney general would ever again give
a private lawyer as much power as former attorney general Sheldon
Whitehouse gave McConnell.

McConnell had already served four years as state treasurer when he and Whitehouse signed the lead abatement contract.

Whitehouse has since advanced to the U.S. Senate, where he and Sen.
Jack Reed (D) have recommended McConnell to fill a vacancy on the U.S. District Court of Rhode Island. Ultimately, it is the President's role
to nominate a candidate who would then face Senate confirmation.

'Bring the Entire Lead Paint Industry to its Knees'
McConnell joined Motley Rice in 1986, according to the firm's website.

"Jack's career in complex litigation began with asbestos cases and
trials, including several mass consolidation cases on behalf of more
than ten thousand asbestos victims in Maryland, Mississippi and West
Virginia," according to the website.

The firm identifies him as negotiator and primary drafter of the
master tobacco settlement agreement of 1998.

Whitehouse explained to reporters that the state wouldn't spend any
money on lead abatement because Motley Rice had "a big war chest from the tobacco litigation," according to a report in the Providence
Journal.

"McConnell brings horses in a big way," Whitehouse said. "He's part of
a great firm with very deep pockets."

McConnell's boss, Ron Motley of Mount Pleasant, S.C., promised
reporters in 1999 they would "bring the entire lead paint industry to
its knees," according to a report in the Dallas Morning News.

Lawyers' Fee: One Sixth
The abatement agreement provided that if the state obtained judgment, McConnell and his associates would receive a sixth of the judgment as its fee. If the state lost, he and his associates would bear all costs.

Whitehouse and McConnell sued multiple defendants, and some settled out.

Others moved to dismiss, and Silverstein denied the motion.

"Uncork the champagne bottles," Motley told reporters in 2001,
according to court documents.

Silverstein held a trial, but it ended in a jury deadlock and he set
another trial.

By then, Whitehouse had moved to Washington and Patrick Lynch had
replaced him as attorney general.

Five years into the case, the paint makers challenged McConnell's fee agreement.

Financial interest
Atlantic Richfield counsel David Wollin of Providence asked the state
Supreme Court, "May the state's law enforcement power be exercised by lawyers who have a personal financial interest in using the state's
police power to seize a defendant's money, because they will
personally receive a share of the amount seized?"

"A Supreme Court decision declaring the contingent fee agreement void
would confirm that this proceeding has been infected from its
inception by a violation of defendants' constitutional rights," Wollin
wrote.

"Absent that violation, this overbroad case would not have been brought."

Wollin wrote that the case was inconsistent with a lead poisoning law
that Rhode Island legislators passed in 2002.

"The lead poisoning prevention act was not designed to generate huge
contingent fees; this lawsuit was," Wollin wrote.

The agreement disabled the attorney general from terminating the
lawyers, he wrote, by requiring a substantial payment for termination.

The Supreme Court didn't answer the question.

The case proceeded to trial against Sherwin Williams, Millennium
Holdings and NL.

Jurors declared a nuisance in 2006 but didn't fashion a remedy.

The paint makers appealed to the Supreme Court and asked Silverstein
to delay abatement until the Justices reached a decision.

Forced Relocations
At a hearing in January 2008, Sherwin Williams lawyer Mickey Pohl of
Pittsburgh told Silverstein that abatement would involve forced
relocations to hotels and motels.

He said property owners couldn't opt out and there would be warrantless entries.

He said legislators didn't require these measures.

Silverstein said that in his first decision of the case he found that
the legislative scheme wasn't a be-all and end-all.

He said an attorney general has rights of his own and he asked Pohl,
"Isn't that what this whole case has been predicated on?"

Pohl said abatement would conflict with laws and regulations, and he
quoted a line about special waivers from Housing and Urban
Development.

Silverstein said, "The jury has determined remedy. Remedy is
abatement. Wasn't it left to the court to determine what abatement
means?"

Silverstein ordered abatement to begin.

He hired two examiners, who hired two more.

By July 2008, abatement had cost paint makers about $242,000.

Rhode Island Supreme Court Reverses
In August 2008, the Supreme Court reversed Silverstein.

"The law of public nuisance never before has been applied to products,
however harmful,"

Chief Justice Frank Williams wrote. "The enormous leap that the state
urges us to take is wholly inconsistent with the widely recognized
principle that the evolution of common law should occur gradually,
predictably, and incrementally," he wrote.

The state couldn't establish that defendants interfered with any
public right or that they were in control of pigment they made at the
time it harmed children, he wrote.

The General Assembly placed the burden of safety on owners, he wrote.

By wiping out the judgment they wiped out McConnell's one sixth share
and rendered moot the challenge to his fee.

Still, they couldn't ignore the danger no attorney general would ever
again sign a contract like the one Whitehouse signed with McConnell.

Court: Contingency fees proper only when AG in control
Justice William Robinson started gently, finding nothing
unconstitutional, illegal or inappropriate about an attorney general
approving a contingency fee.

Results of such relationships might benefit society, he wrote.

Then he changed tone, declaring a contingency fee proper only if an
attorney general retains absolute and total control over all critical
decisions.

Outside counsel must be subordinate, he wrote, and a senior member of
the attorney general's staff must be involved at all stages.

$242,000 Abatement Costs Unpaid
Though the Supreme Court stopped the abatement, the dust still hasn't settled.

McConnell now resists repaying the paint makers the $242,000 that he
and Silverstein made them spend on abatement.

McConnell claims they don't need it because their insurers can cover the loss.

For proof he offers a document someone swiped from a Sherwin Williams
board meeting and faxed to Motley Rice.

Instead of allowing Sherwin Williams to investigate the theft,
Silverstein decided McConnell should investigate Sherwin Williams.

In March, Silverstein granted a motion from McConnell to conduct
discovery into the document and the board meeting.

In May, Fidelma Fitzpatrick of Motley Rice asked Sherwin Williams to
identify who prepared the power point, who saw each draft of the
document and who had access to the board room or its trash cans.

She asked the name of every Sherwin Williams record custodian since
2004. She asked how many copies of the document existed on paper and in e-mail. She asked for policies and procedures on document
distribution, retention and disposal.

She asked for a list of everyone to whom Sherwin Williams provided
insurance information on Rhode Island lead litigation. She asked for
minutes and tape of the board meeting.

And, she asked for all documents identifying the person who sent the
fax to Motley Rice, all documents from the investigation of the fax,
and all documents Sherwin Williams used in preparing responses to her
questions.

In July, Silverstein received briefs from both sides and sealed them.

As of Sept. 4, he had not set a hearing on the $242,000 dispute.

Judge tosses Kivalana global warming suit

2009-10-19T18:04:10Z

SAN FRANCISCO – A U.S. District Court Judge has dismissed a lawsuit filed by an Alaskan native village that targeted Exxon Mobil, alleging the oil company was responsible for global warming.

Earlier this week, Judge Saundra Brown concluded that any issue regarding global warming should be left up to lawmakers and not judges:

"In their Rule 12(b)(1) motions, Defendants contend that Plaintiffs' claims are not justiciable under the political question doctrine, and that Plaintiffs otherwise lack standing under Article III of the United States Constitution. Having read and considered the papers filed in connection with this matter, and being fully informed, the Court hereby GRANTS Defendants' motions to dismiss for lack of jurisdiction."

The 2008 lawsuit was filed by the residents of Kivalina, Alaska, who claim the oil company contributes to global warming with its gas emissions, a nuisance that is causing “severe harm" to the city.

The village was seeking over $400 million in order to “transplant” its residents to a more livable area of the state, according to the suit.

Exxon officials argued the claim was baseless and that the defendants were not seeking an end to the “nuisance” but merely monetary damages.

Even though the decision has been largely ignored by mainstream media outlets, opponents of climate change litigation are applauding the decision.

Houston attorney Richard O. Faulk, head of the Environmental Practice Group and chair of the Litigation Department at Gardere Wynne Sewell LLP, said the ruling was “wise” and proved the issue of global warming should not be a courtroom decision.

"Contrary to the sweeping and unprecedented ruling of the 2nd Circuit in Connecticut v. AEP, the Kivalina court wisely recognized that global climate change allegations cannot support federal question jurisdiction," he stated in a press release.

Faulk added that the court realized the plaintiffs could not show sufficient evidence that their injuries could be “plausibly traced to the acts of the named defendants.”

"Rather than trivializing the suit as an 'ordinary tort case,' the District Court found that the matter could not be resolved without considering the truly global nature of the issue - and the lack of any ascertainable standards to determine its resolution. Unlike the Second Circuit, the court saw major distinctions between ordinary pollution cases and planet-wide climate claims, and was not willing to indulge its creativity to invent liability criteria on a planetary scale," he said.

Faulk cautions industry officials that an appeal is likely to end up in state court, noting that "the court dismissed the state law public nuisance claims without prejudice, thereby allowing the case to be refiled in state court to resolve those issues. Hence, although the scope of the risk has been narrowed, the Kivalina controversy remains unresolved and potentially dangerous."

Kivalina is a 3.9-square-mile town with a population of around 399 people. It sits on the tip of an eight-mile-long barrier island and is made up of predominately Alaskan natives.

No reform in California

2009-10-17T19:26:58Z

SACRAMENTO, Calif. (Legal Newsline) -- While California lawmakers are traditionally busy in their home districts during autumn, after the state Legislature recesses, this year they will be called into at least three special sessions to address a bevy of complex issues.

Not among them is legal reform, which proponents say would help kick-start California's lagging economy and draw new industry to the Golden State, where unemployment has topped 12 percent, up from 7.8 percent a year ago. Last month alone, employers cut 39,000 workers from their payrolls, a state report issued Friday said.

The leader of the state's leading tort reform lobby, John Sullivan, executive director of the Civil Justice Association of California,
told Legal Newsline that some political changes need to take place before lawsuit abuse can be addressed in earnest.

"First, we have to get the Legislature to understand the need; and second, we have to get a governor that goes along with it," Sullivan said. "It's going to be tough, let's put it that way. We just have to keep bad things from happening in the mean time."

Democrats have overwhelming majorities in both Assembly and state Senate, and given the state's trial bar doles out a lot of campaign cash to many Democrats, it its unlikely any meaningful reform could emerge from the state Capitol, legal reformers frequently say.

Gov. Arnold Schwarzenegger, who is in his last year in office, recently won praise for vetoing three bills in the final days of the 2009 legislative session that critics, including CJAC, said would have cost jobs and increased litigation in the state.

The bills would have restricted the ability of insurance companies to cancel individual policies of sick patients unless a patient intentionally lied to the insurer about preexisting conditions, would have made it easier for California workers to sue for alleged age discrimination on the job, and would have made a violation of the California Unruh Civil Rights Act -- subject to minimum damages of $4,000 -- if a business prohibits the use of any language in or with its establishment.

The California Chamber of Commerce decried the three Democrat-backed proposals as "job killers."

"One lawsuit can really mean the difference between being in and out of business," said Tom Scott, executive director of California Citizens Against Lawsuit Abuse, a grassroots organization.

In an interview Friday, he said while there are a handful of moderate Democrats in the Legislature who "get it" when it comes to the struggles faced by small businesses, their influence is not strong enough to make the issue part of their caucus's agenda.

"There is no two ways about it: businesses are struggling on every dollar," said Scott, who sits on the board of his local chamber of commerce in Folsom, Calif.

In addition to supporting the legislative work of CJAC, Scott said his group is seeking to educate Californians about the ramifications of lawsuit abuse.

"This state seems to be obsessed with litigation as the answer," he said. "Whether we are driving or shopping there is this side thought, 'Will I get sued?' or will something happen."

So, rather than enact reforms to curb frivolous lawsuits that hobble many small and mid-sized businesses, the Democratic leadership and the Republican governor are turning their attention to other issues they see as more pressing.

Schwarzenegger has called lawmakers back into the 12th, 13th and 14th special session since he's taken office to consider education reforms, a rewrite of the California tax code and an overhaul of the state's water system.

"Tort reform is major issue, but doesn't have quite the same urgency as, say, water," said Jack Pitney, a political science professor at Claremont McKenna College near Los Angeles. "It may come up. Some of the more responsible legislators will talk about it but the political cross-currents remain extremely difficult."

As for pressing for changes to the civil justice system, Scott said he expects that tort reformers will be playing defense at least for the coming years.

He said the state's trial lawyers did not press an "aggressive" agenda during the 2009-2010 legislative session, largely because the trial bar focused its energies at the federal level where they have, among other initiatives, resisted having tort reform as part of the health care overhaul sought by President Barack Obama.

But that will change, he said, in the next session of the California Legislature.

"2011 will be a different story," he said. "The next three to four years in this state are going to be a challenge (for legal reformers in California)."

Ohio AG weighs in on McDonald v. Chicago

2009-10-16T18:38:36Z

Now that the United States Supreme Court has agreed to hear arguments in the case of McDonald v. Chicago, the Second Amendment is back in the spotlight. Ohio Attorney General Richard Cordray, who will join arguments in the case, believes that the people's Second Amendment right to keep and bear arms is fundamental and cannot be denied by state and local governments. He outlined his perspective in an exclusive interview with Public Nuisance Wire.

PNW: The Second Amendment has become a hot topic of late. Why do you think this is?

Cordray: I think Americans have always valued their rights under the Second Amendment and want to ensure that these rights are not unduly restricted by government.

PNW: What are your views about the right to keep and bear arms?

Cordray: I have always admired Abraham Lincoln, and he believed strongly, and I agree, that the rights provided and recognized in our Constitution were not just created there, but are reflective of rights provided in the Declaration of Independence. And they include the rights derived from self-preservation, the right to security, and the right to pursue happiness. And those are, to me, the tenets that inform the constitutional rights which we all work to uphold. I believe that the Second Amendment affords Americans an individual right to keep and bear arms, which involves the right of self-preservation and the right to security in the home and for your family.

PNW: Why was it important that the Supreme Court hear McDonald v. Chicago?

Cordray: It was important for the United States Supreme Court to hear McDonald v. Chicago, because the case involves one of our most fundamental constitutional rights and whether that right will be given full meaning to all Americans, in light of the Court's landmark decision last year in District of Columbia v. Heller. Until now, the Court has only interpreted the Second Amendment to protect an individual's right to keep and bear arms against undue interference from the federal government. In McDonald, the Court will decide whether the Second Amendment is incorporated into the Fourteenth Amendment so as to also apply to the states, protecting citizens from undue gun restrictions imposed by state and local governments.

PNW: What would be the ideal outcome of this case?

Cordray: I think that the Court should hold that the Second Amendment is incorporated through the Fourteenth Amendment against the states. I hope that citizens take from such a ruling a sense of security that their Second Amendment rights cannot be restricted unduly by either federal, state, or local government.

Ohio AG to address Supreme Court on gun rights case

2009-10-16T18:06:46Z

COLUMBUS, Ohio -- After the U.S. Supreme Court granted full review to examine the case of McDonald v. Chicago and whether or not Second Amendment rights should be protected from undue state and local restrictions, Ohio Attorney General Richard Cordray announced he would join in the arguments.

“It was important for the United States Supreme Court to hear McDonald v. Chicago, because the case involves one of our most fundamental constitutional rights and whether that right will be given full meaning to all Americans, in light of the Court's landmark decision last year in District of Columbia v. Heller,” Cordray said.

Heller recognized that the federal government cannot infringe upon the Second Amendment right of individuals to keep and bear arms.

“Until now, the Court has only interpreted the Second Amendment to protect an individual's right to keep and bear arms against undue interference from the federal government,” Cordray said. “In McDonald, the Court will decide whether the Second Amendment is incorporated into the Fourteenth Amendment, so as to also apply to the states, protecting citizens from undue gun restrictions imposed by state and local governments.”

Cordray joined an amicus brief on July 7, 2009, asking the Court to take this case and decide whether the right of the people to keep and bear arms guaranteed by the Second Amendment is incorporated into the Fourteenth Amendment so as to apply to the states.

“We will join with other states in making clear that Second Amendment rights under the United States Constitution should be protected from undue restrictions imposed by state and local governments,” Cordray said.

The amicus brief argues that the right to keep and bear arms under the Second Amendment is not just a fundamental liberty interest. In the Anglo-American tradition, it is among the most fundamental of rights, because it is essential to securing all our other liberties. The Founders well understood that, without the protections afforded by the Second Amendment, all of the other rights and privileges ordinarily enjoyed by Americans would be vulnerable to governmental acts of oppression.

Medical malpractice litigation blamed for rising health care costs

2009-10-14T23:20:10Z

NEW YORK (Legal Newsline) -- Medical malpractice litigation has driven up U.S. health care costs dramatically, translating into higher costs for consumers, a study said Tuesday.

The report by the Manhattan Institute's Center for Legal Policy said the direct cost of medical malpractice litigation is roughly $30.4 billion annually.

"America's lawsuit-friendly culture skews medical decision-making and inflates costs," the report by Jim Copland, the director of the New York-based think tank's legal center.

Copland told Legal Newsline that despite the ever-increasing costs of medical care, the nation's trial attorneys are steadfastly opposed to legal reforms that would bring down health care costs.

"It all really comes down to money," he said in an interview, explaining that trial lawyer political action committees undoubtedly wield more than their fair share of influence over the Democrat-led Congress.

"The trial bar in many respects is the most influential lobby over the congressional leadership," he said. "The PAC money coming from the trial bar is second only to labor unions for Democratic candidates."

The American Association of Justice, formerly known as the Association of Trial Lawyers of America, is the second biggest donor to Democratic candidates, Copland said.

In all, lawyers doled out $127 million to congressional candidates in the 2008 political cycle.

Copland said lawyers gave more campaign cash to 2008 candidates than did doctors and other health professionals, hospitals and nursing homes, pharmaceutical companies and HMOs combined.

The Manhattan Institute report -- titled "Trial Lawyers Inc. Update: Healthcare" -- chided plaintiffs' lawyers for resisting Republican calls for tort reform provisions to be a part of current congressional legislation aimed at overhauling the nation's health care system.

There are currently five bills -- two in the Senate and three in the House -- that would significantly change the way the health insurance industry operates in the United States. The bills will be separately merged into one House bill and one Senate bill that will later be reconciled in conference committee.

"Regardless of the merits or demerits of various portions of the health care reform bills in Congress, the bills' failure to address out-of-control litigation is a glaring omission that will limit any reform's ultimate effectiveness," Copland's report said.

The director of the independent Congressional Budget Office, Douglas Elmendorf, said in a letter to members of the Senate Finance Committee last week that enacting tort reform would save U.S. taxpayers billions of dollars annually.

He said legal reforms -- including a $250,000 cap on damages for pain and suffering and a $500,000 cap on punitive damages and restricting the statute of limitations on malpractice claims -- would reduce total national health care spending by about 0.5 percent, saving taxpayers about $54 billion over the next 10 years.

"In spite of the clear evidence that litigation is an important piece of the puzzle in explaining high U.S. health care costs, Congress is refusing to consider any serious efforts to reform the legal system," the report said. "Instead, congressional leaders are pushing legislation that threatens to increase litigation and drive up health care costs."

Among other things, the CBO report blamed the practice of so-called defensive medicine for skyrocketing health care costs.

A 2005 survey published in the Journal of the American Medical Association indicated that 93 percent of doctors say they have practiced defensive medicine, where they perform unnecessary tests and procedures to protect them from possible civil action, so not to get caught up in a medical malpractice claim.

"The cost of defensive medicine likely exceeds the total cost of malpractice liability itself because doctors themselves bear the cost of any potential litigation even if their insurance companies cover their losses, doctors must endure the time, stress, and reputational effects of dealing with the lawsuit, while they bear little cost for imposing extra tests and procedures since patients with low-deductible health insurance are not price-sensitive, in part because the expenses are borne by their insurance companies," the report said.

The underlying message of climate change regulation

2009-10-13T22:22:25Z

ATLANTA -- The Second Circuit's recent ruling that electric utility companies can be sued for allegedly contributing to global warming could have devastating consequences for southern states, according to one environmental expert. Benita Dodd, vice president of the Georgia Public Policy Foundation and director for the foundation’s environmental initiative, offered her assessment of the ruling in an exclusive interview with Public Nuisance Wire.

PNW: How can lawmakers address the alleged problem of global warming without harming utilities that rely on coal?

DODD: We need a common sense approach to climate change. This ruling, along with legislation, will put the south and the southeast to a disadvantage if it is followed through. I think one of the worst parts of this is it's legislating from the bench. The court is basically telling an entire portion of America that we are in a sense going to enact “regulation by litigation.” This is very damaging not only to the state of Georgia, but the entire south.

PNW: What is the Georgia Public Policy Foundation doing to make Southerners aware of this threat to their economy?

DODD: This year we started a climate change education project, which brings in national and international experts to look at the issue of climate change and its credibility. The project highlights the lack of consensus in the scientific community and policy community as a whole towards the issue of global warming. We, as a foundation, have worked towards educating policy makers in the state of Georgia through supplying facts and research. We are, in a nonpartisan fashion, getting the message out that we cannot cripple our economy or quality of life. We want residents to realize what is happening and how their own way of life could be dramatically changed over the next few years.

PNW: Aren't big energy companies like Southern complying with existing regulation, even exceeding requirements?

DODD: Southern Company has done an awesome job of installing the kinds of clean air and clean coal technology that lessens the air quality challenges from coal-fired plants. But we are at a disadvantage because 65 percent of our electricity is coal-generated. The companies are complying, bottom line. The real problem is tougher legislation, and regulations make it more expensive. That is what is hurting Georgia’s economy, as well as the South. We are such a coal-dependent region. We already have a lot of rules and regulations in place that we follow. However, we have states in the North that are not as dependent on coal; therefore, they do not understand the challenges we face with harmful legislation.

PNW: What will the impact be on Georgia?

DODD: Our concern is that so much of the global warming regulation and legislation is going to devastate the South. A lot of the southern states have high low-income populations, like here in Georgia. A higher proportion of discretionary income is devoted to energy and resources like coal. We are going to end up paying more for energy because of these punitive efforts. Alternative energy resources like solar and wind power will not work here. Nuclear energy, while it is a much better solution, is simply taking so long to come on board because of all the infighting in that arena, not to mention its own regulations. In a sense, this is simply discrimination against southern states and their people. They are setting out to damage our economy. It is going to hurt a lot of poor people here in the south. This is legislation by regulation.

PNW: What's the underlying message that regulation is sending?

DODD: People from other parts of the country do not understand what this will do to the south’s economy, and some may not care. It is not hard to see that the south has always been a place with a thriving economy, and some still resent that. There is a discriminatory message being sent to the south, and that is, “we are going to regulate you, no matter the cost.”

Blunt assessment of medical malpractice tort reform

2009-10-10T20:55:53Z

JEFFERSON CITY, Mo. -- In a recent commentary in the Wall Street Journal, former Missouri Governor Matt Blunt lamented the lack of "a sense of urgency for national tort reform." He knows from personal experience that tort reform "can cut costs, create jobs, and increase the quality of care available to patients."

When Blunt assumed the governorship in January 2005, "runaway lawsuits were driving up the cost of doing business . . . and forcing doctors and other business owners to close their doors."

Venue-shopping was common, Blunt recalled. "Defendants could be made to pay 100 percent of a judgment even if they were only 1 percent responsible for the injury," he added. "And caps on damages had been rendered meaningless by state court decisions."

One of Blunt's reforms was to require "that cases be heard in the county where the alleged injury occurred." Another was to make sure that "defendants could only be forced to pay a full judgment if their fault exceeded 50 percent."

"We put a $350,000 cap on noneconomic damages," he noted, "and created rules to prevent baseless cases from getting off of the ground.

"Tort reform works," Blunt affirmed. "Missouri's medical malpractice claims are now at a 30-year low. Average payouts are about $50,000 below the 2005 average. Malpractice insurers are also turning a profit for the fifth year in a row -- allowing other insurers to compete for business in Missouri. This will drive down costs, which will save government programs money as well as improve the system for patients. It will also leave doctors with more resources to invest in better care."

Blunt pointed out that "Texas has seen similar success from its 2003 tort reforms. The number of doctors applying for a license in that state has increased by 57 percent and doctors' insurance rates have declined by an average of 27 percent," noted. "There are now more doctors in Texas providing care in previously underserved areas."

Blunt sees "no reason that the success that Missouri, Texas and other states have experienced cannot be replicated nationally."

Alabama Attorney General requests dismissal of pharmacy lawsuits

2009-10-09T17:52:40Z

MONTGOMERY, Ala. (Legal Newsline) -- Attorney General Troy King said Thursday he would like judges in five counties to throw out lawsuits against a group of pharmacies, saying that the suits are frivolous.

CVS Caremark Corp., Rite Aid Corp., Wal-Mart Stores and Walgreen Co. are named in the lawsuits that claim that their pharmacists filled prescriptions with generic medications without physicians' authorizations.

King says that the deceptive practices lawsuits brought by private attorneys on behalf of five district attorneys are frivolous and should be dropped and that he will use his authority as the state's top attorney to do so.

One such lawsuit has been dismissed in Colbert County. Other counties with suits pending are Tallapoosa, Wilcox, Autauga and Jefferson's Bessemer Division.

"These suits represent a contortion of the Deceptive Trade Practices Act in ways that those who wrote it would no longer recognize. Never before has anyone suggested that this law permits the suing of businesses in Alabama -- county by county, in the name of the state by private lawyers who have not been authorized by the attorney general to do so," King said. "These actions threaten every business in Alabama and are an end run around the tort reform for which so many of us have fought."

Poultry industry scores partial victory

2009-10-08T22:46:34Z

TULSA, Okla. -- A United States District Court Judge has ruled that a state environmental official is not qualified to give testimony on whether or not poultry litter has polluted the Illinois River watershed.

Earlier this week, attorneys for the poultry industry successfully blocked the testimony of Shannon Phillips, the state’s water quality director.

Phillips was set to testify about potential sources of pollution in the watershed, as well as the claim that farmers have known for decades of the environmental damage allegedly caused by poultry litter.

Judge Gregory Frizzell ruled that Phillips lacked the qualifications to give an opinion on the cause of the pollution, but did allow her to testify on the overall impact of pollution in water supplies.

The state is arguing that runoff from fields contains toxic bacteria that is a potential health hazard.

Lawyers for the poultry industry challenged Phillip’s credentials, asserting that her research was done in college and does not qualify her as an “expert."

Randy Allen, a local poultry farmer, said farmers were able to score a “small” victory even though the local media has been quiet on the issue.

“It’s the first of many small battles in this war, but the farmers are hoping the judge will be fair and side with the industry,” Allen said.

He added that lawsuits such as the current one have badly damaged the poultry industry in the state, resulting in jobs lost.

“This case has had an impact on our industry. It has taken a toll on companies as far as expense. The company we used to grow for had to sell because of its legal battle,” Allen said.

“The prices were down, but the feed was high. It hasn’t been a good time for the poultry industry. Then you add on a lawsuit and the high cost of lawyers and it gets even worse.”

In previous years, nearly a dozen companies outside of Oklahoma had contracts with state farmers, but that number has dwindled to just two, according to Allen.

“Some of them have gone out of business, while some simply refuse to do business because of the lawsuits. Hopefully, when this over, we will have jobs again,” he said.

The other defendants named in the ongoing lawsuit are Cargill Inc., Cal-Maine Foods, Inc., Tyson Poultry Inc., Tyson Chicken Inc., Cobb-Vantress Inc., Cargill Turkey Production LLC, George's Inc., George's Farms Inc., Peterson Farms Inc. and Simmons Foods Inc.

Heritage Foundation takes aim at gun case

2009-10-07T16:18:02Z

WASHINGTON, DC – The U.S. Supreme Court is gearing up to hear arguments on whether or not the 2nd Amendment applies directly to the states, an issue that could have a huge impact on gun ownership in America.

The nation’s highest court will review whether or not the City of Chicago’s 27-year old ban on firearms is constitutional.

The case was brought on behalf of four Chicago residents, the Second Amendment Foundation, and the Illinois State Rifle Association.

Todd Gaziano, director of the center for legal and judicial studies at the Heritage Foundation, is predicting a major blow to gun control advocates and a big win for states.

He predicts liberals will make the case that the 2nd Amendment, like abortion, should be legislated on the federal level, but too much evidence shows it is a state issue.

“Ever since the 14th Amendment passed, the framers talked about how it would apply to the states. The framers were a little unclear how the 14th Amendment should be interpreted. In the late 19th century, the Supreme Court limited privileges but in the 1930s they said it applied to the states. Ever since the 1930s, they (the Supreme Court) have largely ignored the immunities and privileges clause,” Gaziano said.

“There is a lot of serious and powerful evidence that the framers of the 14th amendment understood that former slave owners would try to disarm the freedmen. There was legislation preventing the freedmen from having their guns confiscated. Leaders in Washington didn’t want the former Confederate states to disarm newly freed slaves or to intimidate them, so they tried to prevent this, which is why they passed the 14th amendment,” he said.

He cited the 8th amendment as another example of how the nation’s highest court reversed its opinion, eventually allocating power to individual states.

Gaziano said that over the last 75 years the most enthusiastic supporters of gun control have been liberals.

“We will definitely see some hypocrisy. Some of these liberals seem to like rights that limit state action. They are the ones that believe so-called abortion rights limit states from protecting late-term fetuses. All of a sudden this group will say the right to self-defense is not a real right or not a fundamental right,” he said.

However, if the question is whether or not gun ownership applies to all Americans in every state, then the court will side with the 2nd Amendment, according to Gaziano.

“Gun ownership is the fundamental right deeply rooted in our history and culture. If that is the test, then the court should say it applies to the states.”

Even though the ruling might not completely clear up what kinds of gun regulations cities and municipalities can enforce, outright gun bans will be deemed unconstitutional, said Gaziano.

“Some states and cities will try to regulate guns to death. In America, we don’t register religious beliefs or books, so why would we register guns? It doesn’t matter whether some politician thinks a church teaches dangerous ideas,” he said.

Oral arguments are being scheduled as early as this coming winter, with a decision expected by June 2010.

AVALA, King spar over outside counsel process

2009-10-02T17:06:17Z

MONTGOMERY, Ala. (Legal Newsline) - Alabama Attorney General Troy King should open state legal contracts to a bidding process and stop putting political pressure on the state Supreme Court, the executive director of a legal reform group said Wednesday.

King recently called Alabama Voters Against Lawsuit Abuse a "mouthpiece" for the pharmaceutical industry in reference to its stance against fees earned by outside counsel hired by King to sue more than 70 drug companies over alleged overpricing.

AVALA executive director Skip Tucker says King should open the bidding process to possibly get a better deal than the 14 percent the two firms are receiving.

"There are probably six major law firms in Alabama that have the resources to handle a lawsuit of that kind, and as we said before those contracts ought to be bid on and be online so everyone can put out a bid," Tucker said.

"We have also asked for the time and expenses they spend be kept very detailed. Basically just common sense things."

Tucker made similar comments in a story regarding the lawsuits, and King, a Republican, fired back with an editorial that ran in three Alabama newspapers.

"(I)ntense political and public relations efforts have been made to shift the focus of the debate away from the actions of these defendants," King wrote.

"For example, some of their mouthpieces have tried to change the focus from the drug companies' guilt to how much the attorneys who prosecuted them have been paid.

"It is no secret -- the state's lawyers have been paid 14 percent of what they recovered. As my daddy used to tell me, most of something is better than all of nothing, which is how much Alabama would have recovered if outside lawyers had not litigated these cases since these law firms have fronted time and out-of-pocket expenses in amounts greater than my office's entire annual budget."

Tucker said his organization's relationship with King is not quite "love-hate." He feels King thinks AVALA is in the corner of Luther Strange, King's opponent in 2010's Republican primary, because Strange embraced the proposed Private Attorney Retention Sunshine Act.

Tucker noted that King also supported the bill earlier this year.

"We're not in (Strange's) camp," Tucker said. "Troy King thinks we're mouthpieces for pharmaceutical companies.

"Anyone that harms or injures anyone else should reasonably compensate them. We believe in lawsuits, but these cases appear to be weak when you combined the bully pulpit and trial lawyers representing the State.

"Then, with a highly effective trial lawyer like (Jere) Beasley, the propensity for lawsuit abuse reaches critical mass when the State combines with a high-powered law firm."

PARSA requires outside firms to keep a detailed record of hours and expenses to be made public at some point, and caps what the firms can earn at $1,000 per hour. It is modeled after a proposal made by the American Tort Reform Association.

Another Republican attorney general, South Carolina's Henry McMaster, has received attention for accepting campaign contributions from attorneys he hired for state cases.

The two firms on King's pharmaceutical cases, Beasley's firm and Hand Arendall, have not contributed to King's campaign.

AVALA says the State has received nearly $100 million from the cases so far. Of that, $56.7 million have gone to the general fund, $26 million have gone to the attorneys and $17 million is in an escrow account.

King has filed a lawsuit against the federal Centers for Medicare and Medicaid Services regarding the amount of money the federal government can claim from Medicaid recovery lawsuits.

Five cases have gone to trial. Three were successful, earning the State judgments of $215 million, $80.9 million and $33.2 million. The defendants have appealed to the state Supreme Court.

"It has now been more than 18 months since the first verdict," King wrote.

"And still the Alabama Supreme Court has not ruled on these cases. I call on the court to do so. I have done my part and sent the message -- Alabama is a very bad place to come and steal. All of Alabama now watches and waits to see if the court will allow that message to be received and our people protected."

Tucker said King shouldn't be pressuring the Court, on which Republicans hold an 8-1 majority. Three of the seats are up for election next year.

"(King is) putting undue pressure on his fellow conservatives and GOP members," Tucker said.

"King, with three justice seats coming open in 2010, is knowably putting political pressure to cave into trial lawyers, even though they only have a 60-percent success rate.

"And what it does, if the Supreme Court affirms these high-dollar verdicts, once the Supreme Court reaches a decision on this thing the settlements will start. Depending on the Supreme Court decisions, millions upon millions upon millions of dollars are at stake. If they affirm high-dollar awards, the settlements are going to be high-dollar."

U.S. Chamber responds to Second Circuit decision

2009-10-01T21:18:49Z

Harold Kim, senior vice president for legal reform initiatives at the U.S. Chamber's Institute for Legal Reform (ILR), believes that the Second Circuit's recent decision in Connecticut v. American Electric Power, upholding public nuisance claims in climate change litigation, is something to be alarmed about. He shared his concerns in an exclusive interview with Public Nuisance Wire.

PNW: What was the Institute's reaction to the Second Circuit decision?

Kim: We’re concerned about the decision because it really advances a common law doctrine from many, many hundreds of years ago into a new area. If you look at the history of public nuisance law and where it has gone, it is a concern because it comes from common law English origins where the King held his property and was almost quasi-criminal in the way that it was applied, because it was an offense against the public at large. Over the last few decades, the theory has been expanded tremendously into areas of product liability, for example. We’ve seen it in asbestos, we’ve seen it in lead paint, we’ve seen it in tobacco, and now we are seeing it in respect to climate change.

The decision, in addition to looking at the aspects of federal common law as it relates to public nuisance, really did address some other core legal issues as it related to the ongoing policy debate regarding climate change and the effects on the environment. This decision -- some would say it’s a watershed decision because of the way it was addressed and elevated, and that is a concern to us.

PNW: What does the decision mean for the five electric utility companies?

Kim: Their immediate procedural mechanism is to appeal the decision. It puts them in an interesting, difficult position, because they now have litigation being advanced at the state level to essentially enjoin or to cap their carbon emissions based on a public nuisance theory. Then you have the policy makers on Capitol Hill trying to address that legislatively. What’s going on here is that they are being pushed and pulled essentially by the courts, by the states, by the local municipalities who were party to this underlying litigation, and by Congress. The practical effect is that it has elevated the pressure on the issue.

PNW: What effect will this decision have on public nuisance suits in the future?

Kim: It’s almost like the snowball effect, with the evolving theories of public nuisance law that have advanced the product liability cases, and now into areas involving climate change. If you look at the climate change area, the Chamber is very concerned about the direction of that litigation moving forward. Right now, there are a handful of these cases being brought against carbon emitters, whether they are coal-fired utilities or manufacturing sites that release carbon. Where this litigation is being brought in a handful of states, by and large they are being dismissed because of political-question grounds. This Second Circuit case has essentially set aside those defenses by allowing the complaint to proceed.

PNW: Why is this problematic in the long run?

Kim: The problem is that right now we are seeing a number of these cases being brought on public nuisance grounds based upon damaged property, based upon some harm to the public -- but, more specifically, the harm as it relates to the environment, and how it relates to how you can use your land. For example, there’s this case involving an Alaskan village and Exxon where there are public nuisance and conspiracy claims being asserted by this small Eskimo village and the climate change problems allegedly caused by Exxon. That case has been challenged by some of the very same defenses that were raised in the Second Circuit case. Are those the potential lawsuits that can eventually evolve with a very creative plaintiff’s bar, where not only will they expand their legal theories beyond affecting property but eventually to injuries for individuals? Will it be mass tort, in effect, like you see with lead paint or asbestos? That can be the next frontier, as the plaintiff class can be virtually everyone who inhabits this Earth.

Gun rights group blasts mayor's "illegal" gun ban

2009-09-30T22:46:34Z

SEATTLE -- If Mayor Greg Nickels bans firearms, the Seattle-based Second Amendment Foundation (SAF) will sue the city.

Dave Workman, public relations director for the organization, said this is the mayor’s second attempt in as many years to institute a ban on all firearms in public even though the state has warned against such action.

“This all began last year when two men got into a scuffle. One was legally carrying a firearm. The gun went off and injured a couple of bystanders, resulting in the man losing his pistol license,” Workman said.

“The mayor used this incident to launch a campaign to ban all firearms, including those legally carried, on all city property in Seattle. Under state statute he has no authority to do that.”

According to Workman, Washington has one of the oldest preemption laws on the books. Under state statute, gun control measures are solely the discretion of the legislature.

“The mayor announced this by executive order," Workman noted. "The Second Amendment Foundation issued a warning that if he went ahead he would be sued. That seemed to cool his jets for a while, because there was never a public hearing.”

Workman, who also serves as editor for SAF's Gun Weekly, said Nickels announced in August that he was going to institute a ban on guns on public property administered by the parks and recreation department.

“In his view, these are areas with high traffic of children -- like swimming pool, basketball courts, etc.” he said.

Even though the state attorney general’s office sent a warning to the mayor, the Second Amendment Foundation is preparing to file a lawsuit should the ban move forward.

“In the middle of all of this, the Seattle police department is facing the possibility that it will have to enforce an illegal ban on guns," said Workman. "There is no penalty attached to the ban, but what they will do is file charges of trespassing on anyone who has a firearm on the property. If the person doesn’t leave, he can be arrested for criminal trespass.”

The Second Amendment Foundation won two San Francisco gun ban lawsuits dating back to the 1980s and is currently suing the city of Chicago over a handgun ban it considers unconstitutional. SAF expects to triumph in the Seattle case.

“We have warned the mayor repeatedly," Workman said. "Now it is up to him whether to move forward or give up on the measure.”

Legalizing theft by lawsuit

2009-09-30T20:11:53Z

"When public officials prosecute lawbreakers, those officials are fulfilling a legitimate role of government," observed Robert Levy of the Cato Institute in a 2001 commentary that resonates even more today. "Most of the time, that prosecutorial role is unobjectionable, and it is often commendable. But the latest rounds of litigation -- tobacco, then guns -- are different in three respects," he contended, "each of which threatens the rule of law."

Levy noted first that "coordinated actions by multiple government entities can impose enormous legal fees on defendants. Such actions have been used to extort money, notwithstanding the fact that the underlying case is without merit." To discourage this "extortion parading as law," he recommended "a 'government pays' rule for legal fees when a government unit is the losing plaintiff in a civil case."

Levy was also concerned about "the recent emergence of an insidious relationship between the plaintiff's bar and some government officials. That relationship -- common to tobacco and gun litigation -- is a second major threat to the rule of law," he asserted. "Both rounds of litigation were concocted by a handful of private attorneys who entered into contingency fee contracts with the government," Levy recalled. "In effect, members of the private bar were hired as government subcontractors, but with a huge financial share in the outcome." He worried that a private lawyer subcontracting his services to the government under these terms might forget that he has become, at least temporarily, "a public servant beholden to all citizens, including the defendant," and that "his overriding objective is to seek justice."

Levy pointed out that "the states in their tobacco suits doled out multibillion contracts to private counsel -- not pursuant to per-hour fee agreements, which might occasionally be justified to acquire unique outside competence or experience, but as contingency fees, a surefire catalyst for abuse of power. And those contracts," he added, "were awarded without competitive bidding to lawyers who often bankrolled state political campaigns."

Levy emphasized government's status as "the single entity authorized, in narrowly defined circumstances, to wield coercive power against private citizens. When government functions as prosecutor or plaintiff in a legal proceeding in which it also dispenses punishment," he cautioned, "adequate safeguards against state mischief are essential." Levy argued that "contingency fee contracts between government and a private attorney should be illegal" and that private lawyers should not be "enforcing public law with an incentive kicker to increase the penalties."

Of paramount importance, said Levy, is the fact that "laws are supposed to be enacted by legislatures, not by the executive or judicial branches. In too many instances," he lamented, "government-sponsored litigation has been a substitute for failed legislation. That violates the principle of separation of powers -- a centerpiece of the federal Constitution and no less important at the state level. Evidently," Levy concluded, "none of that matters to many of the attorneys general, mayors, and their allies in the private bar. In an attempt to circumvent the legislative process, they intend to pursue through litigation what was rejected by the legislature."

Climate change nuisance ruling threatens all industries

2009-09-25T15:25:35Z

The U.S. Court of Appeals for the Second Circuit has ruled that a public nuisance suit against five of the nation's largest electric utility companies, alleging that they contribute to global warming with greenhouse gas emissions, can go forward.

The complaint against American Electric Power, The Southern Company, the Tennessee Valley Authority, XCEL Energy and Cinergy seeks to force the utilities to reduce their emissions.

In prior cases, the courts have deemed the political questions raised by public nuisance claims to be non-justiciable.

"The Second Circuit's decision is extraordinarily broad and entails major risks for all industries, not just the electric utilities," say Richard O. Faulk and John S. Gray of Gardere Wynne Sewell LLP. "Any industry that generates greenhouse gas emissions is implicated, and that category includes virtually all businesses."

The ruling in State of Connecticut v. American Electric Power Co. Inc. explicitly rejected the political question doctrine and found that the plaintiffs -- eight states, three land trusts and the City of New York -- have standing both to sue and to present common law nuisance claims. It also vacated the federal district court decision.

"The district court held that the plaintiffs’ claim raised 'political questions' that could not be decided by federal courts because of a lack of standards for determining whether the defendants’ conduct was unreasonable, and the overarching national and international policy implications of regulating greenhouse gases," Faulk and Gray recall.

The district court also said it was not equipped to determine the appropriate level of emissions, assess alternative energy resources, or consider the implications for US energy policy.

In reinstating the case, the Second Circuit observed: "It is error to equate a political question with a political case. Given the checks and balances among the three branches of our government, the judiciary can no more usurp executive and legislative prerogatives than it can decline to decide matters within its jurisdiction simply because such matters may have political ramifications."

The Second Circuit court held that the political questionsraised by the suit are justiciable in federal courts, that none of the claims are preempted by regulations or legislation, and that all of the plaintiffs have standing to bring the suit.

"Even though the case plainly concerned damages caused by global warming, the court characterized the case as an 'ordinary tort case' concerning emissions from six power plants. It concluded that the controversy involved nothing other than the localized activities described in the complaint and held that the narrowed controversy entailed no overarching national or international issues," Faulk and Gray lament.

"The court trivialized the significance and scope of the controversy and belittled the ultimate impact of its holding - even though, in fact, its ruling may serve as a 'bellwether' determination for many controversies yet to arise."

The court also applied reduced standing requirements in its ruling, holding that municipalities and even private nonprofit entities have standing to sue over the impact of global warming on properties they own.

In addition, the court ruled that global warming impacts need only be an "identifiable trifle" involving either recreational or aesthetic concerns.

"Apparently, the court decided to graft the standing requirements for statutory citizens suits seeking to protect the public from recognized harms onto the common law tort of public nuisance," Faulk and Gray conclude. "Under this reasoning, it is difficult to imagine persons who lack standing to file nuisance claims regarding greenhouse gas emissions."

The court also held that the Clean Air Act or regulations issued pursuant to it do not displace the federal public nuisance remedy.

Faulk and Gray believe that the court's ruling puts American businesses in a lose-lose situation.

"So long as industries resist regulations and legislation, they risk public nuisance liability in the courts," Faulk and Gray explain. "Hence, delaying regulation does not confer any advantages. Indeed, it may be advantageous to accept comprehensive regulations and statutes that 'displace' private tort remedies. If, however, the regulations and legislation are not sufficiently comprehensive, industries may still face lawsuits to the extent that claims are not completely preempted. Hence, the entire process must be handled carefully."

Global warming ruling invites copycat suits

2009-09-24T17:24:19Z

HARTFORD, Conn. -- This week’s Second Circuit Court ruling could have profound implications for the future of climate change litigation, according to an environmental law expert.

Earlier this week, the U.S. Court of Appeals for the Second Circuit ruled that electric utility companies can be sued for contributing to global warming by emitting too much greenhouse gas.

In 2004, Connecticut, New York, California, Iowa, New Jersey, Rhode Island, Vermont, Wisconsin and the City of New York filed suit against American Electric Power, the Southern Company, the Tennessee Valley Authority, XCEL Energy, and Cinergy.

Trent Taylor, an environmental lawyer with McGuire Woods LLP, said the verdict was extremely lopsided and unpredictable.

“It is the first time that a court has permitted this type of litigation to survive a motion to dismiss. Not only did the court state that the political question doctrine was not a valid defense for defendants; the court went a step further and said the plaintiffs have standing and that the allegations in the lawsuit actually stated a valid claim under the federal common law of nuisance,” he said.

Taylor said that not even the Sierra Club could have written an opinion more biased than the one delivered.

“This (ruling) means that unless the full Second Circuit or the U.S. Supreme Court steps in and reverses this decision, this suit will go to trial -- a heretofore unthinkable result in the context of climate change litigation,” he said.

Prior to this decision, plaintiffs in this type of litigation had been unable to gain any traction. With the removal of the political question barrier, the energy industry can expect an uptick in copycat suits.

“The fact that this legal authority comes from not only a federal circuit court of appeals, but the widely respected Second Circuit, will further embolden plaintiffs,” Taylor said.

Second Circuit reinstates climate change public nuisance case

2009-09-23T19:15:59Z

The U.S. Court of Appeals for the Second Circuit has ruled that five of the nation’s largest electric utility companies can be sued for creating a public nuisance by emitting greenhouse gases (GHG) that allegedly contribute to global warming.

This is the first time a court has allowed public nuisance litigation involving GHG to proceed to trial. Until now, courts have ruled that such claims present non-justiciable political questions. The Second Circuit explicitly rejected the political question doctrine and found that the plaintiffs have standing to sue and present common law nuisance claims. The court vacated the decision of the federal district court and remanded the case for further proceedings.

“This decision is out of line with current law and thinking about how to address climate change," said Stan Anderson, executive director of the Public Nuisance Fairness Coalition. "These are issues seeking a comprehensive legislative solution, not a piecemeal approach by activist courts.”

Connecticut, New York, California, Iowa, New Jersey, Rhode Island, Vermont, Wisconsin and the City of New York originally filed suit against American Electric Power, The Southern Company, the Tennessee Valley Authority, XCEL Energy, and Cinergy in 2004, seeking abatement of "ongoing contributions to a public nuisance. Defendants’ power plants emit large quantities of carbon dioxide and are contributing to an elevated level of carbon dioxide in the atmosphere," their complaint read.

The Second Circuit panel's decision is likely to be challenged -- and may wind up before the U.S. Supreme Court, where the issue of non-justiciable political questions will get another hearing.

"Addressing climate change is fundamentally a legislative issue that should be decided by the People's elected representatives," attorneys Peter Glaser and Carroll W. McGuffey III noted in a recent Washington Legal Foundation paper on the EPA's proposed endangerment finding on CO2. "Only Congress can balance the overriding economic and environmental issues involved, and only Congress can balance the differing economic effects that climate change regulation poses for different regions of the country and different sectors of the economy."

Glaser and McGuffey argued that "individual state and federal court judges are not equipped to address these broad climate change issues in the context of general tort law. Judges in lawsuits are concerned only with addressing the rights of individual litigants. Judges are not lawmakers; they only interpret the law as promulgated by state legislatures or by Congress, or as developed through common law. The climate change tort lawsuits, however, ask the courts to determine broad environmental policy," the two attorneys emphasize. "For instance, in some of the lawsuits, the courts were asked to issue injunctive relief ordering the defendant companies to reduce their GHG emissions. Even the lawsuits seeking damages, if successful, would ultimately compel the defendant companies to reduce their GHG emissions. But the amount by which various sectors of the economy should reduce their emissions is a fundamental policy question that should be determined by Congress, not judges."

Contingency arrangement violates separation of powers, due process

2009-09-22T21:58:28Z

Janssen’s January application to the Pennsylvania Supreme Court for extraordinary relief in the case of Pennsylvania v. Janssen Pharmaceutica makes a compelling argument against contingency arrangements between governments and private attorneys.

“The contingent fee contract whereby the Office of General Counsel (OGC) retained Bailey Perrin was not the subject of any competitive bidding or legislative authorization,” Janssen affirms in its application. “Rather, the contract appears to be the product of private negotiations between the Governor's General Counsel and Bailey Perrin over a period of several months in 2006.”

Concurrent with the negotiations, Janssen asserts, “F. Kenneth
Bailey, a Bailey Perrin founding partner, made repeated and significant contributions, totaling more than $100,000, to Governor Rendell's re-election campaign and to the Democratic Governor's Association."

Bailey Perrin could receive as much as 15 percent of a settlement in the case, a figure that could run into the millions.

Janssen notes that “Bailey Perrin has taken on numerous engagements similar to this action, including representation of the States of Louisiana, South Carolina, Arkansas, Mississippi and New Mexico, as well as individual plaintiffs asserting claims against Janssen and/or other companies that market antipsychotic medicines."

Janssen also notes that “the contract here does not include an express provision for ‘Control and Management of the Litigation.’ It instead contains a ‘Consultation’ paragraph that merely obligates Bailey Perrin to ‘consult with’ the OGC and to deal with the OGC as it would with any other client.”

Janssen’s application for extraordinary relief suggests that Bailey Perrin should be disqualified as counsel “because the General Assembly did not authorize the contingent fee arrangement between the OGC and the firm,” as required by the state constitution, and because “the due process guarantees of the United States and Pennsylvania Constitutions prohibit the Commonwealth from delegating the exercise of its sovereign powers to private counsel with a direct financial
interest in the outcome of litigation.”

Janssen argues that the contingency arrangement “raises serious separation of powers concerns and has created an appearance of impropriety and partiality.” The arrangement, it says, “is an unconstitutional ‘appropriation’ of Commonwealth funds by the executive branch.”

Janssen further argues that the contingent fee arrangement violates its “federal and state constitutional rights of due process, which guarantee that government officers wielding the powers of the sovereign, and their lawyers, will be impartial and will not have a pecuniary interest in the success of the government efforts.”

Janssen charges that “the circumstances surrounding the OGC's retention of Bailey Perrin create the appearance of impropriety” and that “Bailey Perrin's financial stake in the litigation necessarily prevents it from wielding the Commonwealth's power, as sovereign, consistent with due process.”

Janssen drives its point home with a hypothetical situation: "Certainly, if this action were prosecuted by the Governor's General Counsel herself or by other lawyers employed by the Commonwealth, no court would allow them to possess a direct stake in the recovery,” it asserts confidently. “The rules do not change simply because the OGC decides to retain private counsel to act on its behalf. To the contrary, as a private party exercising state powers, Bailey Perrin is not authorized to do anything that the lawyers of the OGC themselves would be prohibited from doing."

Can Bailey Perrin act on behalf of the Commonwealth of Pennsylvania with propriety and impartiality? "The amount at stake here is enormous -- many millions of dollars of potential legal fees in this case and in other Bailey Perrin-led litigation that could be impacted by the resolution of this case,” Janssen concludes. “Thus, the risk that Bailey Perrin's financial stake in the outcome will affect ‘government’ decision-making is real and serious. Indeed, the role of the Governor's General Counsel in the retention of Bailey Perrin, the timing and amounts of Mr. Bailey's campaign contributions, the terms of the contingent fee agreement and the involvement of Bailey Perrin in other Risperdal-related litigation that might be affected by this lawsuit combine to give rise to a manifest appearance of impropriety -- the impression that the government's prosecutorial decisions have already been infected by impermissible considerations."

Is medical liability reform achievable?

2009-09-18T15:00:37Z

"Liability is important because it creates a huge cost on medicine,with as much as $100 billion a year being spent on defensive medicine," says Troy M. Tippett, MD, Florida neurosurgeon and president of the American Association of Neurological Surgeons. "We have to order a lot of tests that wouldn't be necessary if we were weren't concerned about the coverage."

In an exclusive interview with Public Nuisance Wire, Dr. Tippett speaks about the need for, and the likelihood of, medical liability reform.

PNW: Why does medical liability need to be reformed?

Tippett: The system, as it stands, is a huge cost and drain on the entire health care system. We have proven systems that work in two states, but those are being ignored in favor of unproven plans.

PNW: What sort of medical liability reforms are being proposed?

Tippett: There's talk about using certificate of merit and early settlement reform on the House side, but there's been no talk of how those would be implemented.

Certificate of merit means that, in order to move a presumed liability case along, you have to have someone who's an expert say that you did, in fact, commit malpractice. If that happens, then a case can move forward.

Early settlement means just what it sounds like. If there is a bad outcome or a presumed problem, then you go in and talk to the patient and explain that there is a problem, it's recognized as a problem, and then a certain monetary settlement is offered if the patient will say that it's a settlement in full and not pursue a lawsuit.

PNW: Do you support those reforms?

Tippett: Early settlement is an approach that has worked on a small scale in some areas, but there's also a huge possibility that it could make things worse rather than better. If you make the offer to the patient and they decide they don't want to take the offer, it can be brought up in court. That creates a greater likelihood that you could lose that case even if you made the early offer to help someone who's had a bad outcome.

Once you go to them and make the offer, chances are significant that it could increase the likelihood that you'd lose in court.

PNW: What other types of reform have been proposed?

Tippett: Another thing that has been put forward is health courts. They'd be set up with judges who had health-care experience. You'd present to that judge rather than a jury and it would work sort of like workers' compensation courts. That, too, has potential to help the situation depending on how it's set up.

PNW: What would be the ideal reform?

Tippett: The MICRA-type reform, which has a history of working in California, where it's been in use for quite some time, is basically a system where, if someone is injured and there is a settlement, all future health care bills will be paid. The injured patient also gets all of their future economic disadvantages paid for.

What is limited is that there is a $250,000 cap on so-called non-economic damages like pain and suffering - on things that can't be measured and aren't objective.

There's also a limit on the contingency fee of the plaintiff's bar. They dont' get 40 percent of the settlement like they do in other cases.

PNW: Do other states have similar laws?

Tippett: Texas has a little simpler law, but the similarity is that they also have a $250,000 limit on non-economic damages from the doctor and the hospital. There's a limit of that same amount for nursing homes, too, so [a plaintiff] could potentially earn $750,000 [in a judgment against all three]. You also receive economic and health care costs. That has really made a huge difference on the cost of liability insurance.

PNW: What's the situation in Florida, where you practice?

Tippett: For coverage of $1 million in San Francisco a few years ago, you paid $45,000. In Miami, Florida, you can't get that kind of coverage. If you could, the most you could get would be $250,000 of coverage for $200,000. You can't even purcahse a $1 million policy in Florida. That makes a huge difference. The only real difference in those prices is California's liability law, which allows high risk physicians to practice.

PNW: Do high insurance rates dissuade doctors from practicing in Florida?

Tippett: Many neurosurgeons cannot afford to have insurance in Florida -- or, if they do have it, it's paid for by the hospital employing them.

PNW: What would be the best approach for enacting reform?

Tippett: A state-by-state basis would be ideal, but the plaintiff's bar is so powerful on the state level that it's just not feasible. That why the federal approach is more conceivable.

PNW: What are the chances of reform on a national level?

Tippett: I could see some limited form of liability reform that might occur as part of some compromise deal if Congress reaches a point where it can't move health-care legislation along. The Republicans have been very supportive of liability reform.

I think there's a chance that it could happen, but the methods they propose are unproven. At most, what's been talked about are pilot studies. We really don't need pilot studies when we can point to California and Texas where there are proven systems that work.

Contingency Controversy Highlights Larger Problem

2009-09-15T19:20:53Z

As the October 21st date for oral arguments in the notorious case between Janssen Pharmaceutica and the state of Pennsylvania nears, contingency contracts between states and law firms remain a hot button issue. Legal reformers say the Pennsylvania case is emblematic of a larger problem that lies with attorney generals and other elected officials.

Washington Legal Foundation Chief Counsel Glenn Lammi says the conflict becomes apparent when contingency contracts are viewed from a larger prosecutorial perspective.

“If the government were to delegate the ability to prosecute to a private lawyer or citizen, the due process rights of the potential targets of those prosecutions would certainly be put at a very serious risk,” he said. “And it’s even worse if the payment of these lawyers or individuals is contingent on the success of that action.”

According to Lammi, one of the most problematic aspects of the Pennsylvania contingency contract, and numerous others like it, is the money-driven way in which it motivates attorneys to try their cases. He thinks such partnerships could eventually change the way state attorneys choose their cases overall.

“There’s a certain expectation that’s placed on state and federal officials in the sense that their job is to do justice,” said Lammi. “And they may make decisions on whether or not to pursue something based on a lot of different factors. One of those factors should not be whether there’s going to be payment in the end; and contingency cases, by definition, taint those arrangements and decisions.”

In order to maintain fairness and avoid any implication of favoritism, Lammi believes that contingency contracts between law firms and states should be determined based on an “open, competitive bidding process, like any other government contract.” He says such a process would make concerns of pay-for-play null and void when it comes to contingency contracts.

When it comes to the big picture, Lammi believes the public should be aware that contingency contracts could affect the way their elected officials work.

“People should be troubled by any sort of favoritism that is provided from government officials to private industry,” he said. “I think the fact that this is law enforcement makes it a little bit harder for people to grasp, but if people keep in mind that the state’s job is to pursue justice rather than pursue a certain outcome that may be influenced by money, then maybe it will be a little bit easier to grasp.”

As for the outcome of the controversial Pennsylvania case, Lammi believes it will be a partial victory for reformers. He doubts the court will expressly castigate the contingency arrangement, but instead will say the contract is null and void because of the appearance of impropriety or because the state didn’t follow procedure. Lammi emphasizes that the case went straight to the Pennsylvania Supreme Court, bypassing the appeals court.

“We’d like to see a very firm statement from the Pennsylvania Supreme Court that says these sorts of arrangements are suspect at best,” he continued. “And that states shouldn’t be pursuing these without going through the same procedures they do for all other government contracts. But I don’t think we’re going to get that.”

Massive fraud cited in dismissal of cases against Dole

2009-09-14T14:52:29Z

Citing fraudulent tactics such as faked sterility tests and bogus employees, the California Superior Court has overturned a Nicaraguan court's $2.1 billion judgment against Dole.

"Apparently, they did everything in this case from completely fabricating who was working at these plantations to fabricating the lab reports," said Hans von Spakovsky, senior legal fellow of the Heritage Foundation.

"The judge makes the point that there was so much fraud involved in this case that there's no way to know whether there were real individuals who were injured by working on the plantation. There's an individual plaintiff who claimed that he'd been made sterile and Dole showed through DNA testing that he had three children.

"There's even evidence of threats that were made against witnesses who wanted to testify against the fraud, and threats against Dole's investigators who were trying to figure out what was going on."

In dismissing two cases against Dole involving the use of the pesticide DBCP, which has been linked to sterility, California Superior Court Judge Victoria Chaney cited "clear and convincing evidence" of fraud. Her decision raises questions about 30 more such cases still remaining in state and federal court.

"I find, even beyond reasonable doubt, that each and every one of the plaintiffs in the Rivera and Mejia cases have presented fraudulent documents and actively participated in a conspiracy to defraud this court and extort money from defendants," Chaney said. "That alone . . . is more than enough to dismiss these claims with prejudice."

“The Court’s ruling and findings confirm that Dole, its co-defendants and the Superior Court itself are victims of a wide-ranging fraud and a conspiracy and obstruction of justice,” said C. Michael Carter, Dole’s executive vice president and general counsel. “These plaintiffs and their counsel made a mockery of our judicial system by bringing these fraudulent claims against Dole, and this fraudulent behavior and conspiracy implicate other cases pending in the United States and in Nicaragua. None of this illegal conduct would have come to light had it not been for the courageous witnesses in Nicaragua who came forward to testify despite threats of violence and significant and substantial risk to their own health and safety and their families.”

Mejia v. Dole and Rivera v. Dole alleged that exposure to the pesticide DBCP on Dole-contracted banana farms in Nicaragua over the last three decades made the plaintiffs sterile.

"There's an individual plaintiff who claimed that he'd been made sterile," von Spakovsky said. "Dole showed through DNA testing that he had three children."

DBCP, or dibromochloropropane, was used widely in the 1960s and 1970s to control microscopic nematode worms that destroy crops by attacking their roots.

Production was stopped on the chemical in 1977 after it was discovered that workers at a DBCP manufacturing plant had become sterile. The U.S. Environmental Protection Agency banned DBCP from nearly all uses in the United States in 1979, citing risk of cancer, gene and chromosomal damage as well as male infertility. Dole stopped its use of the chemical in 1980.

Nicaragua established rules for DBCP trials in 2000, setting minimum damages of $100,000 for claimants who became infertile from exposure.

"It's basically become a massive money grab," von Spakovsky said. "I think any claim made by someone coming out of South America is now going to be viewed with considerable suspicion, given what this California judge has said happened and given the participation in the fraud by some of the American law firms involved. Also, the corruption that it reveals in the court system down there should make any American judge asked to enforce a foreign judgment highly suspicious."

Judge Chaney also found that lawyers Juan Dominguez from Los Angeles, Antonio Ordenaña from Nicaragua, and others conspired to recruit bogus plaintiffs, teach them to lie about working on plantations, assist them in attaining false lab reports and other documents, and obstruct investigation into their scheme.

"The actions of Juan Dominguez perverted this court's ability to deliver justice to those parties that come before it," Judge Chaney said.

Dominguez advertised on the radio for former banana workers and hired employees to find plaintiffs. Sterility tests were allegedly done inside his law office.

Despite its win in these two cases, Dole faces approximately 250 more DBCP lawsuits, mostly in Nicaragua.

"You cannot trust any judgment obtained against a big company coming out of South America," von Spakosvky said. "I think the only way to stop these cases is to not trust any large judgment rendered, particularly not in countries where control of the government is in the hands of individuals hostile to the United States, like the Sandinistas in Nicaragua."

Petition targets gun manufacturer liability

2009-09-11T15:01:50Z

A petition filed in Adames, et al. v. Beretta USA Corp could reopen the case of a teenage boy fatally shot by his best friend eight years ago. In 2001 13-year-old Billy Swan jokingly fired a Beretta pistol at his friend, having first removed the clip and not realizing a bullet remained in the chamber. Swan’s parents sued Beretta, claiming the manufacturer failed to warn consumers that removing the gun’s magazine does not insure total safety. Later that year, the Illinois Supreme Court threw out the case.

In an exclusive interview with Public Nuisance Wire, Jeff Dissell, firearms instructor and former Florida state chairman of the Friends of NRA, argues that the current lawsuit ignores federal law.

PNW: Who is really to blame for the accidental slaying in this case?

DISSELL: As a firearms instructor of many years and of many disciplines, the root cause of this accident (and it was merely a terrible accident) is obvious, but requires courage to accept. First, the fact that the child was unaware that the mere removal of a magazine from a Beretta 92 series pistol does not disallow the firearm from firing shows a clear ignorance that could have been easily dispensed with by even the most fundamental training by the owner, David Swan. I have personally trained literally thousands of men, women and children in the safe and proper use of firearms, and to my knowledge, not one of my students has ever been involved in an accidental shooting of this kind.

Secondly, the lack of knowledge demonstrated by the child as to the safe use of a firearm, whether or not a magazine is inserted, shows that if any training was provided the child it was fundamental at best -- and therefore potentially dangerous at worst. A basic tenet of firearms safety taught in virtually every firearms class -- from that of a basic nature to those taught to military and law enforcement -- is that a firearm is never pointed at anything that one does not wish to destroy, with absolutely no exceptions. If that simple concept had been followed, the results of this incident would have been embarrassing at worst. That the child even pointed the firearm, loaded or unloaded, at another child demonstrates an elemental lack of even the most basic firearms training.

PNW: What could have been done to prevent this tragic accident?

DISSELL: Responsibility for the storage of loaded firearms cannot be that of a firearms manufacturer, since there is no practical way for a manufacturer of any firearm to monitor the safe use or storage of its products. Firearms ownership, even as a law enforcement tool, implies that the owner of that firearm will accept the responsibility for removing any practical possibility that the firearm could be accidentally discharged, causing injury or death to another human being. In this case, the chain of custody was broken and multiple basic rules of firearms safety were violated by someone who was supposedly trained in the safe and proper use of a firearm by a public entity -- i.e., a law enforcement agency -- and who then should have been fully aware of the fact that the pistol in question could fire minus its magazine. It seems highly unlikely that at some point during academy or range training the fact that the Beretta 92 series of pistols could fire without a magazine in the magazine well was not a topic of discussion. If not tactically, then for safety reasons alone.

In point of fact, it could be argued that the public entity for whom David Swan worked could have logically concluded that he continued to store a pistol at home and therefore should have provided effective and continuing home firearms safety training for its personnel, which it apparently did not.

PNW: Does Beretta bear any responsibility for the unsafe use of its product?

DISSELL: Testimony given by Billy Swan and his father, David, are at odds regarding the lockbox in question. Even so, it remains the legal obligation of the firearm owner, not the manufacturer, to provide a safe and secure environment for young children. If the box was locked as suggested by David Swan, the child obviously had access to the key and, therefore, to the pistol. And if the box was unlocked, the pistol was still accessible to Billy. In either case, the result was the same and the tragic result was the accidental discharge of a firearm, causing the death of Joshua Adames. In this case, the Tenth Amendment to the Constitution of The United States must be respected and the laws of the State of Illinois upheld.

The suggestion by expert witnesses that Beretta should incorporate some sort of magical mechanical device into its Model 92 firearms design is supremely impractical, given that many thousands of the Beretta 92 series pistols are used throughout the world every day by civilians, law enforcement and the military personnel without incident and therefore there is ample evidence that the Beretta 92 series pistol is exceedingly safe as marketed. In the real world of firearms, a magazine disconnect or any other mechanical device is never, under any circumstances, to be relied upon as life-saving. Only firearms safety training, which is portable and can be utilized with any firearm manufactured, can be depended upon to prevent firearms accidents such as this with certainty.

It should also be noted that while there are a handful of semi-automatic pistol models available that do in fact disable a firearm when the magazine is removed (the fabled magazine disconnect), there is running contention in the professional firearms training community as to whether or not such a feature actually places the lawful operator of a pistol with such a feature in harm’s way. While such a feature may at first glance seem to be a good idea, in a self-defense or law enforcement situation a pistol that has become unintentionally disabled by virtue of a dropped magazine could prove to be fatal to its lawful operator. In the long run, gun locks, magazine disconnects and loaded chamber indicators have never been a substitute for safety knowledge, nor can they ever be. The sad truth is and always will be that if Billy Swan had been properly trained in the rules of gun safety and if the owner had provided a truly secure place to store the gun in question, Joshua Adames would almost certainly be alive today. To try and place blame upon the firearms industry is ludicrous.

PNW: Is there an agenda behind the reopening of this case?

DISSELL: One has only to inspect the first few pages of the court document to see who is involved as representation for the plaintiff. Wherever the words “Brady Center to Prevent Gun Violence” are found, it can be suggested with some certainty that the action, no matter what the venue, is simply a political effort to undermine the Second Amendment rights of Americans. The Brady Center to Prevent Gun Violence has a long history of carrying out a calculated and systematic vendetta against firearms, firearms owners and firearms manufacturers for decades, even to the extent of using a tragic case such as this one as a tool to further an otherwise failed political agenda.

Legally, the law is clear and historically attempts to hold firearms manufacturers liable for the misuse of a product in the hands of the ignorant or a criminal have been rejected, as they were in this case. The pursuit of legal redress for the unfortunate misuse of a product with a long history of safe use around the globe seems to be little more than an attempt to create an exception that can be further exploited in the future to the sole benefit of the Brady Center To Prevent Gun Violence.

Class action suit against Snapple reinstated

2009-09-11T00:00:45Z

In what could be a big blow for consumer product companies, the 3rd U.S. Circuit Court of Appeals has revived a New Jersey statewide class action suit against Snapple, finding that federal regulation does not preempt consumer fraud claims involving Snapple’s “All Natural” labeling.

The class action was initiated by New Jersey resident Stacy Holk, who allegeldy bought two bottles of Snapple in May of 2007 at a “premium price” of $1.09 each. Holk was apparently surprised and distressed to discover that her Snapple contained high-fructose corn syrup, despite having the words “all natural” on the label. Represented by Wilentz, Goldman & Spitzer and Tunney & Halbfish, Holk filed a class action in New Jersey state court, alleging consumer fraud and breach of warranty.

Snapple’s lawyers at Baker Botts had the case removed to federal court, where Trenton Federal District Court Judge Mary Cooper dismissed it, ruling that Holk’s claims were preempted by FDA regulation of food and beverage labeling.

“Snapple has always followed FDA labeling rules and this is no different,” said Van H. Beckwith, a partner with Baker Botts, LLP. “Last July, the FDA specifically spoke to the issue and said that it would not object to labeling HFCS as natural. This makes perfect sense, considering it follows 15 years of FDA pronouncements and the sweetener has the same basic ingredients as table sugar—glucose and fructose.”

However, in its 30-page ruling, the 3rd Circuit disagreed. The appellate court found that FDA policy (and legal precedent) left room for state regulation in food and beverage labeling. It also concluded that the FDA’s informal policy on the use of the phrase "all natural" did not preempt Holk’s claims.

“It’s not so much they are saying there’s any validity to the actual claim that this woman made, but they were interpreting the FDA’s label authority in whether or not it permitted a lawsuit in state court,” said Hans von Spakovsky, senior legal fellow at the Heritage Foundation. “Based on their interpretation of the law, the court is saying the action of the state court is not preemptive. They are sending it back down to courts so the case can go forward and, at that point, Snapple will hopefully prevail by showing they didn’t in any way violate the labeling on the product.”

The suit seeks disgorgement of Snapple's profits from its allegedly false labeling.

“I’m afraid that what it means is that this will encourage the plaintiff’s bar to file lots more frivolous lawsuits against makers of consumer products,” said von Spakovsky. “Let’s face it, 99 percent of us don’t pay any attention to what’s on a label when we go in and buy something like this. And for someone to sue is the kind of frivolous lawsuit that causes the price of consumer goods to go up, because the companies have to deal with them.”

Since the charges, Snapple has revised its formula, replacing high fructose corn syrup with sugar, although the company doesn’t believe it has done anything wrong.

“Snapple’s labels tell the individual consumer everything he or she needs to know in making an individual buying decision and fully discloses all of the beverage’s ingredients,” said Beckwith.

Philip Morris to appeal $1.9M verdict

2009-09-09T15:42:21Z

RICHMOND, VA. -- Philip Morris USA announced on August 13 that it would appeal a Ft. Lauderdale jury verdict awarding $5.3 million in compensatory damages to the family of a former smoker.

The money was awarded to 92-year-old Leon Barbanell, the husband of a woman who smoked two packs of cigarettes a day for more than 40 years. Shirley started smoking when she was 16 and died from lung cancer in 1996 at 73. The widower's attorney, Jonathan Gdanski of the Law Offices of Sheldon J. Schlesinger in Fort Lauderdale, filed suit against Philip Morris alleging the tobacco company negligently concealed facts about the dangers of smoking.

The verdict is "the result of a severely prejudicial trial plan,” said Murray Garnick, Altria Client Services senior vice president and associate general counsel, speaking on behalf of Philip Morris USA. “From beginning to end, this case was marked by legal rulings that should be reversed on appeal, including allowing this jury to rely almost exclusively on findings by a prior jury that have no direct connection with the plaintiff in this case.”

About 8,000 sick smokers are suing statewide in individual spinoffs from a 1994 class action that was disbanded on appeal. The class action named for the late Miami Beach pediatrician Howard Engle resulted in a $145 billion verdict, which was overturned. The case ended when the U.S. Supreme Court declined to review a 2006 Florida Supreme Court decision.

“There is mixed news for both sides in this case. The plaintiff recovered $5.3 million in damages, but will receive only $1.9 million, discounted by 63.5 percent because the plaintiff's deceased wife was found to have contributed that percentage of the damages by her own conduct in smoking,” said Maureen Martin, senior fellow for legal affairs at the Heartland Institute. “The plaintiff’s wife continued to smoke for more than 25 years after warning labels appeared on cigarette packages warning of health hazards. The jury rightfully should have found the plaintiff's deceased wife 100-percent liable.”

Approximately 4,000 claims, or roughly half of those filed in the wake of the Florida Supreme Court’s decision in Engle, are pending in federal court and have been put on hold pending a federal appeals court review of the constitutional implications of allowing the plaintiff to rely on prior Engle jury findings.

“A primary ground for the appeal is that the jury in this case was almost entirely bound by factual findings made by a jury in a prior case whose verdict was overturned,” Martin said. “These factual findings had no direct relationship to this case, Philip Morris said. This raises constitutional problems in my opinion and also deprives Philip Morris of the right to trial by jury. So I believe Philip Morris has strong grounds for appeal.”

Alien Tort Claim against Coca-Cola dismissed

2009-09-08T15:55:31Z

ATLANTA,Ga. -- As the once moribund Alien Tort Statute continues to plague American corporations abroad, Coca-Cola has dodged a bullet with the dismissal in the Eleventh Circuit Court of Appeals of claims brought against it under the statute in 2001.

The three-judge panel upheld a previous Miami federal court's dismissal of four total cases that claimed Coca-Cola and its two Colombian bottling subsidiaries, Panamco and Bebidas, were liable in the torture and murder -- by Colombian paramilitary forces -- of union leaders employed at the bottling plants.

"Basically, the plaintiffs were suing the Coca-Cola company and the Coke bottlers for the killing, saying that it was the responsibility of the bottling company and the parent company because of a claimed conspiracy between the bottlers and paramilitary forces," said Hans von Spakovsky, senior legal fellow at the Heritage Foundation.

The plaintiffs' allegations of liability were based on theories of agency, aiding and abetting, conspiracy, and vicarious liability.

"There was no proof to any of the lawsuit's claims," von Spakovsky said. "The court, in dismissing the case, basically said that everything being claimed is speculation and, while it was an unfortunate series of events, there are no facts to show that the defendants had anything to do with what happened."

Citing the May 2009 Ashcroft v. Iqbal ruling, the court concluded that the complaints brought against Coca-Cola "fail to sufficiently plead factual allegations," offering neither a valid claim nor establishing subject-matter jurisdiction.

"The allegations that were the base of these claims have been investigated by courts in Colombia, as well by the International Labor Organization, outside law firms and senior executives of this Company," Coca-Cola said in a released statement, "all concluding that Coca-Cola employees in Colombia enjoy extensive, normal relations with multiple unions and are provided with safe working conditions there."

Plaintiffs' attorney Terrence P. Collingsworth criticized the court's application of pleading standards that were not in existence when the case was filed, amended or appealed.

The complaint might have survived a motion to dismiss prior to the Supreme Court's ruling in Ashcroft v. Iqbal, which restricted a plaintiff's right of discovery and raised pleading standards, requiring that allegations be plausible.

"The court specifically says that their attenuated chain of conspiracy fails to take their claims from conceivable to the newly required plausible," von Spakovsky said.

Neither Coca-Cola nor the bottlers were accused of direct responsibility for the crimes, though they were alleged to have aided and abetted the paramilitary forces, an allegation that could harm the company just as much as a judgment against it.

"This is a move aimed at hurting Coca-Cola's image and potentially forcing a settlement to save that image," von Spakovsky said. "For Coca-Cola, which markets its products all over the world, being supposedly involved with paramilitary forces that murdered people would obviously hurt their image, even if it's a totally frivolous claim. I think Coca-Cola made the correct decision to fight this, as the court recognized there's no evidence to tie them into this."

Coca-Cola's victory is not likely to put an end to suits brought under the Alien Tort Statute.

"I think it's here to stay," said von Spakovsky. "Plaintiffs and attorneys are going to continue to use the statute to file cases. Despite the difficulty of bringing a successful claim under this statute, it's something that people hope is enough of a threat, along with bad publicity, that it will cause the companies to settle the claims."

The original case was filed in 2001 on behalf of the estate of Isidro Segundo Gil, a union leader murdered at the Bebidas bottling plant, allegedly by paramilitary forces. Another plaintiff who witnessed the murder was allegedly detained and tortured by paramilitary forces.

The other three cases, all involving union leaders at Panamco bottling plants, alleged that death threats were received, that the plaintiffs were shot at, kidnapped or tortured because of union activity, or that they were jailed by local police for six months for the same reason.

In 2003, the district court held that it did not have subject-matter jurisdiction over the claims because Coca-Cola did not have control of daily operations at the plant,but only the right to enforce product standards.

In 2006, the district court held that all four complaints did not present sufficient factual allegations to give the court subject-matter jurisdiction under the Alien Tort Statute.

Florida tort reform cuts workers compensation costs

2009-09-04T18:08:54Z

WASHINGTON D.C. -- Florida passed tort reform legislation in 2003 to control excessive litigation in workers’ compensation cases and contain medical costs for injured workers. In an exclusive interview with Public Nuisance Wire, N. Michael Helvacian, senior fellow with the National Center for Policy Analysis, explains the impact of this reform.

PNW: What are the benefits of Florida's tort reform?

HELVACIAN: It will be a big help in terms of reducing attorney involvement. This is a system where the attorneys don’t have to prove negligence or liability. This is designed so there shouldn’t need that much attorney involvement in these cases. The new law required attorneys in most cases to base their fees on the benefit they secured on behalf of their clients, instead of the total permanent partial disability award. This is measured in the monetary amount ultimately awarded to the claimant above the initial offer by the employer or insurer to settle the claim. This gave employers and insurers an incentive to make their best settlement offers at the start. It also discouraged attorneys from representing claimants when it was unlikely their work would add significantly to the final award.

PNW: What has been the impact on disability cases in the state?

HELVACIAN: In Florida, after they reformed, the frequency of permanent partial disability claims cases declined, but it wasn’t a big decline. The big decline occurred in cases where there was an attorney involvement. In those cases, there was a big difference. The workers don’t have an incentive to get a lawyer, were able to get a permanent partial rating without an attorney, meaning they kept more of the money.

PNW: How else did reform help employees?

HELVACIAN: A bigger percentage of claimants went back to work in the post-reform period sooner. Workers were going back to work sooner because the claims were closing faster. We have evidence that a bigger percentage of claims closed after 18 months, meaning the employees usually went back to work right after. That also has a positive impact, because the worker is gainfully employed and earning money, which means his lifetime earnings increase. Second, workers kept a greater percentage of the amount they were awarded for lost wages. Finally, higher wage-and-employment growth in Florida compared to neighboring states has increased opportunities for all workers in the state.

PNW: What are the drawbacks of using the legal system in resolving injury claims?

HELVACIAN: The cost of litigation -- principally attorneys’ fees -- raises claim costs, adding billions of dollars a year to premiums for workers’ compensation and health insurance. The threat of litigation leads doctors to practice defensive medicine (ordering unnecessary tests and procedures to avoid lawsuits), which also adds to the country’s medical bills.

PNW: Have other states followed Florida’s lead?

HELVACIAN: To my knowledge, the only state that has been able to do this is Florida. I’m only aware of one other state that tried and failed. In Oklahoma, they tried and trial attorneys were very opposed to it and a Democratic governor was elected and they couldn’t enact it. This was before Florida enacted it, and they tried to push it through but they couldn’t.

PNW: What would be the outcome of similar reform nationwide?

HELVACIAN: I think there would be two impacts. There would be some immediate impact as far as costs associated with workers comp, as cost would be reduced, especially in states where litigation is high or increasing. It would lower workers comp costs and, for employers, their rates would go down. Secondly, I think it would create a better work environment, as I think employee wages would go up for all employees because there is a tradeoff between how much it costs to provide these mandated benefits. The less the cost on the employer, the greater the wage. Employment levels would start rising, which we desperately need in many of the industries afflicted with this. So it would be direct benefits in terms of all of the insurance costs and also, in my opinion, secondary benefits in terms of higher wages and greater employment levels for everyone.

Amici demand neutrality in contingency lawyers acting on public's behalf

2009-09-04T01:51:35Z

The Public Nuisance Fairness Coalition (PNFC) and associated groups have filed an amici curiae brief in support of the defendant in Commonwealth of Pennsylvania v. Janssen Pharmaceutica, Inc.

Filed in conjunction with the American Chemistry Council, the Property Casualty Insurers Association of America, and the National Association of Manufacturers, the brief expresses concern about legal and ethical issues raised by the trial, such as governmental authorities offering outside attorneys a financial interest in cases involving the Commonwealth's police powers.

Pennsylvania Gov. Ed Rendell's administration hired the Houston law firm Bailey Perrin & Bailey on a contingency basis in September 2007 to prosecute Janssen Pharmaceutica over marketing done for Risperdal, an antipsychotic drug.

By filing the lawsuit, the PNFC brief argues, Bailey Perrin & Bailey effectively abused the sovereign authority of the state to sue on behalf of its citizens because the lawsuit created a financial incentive for the lawyers that could supersede the quest for justice.

Political impropriety has also been alleged in the case after the revelation that F. Kenneth Bailey, a founding partner, donated more than $90,000 to the 2006 re-election campaign of Gov. Rendell. Bailey Perrin & Bailey were also found to have received several similarly lucrative contingent fee contracts following large donations to other high-ranking political figures.

The PNFC brief focuses on "the stark due process issue of whether the government attorney's job is to 'ensure that justice is done' or merely achieve the maximum recovery for the Commonwealth's coffers.

"All citizens, including the parties to lawsuits, are entitled to absolute confidence that the sovereign's counsel is seeking justice for all persons. Maintaining allegiance to neutrality guarantees this important public trust," the brief affirms.

PNFC, et al. ask the court to define both the ethical and constitutional boundaries for a private counsel representing the Commonwealth when it is acting as the sovereign, or parens patriae, in tort litigation.

PNFC seeks not to correct actions after the fact, but before the abuses before occur.

"There is a heightened need not only to ensure that the judicial system works without bias," the brief states, "but also to guarantee the fairness and neutrality of counsel representing the people's interests."

The brief advocates absolute neutrality on the part of private lawyers representing the public not only for ethical reasons, but in the interest of maintaining public trust in the judicial system.

"That confidence - the trust of the average citizen - cannot be preserved without strict standards that foreclose the appearance of impropriety or the possibility that financial self-interest may influence counsel's judgment," the brief asserts. "Rewarding successful public service with private gain is suspect under any circumstances, but it is especially destructive where, as here, abuses imperil not only the allegiance of counsel to their clients, but also undermines the faith of citizens in their government's objectivity."

The Supreme Court has stated in Brady v. Maryland that it is not the government attorney's duty to achieve the maximum recovery or even to prevail, for "the government wins its point when justice is done in its courts."

The brief argues that private practitioners hired to represent the sovereign must shift their focus from representing a single client to the broader interests of every citizen. Contingent fee contracts, by their very nature, impede the ability to make that shift from profit to justice, creating a potential for abuse.

"Contingent fee contracts create the potential to earn huge profits - but this same potential creates a powerful incentive for private attorneys wielding the power of government to make decisions based on their own pecuniary interests, rather than the interest of justice," the brief emphasizes. "Such financial incentives may be acceptable in private litigation where contingent fee counsel and litigants always share an interest in maximizing recovery, but they have no place in litigation where attorneys are exercising the sovereign's police powers on behalf of the people.

"The 'appearance of impropriety' created by this arrangement - even if actual misconduct by private contingent fee counsel does not occur - cannot be tolerated." the brief concludes. "The public is entitled to know that agreements that secure their representation will not even tempt their counsel to stray."

Wyoming coal association joins opposition to climate bill

2009-09-02T21:56:29Z

CHEYENNE, Wyo. -- Wyoming has joined the ranks of mining states like Kentucky, Pennsylvania and West Virginia in expressing its opposition to Cap and Trade. Marion Loomis, executive director of the Wyoming Mining Association, representing 32 mining operations in the state, warns his members not to expect support for coal in Washington -- especially Western coal. Though predicting the bill will lose support, Loomis remains concerned over future land-leasing costs and production fees. Loomis spoke to Public Nuisance Wire in an exclusive interview.

PNW: How will the climate bill affect Wyoming?

LOOMIS: The state of Wyoming is unique in that most of the land leased to mine coal is on federal property. Even though we are supposed to get half of all the AMR (Abandoned Mine Reclamation) fees, the current administration wants to keep all of it. However, the biggest problem is the fact that President Obama wants us to pay all of our leasing fees up front.

PNW: Why is that a problem?

LOOMIS: The problem is that policy currently states we have to apply to the federal government in order to lease coal property. Right now, we are mining coal at 466 million tons. When you are mining it at that rate, these mines need reserves to come out on the market to bid on a timely basis. We have asked for over 4 billion tons of coal to be leased between now and 2013. We have to pay a bonus bid to acquire those leases. The impact on our industry will be huge if we have to pay all of those fees up front. Current policy gives us a five-year window to get all of our fees and costs paid. However, the Obama administration wants to do away with the five-year window. This would amount to around $250 - $300 million up front prior to production.

PNW: Can the industry afford those costs?

LOOMIS: It would be extremely difficult, considering we have to bid on these lands frequently. This would be a major cost going out that we should be avoiding. It all goes back to the federal government wants all of the money and is not willing to work with the mining industry.

PNW: How will the state be affected?

LOOMIS: We cannot support this bill in its current form. People are already struggling without jobs and this will skyrocket utility costs. The worst part is, the industry will take a huge hit with all of the upfront costs that could have been avoided if things were left as they are. Cap and Trade will be a huge roadblock for our industry in the near future. Our members have seen that this administration is showing a huge lack of support for us and our jobs.

Last Monday, Pennsylvania joined the ranks of mining states in opposition, when the Pennsylvania Coal Association voted unanimously to oppose the Waxman-Markey climate bill. Association President George Ellis predicted that the bill will “pick the pockets of every Pennsylvania resident.”

TVA must install pollution controls during public nuisance appeal

2009-09-01T19:15:47Z

ASHEVILLE, N.C. (Legal Newsline) - The decision to have Tennessee Valley Authority spend hundreds of millions of dollars in pollution controls at four of its power plants won't be stayed during the company's appeal.

U.S. District Judge Lacy Thornburg also ruled in January that TVA place a cap on its annual emissions. He wrote that three Tennessee plants and one Alabama plant were causing a public nuisance in North Carolina.

North Carolina Attorney General Roy Cooper alleged seven out-of-state TVA plants are emitting large amounts of sulfur dioxide, nitrogen oxide and mercury into the air, and they are being carried to his state.

TVA, the largest public power provider in the country, is appealing Thornburg's ruling to the U.S. Court of Appeals for the Fourth Circuit.

"The Court finds that the installation time lines set forth in the Judgment are reasonable and can be accomplished if TVA continues to follow the clear schedule crafted by the Court as such pertains to each of the power plants identified in the Judgment," Thornburg wrote Aug. 14.

"Simply put, the Court finds the evidence presented at trial supports the conclusion that TVA can install all of the pollution controls required by the Judgment within the time provided.

"TVA's arguments to the contrary in this latest motion for relief are unavailing and are expressly rejected."

Cooper blamed TVA's smokestacks for more than 15,000 illnesses a year, adding they damage forests, lakes and streams. He, the Resolution Group and the Ayres Law Group of Washington, D.C., filed his complaint in Jan. 2006.

The company already planned some of the updates required by Thornburg's decision, but had asked for a stay on those it did not.

TVA argued that its customers would suffer irreparable harm if the stay was not granted and that its appeal presents significant federal and state legal issues likely to be decided in its favor.

Alabama Attorney General Troy King is intervening in the appeal. He called Thornburg's decision "extraterritorial regulation."

"The district court's decision is extraordinary," King's attorneys wrote in July.

"Pursuant to a North Carolina statute expressly directing him to do so, North Carolina's attorney general convinced the district court to enter a sweeping, detailed and demanding injunction that purports to micromanage the operation of a power plant located in Alabama.

"The details of that injunction come straight out of North Carolina's Clean Smokestacks Act, and thus place the burden of North Carolinians' policy choices squarely on the shoulders of Alabamians."

Wyoming wool growers join opposition to Cap and Trade

2009-08-31T18:26:24Z

CASPER, Wyo.-- Another major state industry has come out against the Obama administration’s proposed climate bill.

The Wyoming Wool Growers Association is advising its members that cap and trade legislation could badly damage the industry's global market competition.

Bryce Reese, executive vice president of the Wyoming Wool Growers Association, warned that the bill could “dramatically” drive up production costs.

“Any proposal such as Cap and Trade which could so dramatically increase operating costs for American producers, while their foreign competitors are either exempt from or do not face the same level of such increased costs, puts U.S producers at a further disadvantage,” Reese said.

“It is well recognized that American lamb and wool producers can compete with any producer in the world in terms of quality of production and efficiency of production,” he added.

Reese said federal officials and agriculture industry leaders both recognize the bill would increase operating, production and consumer costs, which could lead to more job outsourcing.

“Where it is difficult for us to compete is in terms of cost of production," Reese explained. "Everyone from the President to the Secretary of Agriculture to Congressional members has all stated that Cap and Trade will increase costs to American industries.”

Last month during a Senate Western Caucus hearing, a representative of the Wyoming Stock Growers Association blasted the bill, claiming the legislation will be harmful to farmers and ranchers across the west.

Even Wyoming Senator John Barrasso predicted the bill, if passed, could result in a total collapse of the agriculture industry, as well as having cultural implications for future generations.

“There is no way that any industry such as ours can support this type of proposal," Reese declared,"no matter what potential benefits might occur, especially given the fact that there is such serious disagreement between scientists over the benefits in terms of climate change and the environment.”

Since early spring, industries such as agriculture, coal and manufacturing have come out in opposition to Cap and Trade legislation. The bill now heads to the Senate, where many experts believe it is unlikely to pass in its current form.

Wyomans turn up heat on climate bill

2009-08-29T16:28:55Z

CHEYENNE, Wyo.-- Even though the Senate is in full summer recess, organizations are already gearing up for a showdown this fall over so-called "cap and trade" legislation that could badly damage the farming industry.

Last month, during a hearing held by the Senate Western Caucus, Wyoming Republican Senator John Barrasso relabeled the legislation “Cap and Tax.”

Barrasso, who chairs that caucus, said the current bill would have “terrible” consequences for the state’s agriculture community.

“Cap and Tax would only deal another blow to our farmers and ranchers during this recession,” Barrasso predicted.

“Meat and vegetables don’t magically appear in grocery aisles. Wyoming’s farmers and ranchers work hard to help feed America. During these tough economic times, we need to ensure we don’t lose Wyoming agriculture,” he said.

Jim Magagna, executive vice president of the Wyoming Stock Growers Association, also blasted the bill while testifying at the hearing.

“Agriculture producers face tough markets in today’s economic climate. Implementing a policy that would increase energy and input costs during these tough times will be harmful to farms and ranches across the West,” Magagna said.

“This bill will particularly impact our young producers -- those who represent a bright future for American agriculture,” he added.

Susan Gore, founder of the Wyoming Liberty Group, charged that the bill is more about expanding the size of government than changing America’s pollution problem.

“We don’t feel there is even scientific evidence to support this bill. Recent EPA reports have even contradicted the White House. Obama wants to get rid of and hide these reports,” she said.

Gore said most agriculture and farming industries in Wyoming will not support the legislation.

“All this bill will do is implement a huge tax on everyone who cannot afford to pay more,” Gore said.

In July, the U.S. House of Representatives narrowly passed Cap and Trade by a 219-212 vote. The bill goes to the Senate after the summer recess.

“If agriculture declines, so do our western communities," Barrasso warned. "Policies that harm agriculture lead to a loss of jobs and a loss of a culture and way of life.”

North Carolina Foundation Scrutinizes TVA Case

2009-08-28T17:51:13Z

Targeting a company across state lines is not the only thing that makes North Carolina’s air quality lawsuit against the Tennessee Valley Authority controversial. According to recent articles by David N. Bass of the Carolina Journal, published by the North Carolina-based John Locke Foundation, the lawsuit is also costing taxpayers money and jobs. Additionally, Bass reports, the state spiked a recent study by its division of air quality that undermined its case against TVA.

“The N.C. Division of Air Quality (DAQ) scrapped a pollution report days after lawyers working for Attorney General Roy Cooper expressed concerns that its findings might lead to unwanted questions about the state’s lawsuit against the Tennessee Valley Authority,” Bass wrote in his July 21st article.

North Carolina contends that emissions from the TVA's Tennessee and Alabama coal-fired power plants negatively affect its air quality. In January, a federal district judge found that TVA’s plants did create a public nuisance in North Carolina. The company is currently appealing the decision.

According to Bass, just months before the judge’s decision, North Carolina dropped the DAQ report because it contradicted the foundation of its case against TVA, which was filed in 2006.

“The DAQ report, part of a larger document discussing compliance with air-quality regulations in Hickory and the Triad region, never got beyond the draft stage,” Bass notes. “It had concluded that nitrogen oxide, NOx, was an ‘insignificant’ precursor to the formation of fine particulate matter, PM2.5, a type of pollution that poses respiratory health risks. But in the TVA lawsuit, Cooper claimed the opposite. He argued that NOx emissions from TVA’s coal-fired power plants are a primary component of PM2.5, contributing to smog in western North Carolina and threatening residents’ health.”

Bass identified another waste of taxpayer money in his July 2nd Carolina Journal article about alleged abuse of reimbursements by the law firm North Carolina hired to assist in the TVA case.

“The documents suggest that Cooper's office has been less than thorough in reviewing expense reports submitted by Resolution Law Group, a firm assisting Cooper in his pollution control suit against the Tennessee Valley Authority,” Bass asserts. “Invoices show that a Resolution paralegal was reimbursed almost $7,000 last year for a month-long stay at an upscale Washington, D.C., hotel. But airline receipts indicate that she was present at the hotel only 12 out of 29 nights, incurring more than $4,000 in unused room fees.”

Bass cites thousands of dollars in frivolous expenses the state reimbursed to the firms assisting in the TVA suit -- things like candy, flight upgrades, valet parking, alcohol, and numerous instances of unused hotel suites.

To finance the TVA lawsuit, the state has siphoned money from the DAQ's maintenance and gas tax and inspection funds. The agency's recent announcement of 25 job cuts can be partially attributed to the transfer of DAQ funds to the TVA case.

“An internal e-mail memo by DAQ Director Keith Overcash dated May 4 reported that ‘the most recent loss of funds, combined with an additional loss of $1.75 million over the last two years to help pay for the TVA lawsuit’ has forced the agency to ‘move up the timetable to reduce the number of positions funded by DAQ,’” Bass reports.

Experts predict the TVA case will eventually reach the Supreme Court. If the final decision goes against North Carolina, the state will get nothing for the time, money, and jobs it squandered on this mad gamble.

The unintended consequences of North Carolina v. TVA

2009-08-27T16:58:00Z

As State of North Carolina v. Tennessee Valley Authority grinds inexorably through the Fourth Circuit Court of Appeals, opponents of North Carolina's claim foresee a worst-case scenario in which state-created environmental regulations supersede established federal regulations.

"This case, if unchallenged and not overturned, could embolden environmental activists and left-wing judges to begin to create piecemeal environmental regulations on all kinds of socially and economically beneficial conduct and thus usurp the proper function of the political branches of the government," warns Brian Walsh, senior legal research fellow at the Heritage Foundation.

"The other worst-case scenario," Walsh adds, "is that politically minded governors and attorneys general in some states can force neighboring states through the federal courts to engage in odious environmental exercises and make themselves look good with no political cost to themselves."

Another potential problem is the domino effect that could result if more governments sue over polluted air allegedly wafting in from neighboring states.

"You can't prove where this pollution is coming from, the Tennessee Valley Authority says, and North Carolina has sources in its state," comments Maureen Martin, senior fellow for legal affairs at the Heartland Institute. "Nothing would prevent South Carolina from suing North Carolina by saying that the pollution is being sent their way. Or England could say that we're blowing air pollution over to them. North Carolina winning this case could potentially cause that kind of insanity."

Following a general assembly decision to pursue every possible means to attack air pollutants from neighboring states, North Carolina filed suit against the Tennessee Valley Authority in 2006, even the though the public utility was in full compliance with the Clean Air Act.

"Along comes the state of North Carolina, and they say to the TVA that the winds are blowing your pollution over into our state and that's a public nuisance for our citizens. It impairs their health and welfare," Martin continues.

"The case was kind of under the radar because nobody believed it would come as far as it's come. After a number of trial court proceedings in the federal district court, the judge issued a ruling saying that a public nuisance case could be brought against an electrical power generating plant even though the clean air act regulates thoroughly the emissions from these kinds of plants.

"Nobody thought that you could bring a case like this against an entity that is in full compliance with environmental and CAA law," Martin recalls. "To have a plant that the EPA has said is operating at a safe level and have that plant be the target of a public nuisance tort case is unprecedented.

"What North Carolina is saying is that the CAA, which has been in effect since the beginning of 1970 and routinely tweaked since then, allows a little bit of air pollution but that it's too much. The only number North Carolina accepts is zero, despite the EPA's safe level of pollutants."

According to Walsh, the chance of reversing the decision is entirely dependent upon which judges are drawn for the appeal. He considers the case an outrageous example of a court engaging in public policy and violating the separation of powers.

"There's no way that a single unelected, unaccountable judge in the mountains of North Carolina should be able to dictate a billion dollars' worth of allegedly helpful environmental controls for a federal project that is located in other states," Walsh asserts.

"Among other things, it means that the federal judiciary is willing to interpret extremely broad amorphous tort law concepts -- in this case, the public nuisance doctrine -- to engage in whatever level of meddling it desires to achieve politically desirable outcomes."

Whatever the eventual outcome of North Carolina v. Tennessee Valley Authority, Heartland's Maureen Martin guarantees an appeal to the Supreme Court.

"This might be tempting for the Supreme Court to take," Martin speculates. "Reading the tea leaves, if they were to take this case, I believe they would come to the conclusion that you can't sue under public nuisance."

Brian Walsh of Heritage agrees. "If TVA were to lose in the Fourth Circuit, it certainly will appeal the case to the Supreme Court, where there might be enhanced briefing by amici and the issues of separation of powers could be developed more fully and more expertly by numerous parties," he predicts.

"The reality of the case, if it stands,is that these costs will be passed along to everyone that has a stove, refrigerator or a furnace, whether they have low income or high income. The court has chosen to weigh in on a political matter regarding whether coal-fired power will be economically viable for this nation. That's not the job of judges or courts," Walsh insists. "That's the job of legislators and the people who elect them."

Idaho sheep growers score decisive victory

2009-08-26T18:54:30Z

BOISE, Idaho -- In a major victory for the Idaho Wool Growers Association, a federal judge ruled in July that the US Forest Service cannot use an advisory committee’s report on whether domestic sheep pose a disease risk to bighorn sheep because the committee was improperly formed.

The Forest Service is considering closing 61 percent of the domestic sheep grazing allotments in the Payette National Forest.

The Idaho Wool Growers Association filed suit in 2008, arguing that the Forest Service had chosen like-minded scientists to meet behind closed doors and come up with opinions supporting a decision to close grazing allotments to domestic sheep.

“Our board of directors decided to file this lawsuit because we felt that the industry was being sandbagged,” said Stan Boyd, executive director for the Idaho Wool Growers Association. “The Forest Service was handpicking their researchers that were giving them what they wanted to hear. They were biased, they were one-sided, and we felt that wasn’t fair and the federal judge agreed with us.”

U.S. District Judge B. Lynn Winmill declined to comment on the conclusions of the committee, noting only that the process itself was flawed. The Forest Service has not decided if they will rewrite their report.

“If they are going to convene researchers and take recommendations from them, we want an unbiased panel with researchers across the spectrum,” Boyd said. “We don’t want these extremely liberal, extremely environmental-oriented researchers.”

Payette National's final environmental impact statement, originally scheduled for release in December, may be delayed. The Idaho Wool Growers Association merely asks for fair treatment.

“This is real important. They are using the bighorn sheep as a tool for a much larger example, and that’s basically to remove livestock from public lands,” Boyd said. “They don’t want these public lands grazed or logged. They carried this to the extreme, and they are looking to further close allotments utilized by the sheep industry. We want to point out how one-sided this whole issue is.”

Following Judge Winmill's decision, the Colorado Wool Growers objected to a similar document and the Forest Service voluntarily withdrew it.

Virginia energy company rejects claim of future harm

2009-08-25T15:18:19Z

CHESAPEAKE, Va. -- Nearly 400 neighbors of Battlefield Golf Club sued Dominion Virginia Power in March, seeking damages and the removal of 1.5 million tons of fly ash from the site.

Fly ash, the residue left from coal burned in power generators, contains heavy metals that can pose an environmental risk.

Plaintiffs seek $1 billion in damages, accusing Dominion Power of conspiracy, fraud, and creating a public nuisance. They also seek to have the groundwater from the site cleaned, so as not to contaminate their well water.

Dominion officials say it was not their decision to sculpt the golf course with fly ash and have asked a Chesapeake judge to throw out the case. In lieu of dismissal, Dominion seeks to have the case moved to a new jurisdiction, away from the “persistent” and “inflammatory” local media coverage.

In their 45-page motion, Dominion lawyers claim that the 388 plaintiffs failed to show specific injuries caused by the material, and that their fear of future injury is not grounds for a lawsuit.

Since the project was approved by the city of Chesapeake and met the requirements of the Virginia Department of Environmental Quality before the golf course opened in 2007, and any injuries suffered by residents happened after course developers took possession of the fly ash, Dominion should not be held responsible, the company argues.

“Dominion did not own or control the coal ash because it had been supplied to the golf course's developers,” the motion reads. “Entities other than Dominion modified, transported, placed, and sculpted the coal ash after it left Dominion's control.”

Dominion spokesman Jim Norvelle declined to comment on the matter.

“Environmental contamination cases are extremely complicated in many different ways and, unfortunately, the mainstream press often reports them in a very simplistic, melodramatic manner that pits an inherently evil company against an inherently innocent victim,” said Brian W. Walsh, senior legal research fellow at the Heritage Foundation. “That’s rarely the case.

“What does seem to be clear is that the Virginia Department of Environmental Quality and the city of Chesapeake could have stopped this project if they wanted to,” Walsh said. “Companies have a right to build and rely upon government experts when they make a determination that something is safe -- unless there is abundant evidence that they engaged in deception of those government experts, and there doesn’t seem to appear to be that here.”

Disqualify outside counsel, paint association argues

2009-08-24T17:05:54Z

HARRISBURG, Pa. (Legal Newsline) - A trade association says government agencies that were lured by the "siren song" of plaintiffs attorneys seeking state contracts have jeopardized balanced government decision-making in parens patriae litigation.

The National Paint and Coatings Association on August 11th submitted an amicus brief to the Pennsylvania Supreme Court in Janssen Pharmaceutica's challenge to Pennsylvania Governor Ed Rendell hiring outside counsel on a contingency fee to sue the company.

Rendell hired Houston-based Bailey Perrin Bailey, a firm that donated $75,000 to his re-election campaign and another $16,000 in airplane travel. They filed the suit after state Attorney General Tom Corbett declined their contingency fee offer.

The paint industry has been a target of similar lawsuits filed over lead paint.

"The vast majority of state and local governments properly rejected these private attorney solicitations, continuing instead with their successful efforts to reduce blood lead levels through proper governmental actions, and those governments who did respond to the private attorneys' siren song have seen their lawsuits uniformly rejected by every court to finally address the issue," says the brief, posted on the Web site Law and More.

"But nonetheless, the costs imposed on NPCA members from the private attorneys' entrepreneurial litigation campaign have been significant. NPCA members have been compelled to expend millions of dollars in defense costs, and they have been improperly stigmatized for the historic sale of lawful products more than 30 years ago."

The state Supreme Court agreed to hear Janssen's challenge in July. Arguments are scheduled for October 21st.

The Court will rule on:

-Whether Janssen lacks standing to seek the disqualification of BPB on the basis of alleged violations of constitutional law;

-Whether Rendell's office is allowed to enter into a contingent fee agreement with BPB;

-Whether BPB should be disqualified because the General Assembly did not authorize the contingent fee contract; and

-Whether BPB should be disqualified because it has a direct financial interest in the outcome of the litigation.

NPCA wrote that it wanted to address a separate flaw in the State's argument than Janssen.

The State has failed "to recognize the distorting impacts of contingent fee agreements not only on the decision-making of the retained private attorneys, but also on the decision-making of the government attorneys who retained and on the proper balancing of governmental authority exercised by the legislative, executive and judicial branches in connection with its quasi-sovereign parens patriae interests."

The brief calls a lawsuit brought at no cost to the government a "moral hazard" and creates improper financial incentives for the outside counsel and government.

"The appearance of a pay-to-play scheme has led to significant controversy that in itself has inflicted significant injury to the public trust in the fair exercise of government authority in Pennsylvania, an injury that is exacerbated by the fact that the State has thus apparently contracted away one of its most core responsibilities of serving as parens patriae for its citizenry as a whole," the brief says.

"And the Commonwealth's contingent fee agreement inflicts and impermissible deprivation as well of the due process rights of the targets of the private plaintiff counsel's litigation business plan."

Attorneys for Janssen are not making the argument for BPB's disqualification based on the contributions given to Rendell, but have mentioned them in several briefs.

Bailey has contributed heavily in other states, also giving $75,000 to Mississippi Attorney General Jim Hood, who hired BPB to pursue a claim against Eli Lilly & Co.

In Louisiana, another state BPB is representing in litigation, Bailey gave $20,000 to the state's Democratic Party. In Arkansas, which hired BPB for a suit against Janssen, he gave $70,000 to the Democratic Party in 2006.

Attorneys for Janssen argue that counsel representing a government office should be motivated by justice, not money, and that BPB is controlling the decision-making instead of someone from the Office of General Counsel.

"There wasn't the slightest bit of pay-to-play here," Rendell told the Philadelphia Inquirer. "I never put a dime of state money in jeopardy for Ken Bailey."

EPA endangerment finding: not for tort use

2009-08-22T16:34:49Z

WASHINGTON DC -- The Washington Legal Foundation (WLF) has urged the Environmental Protection Agency to clarify that any Endangerment Finding it may issue with regard to greenhouse gases (GHG) "is not intended to encourage, or to be used as evidence in, tort lawsuits seeking to enjoin or penalize GHG emissions."

WLF expressed concern that "EPA's proposal may have the unintended consequence of encouraging tort lawsuits against companies that emit GHGs, and particularly the hundreds of thousands of businesses whose operations result in the emission of CO2." Unless properly clarified, an Endangerment Finding "could potentially encourage a flood of lawsuits against companies that emit greenhouse gases claming that such activities constitute 'negligence' or a 'nuisance," the DC-based think tank warned.

Noting that "companies that emit GHGs are being sued for otherwise legal activities on the theory that the emissions from those activities contribute to what is described as the tort of global climate change," WLF predicted that "potential plaintiffs may try to use an EPA Endangerment Finding as support in these and other lawsuits."

Misuse of the finding in such a manner "will interfere with any climate change regulatory program that EPA may adopt under the Clean Air Act or that Congress may enact in legislation that it currently is considering," WLF continued. "Given the huge effect climate change regulation will have throughout the economy, Congress, not the courts in tort lawsuits, should be the governmental body that makes the numerous policy choices that must be made to fashion an appropriate program."

WLF argued that "individual state and federal court judges are not equipped to address these broad climate change issues in the context of general tort law." Nevertheless, climate change tort lawsuits "ask the courts to determine important climate change policy," such as the permissible level of emissions for the defendant companies.

WLF emphasized that "climate change tort lawsuits, if successful, would interfere with EPA's ability to regulate GHGs under the Clean Air Act" and "could require sources to adopt a completely different set of control requirements."

Congressman calls CFPA "Orwellian"

2009-08-22T15:01:29Z

WASHINGTON DC -- Republican Rep. Jeb Hensarling of Texas says Democrats in Congress have "a control issue." They want to control "what types of cars we drive," he asserts, "what doctors we can see and when we can see them," and "which -- if any -- credit cards, mortgages, and consumer loans we are allowed to receive."

In a recent editorial in The Washington Times, Hensarling declares his opposition to congressional control freaks, and his determination "to ensure that decisions that belong in the hands of America's families and small businesses are not dictated instead by Washington."

Hensarling describes the Democrats' latest attempt to seize control, the Consumer Financial Protection Agency (CFPA), as "positively Orwellian." "Protection" would be provided by "five unelected individuals appointed by the president," with "the power to strip from consumers their freedom of choice and restrict their credit opportunities in the midst of a financial recession."

With "sweeping powers to ban or modify any home mortgage, credit card, personal loan, or other 'consumer financial product' it subjectively deems to be 'unfair' or 'abusive,'" the CFPA represents "one of the great assaults on consumer rights," Hensarling warns.

The Texas representative predicts that the CFPA will stifle innovation, make markets less competitive, and hurt small businesses. "It is doubtful how many financial firms will choose to invest in research, development, and consumer testing on new products, only to discover later the CFPA deems them to be 'unfair' and thus unlawful," he observes. "Had the CFPA existed 25 years ago, we would probably have no ATMS, frequent-flyer miles, or debit cards."

How will the CFPA make markets less competitive and hurt small businesses? "Smaller and regional [finiancial] firms cannot afford the legal and regulatory burden of CFPA," Hensarling explains. They will either close their doors or be absorbed by bigger institutions. Ditto for small businesses, which often rely on credit cards and other consumer lending vehicles for financing.

As a truly consumer-friendly alternative to CFPA, Hensarling and his Republican colleagues propose "a regulatory reform plan that will simplify consumer disclosures and bolster the anti-fraud protection efforts of existing federal agencies." In addition to requiring greater transparency in financial disclosures, their plan would "reauthorize the federal government's Financial Crimes Enforcement Network, FinCEN, specifically to go after financial crimes such as residential mortgage fraud."

But the key to consumer protection is "personal responsibility," Hensarling emphasizes, arguing that "well-informed consumers will always be the best judge of what financial products are appropriate for their needs, not a nanny-state government panel like the CFPA."

Chamber, et al. file amicus brief in TVA interstate pollution case

2009-08-20T15:19:39Z

RICHMOND, Va. -- The U.S. Chamber of Commerce has filed an amicus brief in the appeal of State of North Carolina v. Tennessee Valley Authority, asserting that the previous ruling in the case violates existing federal air pollution provisions.

Joining the brief in support of the TVA are the National Association of Manufacturers, the American Petroleum Institute, the Public Nuisance Fairness Coalition, the Utility Air Regulatory Group, and the American Forest & Paper Association.

In the first trial, U.S. District Judge Lacy Thornburg concluded that TVA's coal-fired plants in neighboring states create a public nuisance in North Carolina and ordered the utility to reduce emissions by a set date, at a cost of approximately $1 billion.

"As a practical matter," the Chamber, et al. argue in their brief, "the district court's decision could expose virtually any source of emissions above an arbitrary case-by-case threshold anywhere in the country to liability for causing or contributing to a public nuisance."

The brief asserts that state-sponsored public nuisance claims are preempted by the comprehensive interstate air pollution regimen of the Clean Air Act (CAA). International Paper Co. v. Ouellete established that federal preemption "may be presumed when the federal legislation is sufficiently comprehensive to make reasonable the inference that Congress 'left no room' for supplementary state regulation.'"

The amicus brief also states that the EPA, pursuant to Congress' authorization, has established programs to address interstate pollution that specifically address the issues in North Carolina's case. The EPA's Clean Air Interstate Rule and Nitrogen Oxide Budget Trading Program give states downwind of potential polluters the right to present their positions administratively and on judicial review. This comprehensive federal system of regulation leaves no room for additional controls arising from interstate public nuisance suits.

The CAA requires major sources of air pollution to obtain federal operating permits mandating compliance with the act. Any additional requirements resulting from interstate public nuisance suits would directly conflict with the goal of the CAA.

"Moreover," the brief states,"major capital expenditures a source makes to comply with CAA requirements might be nullified or superseded by additional or alternative controls imposed by a public nuisance suit."

The Supreme Court has already ruled in Ouellete that a state nuisance law cannot be applied if it conflicts with federal law. That case established that provisions in the Clean Water Act similar to those in the CAA preserved the individual's right to bring interstate private nuisance acts, but did not allow state nuisance law to be applied if it conflicted with federal law.

The brief also argues that Ouellete, a private nuisance suit, required a demonstration that individual plaintiffs suffered special damages caused by the defendant -- much like typical tort liability. North Carolina's public nuisance suit, however, conflicts with the EPA's comprehensive regulatory system and does not meet the threshold established by Ouellete.

"Allowing a neighboring state to bring a public nuisance suit in these circumstances," the brief concludes, "directly conflicts with the comprehensive federal scheme, and frustrates Congress' purpose in enacting the CAA and delegating its implementation to EPA and state regulators."

Judge rules poultry litter is waste

2009-08-19T18:50:51Z

TULSA, Okla. -- A federal judge in Oklahoma has ruled that excessive amounts of poultry litter can be classified as solid waste under federal environmental guidelines.

U.S. District Judge Gregory Frizzell’s ruling represents a partial victory for the state of Oklahoma, which is suing 12 poultry companies for knowingly contaminating parts of the Illinois River watershed in Oklahoma.

Oklahoma poultry farmer Randy Allen considers the ruling “strange.”

“Our state laws specifically state that if the levels of phosphorus are too high, the disposal of the litter must be done in a different manner," he explains. "The judge did not take into account already existing laws."

If poultry litter is a valuable nutrient for plants, how can it be considered a hazardous material?

“We’ve been in business since 1968 and never thought of chicken litter as a hazard other than making grass grow," Allen emphasizes. "I can’t believe there has been a conspiracy revolving around these companies, that they knew the litter was destroying the environment and chose to look the other way.”

Allen believes the state's lawsuit is about making money, not about solving environmental problems, and that it could be the first of many.

“This kind of lawsuit could open the door for other lawsuits aimed at farmers," he warns. "This could be a big problem in the near future for individuals in the farming industry who rely on this type of fertilizer.”

Judge Frizzell also ruled that an economist could testify that the poultry industry knew about the environmental harm poultry litter was causing to the watershed.

The Illinois River watershed stretches 1 million acres into parts of Oklahoma and Arkansas. Around 1,800 poultry farms produce 345,000 tons of chicken waste each year.

The companies named in the lawsuit are Tyson Foods, Tyson Poultry, Tyson Chicken, Cobb-Vantress, Cal-Maine Foods, Cal-Maine Farms, Cargill, Cargill Turkey Production, George's, George's Farms, Peterson Farms, and Simmons Foods.

Trial is set for September 21st.

Alabama intervenes in North Carolina public nuisance suit

2009-08-17T14:46:12Z

ASHEVILLE, N.C. (Legal Newsline) - Alabama Attorney General Troy King is getting his chance to intervene in North Carolina Attorney General Roy Cooper's public nuisance suit against power provider Tennessee Valley Authority.

The U.S. Court of Appeals for the Fourth Circuit granted King's motion to intervene July 20 in TVA's appeal of a decision against the company. Cooper alleged seven out-of-state TVA plants are emitting large amounts of sulfur dioxide, nitrogen oxide and mercury into the air, and they are being carried to his state.

In a decision King called "extraterritorial regulation," U.S. District Judge Lacy Thornburg ruled in January that TVA must spend hundreds of millions of dollars installing pollution controls and placed a cap on its annual emissions. He wrote that three Tennessee plants and one Alabama plant were causing a public nuisance in North Carolina.

"The district court's decision is extraordinary," King's attorneys wrote in July.

"Pursuant to a North Carolina statute expressly directing him to do so, North Carolina's attorney general convinced the district court to enter a sweeping, detailed and demanding injunction that purports to micromanage the operation of a power plant located in Alabama.

"The details of that injunction come straight out of North Carolina's
Clean Smokestacks Act, and thus place the burden of North Carolinians' policy choices squarely on the shoulders of Alabamians."

TVA did not deny some of its emissions entered North Carolina, but protested the amount Cooper claimed.

Cooper blamed TVA's smokestacks for more than 15,000 illnesses a year, adding they damage forests, lakes and streams. He, the Resolution Group and the Ayres Law Group of Washington, D.C., filed his complaint in Jan. 2006.

The company already planned some of the updates required by Thornburg's decision, but has asked for a stay on those it did not.

Meanwhile, King complained assertively about the decision. The state has its own clean air laws, but Thornburg wrote they were inapplicable to the case because the alleged harm occurred in North Carolina.

"Alabama's interest here, put simply, is in resisting the hijacking of its law," King's attorneys wrote.

Cooper argued that Alabama should be required to join in TVA's briefs or simply file an amicus brief, but the State will get to file its own briefs and participate in oral arguments.

King also had few kind words for Cooper's argument.

"Rather than addressing (Alabama's) interest head on, North Carolina sets up and then knocks down a straw man: that Alabama's interest exists solely because the district court's decision 'was based... on Alabama nuisance law.' That is incorrect.

"Alabama's sovereign and parens patriae interests arise in this appeal not by virtue of the fact that Alabama law was applied, but by virtue of the fact that Alabama law was disregarded."

King also wrote that Cooper cannot dispute that his intention in filing the suit was to enforce North Carolina smokestacks law in other states.

"As directed, North Carolina filed suit against Tennessee Valley Authority plants in other states and then urged the district court to impose on those out-of-state plants 'emission rates equivalent to North Carolina's Clean Smokestack Act.'

"Indeed, upon filing the complaint, North Carolina's attorney general issued a press release announcing that he was 'asking the Court' to 'requir[e] TVA to control its emissions to levels similar to those required... by the North Carolina Clean Smokestacks Act on a similar timetable.'"

Bradley Arant Boult Cummings of Birmingham is representing Alabama in the case. TVA is federally owned and the largest public power provider in the country.

New York City v Exxon Mobil trial underway

2009-08-15T14:37:06Z

NEW YORK – New York City lawyers are trying to convince a jury in a United States District Court in Manhattan that Exxon Mobil knew an additive it used in gasoline would eventually contaminate groundwater.

Over 20 years ago, Exxon began using a chemical substance known as methyl tert-butyl ether (MTBE), which helps gasoline burn more cleanly and reduces emissions.

During that time, wells in Jamaica, Queens reserved for emergency backup drinking water have become contaminated with large amounts of MTBE.

In their opening statement last week, city lawyers argued that “Exxon, which started using MTBE in the 1980s, ignored evidence from its own scientists of a strong risk of groundwater contamination should the compound be added to gasoline.”

However, Exxon claims “oil companies initially used more MTBE than ethanol as a substitute for lead because the supply of ethanol was limited and car manufacturers had serious concerns that [ethanol] would diminish vehicles’ performance.”

According to Trent Taylor, a Richmond-based environmental attorney with McGuireWoods, “Many corporate defendants are watching the trial closely. A variety of causes of action are alleged, and two of them are nuisance and trespass, both of which survived motions to dismiss.”

Taylor said the city may try to prove its case with a combination of alternative causation arguments, including market share and a commingled product theory of liability. A victory for the city would represent a significant expansion of liability.

“Rarely have such suits relying on alternative theories of liability been successful, especially when they involve nuisance and trespass causes of action," he noted. "The fact that the suit has gotten this far, after five years of hard-fought litigation, is no doubt troubling for corporate defendants.”

In its opening statements, Exxon denied any liability and claimed that the groundwater wells are contaminated by other industry in the area.

So far, twenty-five states, including New York, have restricted or banned the use of MTBE.

Salvos fired in California water battle

2009-08-14T15:58:50Z

FRESNO, Calif. - The Pacific Legal Foundation (PLF) is following every avenue to stop the cutbacks on water supplies resulting from federal environmental regulations -- cutbacks that have devastated California's San Joaquin Valley.

"What we have now," said Damien Schiff, staff attorney for the PLF, "is a significant water crisis, where farms are going fallow, orchards are drying up, fields are turning into dust bowls, and people are losing their livelihoods because they can't get the water they need to make the agricultural system work."

The crisis stems from two biological opinions released by the U.S. Fish and Wildlife Service and the National Marine Fisheries Service relating to the protection of Delta smelt, Chinook salmon, and steelhead fish in California's main water system.

"The U.S. Fish and Wildlife Service issued its biological opinion in December of last year, which applies to the Delta smelt - a small fish that live in the Delta area," Schiff said. "The conclusion of the opinion is that the way the water pumps are operating jeopardizes the continued existence of the smelt, which is protected under the Endangered Species Act.

"As a consequence, the service prescribed a series of major steps that have to be followed to avoid harming the smelt, reducing the water deliveries."

The National Marine Fisheries Service's opinion calls for further cuts to pumping and water supplies, removing an estimated 500,000 acre-feet more of water. That amount is required to serve two million people annually. The opinion also calls for upgrades to make the water system's infrastructure friendlier to species that are protected.

"There were casual estimates in the press when the most recent biological opinion was issued that we were talking well over a billion dollars in infrastructure costs to comply," Schiff said. "That's not taking into account the economic and social cost of having to accommodate for reduction. The water would continue to be reduced even after the upgrades were done. It would basically be a permanent reduction."

To combat the water restrictions, the PLF has launched a signature-gathering drive to urge California Governor Arnold Schwarzenegger and President Obama to convene a special Endangered Species Committee to determine if an exemption from the Endangered Species Act can be granted to allow operation of the water system without Endangered Species Act regulations.

"The Endangered Species Committee is expressly authorized by the Endangered Species Act," Schiff said. "It does not sit all the time and con only be convened by a petition that is first reviewed by the Interior Secretary. It can't be convened or petitioned by just anybody. The law restricts who can petition to have the committee convened, and one of those people is the governor of the state where the problem occurs."

The PLF's informal petition seeks to persuade Governor Schwarzenegger to make a formal petition for the convening of the committee.

"We currently have 10,000 signatures," Schiff said," and presumably that number will go up before we give the petition to the governor next week."

The PLF has also filed a lawsuit in federal court challenging the Delta smelt biological opinion. Other entities have also filed suit against the National Marine Fisheries Service's biological opinion.

Another lawsuit filed against the Delta smelt biological opinion has been granted a preliminary injunction by the court, something Schiff sees as a foothold in the fight against the opinions.

"That shows to some extent that the court thinks there may well be legal problems with that opinion," Schiff said. "It begins to tip the cards of the court. I think that litigation gives a strong chance for relief, though with litigation it's always hard to say.

"I think there's a stronger chance for relief through litigation. Even if the governor petitions for the Endangered Species Committee, there's no guarantee that the Interior Secretary would agree to the petition, and then there's no guarantee that the committee would grant the petition.

"The committee has been convened, I believe, fewer than a dozen times. I believe it's granted two exemptions in its history. It's been used rarely.

"The hard and bitter truth, though, is that if these opinions remain the law, the reduction in water deliveries that we have seen will be the new norm. We need a significant and immediate relief and a return to the old water deliveries."

Film company shoots Kivalina documentary before trial ends

2009-08-13T16:42:56Z

TORONTO – A Canadian-based film company has begun filming a documentary aimed at exposing the controversial case of Kivalina v Exxon Mobil.

Filming began last month in the tiny Alaskan village of Kivalina, a 3.9 square-mile town with a population of around 399 people. The village is in the middle of a lawsuit with Exxon Mobil over allegations the big oil company’s excess gas emissions have caused erosion and damages to the town.

In a press release, Phoebe Greenberg, one of the film’s producers, said she was intrigued by the subject matter and that the dramatic consequences of global warming affect not only the small Alaskan community, but the world as well.

The production company labels Exxon one the world’s “worst polluters,” claiming the oil giant should pay for the consequences of global warming.

However, the trial is still pending in a Northern District, California court.

Doug Reynolds, an attorney and member of the West Virginia House of Delegates, questions the motive behind the filmmakers.

“This entire case, as well as the film, is pure propaganda with no legal basis. It is a publicity stunt to drum up business and sell the documentary,” he asserts.

Reynolds said the company is in a no-loss situation due to the controversy and timing of the film’s release.

“If the judge sides with Exxon, then the film will expose that individual and sympathize with the village and its residents. If the judge sides with Kivalina, then the film makers will have a global warming hit. They will paint it anyway they want,” he predicts.

Reynolds believes the real agenda behind the film is profit and not sympathy towards the town.

“Legally, there is nothing to prove in the case. The actual act is nonsense. It would be like suing tobacco farmers for cigarette aliments,” he contends.

“Cases like this are filed all the time. Once there is some discovery done, it will more than likely be dismissed. This isn’t even plausible.”

In its motion, Exxon argues that the citizens of Kivalina are not seeking an end to the "nuisance," but rather only monetary damages. The Supreme Court has never held that a plaintiff can bring such an action for damages rather than abatement.

Rob Young, Corporate Media Relations Director for Exxon Mobil, told Public Nuisance Wire the case is still pending, with the possibility of lasting another year before a verdict is reached.

The next target for public nuisance suits

2009-08-12T17:25:17Z

As cash-strapped states and cities look for unconventional ways to come up with funds for basic services, one attorney believes they will set their sights on an unpopular industry: subprime mortgage lenders. Brian Brooks, managing partner of the Washington, D.C. office of O’Melveny & Myers LLP, asserts that municipalities have “attempted to achieve political goals, and to fill municipal coffers, by suing unpopular industries for damages because they have supposedly caused a ‘public nuisance.’”

In an article entitled "Public Nuisance Litigation against Subprime Industry Hits Roadblock in Cleveland," published by the Federalist Society, Brooks argues that city governments have made a habit of suing unpopular businesses such as paint and gun manufacturers. Thanks to the housing market meltdown, the subprime mortgage industry is chockfull of unpopular businesses. According to Brooks, the city of Cleveland’s recent attempt to sue 21 companies associated with the subprime mortgage business illustrates municipalities’ dogged determination to take entire industries to court – even when it's been proven to be a no-win endeavor.

“The Cleveland complaint was filed in early 2008 against a backdrop of public nuisance case law that was almost uniformly unfavorable to the city’s legal theories,” Brooks notes. “State supreme courts in Illinois, New Jersey, Rhode Island, Missouri, and the District of Columbia, along with numerous other courts, had squarely rejected the idea that entire industries could be held liable under a public nuisance theory without establishing both that particular industry participants had caused injury to a ‘public right’ (as opposed to merely causing private property damage or economic loss) and that the conduct of specific defendants proximately caused specific instances of damage.”

According to Brooks, the city’s sole desire to collect money from the businesses named in the suit was clear in the argument it used to defend itself. When the district court argued that the public nuisance claims were overridden by a state statute that prohibited municipalities from regulating any type of loan transaction, Cleveland’s counsel responded that the lawsuit was not an attempt to regulate, and was instead only looking to recover damages for the way the transactions adversely affected the city -- i.e., high foreclosure rates that lead to increased fire and police costs in an increasingly depressed tax base.

U.S. Northern Ohio District Judge Sara Lioi did not buy that line of reasoning.

“Judge Lioi rejected this argument, noting the U.S. Supreme Court’s repeated holding that ‘regulation can be as effectively exerted through an action for damages as through some form of preventive relief,’” Brooks reports. “She also noted that, but for a generalized public interest in regulating subprime mortgage lending, the city could not establish the critical ‘public right’ element of its nuisance claim, since a claim of public nuisance is not available to redress purely private injuries such as property damage or economic loss.”

Brooks predicts that additional municipalities will target the subprime mortgage industry via the court system – even though the activities of the targeted businesses were lawful and encouraged, and even though the Cleveland case failed.

“The court [in the Cleveland case] was particularly influenced by the fact that the challenged subprime mortgage products were not only lawful, but affirmatively regulated and encouraged by various federal and state regulators,” he notes.

A recent case brought against Wells Fargo Bank by the city of Baltimore for allegedly unfair lending practices in subprime mortgage loans reinforces Brooks’ prediction. “These developments suggest that elected city leaders still see political advantage, not to mention potential financial benefits, in attacking an unpopular industry," Brooks concludes, "however weak their claims may be in light of established precedent.”

TVA decision threatens corporate America

2009-08-11T01:58:45Z

North Carolina v. Tennessee Valley Authority is "one of the most significant public nuisance victories ever by a plaintiff," warns attorney Trent Taylor in a Spring issue of Toxics Law Reporter. If upheld by higher courts, the January 13th decision by U.S. District Judge Lacy Thornburg could pose a threat to successful businesses all across America.

Judge Thornburg ruled that coal-fired plants in neighboring states create a public nuisance for North Carolina and ordered TVA to reduce emissions by a specified deadline, at a cost of roughly $1 billion.

A partner in the Toxic Tort and Environmental Litigation Department in the Richmond, Va. office of McGuireWoods,Taylor surveys the history of public nuisance torts in his article and concludes that the TVA decision could be the harbinger of bad times for corporate America.

Traditionally, public nuisance "has been looked down upon, thought of as simple disputes among nieghboring landowners or an antidote to various quasi-criminal offenses," Taylor concedes. "In the past decade, though, it has become one of the central battlefields in tort law."

Taylor reports that "numerous states, counties and municipalities, in association with the plaintiff's bar, have filed nuisance suits against various corporate defendants (including product manufacturers), seeking damages in the millions, and sometimes billions, of dollars."

Though "largely unsuccessful" against manufacturers of asbestos and tobacco, plaintiffs fared better when they set their sights on handguns and lead paint. The initial Rhode Island decision against lead paint manufacturers, subsequently overturned, was "a monumental victory."

Other targets have since emerged. Taylor notes that "plaintiffs have sued, with varying degrees of success, power plants, auto manufacturers, poultry farmers, beer manufacturers, pharmaceutical manufacturers, oil companies, subprime lenders and other financial institutions, coal companies, food manufacturers, electric utilities, gasoline companies, and manufacturers of various chemicals."

The significance of the recent TVA decision is manifold. "First, the decision cements public nuisance's status as a major weapon in the arsenal of environmentalists," Taylor asserts, and is likely to spur copycat suits. Moreover, "the TVA decision suggests courts need not take into account federal and state regulations when deciding whether certain emissions are a public nuisance."

Taylor also believes that "the TVA decision is likely to significantly increase the number of public nuisance suits targeting coal-fired power plants." The possibility of a billion-dollar prize is likely to attract "a great deal of attention from enterprising lawyers," the case was "not terribly time-consuming or expensive for the plaintiffs," North Carolina has provided "the blueprint for prevailing in a public nuisance suit against a coal-fired power plant," and TVA, like tobacco, is a target easily demonized.

But the implications of the TVA decision are not confined to the environmental arena. Taylor argues that the decision will "re-energize the plaintiff's bar to continue to find new and novel ways to apply public nuisance -- including against product manufacturers."

Taylor emphasizes that "the court found for North Carolina despite weak causation" and that "the TVA was held liable despite the fact that it was fully complying with all applicable state and federal regulations related to their emissions."

If the TVA decision stands, Taylor warns, "any level of emissions can be declared a public nuisance if a judge or jury feels that it is higher than they think it should be. The same goes for products," he adds.

Taylor and other attorneys believe that "public nuisance suits targeting global warming and climate change are the next big battlefield in tort law" and that "the TVA decision might provide the kindling to push climate change litigation forward."

One thing is certain. "The TVA decision has reinvigorated public nuisance in a number of ways," Taylor concludes, "and it is a threat that corporate America cannot afford to ignore."

Wells Fargo hit with second discrimination suit

2009-08-06T14:08:26Z

SPRINGFIELD, Ill – Wells Fargo is the target of yet another lawsuit involving minorities, this one filed by Illinois Attorney General Lisa Madigan.

On Monday, Madigan filed suit against the nation’s second largest mortgage lender, alleging the company illegally forced blacks and Latinos into high-cost subprime loans.

The suit claims Wells Fargo specifically targeted heavily populated black and Latino areas for high-cost loans, while whites with similar income levels received lower-cost loans.

The suit also alleges the company put into place a highly flexible lending policy procedure with little oversight, which permitted Wells Fargo's employees to steer African-Americans and Latinos into subprime loans.

Hans. A. Von Spakovsky, legal scholar for the Heritage Foundation, said the lawsuit is highly “suspicious” and based purely on statistics, with no evidence to back up the claim.

“There is a good reason why British Prime Minister Benjamin Disraeli is famous for talking about ‘lies, damned lies, and statistics,’ because it is relatively easy to manipulate statistical results to show almost anything,” Spakovsky said.

He said lending depends on a great deal more than simply someone’s income, including complex analyses of credit histories as well as the location and value of properties.

“Madigan apparently has no real evidence that Wells Fargo applied different lending standards to individual customers based on their race,” he said.

Last month, a U.S. District Court judge ruled that the city of Baltimore had enough evidence to move forward with its own lawsuit against Wells Fargo over allegations that the company targeted all black neighborhoods within the city.

That suit claims that actions taken by Wells Fargo led to a high number of foreclosures, costing the city tens of millions of dollars in taxes and services.

Specter ignites debate over pleading standard

2009-08-04T16:04:38Z

WASHINGTON, D.C. -- With his filing of legislation to return the pleading standard to what it was prior to 2007's Bell Atlantic Corp. v. Twombly case, Arlen Specter has ignited a firestorm of debate over the current standard.

The Twombly case combined with Ashcroft v. Iqbal to raise the standard pleaders must meet to keep their cases from being tossed out, which Specter, in remarks prepared for the Senate floor, referred to as an end run around precedent.

"Basically, Specter's legislation would order the courts to go back to the Conley standard, which says that, if there is any conceivable set of facts upon which the claim would suceed, then it survives the federal notice pleading standard," said Jim Beck, of counsel at Dechert LLP in Philadelphia.

"This means that you could basically file a complaint with no facts in it at all and, in response to a motion to dismiss, you can go and try to present a set of facts that could solve the problem but are not in the complaint. It's essentially an 'anything goes' standard."

In the two months since Ashcroft v. Iqbal, a 5-4 decision written by Justice Anthony Kennedy, more than 500 judges have cited the case in dismissing civil suits. Plaintiff lawyers argue that the specific, concrete facts now required are often not available prior to discovery.

Ashcroft v. Iqbal concerned a Pakistani Muslim arrested after the attacks on September 11, 2001 who was not allowed to sue former Attorney General John Ashcroft or current FBI Director Robert S. Mueller III for abuses incurred in a Brooklyn detention center.

The justice's ruling against Iqbal, which called his pleading too conclusory and not specific enough, heightens the pleading standard under Rule 8 of the Federal Rules of Civil Procedure and, in effect, extended the 2007 Bell Atlantic v. Twombly antitrust case ruling to other cases.

"It's not a whole lot more specific of a standard now than it was before," Beck said, "but it's better. Courts are now trying to interpret what a plausible set of facts are, rather than what a conceivable set of facts are. The standard is undeniably stronger in the current standard."

Specter's legislation, which falls under the Senate Judiciary Committee's jurisdiction, would restore the 1957 Conley v. Gibson standard, which required only that a plaintiff file "a short and plain statement of the claim" in his complaint to initiate a lawsuit.

After filing the complaint, plaintiffs could then force defendants to submit to questioning under oath and open their files.

"If Specter's legislation passes, youll see a lot more litigation and a lot more expensive discovery," Beck said. "Things that now would get thrown out on pleadings because the facts didn't support them will get in. You'll see fishing expeditions through discovery, things taking more time, and a lot more money being spent. It's really a way of increasing litigation and litigation expense."

California contingency cases have potential for fiscal devastation

2009-08-03T23:07:19Z

Legal blogger Jane Genova has a theory on the impact that public nuisance contingency cases could have on the country – and it’s catastrophic.

“If someone were to go to the necessary public utilities and slap them with a public nuisance lawsuit using contingency, they could paralyze the whole nation,” she said.

Genova made the ominous comment as she discussed pending lead paint public nuisance litigation in Santa Clara, California. If the state’s Supreme Court decides to allow contingency contracts, lead paint litigation could spring up across the state, acccording to the legal analyst. Even more taxing to companies and the court system could be the ripple effect the decision could have by spurring government-filed contingency lawsuits across the nation.

Genova says the California appeals court offered one potential solution to the problem: making public nuisance contingency contracts permissible only in situations in which the case would be strictly controlled by the attorney general or the government that hires them. Although that seems to be an ideal arrangement in theory, Geneva says it could be hard to implement in practice.

“Litigation is a seamless process and, even if it were possible to supervise everything in a case, you could risk client confidentiality in trying to do it,” said Genova. “Plus there’s the question of whether you can really supervise the operation of a contingency firm. I think that’s an important one to ask. I think any court would have to say that, given the type of legal process we have in this country, it’s impossible to supervise everything a contingency firm is doing. Plus, there’s the financial incentive for the government to win.”

Dealing with potential conflicts of interest in contingency cases can be problematic if not impossible when an arm of the government is represented. In June, the Orange County Business Council filed an amicus brief supporting the defendants, which include Sherwin-Williams. The group warned that contingency arrangements make it difficult to maintain a balance between conflicting interests.

Genova believes the wrong decision could spell peril for California businesses.

“Given the trouble California is in and the way it's losing industry and population, the court might say we cannot inflict contingency in business in our state,” said Genova. “On the other hand, it might continue its liberal merry way and say as a public policy we have to keep the courts accessible to the public. Whatever is decided, the other side will appeal and it could go all the way to the Supreme Court.

“If contingency is allowed and the plaintiffs win, these types of lawsuits could spread to all the bankrupt counties in California,” she continued. “They could get a windfall from all these companies like DuPont and Sherwin Williams. And California law is very different from the rest of the nation. The plaintiffs could win.”

Given the possibility that the plaintiffs could prevail, Genova believes the California lead paint case could have a greater impact than the well-known lawsuit Rhode Island filed against paint manufacturers.

“People aren’t saying this, but, potentially, this is much more serious than the Rhode Island case,” said Genova. “California has a different type of legal system, a different concept of public policy, and it’s much larger than Rhode Island; plus, it’s starving! It needs the money, and it could win.”

Genova predicts that the allowance of contingency could lead to lawsuit abuse across the state – and the nation – as well as bankrupt numerous businesses. She believes there are other ways that the courts can be made accessible to all without leaving the door open for lawsuit abuse.

“I really like the securities idea, where you can invest like a hedge fund and bet on a trial,” she said. “If it has merit, you can do quite well. Maybe we can still allow access to the courts, but instead of contingency have a different way of financing the legal system. Our legal system is supposed to be very good and no one wants to dismantle it, so the question is: How do you pay for people to go to court without dealing with the dangers of contingency?”

Poultry farmer takes a peck at media bias

2009-07-31T14:27:23Z

TULSA, Okla. -- As the State of Oklahoma draws closer to a courtroom showdown with Tyson Foods, one local poultry farmer wants to set the record straight about poultry litter.

Randy Allen, local poultry farmer and former contract employee with Simmons Foods, blasts the media for implying that poultry farmers dump poultry litter at random without prior consent.

“In order to be a poultry farmer here in Oklahoma, an individual has to go through a stringent process," Allen observes. "As a poultry producer, a permit is required, followed by nine hours of training, with yearly fees and training mandated by the state.”

Allen takes offense at the tendency of liberal media outlets to misrepresent poultry litter as a dangerous pollutant and imply that farmers do not comply with federal and local laws.

“Poultry litter is a safe and non-toxic natural fertilizer containing calcium, organic material and a good supply of natural phosphorous," he asserts. "Oklahoma has laws that limit the amount of poultry litter an individual can apply to the land.”

Allen adds that poultry farmers are required to take soil tests and that it is unlawful for them to apply more poultry litter to a specified property than state law allows.

“If an individual is a commercial farmer, then he or she must fill out reports on where the litter came from, soil analysis updates, how much acreage was used, how much litter was used, etc.,” Allen explains. “If an individual is caught dumping illegally, then that person faces state-enforced fines and the possibility of losing their license.”

Allen emphasizes that state laws are strict and that poultry farmers expend considerable time and money complying with them. “Many individuals, particularly in the media, do not realize how much a farmer goes through in order to do business in this state,” he laments.

Oklahoma filed suit against Tyson Foods in 2005, charging that it polluted lands, water and property along the Illinois River. Last week, however, a federal court judge dealt a devastating blow to the state attorney general by dismissing all claims to monetary damages against the Arkansas-based company.

The case is set for trial September 21st.

TVA case turning into “legal thriller”

2009-07-30T15:59:13Z

ASHEVILLE, NC -- The case of North Carolina v Tennessee Valley Authority is beginning to look more like a soap opera every day. Last month, the state of Alabama joined more than 200 plaintiffs in a case that could end up before the U.S. Supreme Court, said Richmond-based attorney Trent Taylor in an interview with Public Nuisance Wire.

PNW: What effect does the addition of Alabama have on this case?

TAYLOR: The State of Alabama filed a Motion to Intervene in late June, and it was opposed by the State of North Carolina with a lengthy 20-plus page brief. In essence, the State of Alabama asked to be added as a party to this lawsuit with equal rights to TVA and the State of North Carolina, with full briefing and oral argument privileges. This is despite the fact that the State of Alabama was not a party in the underlying action, and did not seek to intervene at the trial court level. Nevertheless, just over a week ago, the Fourth Circuit granted the State of Alabama’s motion; and while it is not unprecedented for an appellate court to permit a non-party appellate intervener who did not intervene below (especially a government actor), it is still rarely seen. In a scene reminiscent of a legal thriller, a surprise character has entered the scene at the last minute, stage right, attempting to change the direction of the narrative.

PNW: Why did Alabama seek to join the case?

TAYLOR: It stated in its motion that “the district court’s decision results in the extraterritorial application of North Carolina’s law and the displacement of Alabama’s own statutory and public nuisance law [and] Alabama has a keen interest in resisting that encroachment.” This brings to the fore an age-old cleavage that has heretofore not been a central focus of this case -- extraterritorial pollution and whether common-law suits are an appropriate strategy to deal with it. I recently discussed this in my article on this case in the Toxics Law Reporter and suggested that the trial court’s decision, if not overturned, could result in an increase of public nuisance suits by one government against another government (whether state, city, county, or municipality). While the application of public nuisance in such a context dates back over a century to the United States Supreme Court case of Georgia v. Tennessee Copper Co., 206 U.S. 230 (1907), it is not one that has been invoked, or challenged, very often.

PNW: What impact will this case have on environmentalists and their legal strategy?

Taylor: This appeal was always going to be important for determining whether public nuisance will be not only a viable liability theory but perhaps the central weapon for environmentalists in the coming years. It now perhaps becomes a flashpoint in the war being currently waged in both legal and policy circles as to environmental policy generally – what should its goals be, how should it be implemented, etc. Indeed, with the State of Alabama now intervening, it makes it more likely that whatever the decision by the Fourth Circuit, the United States Supreme Court may decide to weigh in on this important issue as well.

PNW: Any predictions?

TAYLOR: While it is, of course, impossible to predict what decision the Fourth Circuit panel will reach, it is safe to say that the terms of the debate have shifted, and policy rather than legal arguments will be much more important than they would have otherwise. This appeal will be a dogfight in every sense of the word, and we can all look forward to the briefs filed by TVA and the State of Alabama on August 11th, followed by the State of North Carolina’s response on September 14th.

The next British invasion: green police?

2009-07-29T19:37:42Z

England's Carbon Reduction Commitment (CRC) won't go into effect until next year, but the police force charged with investigating possible infractions is already being viewed as a public nuisance.

The English "green police," a unit of 50 green-jacketed auditors and inspectors, will be armed with warrants and the power to search the premises of any company to ensure CRC compliance.

The enforcers will have the right to demand access to company property, view power meters, call up electricity and gas bills, and examine carbon-trading records for an estimated 6,000 British businesses. They will also be able to demand energy bills from utilities without the companies under investigation knowing they are being watched.

“Climate change and CO2 are the world’s biggest issues right now. The Carbon Reduction Commitment is one of the ways in which Britain is responding,” said Ed Mitchell, head of business performance and regulation at England's Environment Agency. “The inspectors will carry warrant cards giving them powers of entry to collect evidence. We will also have access to company accounts with suppliers.”

The agency will publicize an annual table ranking companies by emission-cutting performance. The government hopes the potential shame of a lowly table ranking will coerce organizations to strive for greater energy efficiency.

The CRC was designed to force medium-size and large companies to pay attention to energy efficiency. The plan calls for companies to use their energy bills to calculate the carbon dioxide generated by their activities. For each ton of CO2 emitted, companies will have to buy a carbon allowance, with the money paid into a central pool. At the end of each reckoning period, compliant companies may get a rebate from the fund.

The least energy efficient will get back less than they paid in, with the surplus going to those that have performed best. The gains and losses will be small at first, but the system is designed to ratchet upwards, making it increasingly expensive for businesses to ignore energy efficiency.

The British model of an emissions control force could be a preview of things to come in America, says Sheldon Richman, editor of The Freeman, published by the Foundation for Economic Education, and U.S. businesses may also find themselves subjected to nitpicking inspections by green cops.

"I don’t see how this would not be inevitable if Congress passes the 'cap and trade' legislation, because everybody gets an allotment of how much they can emit over the year. And the logic is that if you can somehow be efficient and come in under your allotment, you can then sell to someone else who hasn’t been able to,” Richman said. "Isn’t the government going to want to check on individual plans to see if they are living with what their permits allow? I am not in favor of 'cap and trade,' but I don’t see how they can set one up that didn't have enforcement."

Cordray weighs in on lead paint, etc.

2009-07-28T16:45:54Z

COLUMBUS, Ohio -- Ohio Attorney General Richard Cordray recently sat down with RightOhio blogger Matt Naugle to discuss public nuisance lawsuits aimed at lead paint manufacturers and other issues facing the top law enforcement official in the Buckeye State.

The Democrat attorney general contended that the concentrated effort to curb lead paint poisoning through federal and state legislative action has been more successful than lawsuits.

Cordray said he does not support public nuisance lawsuits, unlike his predecessor, Marc Dann.

“They [the state attorney general's office] brought a lawsuit -- a sort of an unwieldy lawsuit under the public nuisance laws -- against a group of companies that, over the years, had sold lead paint at a time when it was entirely legal to sell it, at a time when it was not obvious that it had side effects which have since become clear,” Cordray said.

The courts upheld existing laws by throwing out numerous lawsuits in states such as Rhode Island, he added.

Cordray dismissed the Ohio lawsuit he inherited against Sherwin-Williams, and said it was a tough decision to make.

“Not every problem can be solved by a lawsuit, and that is what we determined there. And that we continue to work on the abatement programs a lot of the cities have and try to address the problem in a different way,” he said.

“Some people will disagree with that decision, but I thought it was our best judgment about the right way to proceed with this problem.”

In addition to public nuisance suits, Naugle pressed the attorney general on the issue of the Second Amendment and his opinion on whether or not it applies to individuals or only to a collective body.

“The U.S. Supreme Court confronted that issue two years ago in the Heller case and determined, I think correctly, that it is an individual right. But that case only involved the District of Columbia, so now there are further cases, as you probably know, that are coming up through the courts to determine whether that right will be incorporated against the states,” Cordray said.

He noted that various courts across the country are now hearing cases that revolve around the question of the Second Amendment and its application to individuals.

“That is maybe the most significant issue pending right now in the 2nd Amendment area,” Cordray said.

Positive trend for defendants in product liability

2009-07-27T15:10:22Z

Defendants in product liability cases have seen laws and statutes change and morph as the Supreme Court and other venues have interpreted laws and created precedents. Jim Beck, of counsel at Dechert LLP in the mass torts and product liability group in Philadelphia, has seen those changes firsthand for the last 25 years and witnessed how each change has affected defendants' rights at trial. Co-author of the Drug and Device Law blog, Beck spoke to Public Nuisance Wire about how those changes came about, what impact they've had on defendants, and how he'd like to see the laws continue to evolve.

PNW: How have class actions changed in the last twenty-five years?

BECK: Back when I first got into a position where I could have influence on litigation - this is compared to around 1987 when I'd been practicing for five years - the concept of personal injury class action was a real threat. There were cases that were allowing this and plaintiffs were arguing it and that was the trend.

Class action and personal injury litigation now, in federal court, is virtually extinct. There's a little more play in state courts versus federal but, even then, there's a lot less and they aren't very large anymore.

Two Supreme Court decisions, Amchem Products, Inc. v. Windsor and Ortiz v. Fibreboard Corp., cut back on the lowers courts' ability to certify class actions in product liability. Since those decisions, there might be one contested personal injury class action that was upheld on appeal in the federal court system in the last ten years.

PNW: How has the use of expert witnesses evolved?

BECK: Daubert v. Merrrell Dow Pharmaceuticals, Inc. really brought a revolution in expert witnesses. It's created a willingness of courts to act as gatekeepers and view expert witnesses critically. Basically, the other side can cross examine expert witnesses at trial. It used to be a hands-off attitude by the court, but now they have to evaluate the reliability of the testimony as well as several other factors. It doesn't matter what standard that you apply, the simple act of applying that standard, given how poor a lot of these expert opinions are, has had a very beneficial effect.

PNW: Has the federal pleading standard changed to help defendants?

BECK: The Supreme Court, back in 1957, issued an interpretation of the federal pleading rule - Rule 8 - that let just about anything go. As long as there's any conceivable set of facts, that was sufficient pleading.

Starting in 2007 and again this term, they've tightened that standard from an initial very liberal interpretation of it. The court felt that it was no longer appropriate to have this broad and vague pleading standard that let anything go. I'd give the current pleading standard an A-minus only because it's a recent development, which makes it sort of incomplete. The courts are starting to enforce this and it's looking quite beneficial for my clients.

PNW: How do you grade preemption's changes?

BECK: There was no preemption in tort cases when I got started. It just didn't exist as a defense. That started to change in the early 1990s with the Chippewa cigarette case. It's not as widespread as people on my side of the fence would like it to be, but we're still much better off than we were when we got started, so I give it a B. It's a significant improvement from where we started and I think we've found some hard limits imposed by the Supreme Court, but it's still a viable defense in a significant number of cases.

PNW: How have changes in the law affected defendants adversely?

BECK: Electronic discovery is awful. It's extremely expensive and involves having to learn about a lot of esoteric computer-related things. It can be a trap for the unwary, and it's a way to make defendants spend money. It's developed in the last 20 years or so and there's probably a lot more electronic discovery than old-fashioned paper discovery now.

Basically, because of our very broad discovery rules, defendants are required to preserve every email and, if they haven't been preserved, they have to ferret out emails in old systems that are no longer supported and make the information available to the plaintiffs in whatever system they want to read it in. It gets into huge databases for maintaining the results of clinical trials and creates very large confidentiality issues.

PNW: What has been the effect of the Supreme Court's ruling on attorney advertisement?

BECK: The Supreme Court decided that attorney advertisement was protected speech and all of the restrictions the bar association had put on those kinds of things fell by the wayside.

Plaintiffs have become very skilled at publicizing and soliciting clients to the point where if there's any kind of adverse FDA action with respect to a drug or device, you can almost surely expect to see telephone numbers, ads in newspapers and ads online inviting people to call in if they have anything wrong.

Plaintiffs are not required to check the validity of these claims and, with any mass tort, you get thousands upon thousands of claims that are borderline or worse, which drives the numbers up, making it very expensive to sort through and find valid claims.

We've yet to find a way to counter this and we're left evaluating on a case-by-case basis if the claims are valid or not, which pushes up the settlement value.

Pending Contingency Rulings Could Spark Lawsuit Abuse by AGs

2009-07-24T22:05:40Z

Contingency contracts between law firms and the government are continuing to raise eyebrows, especially when political contributions come into play. The outcome of two pending motions that contest such contracts could have a domino effect on some contingency contracts as well as the way other lawsuits are handled.

One legal expert believes that, depending on the outcome, state attorney generals could take advantage of contingency contracts and file numerous, high-profile lawsuits. Legal blogger Jane Genova believes that recent warnings about the impact Tylenol can have on the liver is a prime target for overzealous attorney generals with contingency agreements.

“In two years, the attorney generals could all get together, like they did for the tobacco suit, and file a suit on contingency saying that Johnson & Johnson was aware of the potential danger to the liver and that the product should have had stronger labeling,” said Genova. “That could bankrupt Johnson & Johnson and all of their suppliers. I’m sure there’s a memo somewhere in Johnson & Johnson that the attorney generals can uncover that shows that the company knew there should be a stronger warning on labels.”

A recent advisory by an independent panel for the U.S. Food and Drug Administration suggests that regular strength Tylenol should be given in lower doses and that Extra Strength Tylenol should be available through prescription only. Genova says she is convinced that Tylenol will be the next defendant embroiled in a legal battle with state attorney generals across the country – if contingency is possible.

“I see the attorney generals smelling another tobacco-like lawsuit here,” she said. “And they can only do it with contingency. You can’t get one of these suits to litigation, it’s so expensive with discovery and everything, unless you have contingency. You need a high-powered firm with many, many lawyers that are willing to invest in the suit. Contingency makes anything possible, including frivolous or greedy or evil lawsuits.

“Who the hell would sue a company for producing a legal product,” Genova asked. “Until 1978, lead in paint was legal, but now Rhode Island has gotten that tried twice. We’re talking about companies selling a legal product; and I can see it happening again with Tylenol.”

Genova has blogged extensively on the issue of contingency contracts and political contributions. She thinks the defendant in one closely-watched case, Janssen Pharmaceuticals, is taking appropriate action in combating potential conflicts of interest when it comes to contingency and contributions.

Janssen, a subsidiary of Johnson & Johnson, is being sued by the state of Pennsylvania for allegedly promoting off-label uses for Risperdal, an antipsychotic drug. The state’s case is being handled by Houston law firm Bailey, Perrin & Bailey. During the same time that the contingency contract was being negotiated, the firm’s founder was contributing thousands of dollars to the reelection campaign fund of Pennsylvania Governor Ed Rendell. The law firm is set to gain 15 percent of any settlement or judgment resulting from the case.

Janssen Pharmaceuticals filed a motion with the Pennsylvania Supreme Court to invalidate the contingency agreement between the state and the law firm, arguing that it was not approved by the state legislature. The drug company also argued that the contract violates Pennsylvania and federal law, which guarantee that attorneys representing the public will not have a direct financial interest in the outcome of the case.

“In terms of Pennsylvania, it’s very good that the pharmaceutical companies brought a motion to review the contract, because it seems to be a clear-cut instance of political contributions playing a part in the deal,” Genova said. “The contingency contract was awarded in the state’s lawsuit against the pharmaceutical company to a very large campaign donor. There is no proof of cause and effect between the contributions and the contract, but there seems to be the appearance of a linkage.”

Genova believes the Pennsylvania Supreme Court’s decision will have an impact on contingency contracts across the nation.

“Pharmaceutical companies are important and they are really being taken to the cleaners by the plaintiff’s bar and the attorney generals,” Genova said. “The state attorney generals have enormous powers. If they know contingency is a mainstream tool, they’ll just rack up the lawsuits.”

Questionable links between contingency contracts and political contributions are not limited to the case in Pennsylvania. U.S. Attorney General Eric Holder has been asked to investigate a non-bid contingency contract between Rhode Island and Motley Rice, a law firm that allegedly has ties to political contributions to the state’s former attorney general, Jack Whitehouse. The Public Nuisance Fairness Coalition is among those who have brought the potential conflict of interest to the attention of the U.S. Attorney General’s office.

Sherwin-Williams files for new trial in athlete's lead poisoning case

2009-07-23T23:03:59Z

MISSISSIPPI - Paint maker Sherwin-Williams has filed for a new trial after being hit with a jury verdict of $7 million for manufacturing lead paint that allegedly harmed a Mississippi athlete.

Lead paint was outlawed in 1978, though some municipalities, counties and states allege that a public nuisance was created by paint companies that manufactured the paint when it was still legal. Sherwin-Williams claims it did not manufacture lead paint after 1972.

"The idea that Sherwin-Williams did something wrong by today's scientific knowledge as opposed to when they were manufacturing and selling the paint is completely unfair," Hans von Spakovski of the Heritage Foundation said. "When lead paint was made more than 50 years ago, it was a legal product. State and federal government even recommended and required it in governmental housing projects.

"Sherwin-Williams needed to appeal this case because it's a typical example of a jury finding for a local hometown kid. There was no evidence whatsoever that Sherwin-Williams had done anything wrong."

Trellvion Gaines, a former Jefferson county football and basketball player, allegedly suffered neurologial illness and cognitive delays as a result of ingesting lead paint chips as a child. Trellvion Gaines V. The Sherwin-Williams Company claimed that the company was responsible for his lead poisoning as a child.

"They didn't even have any evidence that any of the paint that he supposedly ingested was made by Sherwin-Williams," Spakovski said. "They didn't have any medical evidence that this one-time ingestion of lead had anything to with his learning disability. The evidence shows that he had showed signs of development problems before this happened."

At trial, Gaines' mother, Shermeker Pollard, claimed that, as a result of the lead poisoning from paint, her son could not go to college. Witnesses were produced by Gaines' attorney who said Gaines would be prevented from going to college because of his deficits, Sherwin-Williams' motion for a new trial says.

Gaines is now planning on playing football on scholarship at Southwest Mississippi Community College. At Jefferson County High School, Gaines played wide receiver and helped his team to reach the Class AAA playoffs. Gaines also played on the school's basketball team, scoring 20 points in an early season tournament game.

In Sherwin-Williams' motion for a new trial, the company states that the evidence produced at trial does not support the verdict and that improper trial tactics were used to create speculation, passion and bias from the jury to make up for the lack of evidence.

"They didn't have much evidence at all," von Spakovski said. "As I understand it, they didn't do any of the kind of scientific testing that would show brain injuries. They didn't have MRIs, x-rays, bone scans or blood lead tests."

The motion also notes that the Jefferson County venue was improper, and that a lack of adequate procedural safeguards during jury selection effectively denied an impartial jury for Sherwin-Williams.

"In the South they have an expression called 'home-cooking' that's applied by lawyers in these kinds of cases," von Spakovski said. "It's very easy to make a hometown jury find against a big, out-of-state company with no evidence whatsoever that they did anything wrong, because the jury is sympathetic. That's pretty much what happened here.

"I think if a federal judge had been making the decision as opposed to a jury, Sherwin-Williams would have very clearly won the case. the jury ignored the absence of evidence that the plaintiffs had."

The motion also contends that expert testimony used was both irrelevant and unreliable and that the damages awarded were excessive.

"I think that if the court follows the law on appeal, Sherwin-Williams will win," von Spakovski said.

Sherwin-Williams had already won summary judgment in the case in 2003, which the state Supreme Court overturned in 2007, reinstating the case.

Former NRA chairman takes aim at gun industry lawsuits

2009-07-23T21:54:38Z

GAINESVILLE, Fla -- Even though Supreme Court nominee Sonia Sotomayor has not yet been confirmed to the bench, many in the gun industry fear what might happen if another vacancy occurs.

According to the National Rifle Association (NRA), Sotomayor believes the 2nd Amendment does not apply to individual states. Sotomayor upheld this position in her Second Circuit panel decision in Maloney v. Cuomo (2009), in which she contended that “the Second Amendment applies only to limitations the federal government seeks to impose on this right.”

If another vacancy occurs on the Supreme Court over the next year or two, it could be a nightmare scenario for the gun industry, according to Jeff Dissell, former Florida state chairman for the National Rifle Association.

Dissell spoke to Public Nuisance Wire today in an exclusive interview.

PNW: In 2005, the Republican-led Congress passed, and Bush signed, the Protection of Lawful Commerce in Arms Act, which aimed to rid the nation of frivolous lawsuits against gun manufacturers. Could another Supreme Court vacancy reverse this advance?

Dissell: Right now, the average American gun owner is very curious as to what will happen. Heller said the constitution guarantees an individual’s right to keep and bear arms. However, there is a federal versus state jurisdiction battle going on right now within the White House. On one hand, the President is saying his health care bill will supersede state law, but the Heller decision does not. People are very confused right now. Heller said the Constitution is the law of the land.

PNW: Right now, the nation is struggling with frivolous public nuisance lawsuits that are literally bankrupting some industries. Do you feel there is a growing threat to sidestep Heller and take lawsuits directly to the states?

Dissell: There is always that threat if another activist judge is appointed. These judges feel as though law is made from the bench, so they throw out existing laws they do not like. It’s the same with tobacco and every other big industry in America. Liberal trial lawyers target these companies -- not over politics, but over money. The real threat is job loss.

PNW: How would lawsuits against the gun industry result in job loss?

Dissell: Well, the gun industry is big in America. If firms start targeting these industries because a couple of judges have now thrown out the Commerce Act, then it will ultimately put people out of work. We are talking thousands upon thousands of people losing their jobs due to these lawsuits. Again, look how many are going out of work in other industries that have been targeted by these types of suits.

PNW: There are many states where the gun industry is big. Are their economies in danger?

Dissell: It will hurt a lot of states like mine badly. Obama recently ignored federal law by turning over the auto industry to the UAW. Laws are going unchecked in this country right now, which is why people are fearful the next industry to be targeted heavily will be the firearms industry. If the gun debate goes from being a federal argument to a state one, then we are in serious trouble. Jobs will be lost, people will become disenfranchised quickly, and the economy will suffer even more, particularly right when gun and ammo sales have skyrocketed since Election Day.

PNW: What can be done to protect gun jobs and gun rights?

Dissell: Well, there are many constitutional lawyers who will have to step up. Politically speaking, if this administration goes after the 2nd amendment either by making new laws or through the courtroom, it will be a disaster for the party in power. I think everything rides on if another vacancy occurs on the nation’s Supreme Court. Sotomayor has ruled that states and municipalities can go after the 2nd amendment. If someone else like that fills the bench in the next year or two, I think it will open the door to a litany of lawsuits aimed at the gun industry.

New lead laws strike at smallest factor in youth lead poisoning

2009-07-21T14:37:49Z

BETHESDA, Md. - Small businesses, thrift retailers, and public libraries could be hurt the most by a Consumer Product Safety Commission order lowering the acceptable amount of lead from 600 parts per million to 100 parts per million in products intended for children by 2011. So says a report by H. Sterling Burnett and Michael Hand of the National Center for Policy Analysis.

Aimed at manufacturers, distributors and retailers,the order is part of the Consumer Product Safety Improvement Act, a hastily passed act that followed the 2007 recalls of lead-tainted toys from China. The act purports to protect children 12 years old and younger from lead poisoning and limits the availability of consumer goods for children. The U.S. Centers for Disease Control and Prevention, however, found in a study that just 1.8 percent of lead poisoning cases result from nonenvironmental causes such as toys, jewelery and candy.

The CDCP's study states that approximately 85 percent of the 310,000 children diagnosed annually have contracted lead poisoning from ingesting deteriorating lead-based paint.

The law, in its current form, could result in the destruction of more than $1 billion in inventory, hurting producers, sellers, workers, consumers and the children the law was intended to protect.

Under the new law, manufacturers will be required to test each batch of their children's products at a cost of between $300 to $4,000 per test, depending on the number of components tested. Products featuring numerous colors and embellishments would be more expensive to test than simple toys. Inexpensive, simple toys, however, may not generate enough sales to cover the cost of testing. Some small manufacturers have chosen to stop productions despite the Commission's stay of enforcement of testing requirements for one year.

Thrift stores will also feel the effects of the law, which prohibits retailers from selling lead-tainted goods from existing inventories or from acquired used goods. Testing is not required for goods intended for older children, but stores can be prosecuted for selling tainted good that might be used by younger children.

Some resellers, unable to afford the costs of testing all of their children's items, will be forced to discard the items. Goodwill may have to destroy as much as $170 million worth of merchandise it cannot afford to test, and the Salvation Army expects to dispose of $100 million in goods.

Local and school libraries could also feel the pinch of the new lead law, which has been interpreted to include any children's book printed prior to 1986, when lead-based ink was still in use. Libraries have been advised to deny children access to these books despite research indicating that the books provide virtually no danger of lead poisoning. To avoid the cost of testing, libraries could be forced to reject any donated books published before 1986. Small town libraries, dependent upon donations for book sales to raise funds and simply to stock their shelves, will bear the brunt of the burden.

In its current form,the law not only disadvantages small businesses but also does fails to combat the true major cause of lead poisoning in children. The lead-related risks associated with toys and books are minimal while the effect on small businesses would be major.

Seafood expert takes aim at media bias

2009-07-21T14:29:16Z

WASHINGTON, D.C. -- In an open letter to journalists last week, Mary Anne Hansan, vice president of the National Fisheries Institute, said agenda-driven media bias is hurting the seafood industry.

Hansan charged that members of the media have promoted dishonest messages about mercury levels in fish and warned women who are pregnant to avoid eating seafood.

The letter cited several examples of alleged media bias, such as a November 2007 report done by USA Today’s Larry Wheeler that claimed: “As many as 600,000 babies may be born in the USA each year with irreversible brain damage because pregnant mothers ate mercury-contaminated fish, the U.S. Environmental Protection Agency (EPA) says.”

“What Wheeler failed to mention was that EPA never made that claim, but that it was simply an extrapolation made by an agency employee whose questionable methodology and conclusions have been challenged by other scientists,” Hansan said.

The letter exposed over half a dozen nationally published articles from outlets such as the New York Times and the Associate Press (AP) that purportedly misinterpret EPA reports, fabricate data, and even create false messages.

“At times, it can be hard to tell the difference between a press release from an environmental activist and what passes as mainstream reporting,” she said.

According to Hansan, a majority of the newspapers were forced to issue corrections after complaints were received.

In February 2009, an AP report claimed tuna is regularly contaminated with industrial mercury. The AP never retracted the story or issued a correction, even after the information was shown to have originated with a far-left environmental group pushing for warning labels on tuna, according to Hansan.

The AP information was cited in a recent court case rejecting an appeal by the State of California that would have required tuna to carry a warning label.

The court ruled against the State Attorney General, admitting environmental activists were targeting the tuna manufacturers, according to Hansan.

Gavin Gibbons, director of media relations for the National Fisheries Institute, said the organization has seen increased traffic on its website since the open letter was distributed to the press.

“According to our internal Web metrics, visitors who have been reading the open letter have been spending four times as much time on our Web site as the average reader,” Gibbons said.

Gibbons said the letter even caught the attention of ABC news personality John Stossel, who read the letter on his television program and professed to find it “believable”.

“Later that same day, Marian Burros, a New York Times reporter whose flawed reporting on sushi and mercury was detailed in our open letter, contacted a producer with ABC News and charged that our letter was 'filled with half truths and outright falsehoods,' yet failed to provide any details defending her reporting,” he said.

“It's now been ten days since [Ms. Burros] contacted 20/20, yet she has failed to substantiate her charges.”

Legal expert weighs in on climate bill

2009-07-17T21:36:09Z

RICHMOND -- If the controversial energy bill passes in the Senate, businesses could face a dramatic increase in compliance costs and more government scrutiny, according to legal expert Trent Taylor.

After narrowly making it out of the House last month, the “American Clean Energy and Security Act” may need a makeover before it can pass in the Senate.

Trent Taylor, a Richmond-based attorney with McGuireWoods, said the House version of the bill is likely to spur regulation-writing and litigation.

“If the so-called 'American Clean Energy and Security Act' ends up passing the Senate in anything close to its current form, it will impose a host of new regulations on many businesses and could lead to a significant increase in enforcement actions by the EPA,” Taylor said.

Taylor, who specializes in product liability cases, said the many EPA-mandated provisions hidden underneath the text in the House-approved bill worry the business community.

“In all, there were over 400 regulations and more than 1,000 government mandates in the version of the bill approved by the House,” he said. “At a minimum, businesses across the board will see an increase in compliance costs and face more government scrutiny over their energy practices.”

At a time when courts are split on public nuisance rulings, Taylor said the threat of environmental lawsuits aimed at businesses will become a reality if the bill becomes law.

Industries such as auto manufacturers and agriculture, which already work under tighter EPA restrictions, are increasingly concerned that the bill’s current form will result in job loss and millions more a year in fees.

Last week, in testimony to the Senate Committee on Environmental and Public Works, American Farm Bureau President Bob Stallman said the nation will be “embarking on a fool’s errand.”

Stallman, who opposes the measure, contends that the bill will raise food prices for consumers; increase fuel, fertilizer and energy costs; and lead to energy shortages and much higher energy prices.

President Obama recently urged the Senate to pass the House version as it stands, contending the bill is necessary to relieve America’s dependency on foreign oil.

The Senate is expected to vote on the bill no sooner than early fall just before the recess.

Drink-free zones in the U.K cause a stir

2009-07-16T19:15:17Z

UNITED KINGDOM -- Although Britain's Criminal Justice and Police Act of 2001 has been around for a while, one element of it has caused quite the backlash in 2009, as 712 local authorities have introduced designated alcohol-free zones to tackle anti-social street drinking in public places.

In these zones, police are allowed to seize alcohol from anyone who is not on licensed premises, even if the bottles or cans are unopened. Although drinking is not banned in the zones, police can ask anyone to stop drinking and it is an offense to refuse, punishable by a maximum £500 fine.

“This enables police officers and the ridiculous community support officers to confiscate alcohol on the mere suspicion that someone is going to break the law,” said James Panton, Press and Campaigns officer for the Manifesto Club, a British campaign group that challenges what it sees as excessive regulation. “No explanation or suspicion that the person could be a public nuisance is required.”

The Manifesto Club estimates that 20,000 bottles or cans will be confiscated in July and August this year and are fighting to do something about it.

According to Panton, the original legislation was designed to deal with serious public drunkenness and disorder, not the everyday person doing absolutely nothing wrong.

The Home Office issued this guidance last year: “These powers are not intended to disrupt peaceful activities, for example families having a picnic in a park or on the beach with a glass of wine. Our advice is that it is not appropriate to challenge an individual consuming alcohol where that individual is not causing a problem. Bodies responsible for introducing and enforcing DPPOs must keep in mind section 13 of the Criminal Justice and Police Act 2001, which makes it clear that this power is to be used explicitly for addressing nuisance or annoyance associated with the consumption of alcohol in a public place.”

Yet, more cities and counties have been issuing designated alcohol-free zones and ignoring the Home Office directive.

Brighton has enforced bans on people carrying unopened bottles of wine and beer that they plan to drink at home, Lambeth Council plans to make the entire borough the subject of a designated public place order, and Camden has a borough-wide ban except for Regents Park, Primrose Hill and Hampstead Heath.

“These zones cover large areas of cities and town centres, beaches and parks and they are increasing at a rate of around 100 per year,” says a recent report issued by the Manifesto Club. “It is not illegal to drink in a DPPO, but it is a criminal offence to continue drinking after a police officer has asked you to stop.”

Many around the United Kingdom are upset, including Henry Porter, a writer with The Observer.

“The problem has been building for quite a while because the legislation has been in place for a long time, but lately it’s become used and abused more than it was,” said Porter. “People have done nothing wrong and the important thing is individuals must stick up for their rights, which is to not have their property taken away, which would be the alcohol. I believe that if someone isn’t drinking and they take your drink away from you, I feel you have every right to tell them not to take your property and I think people will.”

Americans may think it can't happen here, but Brian Walsh, senior legal research fellow for the Heritage Foundation, emphasizes that state legislatures are capable of passing all kinds of laws to govern the health and welfare of their citizens. He believes, however, that we Yanks would be wiser because of our flirtation with temperance in the early 20th Century.

“We’ve had our experience in this country with prohibition and we now recognize that alcohol can be used responsibly and is generally used responsibly by most people. To take a draconian approach on alcohol today in the U.S. would show we haven’t learned anything from prohibition,” Walsh said. “The first thing that would likely keep this from happening here is that we have been through that experience and we recognize that that was an overreaction and one that was opposed by a vast majority of Americans.”

As Bobbies and other British law enforcement officials continue to abuse their confiscation powers, Porter suggests it’s up to everyone to fight for their personal freedom.

“Public drinking can be a nuisance but on the vast majority of occasions it is simply a matter of people exercising their lawful right to drink what is lawfully theirs, and councils have no business depriving people of that right. The confiscation of alcohol is theft and this program of joyless illegality needs to be stopped in its tracks,” he said. “In the meantime, all those who have an eye for liberty and want to drink responsibly in public should avoid Brighton, a wonderful town which just needs to push its petty–minded officials into the drink.”

Public Nuisance Trial Jumpstarts No-Nonsense Legal Blog

2009-07-15T13:48:35Z

In a conversation about everything from court cases to Buddhism, it's easy to see why her blog is becoming a must-read for legal professionals and law junkies alike. She’s opinionated, well-read, and lucid. That's why a growing number of readers are flocking to her blog to find out what Jane Genova has to say about "Law And More."

Genova got into legal blogging in a roundabout way, only four years ago, after a successful, but unfulfilling career in the corporate side of public relations and marketing. Armed with two months of Harvard Law School education, she decided to start a blog about Rhode Island’s infamous lead paint trial, in which the state declared that lead paint in homes was a public nuisance and that manufacturers should pay for the clean-up.

The lawsuit ended with Rhode Island’s Supreme Court overturning the jury’s decision to hold the paint companies accountable. The 2008 decision had a major impact on the future of public nuisance cases in the state and, potentially, across the nation.

Readers who check out Genova’s blog this week will encounter a blunt critique of the ineffectuality of law schools during the current recession. “Clearly, law schools, which have been revenue-generators for their universities, have just about everything about them to re-think,” she asserted in the blog. “The macro question here might be: What is the role and responsibility of a law school in a wounded economic system?”

The outlook for law schools may be bleak -- and for lawyers too, Genova believes.

“There are going to be more layoffs in late summer and fall,” she predicted. “I just blogged about that and that’s what the consultants told me. The layoffs will continue. The law firms are protecting PPP, profits-per-partner, and they’ll do whatever it takes. Plus it’s not a stigma anymore to lay someone off. In the old days, it looked like you weren’t doing well if you had to lay someone off, but now it looks smart and like you’re cutting costs to serve the client better.”

Genova thinks many attorneys, and American workers as a whole, are affected by what she calls “magical thinking.” Although many attorneys think the economy will bounce back and things will return to the days when they made oodles of cash, she warns that that the recession marks a transition to a new day in the American economy.

“Some economists are saying growth will resume in the United States at two percent in the third, maybe fourth, quarter,” said Genova. “What I’m reading is that the recovery will initially be slow. But I think that there’s a permanent change in the number of good paying jobs. I think there’ll eventually be more jobs, but I don’t think that they’ll pay what they used to.”

Paint industry beats back defective design argument in Wisconsin

2009-07-14T22:50:09Z

MADISON, Wisc. (Legal Newsline) - After a setback in Mississippi, the paint industry earned another victory Tuesday when the Wisconsin Supreme Court sided with it in the case of a minor who claimed it was liable for his lead poisoning.

The justices affirmed a Court of Appeals decision dismissing Ruben Baez Godoy's defective design claim against four defendants, including DuPont and Sherwin-Williams. Godoy alleged a design flaw in white lead carbonate pigment used in lead paint, outlawed in 1978.

Three courts agreed that the claim could not stand because white lead carbonate pigment is inherant in the nature of the product.

"The Wisconsin Supreme Court followed established law by rejecting plaintiff's claim that lead pigment is defective because it contains lead," said Charles H. Moellenberg, Jr., an attorney for The Sherwin-Williams Company. "Lead is an inherent part of any lead pigment."

The paint industry has won most of the recent court battles over lead paint. Victories in Missouri, Wisconsin and New Jersey set the stage for a win in the Rhode Island Supreme Court that overturned a lower court's ruling that the industry created a public nuisance by manufacturing lead paint before it was outlawed.

The defendants in that case could have been on the hook for Attorney General Patrick Lynch's $2.4 billion abatement plan.

Last month, though, a Mississippi jury awarded $7 million in a high school student's case against Sherwin-Williams. The company had earned summary judgment in the case, but the state Supreme Court disagreed with the trial court's decision and reinstated the case.

Justice Patience Roggensack did not participate in the Wisconsin case, while all six of her colleagues were on the side of the defendants.

Those that filed amicus briefs in the case were The Product Liability Advisory Council, Miller Brewing Co., S.C. Johnson and Son, Wisconsin Knife Works, Midwest Food Processors Association, Wisconsin Dairy Business Association, The Metropolitan Milwaukee Association of Commerce, Hydrite Chemical Co. and the Wisconsin Association for Justice.

Godoy suffered lead poisoning in 1998 while living in Milwaukee.

"A claim for defective design cannot be maintained where the presence of lead is the alleged defect in design, and its very presence is a characteristic of the product itself," the opinion says.

"Without lead, there can be no white lead carbonate pigment. The complaint fails to allege a design feature that makes the design of white lead carbonate pigment defective."

Moellenberg said lead paint was used before the health risks associated with it were known because it was washable and durable.

"Federal and state governments recommended and even required the use of lead paint on government housing projects and other buildings until the late 1970s," he said.

"Litigation alleging novel legal theories against former manufacturers of a lawful product is a distraction from the proven solution of enforcing the law against landlords who neglect their property and expose children to lead paint hazards."

Plaintiffs firm Motley Rice was one of the firms representing Godoy. It also represented the State of Rhode Island in its case on a contingency fee and came up with the idea of making a public nuisance claim, which was not subject to the same expired statute of limitations on a products liability claim.

Wisconsin Supreme Court rules in favor of lead paint manufacturer

2009-07-14T20:31:01Z

MADISON, Wi. -- Children suffering from lead paint poisoning cannot sue the paint’s manufacturer, the Wisconsin Supreme Court ruled today.

The unanimous decision, prohibiting the citing of defective product design as a reason for the suit, may limit future product liability claims that are being filed under public nuisance action.

The case resulted from an incident in 1998 in which a Milwaukee boy became ill with lead paint poisoning after ingesting paint chips. The lawsuit targeted E.I. du Pont de Nemours & Co., Armstrong Containers, the Sherwin-Williams Co. and American Cyanamid.

In 1978, the federal government banned lead paint after determining the ingredients can lead to medical problems such as brain damage and learning disabilities.

In a written statement, DuPont said the company was not surprised by the court’s decision.

"DuPont is very pleased with the Wisconsin Supreme Court's decision in Godoy v. E.I. du Pont de Nemours & Company. We are not surprised that the Court declined Mr. Godoy's invitation to vastly expand Wisconsin's product liability laws. Consistent with longstanding Wisconsin precedent, the Court properly recognized that Mr. Godoy had failed to allege a design defect claim."

Around 30 lead paint lawsuits are still pending with the Wisconsin Supreme Court.

MEALEY'S Editor James Cordrey said the Circuit Court correctly concluded that the complaint failed to state claims for defective design, a ruling affirmed by Tuesday’s six-judge panel.

“A claim for defective design cannot be maintained here where the presence of lead is the alleged defect in design and its very presence is a characteristic of the product itself,” Cordrey said.

Even though the feasibility of an alternative design can be considered when evaluating a design defect claim, it isn't a requirement, the court concluded.

Today’s ruling could have an impact on lead paint personal injury lawsuits, which have skyrocketed in recent years.

Last month, a Mississippi jury awarded $7 million in damages to a child and his mother after Sherwin-Williams was found liable for the boy’s lead paint poisoning.

Litigation slows access to Alaskan oil reserves

2009-07-13T16:07:05Z

ALASKA -- As warmer temperatures open up previously inaccessible Alaskan oil and gas reserves, oil companies are finding their dash to tap them slowed by lawsuits from environmental groups.

"The Center for Biologic Diversity has been the most prominent in challenging arctic oil and gas exploration," Richard Ranger,senior policy adviser at the American Petroleum Institute, said. "They have been particularly active in challenging exploration on the Beaufort and Chukchi seas."

Companies such as BP, ConocoPhillips, Exxon Mobil Corp., Shell, Pioneer Natural Resources, Eni, Anadarko and StatoilHydro can see their exploration slowed or halted by legal challenges.

The Center for Biologic Diversity has had a particularly adverse impact on Shell, affecting the long lead times needed to explore for oil and gas. The process of exploration is rife with legal requirements and permits, almost all of which can be challenged in court, leading to costly legal battles and slowed exploration.

"You don't just buy a lease and start to drill," Ranger said. "Ours is a long lead time industry. Companies will acquire leases in an area where the potential for oil and gas exists. You start out doing a basic geologic evaluation that is followed by carrying out marine seismic operations that require permits, which can be obstructed through litigation claiming the effects of the sound generated by the seismic operations on marine mammals are negative.

"If those go forward, then companies will contract with a rig to drill a test well. During that stage, the permit would require a regulatory process that can be subject to litigation as well.

"Drilling or similar activities in the offshore marine environment requires demonstration of oil spill response and capability. Organizations can challenge oil spill response capability.

"If hydrocarbons are discovered, which hasn't happened in the Chukchi, there's another regulatory process that the company must go to that can be litigated by a party trying to stop the development."

Shell claims to have as much as $3 billion at risk in its Alaskan operations. With litigation efforts currently blocking or delaying exploration, the company is unable to recoup its investment but remains committed to the operation.

With the rise in challenges to slow and even halt exploration, Ranger says, companies are changing how they approach the Alaskan oil fields.

"Companies are going to pursue different strategies. Already, what we're seeing are some companies that, in a perfect world, would have the scale, economic and technical resources necessary to explore in Alaska not do so," Ranger said.

"Any company's investment decisions are guided by a mix of factors," Ranger said. "In the case of Alaska, the risk and challenge of litigation, the long lead times, the seasonal activities - a lot of the activity is only allowed to occur in the winter whereas on the offshore rights, it's only possible on the open water months - and the uncertainties of litigation have made the factor of delays real. It's beginning to affect how the companies evaluate the promise and the opportunity provided by Alaska."

Senator investigates suppression of EPA report challenging global warming

2009-07-10T16:29:15Z

WASHINGTON, D.C. - Oklahoma Sen. James Inhofe (R-OK) wants to know why the Environmental Protection Agency suppressed a report by analyst Alan Carlin that questioned the agency's climate change views and rejected carbon dioxide regulation to reduce global warming.

Inhofe, a climate change skeptic and the former head of the Senate Committee on Environment and Public Works, has ordered an investigation into why the report was suppressed and why Carlin was ordered not to talk about the report.

"We worry that when you have EPA officials suppressed, especially on something of this magnitude, it leaves a lot of questions out there," said Matt Dempsey, Republican staff communications director for the Senate Committee on Environment and Public Works.

The report came to light following the release of internal EPA emails and a draft version of Carlin's report. The EPA subsequently allowed Carlin to release the report on his website.

Carlin's 98-page report claims that the EPA uses United Nations data that are outdated and unreliable and questions science decisions being made by the current administration.

"We reached out to Dr. John Christy, the Alabama state climatologist, and he said he agrees with Carlin on this," Dempsey said. "Dr. Christy supports Carlin's report. The report has the science community backing it. It's also important to note that more than 700 scientists have stated an opposite view of global warming alarmists. As we continue to learn more about this science, it's important to continue the debate. What Carlin put together was not considered. The latest science says that the trend for global warming is not what the EPA would like for people to believe."

Carlin notes in his report that global temperatures have declined as part of an 11-year downward temperature trend. Carlin also addressed Atlantic tropic cyclones, noting that global warming theory initially pointed to increased and more intense storms while newer viewpoints argue that tropical storms will not change from those of the past. Carlin's findings also point to water vapor moderating temperature rather than exacerbating it. Carlin says that ocean cycles are probably the single most important factor in explaining temperature fluctuations.

The effects of Inhofe's investigation could be far-reaching.

"The EPA administrator had put forward a memo about how this was going to be a transparent and open EPA," Dempsey said. "This is one of the major instances in the first few months where we've seen something that appears to contradict that.

"Step one is to get all of the facts. This type of action suggests that the transparency issue is not as it appears. The second stage will be to determine how this impacts the climate debate. Beyond that, we don't really have a timeline at this point."

Brown drops charges against carmakers

2009-07-09T21:14:47Z

SACRAMENTO -- State Attorney General Jerry Brown has dropped a controversial lawsuit aimed at six of the world’s largest automakers over allegations the manufacturers directly contribute to global warming.

The lawsuit, originally filed in 2006 by Brown’s predecessor Bill Lockyer, claimed General Motors, Ford, Chrysler, and U.S.-based Toyota, Honda, Nissan are all responsible for climate change problems allegedly caused by emissions from the vehicles they manufacture and sell to California residents.

In 2007, U.S. District Court Judge Martin Jenkins dismissed the suit, saying it raised issues that needed to be addressed by the White House and Congress, not by the courts.

Dr. Fred Singer, president of the Science and Environmental Policy Project, said he wanted the case to go to court in order to prove the companies' innocence.

“This dismissal robbed us of the opportunity to demonstrate in court that the original allegations were false,” Singer said.

Brown said he dropped the suit because of the current administration’s policies, which are in alignment with California officials and the EPA.

"The EPA and the federal government are now on the side of reducing greenhouse gases," the attorney general said in a statement.

Shell game: payout or payoff?

2009-07-08T14:56:01Z

NEW YORK -- Royal Dutch Shell, the multinational petroleum company, has settled with plaintiffs in New York federal court for $15.5 million in an Alien Tort Statute lawsuit. The settlement could spell trouble for other large corporations, inviting similar suits and pressuring defendants to settle rather than face public relations nightmares.

"Most of these lawsuits are both frivolous and exhortative in the sense that corporations are driven to settle these Alien Tort Statute suits not for legal reason but to avoid the adverse publicity," Andrew Grossman, senior legal policy analyst for the Heritage Foundation, said. "When groups bring these lawsuits, the public relations components are larger than the legal components. These types of lawsuits are really fought in the media rather than the courtroom. It's about shaking down corporations rather than the lawsuit itself."

The suit stemmed from alleged wrongdoing by Shell in Nigeria and claims that Shell was complicit with Nigeria's government in the execution of human rights activist Ken Saro-Wiwa. Saro-Wiwa was part of a protest movement against environmental and other purported injustices in Nigeria. Shell, ranked the second-largest company in the world by Forbes Global 2000 in 2009, agreed to the settlement while maintaining that the allegations in the case were false.

"The facts of this case are heavily contested. The allegation is that Royal Dutch Shell was somehow intimately involved in executions of a Nigerian activist group," Grossman said. "Royal Dutch Shell had pulled out of that region in 1993 when the uprising began. The government there egregiously violated human rights and the question is to what extent was Royal Dutch Shell involved. I don't think there's been any strong evidence on that point beyond allegations."

The lawsuit was filed in 1996 and, after 13 years in court, resulted in a 91-page docket sheet. The suit used the Alien Tort Statute enacted by Congress in 1789, which states, "The district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States." The original use of the Alien Tort Statute was to battle piracy on the high seas, as well as to resolve offenses against ambassadors.

"This case has been bounced around the courts for over a decade. It's gone to the Second Circuit Court twice," Grossman said. "The legal contribution, in the end, is relatively minor, but the settlement, to the extent that it has an effect, is telling groups that if you harass a corporation long enough, they may come to the table with a settlement."

Beginning with the 1980 Filartiga v. Pena-Irala case, the Alien Tort Statute has been used to sue transnational businesses in U.S. federal courtsfor heinous acts committed abroad.

"To say that these lawsuits have become more prevalent since 1980 is understating things. The Alien Tort Statute was not used in this way at all until 1980, when the Center for Constitutional Rights brought the first case of this kind," Grossman said. "It's a very vaguely worded statute that was not even considered to be a part of U.S. law.

"It's important to remember that no corporation so far has been found to be liable under the Alien Tort Statute for human rights abuses abroad or anything like that. These lawsuit are shakedown lawsuits that fail but have large settlements.

"For what it's worth, the settlement directs $5 million into a fund for people and $10.5 million towards the nine individuals who were hung that the Center for Constitutional Rights represented. It seems like the bulk of the money is going to the lawyers, which isn't unusual."

Federal Judge rules against Wells Fargo

2009-07-07T19:15:00Z

BALTIMORE -- The City of Baltimore has provided enough proof to continue its suit against Wells Fargo over allegations that the mortgage lending giant targeted blacks for subprime loans, according to U.S. District Court Judge Benson Legg.

The city’s January 2008 suit claims the mortgage lender intentionally sought out blacks for loans they could not afford, resulting in high numbers of foreclosures that ultimately cost the city tens of millions in taxes and city services.

Legg ruled that the city’s allegations “are sufficiently plausible and grounded in fact to continue the case."

“We continue to believe that this lawsuit lacks merit,” said Cara Heiden, co-president of Wells Fargo Home Mortgage in a written statement. “We welcome the opportunity to set the record straight and demonstrate the many controls we have in place to ensure fair, responsible, and nondiscriminatory lending for all our customers.”

Hans. A. Von Spakovsky, legal scholar for the Heritage Foundation, sees little significance in the judge’s order.

“Motions to dismiss at the beginning of lawsuits are rarely granted by federal judges -- only when there are no disputed facts or, even if the facts asserted by a plaintiff are assumed to be true, they have no legal case,” Spakovsky said.

He said there is almost always a factual dispute that prevents a judge from granting a dismissal motion.

“This was just a preliminary skirmish that does not mean that the plaintiffs will prevail in their claims,” he added.

Wells Fargo officials are eager to demonstrate that the company hasn’t committed wrongdoing, insisting race is never a factor when it makes decisions.

“We have responsibly made homeownership possible for Baltimore borrowers using the many controls we have in place to ensure race is not a factor in the pricing and products we offer,” Heiden said.

She added, “Our long-term commitment to the Baltimore market -- which remains steadfast -- includes supporting its communities by continuing to lend responsibly and working hard to keep people in their homes.”

Alabama Smoking Ban Gives Bars a Pass

2009-07-06T21:00:27Z

SPANISH FORT, Ala. -- As smoking bans continue to pass across the country, one Alabama town is taking a slightly different approach in the fight against secondhand smoke. The Spanish Fort ordinance, which passed with a 5-1 vote on June 15th, prohibits indoor smoking everywhere except bars.

The new law defines bars as “a stand-alone enclosed area in which the principal or sole purpose and business of the establishment is the serving of alcoholic beverages for consumption which comprises at least 60 percent or greater of the gross sales.” The ordinance also allows such establishments to sell food, but only if it is “incidental to the service of alcoholic beverages.”

With that definition, most bars are off the hook when it comes to the smoking ban. But certain establishments, like sports bar-style restaurants, may not be covered because the law prohibits the presence of minors.

One proponent of smoking bans says this is where the bar exemption falls flat.

“With an exemption for bars, Spanish Fort got off easy,” said Bill Hannegan, founder of Keep St. Louis Free, an organization with a mission to protect residents’ personal freedoms and property rights from government intervention. “A more rational compromise, though, would be to limit smoking to ‘over 21’ venues. Coffee houses, bowling alleys, pool halls and many restaurants are hurt by smoking bans too. If no minors are allowed inside, why shouldn't these businesses enjoy the same property rights as bars?”

The ban also forbids smoking within 20 feet of a public place, including restaurants. It goes into effect in two-and-a-half months.

Agriculture, pork industry slam climate bill

2009-07-03T14:15:52Z

Washington, D.C.-- Officials representing America’s agriculture and pork industries are expressing growing concern over the potential of skyrocketing costs and job loss if the climate bill makes it through the Senate.

Last Friday, the House narrowly passed the measure by a 219-212 vote. It now rests in the hands of Senate lawmakers who have expressed doubt it will pass.

Rick Krause, senior director of congressional relations for the American Farm Bureau Federation, said the organization’s members, who opposed the House bill, are hoping for improvements in the Senate version.

“There are too many issues with the bill currently to support it. There will be no way to offset the major costs of this legislation and currently very few of the major issues have even been addressed by members of Congress,” Krause said.

He added that many people question what will replace fossil fuels in the future if renewable energy sources are not available.

“Nationally, gas prices will skyrocket if this bill passes. The 300-page amendment that was squeezed in at the last minute didn’t give lawmakers a chance to read the entire bill, nor did it clear up anything,” he said.

Krause said his organization has stepped up its membership outreach and educational efforts to ensure the bill is slowed down in the Senate.

The National Corn Growers Association saw a glimmer of hope in last week's amendment, sponsored by House Agriculture Committee Chairman Collin Peterson (D-MN), mandating that all agriculture be exempt from a greenhouse gas emissions cap and giving all market restriction jurisdiction to the United States Department of Agriculture (USDA).

“We appreciate the dedication Chairman Peterson has shown to U.S. corn growers and the agriculture industry during this legislative process,” NCGA President Bob Dickey said. “He has been a true champion for our industry during negotiations, and his amendment to the climate change legislation will make several steps in the right direction.”

Dickey said his organization will remain neutral until the bill is ready for final consideration.

“NCGA support[ed] adoption of the Peterson amendment during House floor consideration, but due to the complexity of the bill, recent changes to the legislation and the short period of time to analyze the legislation, NCGA will remain neutral on the overall bill until we can fully analyze the impact on our growers," he said.

While appreciating that the Peterson amendment will allow the USDA to oversee the industries selling off of credits, Dave Warner, director of communications for the National Pork Producers Council, emphasizes that the bill overall will cost the country jobs, as well as drive up costs of production.

“We are talking about costs from fertilizers, oil, produce, agriculture; literally everything will skyrocket under this legislation. This will be a job killer,” Warner said.

Warner said another concern has been the media’s lack of honest coverage of the bill.

“It’s hard to combat an agenda-driven media. By labeling the H-1 swine flu virus in a way that they did, they nearly put an entire industry out of work, even though the facts were presented to them accurately,” he said.

To offset a biased media Warner's organization produces a membership publication, as well as weekly legislative email updates.

American Farm Bureau economists have estimated that permit costs for cattle and cash-crop acreage could also increase astronomically.

Suit against search and rescue team could hinder future rescues

2009-07-03T14:09:47Z

Gilles Blackburn, whose wife froze to death while the two were lost in the British Columbia backcountry, is suing the Royal Canadian Mounted Police, search-and-rescue officials, and ski-resort officials for negligence.

Blackburn and his wife, Marie Josee Fortin, became lost after skiing from the top of a ski lift in the Kicking Horse Resort on February 15. His wife died of hypothermia two days before Blackburn was rescued by helicopter, nine days after they'd first set out.

According to a statement of claim filed in B. C. Supreme Court, Purcell Helicopter Skiing Ltd. reported distress signals to resort staff on or about February 17th. On the same day, the staff notified search-and-rescue officials in nearby Golden, B. C. Four days later, Purcell also notified the RCMP that signals had been spotted in Canyon Creek.

The lawsuit charges that defendants “all negligently failed to initiate or conduct a search for the plaintiff or Ms. Fortin, or otherwise properly investigate the source and significance of the SOS signals.”

“Golden search and rescue and the RCMP heard [Blackburn and Fortin's] cries for help and they did nothing,” Blackburn's lawyer Wilhelm-Morden said. “If it comes to light . . . that there are other problems -- not just with the Golden search and rescue, but with other search and rescue organizations in the province -- if those problems are fixed as a result of these lawsuits, then that's a good thing for everybody.”

The president of the Search and Rescue Volunteers Association of Canada warns that the lawsuit could have a strong ripple effect across the country, forcing 15,000 volunteers to reconsider if they want to risk everything they own.

That fear is shared by many search and rescue organizations in the U.S. and Canada.

“We have been following the incident in British Columbia since it began," said George Ratayczak, president of the Washington State Search and Rescue Coordinators’ Association. "Washington state, I believe, has a similar system as the one in British Columbia for protecting our volunteers while on missions. The individuals are covered but not the organizations they belong to, unless the organization provided its own insurance coverage. With the limited budgets these organizations have being primarily from donations, paying for this additional private insurance could be very hard for most of the smaller groups around the state.”

Ratayczak said the organization is exploring the implications for Washington state SAR teams and will focus on that issue at their upcoming July 16th meeting.

Werner Patels, a freelance translator, interpreter and writer in Calgary, has blogged about the case since it began and believes it could lead to dire consequences.

“His action, if successful, would put a ‘chill’ on search and rescue operations for fear of future lawsuits,” Patels said. “In the extreme, this could mean that some services think twice about starting an operation and may then even decide to forgo such an operation, resulting in the death of even more people.”

Patels believes that, under the traditional principles of equity law, Blackburn enters the court without “clean hands,” meaning he is at least partially responsible for the events leading up to his wife's death.

“According to the ‘clean hands principle,’ which is several hundred years old, Mr. Blackburn, therefore, should not and would not be allowed to bring a legal action,” he explained.

Howard Paul, spokesman for the National Association for Search and Rescue, hopes that the discovery will at least show where there was a breakdown in communication; figure out the why, the how and the by whom; and fix it so it doesn’t happen again.

The outcome of the case could have a bearing on all search and rescue operations, wherever they occur.

“What it points out is that SAR organizations, no matter what type -- public, private, paid -- this illustrates the fact that they really need to understand what their potential liability could be and make sure they have protection,” said Paul.

In B.C., the provincial government covers volunteers for liability, but the search and rescue societies are responsible for getting their own coverage.

The lawsuit has caused the Golden search and rescue team to shut down, and has sent teams across the country scrambling to determine whether they have insurance against such legal action. The search and rescue team in Kimberley, B.C., suspended its services for almost a week before eventually returning to duty. Cranbrook and Fernie are considering pulling the plug, while Kamloops has expressed its concern about the legal action.

The Golden team worries about the coverage gaps and the fact that the province's coverage kicks in only when searchers are called in to duty and not if a proper search isn't launched.

When Blackburn filed the legal action, he said he wanted to make sure no one was ever again left stranded in the woods without help. Ironically, his action may have the very opposite result.

Unhappy Hookah Lounge Owner Protests Shutdown

2009-07-02T21:13:59Z

BRIDGEPORT, Conn. -- The future of a Bridgeport, Conn., hookah bar has gone up in smoke again. The Milford health department has forced the Olive Tree Hookah Lounge to close for a second time, raising issues with the state's smoking ban and usage of the term "private club."

Sammer Karout, owner of the Olive Tree Hookah Lounge, was originally told he would be allowed to open as long as food and alcohol were not served on the premises. Hookahs are water pipes with charcoal-heated mixtures of tobacco, fruit and herbs that are smoked through hoses. Hookahs are popular in the Middle East, where they are typically accompanied by tea or coffee.

Connecticut's legislation banning smoking in public places, specifying "cigarette, cigar, pipe or similar device," makes no mention of hookahs, putting them in a gray area of the law. Connecticut outlawed smoking in public places in 2004, but private clubs, such as the Olive Tree Hookah Lounge, do not fall under that ban. The Olive Tree charges a $1 membership fee and a $20 yearly hookah rental fee.

Two weeks after opening on June 19, the Olive Tree Hookah Lounge was closed by the health department, citing state law and city ordinance. Karout and his lawyer, Steve Leo of Castignoli, Skudlarek & Leo, got the order rescinded.

"The first time, the city attempted to shut the business down," Leo said. "The city viewed the bar as smoking in a public place. We proved that it wasn't a public place and they rescinded that order. 'Public place' is defined very narrowly in the statutes -- it's things like a bar or a restaurant -- and he didn't fall into that definition."

One day after its reopening, the health department shut the lounge down again after inspecting it along with police officers.

"The second time, they shut the place down for being a public nuisance, which it's not," Leo said. "The only people in there are people who want to smoke hookah. There's no other reason to be in there. They don't serve food, they don't serve alcohol. It's just like-minded people doing what they want to do."

Officials contended that the health risks associated with hookah have a public nature. Conditions within the bar, officials said, are hazardous to public health. Officials said that hookah smoking carries the same health risks as cigarette smoking and possibly more, because of the risk of spreading disease through the volume of smoke inhaled, the dampened smoke and sharing of hookah hoses. Karout told health officials that the hookahs were sanitized with bleach and soap between uses.

"The Health Department seems determined to keep him shut," Leo said, "but I think, ultimately, we're going to win. The first time we won very quickly and we were very happy. I think this might be a longer process."

The Bridgeport city planner contends that Karout did not apply to open a private club and would need to submit an application to the Planning and Zoning Board and have a public hearing for the lounge to receive approval to operate as one. Other private clubs in the area, including the Knights of Columbus and Veterans of Foreign Wars chapters, allow smoking.

Regulations may double TVA energy prices

2009-07-02T20:06:43Z

KNOXVILLE -- Regulations emanating from Congress, the Environmental Protection Agency and federal courts over the use of coal-fired energy generation could double the price of power in the Tennessee Valley Authority's jurisdiction.

The Tennessee Valley Authority, which uses the Tennessee River for hydroelectric power and operates the Browns Ferry, Sequoyah and Watts Bar nuclear electric plants, gets the majority of its electricity from its 11 coal-burning plants. Sixty percent of the company's energy comes from coal, a number that isn't likely to come down anytime soon.

The federally owned corporation, America's biggest government utility, is already facing $1 billion in pollution control installation costs at four of its coal-fired power plants -- three in Tennessee and one in Alabama. Following a U.S. judge's order in a 2006 lawsuit, TVA has until 2013 to reduce emissions from its 11 coal-fired plants in three states to meet North Carolina's Clean Smokestacks Act. The total expected cost for the pollution control at the 11 plants ranges from $3 to $5 billion.

The TVA also is projected to spend over $1 billion in cleanup costs following a billion-gallon coal ash spill. Encouraged to write new rules on coal ash disposal, the EPA may replace wet storage with dry storage, adding to the TVA's costs.

On top of its mounting environmental bills, the TVA now faces the American Clean Energy and Security Act, which narrowly passed in the House of Representatives and still must be approved by the Senate. The bill's sponsors claim that it will create jobs, end dependence on foreign oil, and combat global warming by creating a plan for clean energy and promoting renewable sources of energy.

Critics of the bill, such as Kentucky Coal Association president Bill Caylor, contend that the bill will do more harm than good.

"We are talking the biggest job killer in the history of this country," Caylor told Public Nuisance Wire in an interview. "Most states burn coal, so there will be an impact on the poor and elderly, businesses will shut down, manufacturing companies will not relocate here. This won’t happen just in Kentucky but all across America. We have steel plants and auto manufacturers that will be forced to close.

"This bill could not have come at a worse time, when the nation is in a recession. This will sacrifice jobs for anyone in an industry that relies on energy from coal. In fact, jobs will go overseas because of zero competition. Not to mention, the price of gasoline will once again go up and probably hit unprecedented levels. Again, the poor and middle class will suffer greatly."

The TVA, facing mounting bills from all sides, could be forced to raise average monthly electric bills by as much as $100 by 2020.

Mississippi Court awards $7 million in lead paint case

2009-07-02T19:59:17Z

JACKSON, Miss. -- A Mississippi jury has ruled against Sherwin-Williams after the paint company giant was found liable for the illnesses of a Mississippi boy who'd consumed lead paint chips.

A Jefferson County Circuit Court awarded $7 million in damages to Trellvion Gaines and his mother Shermeker Pollard.

Trellvion, now a teenager, was only 9 years old when the original suit was filed back in 2000. Even though the court ruled in favor of Gaines in 2003, a Mississippi Supreme Court overturned the decision in 2007.

Jane Genova, writer and legal blogger, warned that the case could open a Pandora’s Box in lead paint issues, with personal injury lawsuits replacing the lead paint litigation cases that have proven unsuccessful.

“This case was an aberration, simply put. The money awarded was astronomical; all the while, there was no link between the boy’s brain damage and the lead paint,” Genova said.

The original suit filed by the plaintiff targeted NL Industries, Sherwin-Williams, and local retailers Robert Case (dba Fayette Lumber & Supply Company), William Darsey individually (and dba Darsey Hardware Company and Darsey Hardware & Furniture Company), and Hirsch's Store. Eventually, all companies except Sherwin-Williams were dropped from the case.

The suit alleged that a Sherwin-Williams product containing lead was used to paint the plaintiff’s house; however, defendants claimed that no evidence was provided to the court to prove the company’s product was used.

“This ruling never should have happened, because neither the plaintiffs nor the lawyers could even prove Sherwin Williams paint was used. Nothing could be traced back to the company,” Genova said.

She predicted that lead paint lawsuits against the paint companies, paint retailers, and property owners could continue a long time.

“If litigators are unsuccessful at public nuisance suits, they may bring action against companies in the personal injury arena. Personal injury, as opposed to class-action suits, can evoke sympathy from the jurors and the court of public opinion,” she said.

Kentucky Coal President weighs in on climate bill

2009-07-01T20:51:18Z

Lexington, Ky. -- A week after the American Clean Energy and Security Act passed narrowly in the House of Representatives, coal industry experts are hanging on hopes that the bill will die in the Senate.

The Kentucky Coal Association, made up of around 200 businesses and corporations serving the coal industry statewide, has ramped up efforts to ensure future legislation will not create job loss and economic downfall. Association President Bill Caylor is actively educating voters on the benefits of coal.

Caylor said most Kentuckians realize if the bill is signed into law, a large portion of the state will become unemployed. "This could end up being the most disasterous job killers this state has ever seen," Caylor said."The things going on in Washington right now are unbelievable."

Caylor spoke to Public Nuisance Wire today in an exclusive interview.

PNW: What are the ramifications for Kentucky if this bill makes it to the President’s desk and he signs it into law?

CAYLOR: We are talking the biggest job killer in the history of this country. Most states burn coal, so there will be an impact on the poor and elderly, businesses will shut down, manufacturing companies will not relocate here. This won’t happen just in Kentucky but all across America. We have steel plants and auto manufacturers that will be forced to close.

PNW: Did your organization know in advance what was contained in the bill?

CAYLOR: There was a 300-page amendment added at the last minute to a 1200-page bill. Most lawmakers didn’t even read it. This was like the stimulus package. Everything was rushed and hurried through without a process. That was the most frustrating part:not knowing what the bill actually said and the economical impact it would have.

PNW: How will this bill hurt all of America?

CAYLOR: This bill could not have come at a worse time, when the nation is in a recession. This will sacrifice jobs for anyone in an industry that relies on energy from coal. In fact, jobs will go overseas because of zero competition. Not to mention, the price of gasoline will once again go up and probably hit unprecedented levels. Again, the poor and middle class will suffer greatly. Sad to say, a lot of folks are not aware of the serious negative effect this will have on them.

PNW: If this bill passes and jobs are lost, how much of a political impact will this have on the party in power in Washington?

CAYLOR: I hope they are defeated next year. They are out of touch with the American people. We are hoping this bill is bottled up in the Senate where it will eventually die. Now it’s a matter of getting our representatives informed and voters informed. I think this will badly damage Obama and the Democrats next year, because this will be one more disaster for this administration. The real challenge is getting voters to make the connections.

PNW: What steps is the Coal Association taking to ensure people are educated?

CAYLOR: We have the Friends of Coal Association, like West Virginia, in which we do membership drives, pass out pamphlets, send e-mail blasts, and conduct radio and television interviews. We work hard to spread our message. Anytime legislation is about to be passed, good or bad for coal, we let all of our members know, as well as Kentucky residents. We have a public relations program of over 300,000 that works hard for our Friends of Coal. We are always holding events all over the state to get citizens aware of the need for coal. Simply put, coal keeps the lights on for everyone.

Missouri’s top farm official takes aim at climate bill passage

2009-06-30T18:39:58Z

JEFFERSON CITY, Mo. -- Mandating carbon reductions through such a scheme as the climate bill is simply a tax on oil and coal and the businesses and industries using them, according to Missouri Farm Bureau President Charles Kruse.

In a written statement, Kruse said farm bureau members were extremely disappointed by the passage of the bill, which made it through the House by a narrow 219-212 vote.

“Billed as landmark legislation for reducing the threat of man-induced global climate change, H.R. 2454 comes with a hefty price tag for our nation, while it's business as usual in China, India and other greenhouse gas-emitting countries," Kruse said.

Kruse emphasized that costs imposed on farmers and ranchers through higher gasoline, diesel, LP gas, nitrogen fertilizer and other inputs will outweigh potential financial benefits from selling carbon credits.

A recent report by the Missouri Agricultural Statistics Services estimated around 28,000 farmers would be affected by new EPA regulations under the climate bill, with $522 million lost in revenue annually.

American Farm Bureau economists estimate permit costs for cattle and cash-crop acreage could skyrocket under the bill.

“If Members of Congress are serious about moving away from foreign energy and to cleaner energy sources, they should start by allowing for the recovery of our own resources, namely oil and natural gas, and investing in clean coal technology and alternative and renewable energy,” Kruse said.

PNFC sends formal investigation request to AG Holder

2009-06-08T18:26:53Z

PROVIDENCE -- The nomination of trial attorney Jack McConnell to a federal judgeship in Rhode Island and his relationship with former State Attorney General Sheldon Whitehouse has sparked a great deal of controversy.

So much so that the Public Nuisance Fairness Coalition (PNFC) wrote U.S. Attorney General Eric Holder last week to request an investigation of McConnell and his law firm.

Questions surrounding the fairness of his nomination stem from the 1999 hiring of McConnell and his law firm, Motley Rice, for a no-bid contingent fee contract to sue companies that manufactured and, possibly, sold, lead paint to people in Rhode Island.

McConnell and his firm were tapped by Sheldon Whitehouse, who was, at the time, the state’s attorney general and is now a U.S. Senator. McConnell was reportedly a contributor to Whitehouse’s attorney general campaign at the time.

The cases against paint manufacturers were founded on the idea that the sale of lead paint was a public nuisance. If the cases were won, “a substantial amount of money would go to the law firm and McConnell,” according to the letter written to Holder by Stanton D. Anderson, chair of the Public Nuisance Fairness Coalition.

In the case of the recent nomination of McConnell for a federal judgeship, U.S. Senators Jack Reed and Sheldon Whitehouse, who tapped him for the job, say they went through an arduous process and considered a vast number of attorneys for the position.

“We worked hard on this process for months and had many talented and skilled Rhode Islanders express an interest in serving their country on the federal bench. Indeed, we were extraordinarily impressed with the talent, character, and commitment to public service of these distinguished attorneys,” said Reed and Whitehouse in a joint press release after the nomination.

But their nomination of McConnell is being shrouded by allegations that the pick may have something to do with the attorney’s contributions to the senators’ campaigns.

According to a recent report by the Center for Responsive Politics, McConnell contributed $8,800 to Sen. Reed’s campaign and $8,400 to Sen. Whitehouse’s. Additionally, McConnell reportedly contributed another $3,000 to Whitehouse’s political action committee in the recent past.

The PNFC’s letter to Holder also points out that Motley Rice, a South Carolina-based law firm, donated some $500,000 to the Democratic Party. The letter also highlighted that an April editorial in The Wall Street Journal noted that the timing of political contributions raised so many eyebrows that “Whitehouse’s successor Attorney General Patrick Lynch, substantially revised the agreement,” between the Rhode Island and McConnell and his law firm.

The Public Nuisance Fairness Coalition’s letter to Attorney General Holder pointed out that the “allegation of ‘pay to play’ surrounding Mr. McConnell and the non-bid contingent fee contract awarded to Mr. McConnell are significant and need to be thoroughly reviewed."

Several federal statutes appear applicable, including the Hobbs Act. The coalition also noted the urgency of the need to investigate thanks to the April 13th recommendation he received for a federal judgeship by Reed and Whitehouse.

The U.S. Department of Justice has yet to respond to the letter, but it has caught the attention of others. The June issue of Mealey's Litigation Report summarized the contents of the letter and sought comment from other legal authorities.

"In McConnell we have the highest profile advocate for the expansion of tort theory," Washington, D.C. attorney Phil Goldberg commented to Mealey's. "Would a Judge McConnell bring that agenda to the bench?"

Smoking Bans Equal Bad News for Casinos

2009-06-30T02:26:49Z

ST. LOUIS, Mo. -- The Illinois smoking ban may have some breathing cleaner air, but it’s leaving casinos in dire straits. According to a June 2009 study released by the Federal Reserve Bank of St. Louis, “revenue and admissions at Illinois casinos declined by more than 20 percent and 12 percent, respectively,” since the smoking ban began in January of 2008. The report also tallied the figure of lost revenue for Illinois casinos to be somewhere in the neighborhood of $400 million.

One outspoken critic of smoking bans says he is not surprised by the findings.

“The findings are what we expected,” said Bill Hannegan, founder of Keep St. Louis Free, an organization with a mission to protect residents’ personal freedoms and property rights from government intervention. He is strongly opposed to a proposed smoking ban in his hometown of St. Louis. “It’s very clear that the smoking bans hurt the casinos. Most people here in St. Louis believe that already and assume the same thing would happen to the Casino Queen in East St. Louis. The town is broke; it’s laying off police officers and cutting back on essential services. The ban would make everything worse, because the town gets half of its tax revenue from the Casino Queen. It’s devastating.”

The Illinois smoking ban banishes smokers to the outdoors when they get the urge to have a drag. In fact, the smoking ban’s rules insist that smokers light up more than 15 feet away from any entrance to establishments like a bar, casino or restaurant. Proponents of the smoking ban say the rule does not stop people from smoking, since they have the option to smoke outside; instead, it just allows everyone inside to breathe clean air.

But Hannegan believes that pushing smokers outside the door pushes them away altogether.

“With the casinos, when you’re outside smoking, you’re not gambling,” he said. “In addition, the pleasure of smoking and the pleasure of gambling are reinforcing experiences. A lot of people don’t smoke unless they are in a bar. Those people are not addicted to smoking, so they don’t need to go outside.

“The thing is, for some people, the experience of smoking enhances the pleasure of conversation and drinking – and that’s the only reason to do it,” he continued. “They are willing to take the health risk of smoking in exchange for that pleasure, and now they don’t have that choice.”

Hannegan believes a compromise can be reached between those who are concerned about the public health risks of secondhand smoke and those who want to light up whenever, and wherever, they please.

“I do believe air filtration is the answer,” said Hannegan. “It’s really not that expensive; for a typical bar it would cost about ten dollars a day – and that’s perfect air filtration that gets rid of everything. There’s an added benefit because air filtration gets rid of 100 percent of the swine flu virus out of the air.”

On June 30th and July 1st, St. Louis residents will be allowed to sound off on their thoughts about a smoking ban at noon at the town’s City Hall.

Legal foundation weighs in on climate bill

2009-06-30T02:19:08Z

WASHINGTON, DC -- On Friday, the U.S. House of Representatives narrowly passed sweeping legislation that could change the face of business in America. However, one group says Congress should look at loosening current EPA restrictions.

Although legislation may be needed to address environmental concerns,said Glenn Lammi, chief counsel to the Washington Legal Foundation's Legal Studies Division, the bigger issue is tough laws already existing.

“Businesses all across America would be better off with legislation, rather than more EPA rules,” Lammi said.”It is hard to say at this point whether the legislation that will eventually get enacted will be damaging, but it is a process in which everyone can participate rather than imposing more rules.”

Lammi said farmers and individuals working in industries that climate rules affect are having a tough time due to lawyers suing to enforce more EPA regulations.

“What is happening now is the Obama administration has called for tougher EPA regulations to get people comfortable to future laws under the new climate bill if it passes,” Lammi said.

After hours of raging debates, the House narrowly passed the American Clean Energy and Security Act of 2009 by a vote of 219-212, with virtually every Republican and many moderate Democrats voting against the measure.

In May, the U.S. Chamber of Commerce sent a letter to President Obama, warning that the legislation’s mandates could be very “expensive” and result in a “catastrophic” cascade of rules and regulations.

A recent study released by the Chamber of Commerce and the National Association of Manufacturers projected a net loss of jobs by 2030, as well as decreases in household purchasing power of more than $2,100.

“Legislation is a good thing if it works for businesses," Lammi said. “Right now, under current EPA regulations, this is not happening. The question now remains: What will come out of new legislation if we even get a bill this year?”

The bill now heads to the Senate, where many lawmakers feel it will not pass. If the measure makes it through the upper chamber, President Obama is expected to sign the bill before the fall recess.

Insurers Dodge Coverage for Public Nuisance Claims

2009-06-26T19:54:37Z

HARTFORD, Ct. -- Once reserved for small disputes, public nuisance claims have become the weapon of choice for plaintiffs’ attorneys eager to circumvent statutes of limitations, causation and product identification requirements, and other well-established limitations on product liability claims. It seems as if no industry is immune -- with tobacco, paint, finance, and oil and gas industries all having to defend against this novel application of traditional public nuisance theory.

The trend began in the 1990s when tobacco companies agreed to settle public nuisance and other claims brought by state attorneys general for approximately $240 billion. States and municipalities seeking funds to address costly societal problems quickly climbed onto the public nuisance bandwagon.

According to a recent Connecticut Law Tribune article on public nuisance claims and commercial general liability (CGL) policies, written by partner Donna L. Wilson and associate Jennifer Best Vickers of Kelley Drye's Washington, D.C. office, more courts are forcing reluctant insurers to cover public nuisance claims.

The article explores how the newest wave of public nuisance lawsuits seeks to impose liability on financial institutions for an upsurge in foreclosures and on oil and gas companies for global warming. Targeted industries include gun manufacturers for gun-related crime and the paint industry for childhood lead poisoning.

“Although virtually all plaintiffs’ efforts have been unsuccessful, the costs of defending these suits -- which often involve factual allegations dating back decades -- can be significant,” Wilson and Vickers write. “Most companies overlook a commonly available asset that could relieve some of the financial burden -- their insurance policies.”

The courts have rejected insurers’ arguments that their policies do not cover public nuisance claims, concluding that such claims do fall into the category of a company’s CGL policy. Courts tend to favor the policyholder, forcing the insurer to prove that a limitation or exclusion precludes coverage.

“More importantly, CGL policies require insurers to defend the policyholder if the allegations in the complaint permit proof of a claim that would fall within the scope of coverage,” they say. “Insurers must defend the policyholder even if the allegations are groundless or fraudulent. This is key in the public nuisance context, where the merits of the claims are often dubious at best, but the defense costs and liabilities are likely significant.”

Courts have already begun ruling in favor of policyholders and forcing insurers to cover public nuisance claims in the gun and lead paint contexts. Despite this, insurers will probably continue to litigate before honoring coverage obligations, relying on several arguments that have not proven particularly successful.

According to Wilson and Vickers, insurers have argued that coverage exists only for claims seeking monetary damages. When plaintiffs request abatement for an alleged public nuisance, an insurer will contend that the policy does not cover abatement, which is considered an "equitable" remedy as opposed to the “legal” remedy of monetary damages. The prevailing judicial opinion, however, is that CGL policies cover all claims that require the policyholder to pay money to rectify damage, regardless of how plaintiffs style the claim or the relief requested.

Insurers also assert that public nuisance claims do not arise from an “occurrence.” The authors cite the example of alleged injuries from global climate change purportedly caused by oil and gas companies emitting carbon dioxide, which insurers would say is not an occurrence because such emissions are as a matter or course and the energy producers are knowingly contributing to global warming. But most courts hold an “occurrence” to include both intentional and unintentional acts, provided any damage was unintentional.

Then there’s the “expected or intended” defense, denying coverage to a policyholder whose intentional acts gave rise to the public nuisance in disregard of a known danger. The courts tend to reject this defense as well, holding that coverage should be unavailable only when the damage itself was intended or expected with a high degree of certainty.

Going After the Wrong Guys

2009-06-26T20:01:35Z

CLEVELAND, Oh. – Last month’s decisive victory for 21 investment banks, in which a federal district judge dismissed the city of Cleveland's 16-month-old lawsuit against the subprime lenders, was met with mixed emotions in the legal community.

The Buckeye Institute supported the dismissal, considering the premise (that a contract between two parties could be a nuisance for the remainder of society) far-fetched from the outset.

“We definitely agree that the decision was correct. We believe in free people, free markets, and free minds. The idea, when two adults make a voluntary contract, that one of those two adults is preying upon the other and casting that other as a victim, is inconsistent with a free society,” said Maurice A. Thompson, director of the Buckeye Institute's 1851 Center for Constitutional Law. “The idea that the mortgage company had any type of knowledge that is so superior to the borrower's is fairly absurd. It was extremely transparent in each of these cases what the interest rate was.”

The City's lawsuit, filed in January 2008, claimed the banks’ subprime lending practices created a public nuisance under Ohio law by scarring neighborhoods and draining the City’s tax base. The complaint further alleged that the banks facilitated the making of loans to subprime borrowers in Cleveland who could not afford the debt and foreclosed when they defaulted, The abandoned houses then went uncared for.

John S. Gray, a partner at Gardere Wynne Sewell who specializes in environmental law and writes a blog at nuisancelaw.com/blog, sympathizes with the City of Cleveland but believes they blamed the wrong people.

“You have neighborhoods being destroyed by this,” Gray said, “but you need to make sure that you’re getting the party that is actually creating the nuisance. The question to me should be, ‘Who should be held responsible?’ The City of Cleveland says you go all the way back up to the people who were packaging the mortgages into securities and selling them.”

Federal District Judge Sara Lioi obviously disagreed. In her 36-page opinion, she listed numerous reasons for dismissing the case, above and beyond the fact that the banks being sued were not the parties that foreclosed on the properties in question.

Gray believes the City’s other subprime-related public nuisance suit, now working its way through the judicial system, may be better targeted.

“The other suit goes after the banks that foreclosed and allowed the houses to go to pot,” he said. “It says, if you are going to foreclose on these houses, you can’t let them become hellholes; and, as an owner of the property, you have a duty to keep that house in some reasonable living condition.”

Foreclosed houses were left unprotected and vacant, vulnerable to looting, vandalism, and deterioration. The City of Cleveland claimed this neglect was destroying their neighborhoods, while companies taking advantage of the system profited.

“My take on it is that they chased the wrong people,” Gray said. “I’m not saying they are wholly innocent in this, but [you need to look at] who actually created the public nuisance.”

Portable Toilet Seat Wins 12th Annual Wacky Warning Label Award

2009-06-25T23:10:55Z

DETROIT, Mi. -- The Foundation for Fair Civil Justice has announced the 2009 winner of its Wacky Warning Label Contest and it comes from a slightly icky place: an off-road commode. The label from the portable potty seat was nominated by Georgian Steve Shiflett, who found the instructions, “Not for use on moving vehicles," to be contest-worthy since “The Off-Road Commode” is a product designed for outdoorsmen (once they've reached their destination).

“We get entries from all across America,” said Bob Dorigo-Jones, founder of the contest and president of Michigan Lawsuit Abuse Watch. “People send in warning labels from home or work hoping to win the $500 grand prize, which is a good incentive. The gentleman from Atlanta who sent us this warning label had seen it on a product he saw advertised as an off-road commode. He remembered our contest and sent it in.”

Although the labels entered in the contest get lots of laughs, Dorigo-Jones says the purpose of the contest is far more than simple comic relief.

“This is our 12th annual contest, and we did this to get America talking about the way our culture is changing because we live in the most lawsuit-happy place on Earth,” he said. “Lawsuit reform is not necessarily a favorite topic for people to talk about and can be kind of a hard one for people who aren’t lawyers. So we thought this might be a fun way to get people thinking about how we all end up paying for lawsuit abuse in the long run -- for example, by paying higher prices for products. It’s a good way to get people talking about the different ways we are affected by lawsuit abuse.”

The process of determining a winner from the slew of entries received each year is a fairly democratic one – and even solicits the public’s opinion.

“We take the hundreds of labels we receive and drum it down to five,” said Dorigo-Jones. “Then we go on a radio station in Detroit, Michigan and let the listeners pick the grand prize winner.”

Dorigo-Jones says the contest has received a lot of national media coverage, including ABC’s 20/20, Good Morning America and Reader’s Digest. He claims to have also done interviews on the contest in Japan, Germany, England and Australia. Dorigio-Jones has a theory as to why people from other countries would be interested in the contest.

“People in other countries can’t understand why we would have to have warning labels like this when they don’t see it in their country,” said Dorigo-Jones. “They see the labels and they laugh and wonder what’s up with us lawsuit-happy Americans. I think it’s constructive for us Americans to see just how out of whack our legal system is compared to a lot of other industrialized countries.”

Other winners of this year’s contest include instructions for a wart removal product that reads, “Do not use if you cannot see clearly to read the information in the information booklet”; a cereal bowl label that advises users to “Always use this product with adult supervision”; a label on a 1”x 4” LCD panel that cautions, “Do not eat the LCD panel”; and a message on a bag of livestock castration rings that warns, “For animal use only.”

St. Louis Company Settles with the EPA over Lead Paint

2009-06-24T18:39:31Z

ST. LOUIS, Mo. -- Drury Development Corporation settled with the Environmental Protection Agency (EPA) late last month and has agreed to replace windows and get rid of lead in four of its single-family residential properties that it leases in St. Louis. EPA Region 7 alleged that from January 2007 to September 2007 the company failed to provide tenants with mandatory statements and a lead paint hazard information pamphlet before the tenants signed their leases.

According to the EPA’s May 27th press release on the settlement, “The Lead-Based Paint Disclosure Rule is a public right-to-know regulatory initiative under the Residential Lead-Based Paint Hazard Reduction Act. The intent of the act and its accompanying regulations is to help prevent exposure to lead-based paint by requiring disclosure and notification of actual and potential hazards when selling or leasing housing.”

But one legal expert believes the rule is more of a "gotcha" against landlords than a tool to protect and inform the public.

"The Lead-Based Paint Disclosure Rule is a trap for unwary landlords, and Drury Development Corporation fell right into it. Drury evidently did not give the EPA booklet to its tenants and get them to sign and initial an 11-part form acknowledging they got it,” said Maureen Martin, an attorney and senior fellow at the Heartland Institute. “EPA stringently enforces this law -- considering it a violation even if the landlord hands out the booklet but signs a full name where initials are required, or if the landlord initials in the signature box. The penalties pile up quickly, and the EPA then gives the landlord the choice of paying millions of dollars in fines or doing a ‘Supplemental Environmental Project’ or SEP instead. That's what Drury is doing here.”

One St. Louis resident feels the EPA’s rule has led to the unnecessary replacement of windows, adversely affecting the architecture of the "Gateway City."

“My personal feeling is a lot of times the architecture of St. Louis has been compromised by the unnecessary replacement of windows on the premise that the lead paint is a threat to public health,” said Bill Hannegan, founder of Keep St. Louis Free, an organization with a mission to protect residents’ personal freedoms and property rights from government intervention. “If you go around and look at the old buildings in St. Louis, you can see a glaring loss of architectural beauty.”

Under the settlement, Drury Development Corporation has agreed to pay a $3,479 fee to the U.S. government and spend at least $31,311 on supplemental environmental project work. Although the St. Louis-based company settled, it is not admitting or denying the allegations the EPA brought against the corporation.

Martin believes the rule is used to trip landlords up and incite repairs that property owners could not be coerced to make otherwise.

“It's important to note that the EPA cannot force landlords to make repairs by law,” said Martin. “So what they have set up instead is a huge paperwork and record-keeping system that takes a lawyer to figure out. Then EPA pounces upon landlords who make a minor error and the landlord is vilified in the media as indifferent to lead exposure.”

Nevertheless, Martin believes the EPA booklet could be helpful if it were revised and used differently.

“The disclosure law would be valuable if the booklet had some advice that the average person wouldn't be aware of,” said Martin. “But, no. The booklet advises the obvious: keep the kids clean; keep the house clean, especially window sills and floors; and don't let them chew on the window sills. The booklet even gives the bad advice of feeding children a low-fat diet. Numerous public health officials have objected to this part of the booklet, because low-fat diets in children impair healthy development of their brains.”

Excessive lead exposure has been found to cause permanent brain and nervous system damage in children. It can also lead to problems with hearing, growth, and cognitive activities like reading and writing.

Kansas City’s Smoking Ban Stands

2009-06-23T21:59:48Z

KANSAS CITY, Mo. -- A Kansas City bar’s petition against the city’s smoking ban seems to have gone up in smoke thanks to a decision issued today by the Missouri Court of Appeals.

The upholding of Kansas City’s smoking ban came as a result of an appeal that was filed by JC’s Sports Bar, which was cited, along with the bartender and night manager, for violating the ordinance. Throughout the bar, signs were posted that read “Non-smoking areas are unavailable.” The bar’s manager and her attorney argued that an 1889 Missouri statute, providing that cities can only pass ordinances that do not conflict with state law, made it permissible to allow patrons to smoke in the bar as long as the signs were posted.

Missouri’s indoor smoking law allows licensed bars and billiard parlors to permit smoking as long as signs that read “Non-smoking areas are unavailable” are clearly posted throughout the establishment. As a result, JC Sports Bar’s attorney, Jonathan Sternberg, argued that the smoking ban was invalid because it calls for a restriction on smoking in all public places. Sternberg also argued that state law did not allow the city to regulate smoking in establishments that seat less than 50 people.

But, the city argued, not so fast. Attorneys for Kansas City claimed that state law did not “permit” bars, bowling alleys and similar establishments to allow smoking. Instead, Kansas City officials argued, the law simply let those businesses go unregulated, making it okay for individual cities to impose their own laws around the issue of smoking in those areas.

In the end, the Missouri Appellate Court didn’t buy Sternberg’s argument and the sports bar will have to pay a fine for violating the ordinance. One local activist believes the appellate court made a bad decision in affirming the ordinance.

“Unfortunately, the appellate court ruled that the Kansas City smoking ban was not in conflict with state law,” said Bill Hannegan, founder of Keep St. Louis Free, an organization with a mission to protect residents’ personal freedoms and property rights from government intervention. “So state law does not give bars, bowling alleys and restaurants the right to allow smoking, which is really disappointing. I hope that it gets taken up by the Supreme Court, but I’m not confident that it will.”

Hannegan has been quite vocal in opposing smoking bans and plans to continue his fight for the right to light up in a watering hole of his choice.

“I very much expected for the sports bar to win the Kansas City appeal, which would have knocked down the ban here in St. Louis,” said Hannegan. “So we’ll just have to push ahead with a straightforward political battle.”

Conservation Group Sues EPA in One-of-a-Kind Lawsuit

2009-06-22T21:27:35Z

SEATTLE, Wa. -- Attorneys for the U.S. Environmental Protection Agency (EPA) are facing a new challenge from a lawsuit recently filed by the Center for Biological Diversity. The Arizona-based conservation group’s suit is the first to tackle the issue of ocean acidification, which allegedly occurs when a body of water absorbs too much carbon dioxide. High levels of acidity in ocean water may harm marine animals by diminishing their ability to produce protective shells and skeletons.

“Ocean acidification is not some distant threat that can be shunted off to future decision-makers; it has already arrived, and we have to acknowledge and deal with the problem right now,” Miyoko Sakashita, an attorney with the Center for Biological Diversity’s oceans program, stated in a May 14^th press release announcing the lawsuit. “EPA has all the evidence it needs to begin protecting our waters from ocean acidification. Further delay is simply not justified.”

The lawsuit, brought under the Clean Water Act, claims that the EPA failed to add bodies of water in Washington state to a list of impaired waters. Scientists found that the state’s coastal waters were in violation of water-quality standards for pH and could be causing ocean acidification and damaging marine life. The Center for Biological Diversity argues that Washington’s coastal waters should be added to the list of impaired waters, thereby forcing the state or EPA to set limits for dumping and carbon dioxide emissions in the area.

But some environmental policy experts say none of those measures are necessary because ocean acidification is not a real threat to the environment.

“Global warming alarmists, aware that temperatures have been declining for most of the decade and are currently less than 1/10th of a single degree Celsius warmer than they were 30 years ago, are attempting an end run around the embarrassing lack of rising temperatures by resorting to this red-herring ocean acidification claim,” said James Taylor, a senior fellow of environment policy at the Heartland Institute. “The assertion that higher CO2 levels will make water too acidic and will stunt calcification of invertebrates is misleading because it focuses on only a small subset of marine life and ignores the fact that such invertebrates survived and thrived during periods of much higher atmospheric carbon dioxide than the present.

“The new focus on alleged ocean acidification is merely a stunt designed to salvage carbon dioxide restrictions when objective, real-world data show we are not facing any sort of global warming crisis.”

Officials for the Center for Biological Diversity say ocean acidification is a real threat to marine life that needs to be addressed. Sakashita believes the lawsuit is a necessary means to push the EPA to protect marine life by using legislation that is already on the books.

“We already have the legal tools we need to limit ocean acidification,” she said. “The Clean Water Act is the nation’s strongest law protecting water quality, and it is very good at its job, which is to stop water pollution.”

The conservation group may face some scientific hurdles in its case against the EPA. According to Taylor, there is substantial evidence that high levels of carbon dioxide are actually beneficial to marine life.

“The overwhelming verdict from numerous scientific studies is that higher levels of carbon dioxide benefit marine life much like it benefits life on land,” said Taylor. “Study after study after study shows that higher concentrations of carbon dioxide spur more rapid growth of most all marine species, from plankton and phytoplankton at the bottom of the food chain to larger marine species. The scientific data regarding the marine benefits of higher carbon dioxide levels are impressive and dramatic. Indeed, a study just published in the Proceedings of the National Academy of Sciences documents how sea stars grow significantly faster in water with higher carbon dioxide levels, regardless of ocean temperatures.”

The lawsuit was filed in a Seattle U.S. District Court. Using the guidelines outlined in the Clean Water Act, the Center for Biological Diversity wants the EPA to amend their list of impaired waters to include all ocean waters that are not reaching water-quality standards due to ocean acidification. The Crag Law Center is representing the environmental organization in its case against the EPA. The EPA did not respond to calls for comment on this story.

Judge nixes New York City’s "consumer fraud" recovery of cigarette taxes

2009-06-19T13:49:23Z

New York, NY -- A New York Court of Appeals judge has ruled the city can no longer use the state’s consumer fraud law to recover lost revenue from untaxed cigarettes shipped into the city.

Despite city claims that tens of millions of dollars are lost each year from untaxed online cigarette sales, the seven-member court ruled that state law does not allow the city to sue cigarette vendors to recover sales tax.

The city "has failed to establish standing here because its claimed injury, in the form of lost tax revenue, is entirely derivative of injuries that it alleges were suffered by misled consumers who purchased defendants' cigarettes over the Internet," Judge Carmen Beauchamp Ciparick wrote for the unanimous decision.

In the past, the city has used the Racketeer Influenced and Corrupt Organizations Act (RICO) to target cigarette vendors for failing to report revenues.

However, the Court ruled Tuesday that the city does not qualify as a consumer; therefore, officials cannot sue on the grounds of Consumer Fraud Act violations.

Still, the court’s ruling did suggest the city may sue in the context of illegal cigarette sales to minors, which may open the door for an appeal in the near future.

"Although we're disappointed with parts of today's ruling, the Court of Appeals' decision permits us to proceed under the public nuisance law to combat illegal sales of cigarettes to youth,” said Beth Natrella, senior counsel for the City's appeals division.

“Moreover, the Law Department is continuing to prosecute causes of action under federal statutes and are awaiting a review by the U.S. Supreme Court,” Natrella added.

David Sutton, media affairs representative with tobacco giant Phillip Morris, said that even though the company has not gotten involved in the case, they are standing with New York’s legal efforts in regards to tax collection.

“We are standing with New York in its effort to track down and collect taxes on cigarettes,” he said.

Further action against tobacco vendors is stalled as Law Department members consider a possible new suit under different statutes.

Missouri farmers react to EPA regulations

2009-06-17T22:49:13Z

JEFFERSON CITY, Mo. -- Washington politicians have not demonstrated an understanding of the agriculture industry, according to a Missouri Farm Bureau official.

Garrett Hawkins, director of national legislative programs for the Missouri Farm Burea, said the task of conveying to lawmakers just how energy efficient agriculture already is has been difficult.

“Whether you farm cattle, crops or wheat, it takes energy for agriculture to work,” Hawkins said.”When D.C. lawmakers talk about rules that will raise the prices of production, farmers simply cannot pass that cost along.”

Around 28,000 farmers could be affected by new government regulations, costing the state $522 million annually, according to a report by the Missouri Agriculture Statistics Services.

“Farmers are price takers, not price makers,” Hawkins said.”When you look at both EPA and USDA data on the profiles of American agriculture, these new restrictions will hurt the industry.”

Hawkins said the farm bureau officials have been spending most of their time educating residents and lawmakers on the ramifications of new rules.

He added,”Most people do not realize, if these strict standards pass, American farmers will no longer be competitive in the world marketplace.”

Ron Boyer, a Fair Grove resident and hay farmer, said the greatest impact of new standards could be on dairy farmers.

“Our local dairy farmers could suffer the worst with electricity costs expected to skyrocket this year and on down the road,” Boyer said.

He said many members of the community have already seen higher utility costs and local electric companies have estimated a 50 percent increase throughout 2009 into 2010.

Boyer, an officer with the Green County Farm Bureau, said farmers will not see much revenue from selling carbon credits, due to high packaging costs.

“The American Farm Bureau thought the farming community might benefit from selling large numbers of carbon credits, but the truth is the companies who come in and verify these credits will charge nearly as much as what the credits will be turned in for,” he said.

Boyer said all of the money earned for sequestering carbon credits will go towards packing charges and fees, as well as minimal revenue due to company’s reselling credits on the market.

“We strongly oppose cap and trade, and if things continue as they are, this administration and this party in charge of Washington could be in trouble next year and in 2012,” he added.

Ron Hardecke, a cattle and crop farmer, said lawmakers have not informed the public as to where the money will come from when it is time to impose tighter control over the industry.

“They (lawmakers) are trying to entice farmers into thinking they are getting something for nothing, but like the rest of the big government programs, somebody has to pay for this and we feel farmers stand to lose in the end because Washington is not concerned about individual farmers, just environmental standards,” Hardecke said.

He said the end result of EPA regulations will be harmful not only to farmers but all across the business sector.

“We rely on coal in this industry, so when Washington goes after coal, they go after us as well,” he added.

Earlier this year, “The American Clean Energy and Security Act of 2009” was introduced by Democrat Representatives Henry Waxman (CA) and Ed Markey (MA). It is currently under review in the United States Senate.

Baltimore targets Wells Fargo in racially motivated lawsuit

2009-06-16T19:52:46Z

BALTIMORE -- The City of Baltimore is suing Wells Fargo over the company’s alleged practice of steering blacks towards high-interest loans.

Baltimore officials claim the banking giant intentionally sought out blacks for loans they could not afford, resulting in high numbers of foreclosures that cost the city tens of millions in taxes and city services.

Some Wells Fargo employees and administrative officials have filed affidavits affirming some of the allegations, according to a report in the New York Times.

Officials with the banking company deny all allegations.

“Wells Fargo's lending practices did not cause foreclosures or any of the many broad problems the city of Baltimore claims are impacting its housing market. As the city states in its complaint, only 1 percent of the 33,000 foreclosures (approximately 300) filed are associated with Wells Fargo. This lawsuit absolutely lacks merit,” said Kevin Waetke, Wells Fargo communications manager, in a statement.

Waetke said the company has a system of principles already in place that ensures the issue of race is never a factor in pricing or product marketing.

“We have worked extremely hard to make homeownership possible for more African-American borrowers and for all customer segments, and we have done so fairly and responsibly. We absolutely do not tolerate team members treating our customers or others disrespectfully or unfairly, or who violate our ethics and lending policies,” he said.

Hans A. von Spakovsky, legal scholar for the Heritage Foundation, considers the lawsuit frivolous and unwarranted.

“The subprime lending crisis was directly caused by government agencies such as the Federal Reserve, Freddie Mac, Fannie Mae, and the FDIC directly pressuring and forcing lenders to relax or get rid of their traditional credit requirements for mortgages to increase the number of minorities receiving home loans,” he said.

Spakovsky said lenders such as Wells Fargo knew they would be accused of redlining and racial discrimination if they did not have large numbers of loans in minority neighborhoods.

“They risked law enforcement actions against them if they did not lend in distressed neighborhoods, and they risked higher foreclosures, economic losses, and now false accusations of predatory lending if they did lend in such neighborhoods,” he said.

During the Clinton administration, banks were required to become more lenient in loan distribution, especially towards minorities and lower income individuals.

The case is expected to go to court later this month.

Energy company’s Clean Air violations lead to costly changes

2009-06-12T01:49:17Z

SAN JUAN, N.M. -- Recent federally mandated upgrades to a Public Service Company of New Mexico (PNM) generating station will likely result in increased energy prices for consumers.

The San Juan plant underwent $330 million worth of environmentally-friendly upgrades after the company was sued by the Grand Canyon Trust and the Sierra Club over allegations that it violated emission limits outlined in the Clean Air Act.

The lawsuit resulted in a federal consent degree to significantly decrease emissions at the plant, which was alleged to be producing thousands of tons of pollution in the form of nitrous oxides, sulfur dioxide and particulates.

The upgrade included installation of technology that reduces mercury and particulate emissions and eliminates nitrous oxides. PNM estimates that the changes will result in a reduction of 14,000 tons of emissions. The consent decree covers plant violations made between 2001 and 2004.

But the benefits of the upgrades are not without cost to the public.

In March, PNM and 11 government and consumer groups came to a tentative agreement on a $52 million rate increase. If the proposed rate hike goes into effect on July 1 as proposed, customers can expect a ten-percent increase in their electric bills.

“The rate increase is totally predictable,” said James Taylor, a senior fellow of environment policy at the Heartland Institute. “We know the cost of the environmental upgrade is $330 million. We know that PNM has approximately 400,000 customers and the San Juan plant services approximately 230,000 customers. If you do the math, with 230,000 customers affected, that equates to approximately $1,500 per customer in terms of the cost of these environmental upgrades.”

“Whether or not that’s worth it to the individual customer depends on their preference,” he continued. “But that is a significant amount of money that ultimately has to be borne by the customers. Looking at the environmental improvements, it doesn’t seem like they’re getting their bang for the buck.”

Taylor dismisses the environmental benefit of the reduction in mercury, sulfer dioxide and nitrogen oxide emissions because none of the pollutants measure at high levels in the region.

“What we have essentially is environmental activist groups for whom even the smallest amount of emissions is unacceptable,” he said. “And they are making customers pay astronomical rate increases to deal with very minor amounts of pollution that are already below the level scientists have determined as a threat to human health.”

Tests show that the plant is now emitting 80 percent less mercury, 30 percent less nitrogen oxide and 20 percent less sulfur dioxide. There is reportedly a significant decrease in opacity, or particulates, as well.

"The Trust is pleased about PNM's installation of better pollution controls at the San Juan power plant under the terms of our consent order,” said Roger Clark, director of the Air and Energy program at the Grand Canyon Trust in a joint press release with the Sierra Club. “We still need to confirm that the controls are able to meet the order's emission limits, but this should mean cleaner air for the Four Corners region. This is an important milestone in an ongoing effort by residents to clean up their air, keep mercury out of their rivers and streams, protect their health, and restore the region’s spectacular vistas.”

Earlier this month, PNM also paid the state of New Mexico $6.9 million for air quality violations between 2005 and 2008. The settlement money will go to the state’s general fund.

GOP official, think tank take aim at McConnell investigation

2009-06-10T22:04:40Z

PROVIDENCE -- Jack McConnell’s highly partisan background could bar him from a federal judgeship seat, according to a Rhode Island Republican Party official.

Dave Talan, Providence Republican Party chairman and former mayoral candidate, said McConnell’s big campaign contributions to Democrats and left-leaning organizations could come back to haunt him as his nomination for a federal judgeship is reviewed.

“Because [he] is such a partisan individual, the biggest concern I would have is what happens if I or another member of the local Republican Party has to appear before him in court,” Talan said.

Talan, a former member of the Providence Park Board Commission, said McConnell’s involvement in lead paint cases has spurred criticism from the business community.

“His background in public nuisance lawsuits has been very destructive to American businesses, as well as here in Rhode Island,” Talan said.

Earlier this week, the Public Nuisance Fairness Coalition (PNFC) sent a written request to U.S. Attorney General Eric Holder, demanding an investigation into McConnell’s nomination. Last month, PNFC members began raising questions about McConnell and the substantial campaign contributions he's made over the last several election cycles.

“We have not been as concerned with McConnell’s political background as much as with where the money goes and the court’s decisions,” said Brian Bishop, spokesman for the Ocean State Policy Research Institute.

Bishop said Ocean State researchers have been following up on allegations that part of a $10 million settlement went to a hospital in Massachusetts with ties to McConnell’s law firm, Motley-Rice.

“Our organization is concerned with transparency, so when you have $2 million from a $10 million lawsuit go to a hospital out of state that doesn’t even deal with lead paint poisoning, eyebrows begin to raise,” Bishop said.

The nonprofit think tank, which champions free enterprise and government transparency, has begun their own study into the large settlement’s paper trail.

McConnell’s nomination generated controversy when a Center for Responsible Politics report showed McConnell and his wife contributing around $700,000 to Democrat candidates and liberal organizations. During the 2008 election cycle, McConnell donated over $100,000 to Democrat officials, as well as $15,500 to then-candidates Barack Obama and Joe Biden.

McConnell has been active in the Rhode Island Democrat Party, currently serving as treasurer and previously as campaign chairman for Providence Mayor David Cicilline’s reelection committee.

McConnell was nominated earlier this year by U.S. Senators Sheldon Whitehouse and Jack Reed. Both Senators have received large campaign donations from McConnell.

The final verdict on whether McConnell will be awarded a seat on the federal bench rests with the President.

EPA regulations to cost Missouri farmers $522 million annually

2009-06-09T19:18:12Z

JEFFERSON CITY, Mo. -- American farmers could lose as much as 20 percent of their total net income if proposed federal regulations take effect, according to Missouri Farm bureau officials.

In a letter sent to Congress, Missouri Farm Bureau President Charles Kruse said the organization is “very concerned” about the direction of climate change discussions in Washington. Kruse urged lawmakers to oppose “The American Clean Energy and Security Act of 2009.”

“The American Farm Bureau Federation (AFBF) has repeatedly expressed opposition to a carbon tax and said a cap and trade program should be voluntary. Moreover, any legislation designed to reduce carbon emissions should be based on sound, peer-reviewed science and be formulated in a manner that the costs of such a program do not outweigh the benefits. These core principles were shared with the Energy and Commerce Committee prior to the markup,” Kruse said.

Earlier in the month, farm bureau members urged Missouri’s congressional delegation to extend the public comments period, after learning of new EPA regulations aimed at lowering greenhouse gases within the industry.

Around 28,000 Missouri farmers would be affected by the new government regulations, costing the state’s farmers and ranchers around $522 million annually, according to a report by the Missouri Agricultural Statistics Services.

EPA regulations would apply to six gases: carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride.

“Agricultural operations primarily emit methane from rice and animal agriculture operations, and nitrous oxide from fertilizer applications and animals. The potency of these two gases is greater than carbon dioxide; thus CAA regulation would affect even small to mid-size farms,” Kruse added.

American Farm Bureau economists estimate permit costs for cattle and cash-crop acreage could skyrocket under the new proposed regulations.

"Proponents of climate change legislation have called last week's action ‘historic.’ It is historic in the sense that Congress is considering legislation to mandate emissions reductions that in turn will raise fuel, fertilizer and energy costs -- which have been at historic highs in recent years -- to levels that could make it uneconomical to raise food and fiber,” Kruse said.

The "American Clean Energy and Security Act of 2009" was introduced by Representatives Henry Waxman (D-CA) and Ed Markey (D-MA). The U.S. Chamber of Commerce has labeled it "a catastrophic cascade of rules and regulations."

Obama administration allocates $100M of stimulus for lead paint cleanup

2009-06-08T13:05:23Z

WASHINGTON, D.C. -- Vice President Joe Biden has announced nearly $100 million of stimulus funding will go toward lead paint removal from low income homes.

Biden said the money will be used to track and remove health hazards such as toxic paint as well as to hire workers for the cleanup efforts.

Many economic experts claim the money is not enough and could end up being a drop in the bucket.

Maureen Martin, senior legal advisor for The Heartland Institute, said the figure is too small to make an impact on health care concerns.

“There are currently 240,000 residential homes in the state of Rhode Island that contain some sort of lead paint. Around $11,252 is estimated to clean up each individual unit which averages out to around $2.7 billion," Martin said. "So this figure won’t even scratch the surface."

She said the money allocated from the stimulus package would only clean up around 9,000 homes, which wouldn’t be enough to make a significant impact.

According to Biden’s office, the money will allegedly fund lead paint cleanup over 20 different states and 53 different communities including Washington, D.C.

The U.S. Department of Housing and Urban Development (HUD) will be overseeing the projects.

"It's unacceptable that some 40 percent of homes in this country still contain lead-based paints, the majority of which are in low-income areas where homes have not been renovated in decades," Biden said.

The U.S. Census Bureau reports there are currently around 160 million homes in the United States.

Biden said the project will save the U.S. millions in future health care costs for treating ailments associated with lead paint.

Judge orders Cinergy to shut down three Indiana power plants

2009-06-04T16:52:31Z

INDIANAPOLIS -- A federal judge has ordered three Cinergy-owned Indiana power plants to shut down due to an increase in sulfur dioxide emissions.

U.S. District Judge Larry McKinney ordered the closing of the Wabash River coal fired power plants no later than September 30, after citing Federal Clean Air Act violations.

This is not the first ruling against Cinergy, which earlier this month was found in violation of U.S. environmental regulations at two power plants at its Gallagher Station in New Albany.

Duke Energy Chief Legal Officer Marc Manly said company officials were “very disappointed” with the court’s decision.

Charlotte-based Duke Energy, which is the nation’s third largest electric power holding company, acquired Cinergy in 2006.

“But even though disappointed, I will reiterate our satisfaction that after 10 years of litigation, the company’s position regarding power plant projects was vindicated in the vast majority of instances about which the government originally complained," Manly said. "We will continue to review the Court’s ruling and evaluate our options.”

According to Duke reports, even though the judge’s ruling won’t affect the majority of the plant’s capacity, the closing of the three units will remove 39 percent of the station’s 677 megawatt power generating capacity.

Judge McKinney also ruled the company will not have to install additional emission reductions equipment on the other two Indiana units.

“The units at Wabash River impacted by this decision are more than 50 years old," said James L. Turner, president and chief operating officer of Duke Energy’s Franchised Electric & Gas segment. “This order should not have an impact on Duke Energy’s operation in 2009 because of changes we already made to our operating plans following the jury’s verdict last summer.”

An Indianapolis jury sided with Duke earlier this month on four of six counts of environmental regulations. That ruling prompted Duke officials to close three of the Indiana plants by 2012 in an effort to reduce emissions.

The litigation began in 1999 after a series of Environmental Protection Agency (EPA) enforcement actions were filed against multiple energy companies.

Oklahoma allowed to proceed with Tyson Foods lawsuit

2009-06-03T15:19:14Z

TAHLEQUAH, Okla. -- The state of Oklahoma and the Cherokee Nation have reached an agreement allowing the lawsuit against Tyson Foods to go forth.

In 2005, the state filed suit against Tyson Foods on grounds it polluted lands, water and property along the Illinois River. Tyson filed a motion in 2008 arguing the area was actually owned by the Cherokee Nation and not the state.

According to the agreement, the state now has the right to prosecute any and all claims made against the poultry companies by the Nation, as long as the claim deals with the polluted watershed.

Cherokee Nation Attorney General Diane Hammons said she was pleased with the agreement and the state has a vested interest in the Nation’s grievances.

"Both the State and the Cherokee Nation are committed to protection of the Illinois River Watershed and the longevity of those resources for our citizens. This agreement represents the Nation’s authorization to the State to proceed in the litigation without the Nation entering as a party,” she said.

The agreement reached does not spell out land ownership between the two parties, rather signifies that both governments are working together against the food maker.

Earlier this month, the U.S. Tenth Circuit Court of Appeals in Denver denied a motion by Oklahoma’s Attorney General for a preliminary injunction to prohibit the use of poultry liter as fertilizer.

Tyson Foods has since argued the state lacks the sufficient evidence needed to prove bacteria and other pollutants were a direct result of poultry litter used near the watershed.

In an issued statement Tyson Foods argued that, “Poultry litter belongs to independent poultry growers, not to the poultry companies. The growers decide whether to use it on their own land or sell it to others.”

There is early indication the case may be prolonged in court due to numerous filings by both parties involved.

Oklahoma Republican Party Chairman Gary Jones said the deal is more about Attorney General Drew Edmondson than it is looking out for residents.

“If you look at the money Mr. Edmondson stands to make, it seems more about political payback. All one has to do is take a look at his campaign contributors,” Jones said.

The agreement comes on the heels of an historic lawsuit reform bill aimed at reducing frivolous lawsuits, which overwhelmingly passed through the Oklahoma statehouse.

“How much of this lawsuit against Tyson Foods is driven by doing what is right and ensuring big political favors are paid in full,” Jones added.

On May 20, defendants filed a notice in response to the Cherokee Nation and Oklahoma agreement, citing the deal between the two entities does not explain the legal implications of the provisions.

Tyson Foods claims the court, “need not decide whether the nation or the state is the proper plaintiff because the parties have agreed among themselves that the state has standing.”

The company also argued the state of Oklahoma has a standing process it must follow whenever it enters into an agreement with an Indian tribe. The law maintains the Governor or a state representative must negotiate and enter into a cooperative agreement on behalf of the state when dealing with a federally recognized tribe.

The case is set to begin in early September.

PNFC calls for investigation into McConnell nomination

2009-05-27T20:33:42Z

WASHINGTON, D.C. -- The Public Nuisance Fairness Coalition (PNFC) has called for the Justice Department to investigate into the nomination of trial lawyer Jack McConnell to fill a vacant seat on the federal bench.

U.S. Senators Jack Reed and Sheldon Whitehouse recommended McConnell for a federal judgeship last month.

The nomination drew criticism from many state level lawmakers and GOP officials after reports showed McConnell had donated over $100,000 to Democrat officials and organizations during the 2008 election cycle.

Now a group of U.S. employers and associations have called for action regarding the nomination.

Stan Anderson, chairman of the Public Nuisance Fairness Coalition, said he believes McConnell’s appointment is a political payback for donating to Democrat candidates.

"McConnell was recommended for judge the old-fashioned way: he paid for it,” Anderson said. "This pay-to-play scheme deserves a full public vetting; our federal bench shouldn't be bought and sold,” he added.

McConnell, a Providence native and attorney, is an active member of the Rhode Island Democrat Party, currently serving as its Treasurer. He previously chaired Providence Mayor David Cicilline’s re-election committee.

In 2002, McConnell served as campaign director for Myrth York’s unsuccessful run for Governor.

A recent Center for Responsible Politics report showed that during the 2008 Presidential election cycle, part of McConnell and his wife’s $15,500 donation went to then candidate Barack Obama and Joe Biden.

According to the report, the McConnell’s have donated approximately $700,000 to Democrat candidates and left-leaning organizations since 1980s.

McConnell has recently been targeted by business groups, such as the PNFC, for his active role in lead paint cases. In 1999, he brought a class action lawsuit against several paint manufacturers.

After a Providence Superior Court found the companies at fault, the case was ultimately dismissed by the Rhode Island Supreme Court in July 2006. Both companies are now seeking reimbursement by the state for the costs associated with fighting the suit.

"After the Rhode Island Supreme Court denied Mr. McConnell his big payday, Senator Whitehouse seems intent to give his political contributor the consolation prize of a federal judgeship for life," said Anderson.

Earlier this year, McConnell and his law firm, Motley Rice, were retained in the case of County of Santa Clara vs Atlantic Richfield, in which 10 California counties and cities brought suit against a group of lead paint manufacturers.

The case is currently pending before the California Supreme Court.

The final verdict on whether McConnell is seated on the federal bench rests with the President.

Public nuisance litigator appointed to federal Torts Branch

2009-05-28T15:25:20Z

SAN FRANCISCO -- Bay area attorney and public nuisance litigator Ann Ravel has been appointed by the Obama administration to head the Justice Department’s Torts Branch.

Ravel, who has been Santa Clara County’s chief legal advisor since 1998, will be in charge of the Office of Consumer Litigation, a position that will manage all complaints filed against the government by private citizens seeking damages and reimbursement for harm to federal property.

She will also handle all civil and criminal cases pertaining to federal regulations over consumer products.

In 2000, Ravel filed the first county and West Coast government entity lawsuit against lead paint companies claiming the manufacturers knowingly produced paint products containing hazardous toxic chemicals particularly affecting children.

The suit claimed paint lead manufactures misinformed the government and mislead the public on the dangers of lead paint poisoning.

Ravel sought damages to recover medical costs, costs of inspections and educational costs. Santa Clara county Judge Jack Komar dismissed the lawsuit in 2003.

Several other surrounding counties and municipalities joined Santa Clara in filing the suit. The case is currently pending before California’s Sixth District Court of Appeals.

Ravel, a graduate of Hastings Law School, has been a county employee for over 30 years, also serving as counsel to Santa Clara County since 1998.

In recent years, she has been given credit for starting an elder abuse department, as well as an office for juveniles in trouble with the law.

In July, Ravel will assume the role of deputy assistant attorney.

Ravel is not the first controversial federal appointment. In April, Rhode Island U.S. Senators Jack Reed and Sheldon Whitehouse nominated state trial attorney Jack McConnell to the federal bench.

McConnell has been involved in numerous paint company litigations including the pending California case County of Santa Clara vs. Atlantic Richfield.

The Public Nuisance Fairness Coalition is now calling for a Justice Department investigation into the appointment.

Pennsylvania officials reject TVA’s spilled coal ash

2009-05-26T20:04:36Z

KNOXVILLE, Tenn. -- Officials with Pennsylvania’s Department of Environmental Protection (DEP) have rejected the use of coal ash that was spilled from a TVA plant, saying the spill was too contaminated.

Last year, five million cubic yards of coal ash spilled over a Kingston Fossil Plant containment dike contaminating around a billion gallons of water in the Emory Tennessee River, as well as covering 400 acres of land with fly ash.

In April, TVA applied to the state’s environmental department to use the coal ash to recover old coal mines, however, DEP officials denied the request, citing the authority’s definition of “coal ash” did not meet the state’s requirements.

“Coal ash that has been previously disposed of and stored as a waste material, and spilled onto adjacent land and into a river is classified as residual waste and does not meet the certification requirements for beneficial use under Pennsylvania law,” said Environmental Protection Secretary John Hanger

In March, the authority partnered with the federal Environmental Protection Agency (EPA) to manage the cleanup and disposal of last year’s Kingston spill, all the while promising to meet all federal and state environmental requirements.

Last December, the EPA ordered the company to clean up the spill through the process of “dredging”, or underwater excavating.

TVA officials called the cleanup an “important milestone” and promised to recover the Kingston site without damaging the environment.

TVA’s Environmental Executive Anda Ray said the company has been committed to recovering the ash and restoring the area in a manner that will protect public health interests, as well as the environment.

“We will remove the ash from the river channel as safely and efficiently as possible and restore navigation. “ Ray said.

Officials said removal of the ash from the contaminated areas would reduce flooding, improve water quality and lessen impacts to the marine wildlife.

Pennsylvania current has around 180,000 acres of abandoned coal mines. The state operates under a strict process of using coal ash and other materials for mining reclamation.

According to the DEP, over 11 million tons of coal ash was used in reclamation of old coal mining sites in 2008. The ash came from burning of waste coal from contaminated waste piles.

The state currently has more than two billion tons of waste coal sitting in sites.

DEP officials have not yet stated where they intend on requiring the necessary materials needed to recover the mines or when the process will begin.

Oklahoma House passes lawsuit reform bill with strong support

2009-05-22T17:18:37Z

OKLAHOMA CITY -- Lawsuit reform in Okalahoma is closer to becoming a reality thanks to the House’s vast support of a piece of legislation that would change the way claims are brought to the state’s courts.

The Comprehensive Lawsuit Reform Act of 2009, House Bill 1603, passed last week in the Oklahoma House with an 86-to-13 vote.

The bill calls for a number of changes to the legal system in Oklahoma in hopes of reducing the number of frivolous lawsuits filed in the state. If passed, the bill would cap non-economic damages for claims like pain and suffering at $400,000, except in extenuating circumstances.

In cases when the cap is removed, the remainder of the damages will be paid by a reinsurance policy bought by the state. The policy will cover up to $20 million a year in cases that call for damages larger than the cap, i.e. gross negligence or severe disfigurement.

Experts say the reinsurance policy should cost the state less than $1 million each year.

The bill was a collaborative effort between physicians, lawmakers, attorneys and business and mine owners.

“Unfortunately, we should have had these reforms years ago. But thankfully all of the parties involved agreed that the status quo could no longer continue,” said Rep. Dan Sullivan in a May14th press release. Sullivan is the House author of HB 1603 and the bill’s chief negotiator from the House.

“This bill will ensure all Oklahomans with legitimate claims have a level playing field when they walk into a courtroom. This is real reform that will have real results.”

The legislation would also require physicians to get at least $1 million of medical liability insurance in order to be covered under the state’s reinsurance policy. In return, insurers are to sell the insurance at lower rates due to the physician’s backing by the state’s reinsurance policy.

“This change places the burden on doctors to carry higher levels of insurance to further protect injured Oklahomans, but also adds some certainty to the system in rare catastrophic cases,” said Sullivan, R-Tulsa.

Lawmakers hope the bill’s passage will lower health care costs and help retain good physicians in the state. Officials say physicians flee the state because of the high cost and risks associated with the frequency and type of malpractice lawsuits that hit Okalahoma courts.

According to the Oklahoma House, 70 percent of medical liability claims were dismissed between 2004 and 2007, yet the state’s largest physician insurance company spent $50 million defending cases during that time.

These costs drive malpractice insurance premiums quite high.

“Doctor and nurse shortages are a serious problem in Oklahoma. We have some of the best physician training in the country, but other states are stealing our doctors away,” said Rep. Doug Cox, an emergency room doctor in Grove. “We are training—often with taxpayer dollars—doctors who are being recruited to lawsuit reform-friendly states, it is a fact. This bill will give those physicians a chance to practice in this state.”

The bill also calls for an expert to certify the merits of a professional negligence case. That requirement will be waived if the plaintiff cannot afford the costs of finding said expert.

HB 1603 is now headed to the Senate for vote. Lawmakers in the House hope the Senate passes the bill and Governor Brad Henry continues his support of the bill by signing it.

“The collaboration that occurred between all interested parties to reach this landmark agreement is exactly the type of work the people of Oklahoma expect from their leaders,” said House Speaker Chris Benge, R-Tulsa. “This deal is a compromise, which means everyone didn’t get everything they wanted, but it represents true reform for our state.”

Jury splits rulings in Duke Energy Clean Air Act violations

2009-05-22T17:06:22Z

INDIANAPOLIS -- A federal jury in Indianapolis has found that Duke Energy Corp. violated the Clean Air Act when it increased pollution at plants in Ohio and Indiana.

The jury ruled against the Charlotte, N.C.-based company, citing Duke did not obtain necessary permits it needed for changes it made to the plants, which resulted in elevated sulfur dioxide emissions in the Louisville, Ky., area.

The jury did rule, however, in favor of Duke on four of six projects: one at a plant near Princeton, Ind., one at the New Albany facility and two in Richmond, Ohio. These plants were all found in compliance with the government’s policies.

The litigation began in 1999 after a series of Environmental Protection Agency (EPA) enforcement actions were filed against multiple energy companies. One of the EPA’s complaints was aimed at Cinergy, a company that merged with Duke Energy in 2006. The claim contended the company began six power plant upgrades in Indiana and Ohio without installing proper pollution controls.

Marc Manly, Duke Energy's chief legal officer, said he was pleased with the final ruling on the majority of complaints.

"We are pleased that after nearly 10 years of litigation, the company's position has been vindicated on the vast majority of the projects about which the government originally complained," Manly said.

Manly added although the verdict was dedicated to a particular issue, between 1998 and 2010, the company will have invested around $5 billion across five states to reduce emissions of sulfur dioxide, nitrogen oxide and other coal produced pollutants.

"Our employees performed work that was commonly undertaken in our industry to maintain the capability of our facilities to deliver reliable and affordable power to our customers,” he said.

"The net result of these investments will be a reduction of sulfur dioxide and nitrogen oxide emissions by approximately 70 percent across Duke Energy's five-state service area by 2010," Manly added.

Georgia energy companies abandon new plant, cite potential energy policies

2009-05-21T17:20:38Z

SANDERSVILLE, Ga. -- Four electric companies have pulled out of a deal that would create a $2 billion coal-fired plant in Washington County, Ga.

Jackson Electric Membership Corp., Diverse Power Inc., Excelsior EMC and Greystone Power Corp., announced this week they are abandoning further operations on an 850-megawatt coal-fired plant that is scheduled to be built near Sandersville.

Greg Proctor, spokesman for Excelsior EMC, said the companies got involved in the project largely to replace energy being received from long-term contracts and to meet future needs based on load growth projections.

“At this time we are experiencing an economic slowdown and a similar reduction in member growth,” Proctor said.” When coupled with a new administration whose energy policies are unknown as well as the current capital constraints in the financial markets, we feel there is too much uncertainty to justify moving forward at the present time.”

The coal fired plant is estimated to generate electricity for around 700,000 Georgia residents.

“All four of us chose to step back from this consortium because of the uncertain and regulatory environment,” said Bonnie Jones, spokeswoman for Jackson Electric Membership, Corp.

Jones added the companies felt there is uncertainty across the board with the national energy policy.

“Depending on what is done in Congress, we could end up with additional costs,” Jones said. “It all depends on how they approach this situation.”

Over the last several weeks, Congress has been looking at a controversial energy climate bill that would cap greenhouse emissions.

The American Clean Energy and Security Act of 2009 has been labeled “catastrophic” by the U.S. Chamber of Commerce. Opponents of the legislation claim electricity bills will rise and jobs will be lost.

Georgians for Smart Energy, an Atlanta based anti-coal environmental group, has been campaigning against the creation of the plant along with other plants in nearby states.

The group claims the new project would produce higher levels of pollution than state requirements.

Judge dismisses Cleveland foreclosures lawsuit

2009-05-20T15:38:27Z

CLEVELAND -- Over 15 banking and holding companies scored a victory this week against the city of Cleveland as a federal district judge dismissed a lawsuit against the subprime lenders.

The lawsuit, which was filed in January 2008, claimed the banks had loaned money to unqualified borrowers and as a consequence, homes purchased went into foreclosure resulting in hundreds of abandoned and boarded up properties all over the city.

Cleveland claimed the eyesores were a direct result of the lending company’s bad practices and that the city was already a victim of poverty stricken neighborhoods, along with, a bad economy.

According to Federal District Judge Sara Lioi’s opinion, Ohio state law preempts the city’s public nuisance claim and the city is barred by the economic loss rule.

She went on to add that the City of Cleveland didn't produce enough evidence to support the theory that the lenders were directly responsible for the decline in the city’s

Public nuisance can either be claimed as private or public and is defined under Ohio law as, “a distinct civil wrong, consisting of anything wrongfully done or permitted which interferes with or annoys another in the enjoyment of his legal rights.”

The city sought to recover hundreds of millions of dollars in damages related to the costs of "monitoring, maintaining, and demolishing foreclosed properties" and "the diminution in the city's property tax revenues caused by the depreciating effect foreclosures have had on the affected homes and surrounding properties," according to the opinion.

The banks argue that they didn't originate the loans for the homes and were paid as trustees responsible for protecting investors who bought shares of the securitized debts.

Officials from Deutsche Bank issued a statement contending that the upkeep and maintenance of the foreclosed homes are not the responsibility of the trustees, but of the servicing companies that collect mortgage payments.

The city has filed an appeal with the 6th U.S. Circuit Court of Appeals in Cincinnati.

Ninth Circuit Court dismisses gun manufacturer lawsuit

2009-05-19T16:07:05Z

SAN FRANCISCO -- The United States Court of Appeals for the 9th Circuit has dismissed a lawsuit aimed at gun manufacturer Glock, Inc., and retailer RSR Wholesale Guns Seattle.

The lawsuit, originally filed in August 2000, sought damages for the families of three children, one teenager and one adult shot to death at a Jewish Community Center summer camp located in Granada Hills in August 1999.

National Shooting Sports Foundation (NSSF) senior vice president and general counsel Lawrence G. Keane applauded the decision, calling it “exactly what the courts had in mind when they passed PLCAA”.

“The Ileto case was the textbook example of why Congress needed to pass the Protection of Lawful Commerce in Arms Act (PLCAA)," Keane said. "If Glock and RSR were held legally responsible for this criminal shooting, then the police department to whom the firearm was originally sold would be even more responsible. Such twisted logic defies common sense and explains why in 2005 Congress passed the legislation by such an overwhelming bi-partisan margin,” he said.

In its decision, the court stated “Congress has protected federally licensed manufacturers and sellers of firearms from most civil liability for injuries independently and intentionally inflicted by criminals who use their non-defective products...the claims brought here, by the victims of a criminal who shot them, against a federally licensed manufacturer and a federally licensed seller of firearms must be dismissed. "

The court ruled that the case be dismissed under the PLCAA, which prevents firearms manufacturers and retailers from being held liable for the criminal actions of others who use their products.

The shooter in the case, Bufford Furrow, was in illegal possession of at least seven firearms when he shot and killed the victims, including postal worker Joseph Ileto.

A year later, Ileto’s wife filed the suit claiming the gun manufacturer intentionally marketed and sold a high volume of firearms that were in turn sold to black market dealers.

U.S. Chamber of Commerce: Cap and trade bill will lead to more public nuisance lawsuits

2009-05-19T15:47:37Z

WASHINGTON, D.C. -- New climate legislation making its way through the House of Representatives would result in lost jobs, higher energy prices and an increasing number of public nuisance lawsuits, this according to a letter to lawmakers from the U.S. Chamber of Commerce.

In the letter, the nation’s largest business member group warned the bill would be “very expensive and regulatory to businesses" and would result in a “catastrophic cascade of rules and regulations”, if the bill were to reach President Obama’s desk.

“As Congress once again prepares to bang the gavel on a climate change policy debate, congressional leadership has a serious choice to make: continue to push the same costly, rigid ideas of the past two decades, or take steps to begin a workable process to reduce emissions of greenhouse gases," said R. Bruce Josten, Chamber of Commerce executive VP of governmental affairs.

Representatives Henry Waxman (D-California) and Edward Markey (D-Massachusetts) introduced “American Clean Energy and Security Act of 2009” earlier this year.

The bill would cap greenhouse gases at a 17 percent rate below 2005 levels by 2020 and 83 percent by the year 2050.

Opponents of the bill claim electricity costs will sky rocket after businesses would pass the cost onto consumers, however, supporters of the bill have said consumers would be protected due to free emissions allowances towards utility companies.

Tony Kreindler, a spokesman for the Environmental Defense Fund, said the bill is long overdue and will alleviate the nation’s energy problem without driving up consumer costs.

"The committee appears set to deliver a plan that is environmentally effective and smart on consumer costs, which is precisely what's needed,” Kreindler said.

Chamber of Commerce officials argue jobs could be in jeopardy if the bill were to pass due to more restrictions by the Environmental Protection Agency (EPA).

“The bill would impose carbon tariffs on imports and allow states to continue regional cap-and-trade programs on top of a federal one, he claimed. "The bill would also expose 27 million small businesses to U.S. EPA-enforced New Source Performance Standards for machinery and equipment, “Josten said.

A recent study released by the Chamber of Commerce and the National Association of Manufactures projected a net loss of jobs by 2030, as well as household purchasing downfalls by more than $2,100.

Rep. Waxman and other lawmakers are scheduled to release more details on the bill later this week.

EPA targets troubled Indiana recycling company

2009-05-18T19:18:23Z

ELKHART, Ind. -- An Elkhart, Ind.-based recycling company is embroiled in yet another battle for its business practices, this time with the Environmental Protection Agency (EPA).

VIM Recycling, Inc., was cited by the EPA for Clean Air Act violations, specifically for allegedly violating the state’s regulations forbidding open burning at the site, according to a May EPA press release.

Neighbors of the plant have been complaining about the smell and fumes emanating from the facility as well as health problems, they say, are a result of VIM Recycling’s pollution. In April, a local environmental agency filed an intent to sue VIM Recycling on behalf of the facility’s neighbors.

“VIM Recycling has open dumped hundred-foot piles of RV waste, some of it from Hurricane Katrina, as well as regular treated wood waste at the site,” said Kim Ferraro, executive director of the Legal Environmental Aid Foundation of Indiana and attorney representing the neighbors of the recycling company. “This stuff has been out there ground water leeching. There is also internal combustion that releases all types of particulates into the air and it stinks. It is a huge nuisance and a health issue for the folks that live next to it.”

“When a company has been acting rogue for nine years action must be taken,” she continued. “They moved into the community in 2000 and started its operations without proper permits from day one. To this date, they still don’t have a solid waste processing permit from the Indiana Department of Environmental Management. They are doing whatever they want despite what agencies say and hundreds of people who live near the plant are suffering and experiencing health problems because of it. The closest resident to the plant lives 150 feet from the site and there is an elementary school half a mile away. When I go to the area, I can’t stay for more than an hour because of the smell; it’s a really tragic situation.”

Local environmental organizations are pleased with the EPA’s decision to look into the allegations that VIM Recycling is a community health hazard due to pollution.

“We welcome any action taken by U.S. EPA to resolve the chronic environmental and safety problems at VIM recycling,” said Tim Maloney, senior policy director for the Hoosier Environmental Council. “While these problems have persisted for many years, the Indiana Department of Environmental Management has not been effective in solving them. Thus it has been necessary for citizens to take action on their own, and now US EPA has stepped in.”

This is not the first time VIM Recycling has gotten into trouble for Clean Air Act Violations. The company moved from Goshen, Indiana to Elkhart in 2000 after being fined $85,000 by the Indiana Department of Environmental Management for six years of violations including open burning; failing to control fugitive dust emissions’ constructing and operating without a permit; failing to grind/process material in an enclosed facility; and creating a nuisance for neighboring businesses.

Ferraro said the EPA’s recent investigation into VIM’s compliance with environmental laws comes as a result of her filing of an intent to sue. During its investigation, the EPA found massive piles of waste that have smoldering for numerous years, which constitutes as open burning.

Although the investigation lead to EPA citations, Ferraro feels more action should be taken.

“I hoped the EPA would have taken a stronger stance against VIM,” said Ferraro. “I am encouraged that some action has been taken because my clients have received no help from state federal agencies. We are happy we got the EPA’s attention and are hoping they will not stop looking into this. Ultimately, what we want is to have the site cleaned up whether the company does it on its own or it’s done by a federal order.”

According to Ferraro, local politicians are very protective of this facility because they know the owner, who has been providing animal bedding and garden mulch for a cheap price to the faming community.

“There is a lot of spin going on and they are trying to make the owner seem like he’s this green attorney that is helping the community,” said Ferraro. “But essentially this is a company that acts as though they are above the law because the regulatory agencies that should be imposing penalties and taking necessary action have not. As a result, VIM has continued to act this way without impunity. Of course he can provide cheaper farming supplies because he has not been complying with environmental laws so his costs are less and can undercut the competition.”

“Even now, VIM Recycling doesn’t seem to be taking this very seriously,” she when on to say. “I have been privy to some letters that VIM sent to local officials asking that they ‘get us off their back’. That’s why we have taken such drastic action and went to the courts. Residents of the area have been going to meetings and voicing their concerns in attempts to get this resolved, but it hasn’t worked. I don’t think this guy really cares too much about what he is doing to his neighbors and the community.”

Ferraro plans to file a citizen’s lawsuit against VIM Recycling in June and hopes to seek a preliminary injunction asking the courts to shut down the plant until the suit is resolved.

VIM Recycling did not respond to calls for comment on this story.

North Carolina environmental board orders more inspections

2009-05-18T17:37:07Z

CHARLOTTE -- The North Carolina Environmental Management Commission on Thursday ordered increased reviews for facilities that burn fossil fuels.

The motion calls for investigations every five years impacting more than a hundred power plants and coal fired industries.

Duke Energy spokesman Jason Walls said the order will not directly affect the company’s already existing review policies.

Thirty-seven Duke facilities have been identified as potentially releasing more toxic emissions than the state will allow, according to a report in the Charlotte Observer.

“Thursday’s motion was a vote to remove exemptions from previously exempted businesses dated back to the 90’s such as ours,” Walls said.

Walls said Duke Energy already undergoes a series of air quality reviews before it can be granted licensing, however, Thursday’s vote mandates all plants emitting toxic chemicals be investigated by the state review board.

“We were a company that was already exempt before, so this is really a matter of business that was exempt prior to yesterday,” Walls added.

The board’s vote Thursday appears to be more symbolic since fossil fuel burning plants are already ordered to participate with review boards in order to stay in business.

This is the second time this year that Duke Energy has been a target of more scrutiny.

A Durham-based environmental group filed suit against the energy company seeking a shutdown of its Cliffside facility. The North Carolina Utilities Commission (NCUC) had previously granted the building permit for the new plant.

Three suits filed in 2005, 2006, and 2007 were rejected by the NCUC.

“We go through a very strict process and meet our air quality standards,” Walls said.

West Virginia lawmakers look to Georgia bill for legislative model

2009-05-13T21:15:54Z

CHARLESTON, W.V. -- Last week, the Georgia Assembly passed a reform bill to curb public nuisance claims in the state. Now, members of the West Virginia Legislature will be looking closely at similar legislation to stop abuses in the Mountain State.

Dr. Doug McKinney, West Virginia Republican party chairman, said legislation needs to become a priority before public nuisance abuses take a toll. He cites a bill passed in 2003 that helped curb medical malpractice lawsuits.

“Right after [then] Governor Wise signed the bill, malpractice suits dropped 40 percent,” McKinney said.

McKinney, a Bridgeport, W.V., urologist, said the fight for tort reform in the medical industry was a bigger challenge that had gone unnoticed.

He added that malpractice claims have dropped significantly since the bill was signed, which is a sign more doctors will practice in West Virginia.

Aside from malpractice reform, McKinney said now is the time to continue across-the-board tort reform.

“We need reform in all areas besides the medical industry. We have to bring businesses back to West Virginia,” McKinney said.

The West Virginia legislature has looked at legislation in the past aimed at boosting the state’s dismal economy. Many lawmakers cite tax cuts as one cure; however, one legislator has said major tort reform will help alleviate the state’s poor business image.

Tim Armstead, an attorney and the House Minority Leader in the West Virginia House, said he hopes to bring up legislation aimed at curbing public nuisance during the legislative caucus meeting.

Doug McKinney, WV GOP Chairman

PNW: A growing problem across the country has been the abuse of public nuisance claims towards manufactures such as oil companies, firearms makers, food industries, etc. Will West Virginia be taking a look at what Georgia did to curb the problem?

McKinney: West Virginia has always had a problem with lawsuits. We made great steps in curbing medical malpractice suits. There was a huge jump in the 1990s in which hundreds of doctors were being sued weekly. After the 2003 bill passed, things changed dramatically but we still have a way to go. Public nuisance is a danger to businesses here in West Virginia. People won’t bring their industry here if the threat is in place.

PNW: Do you think legislation aimed at curbing public nuisance would pass in West Virginia?

McKinney: On the federal level it will be harder but on the state level I think it will be easier because state’s that have large industries are the ones being affected the most. I think here in West Virginia it would pass but it will take some effort on the part of both parties.

PNW: Tort reform has been a major issue in West Virginia for a long time now. How will this impact the state’s economy?

McKinney: It will have a major impact. West Virginia has been ranked one of the worst states in the country to do business in. We have to keep fighting for tort reform. We have made some progress but plaintiff attorneys keep a tight grip on a lot of politicians in Charleston. West Virginia hasn’t seen a lot of job growth because of wreck less lawsuits aimed at businesses. Congress passed medical malpractice but the Senate wouldn’t pick it up so it was up to individual states to pass the legislation.

Tim Armstead, WV House Minority Leader

PNW: Do think your colleagues will push this through or will this be an issue swept under the rug since it hasn’t been a major problem in West Virginia to date?

Armstead: This is all about jobs and a better economy. We have to do everything we can to ensure our state’s economy gets better. We can’t burden businesses any longer.

PNW: West Virginia is one of the largest coal producing states in the country. With so many coal companies located here, is there a general worry that public nuisance suits against the coal producers are coming?

Armstead: That has always been a fear. Environmental groups target coal everyday so it’s best to stop the threat before it gets here. There is a major shift on the federal level towards more environmental regulations on businesses which has resulted in a lot more regulations here in West Virginia. Coal is very big here, provides a lot of jobs, and is a major player in our economy so we can’t afford to place anymore unnecessary burdens on that industry.

PNW: Will the state’s legislature look at Georgia’s bill that was recently signed into law?

Armstead: We will definitely be looking at their legislation. The cost of frivolous lawsuits on business and industry is unprecedented. It is a real problem to any state’s economy, especially here in West Virginia. We will do everything possible to make sure we aren’t victims of bad public nuisance lawsuits.

Federal court denies Oklahoma AG's request to stop poultry operations

2009-05-15T15:47:16Z

DENVER -- A federal court of appeals in Denver has upheld a district court ruling that denied a motion by the Oklahoma attorney general’s office to stop the use of poultry litter as fertilizer in the Illinois River watershed.

The state of Oklahoma was seeking the preliminary injunction, however the court ruled the state provided no clear evidence in tracking poultry bacteria to the watershed.

“This ruling is additional proof the Attorney General lacks the evidence to support his claims against the Oklahoma and Arkansas poultry industry," Tyson Foods said in a release. "The appeals court agrees that the Attorney General has 'failed to link land-applied poultry litter and bacteria in the IRW (Illinois River Watershed).'"

Tyson Foods is one of 13 companies named in the lawsuit, which was filed by Oklahoma Attorney General Drew Edmondson. The suit alleges the companies are polluting the IRW and are in violation of the federal Comprehensive Environmental Response Compensation and Liability Act and state and federal nuisance laws.

The companies claim cattle and human waste could be the source of contamination in the water supply. This latest ruling agrees with that sentiment.

According to the ruling, “…it is undisputed that humans, various wildlife, and numerous farm animals, including pigs, sheep, and cattle, rely on the IRW lands and waterways and harbor the various bacteria at issue in this case, however, the Attorney General did not account for these alternative sources of bacteria.”

Tyson added, “The people an injunction would have harmed are the hardworking, independent farmers and cattle ranchers who depend upon poultry litter as an economical and beneficial source of fertilizer for land.”

Of the 13 companies named in the suit, one has agreed to an out-of-court settlement.

Willow Brook Foods, Inc, a Springfield, Mo.-based poultry farm, has decided on a large settlement, in addition to halting all future operations in the Illinois watershed.

Willow Brook will pay out $120,000 to avoid future penalty. The company has also stopped all of its poultry production since the lawsuit.

Other companies named in Edmondson's lawsuit include Cobb-Vantress Inc., Cal-Maine Foods Inc., Cargill Inc., Cargill Turkey Production L.L.C., George's Inc., George's Farms Inc., Peterson Farms Inc., Simmons Foods Inc. and Cal-Maine Farms Inc.

Environmental group challenges Duke Energy on NC power plant

2009-05-11T23:29:46Z

DURHAM, N.C. -- A Durham, N.C.-based environmental group is seeking to halt construction on Duke Energy's $2.4 billion coal fired plant in Cliffside.

North Carolina Waste Reduction and Awareness Network (NC Warn) is seeking a reverse decision on a building approval granted by the North Carolina Utilities Commission (NCUC) for the facility, which is set to begin operating in 2012.

Jason Walls, media spokesman for Duke Energy, said the project is on budget and on schedule for the 2012 deadline.

“This facility is currently 35 percent complete, already employing 1,000 workers with total employment reaching around 1,800 when fully complete,” Walls said.

This is not the first time NC Warn has filed suit against Duke Energy. Three claims were rejected in 2005, 2006 and 2007 by the NCUC.

The group cites a lowered demand for power in the area, claiming the 825-megawatt plant is no longer needed and will only raise energy prices for customers.

Walls said recent fluctuations in demand have no impact on Duke Energy's long range plans.

“We respect any group’s opinion; however, Cliffside has a very special purpose. We are providing low electricity costs by funding reliable energy resources keeping our customers satisfied,” Walls said.

NC Warn also raised issues of air quality concerns in a report released last week. The report was prepared by John Blackburn, former chair of Duke University's economics department and long-time advocate of renewable energy.

“We have a very strict air permit granted to us by the North Carolina Department of Air Quality, as well as our integrated resource planning process which is reviewed thoroughly by the state,” Walls said.

Wisconsin high court denies lead paint appeal

2009-05-11T15:36:33Z

MADISON -- A jury verdict that ruled in favor of former lead paint manufacturer NL Industries will not be overturned, thanks to a Wisconsin Supreme Court decision on April 22.

The city of Milwaukee sued the company to recoup $53 million it spent on a massive lead paint cleanup project of homes in the area. Also named in the suit was Mautz Paint Company.

The lawsuit, filed in 2001, claimed that NL Industries and Mautz Paint Company were guilty of public nuisance and conspiracy for selling the lead paint to the city.

After a trial court granted summary judgment to the defendants because, according to the court, the city could not prove the paint companies caused the damage, the state Court of Appeals reinstated the suit and called for a jury trial.

The trial judge broke the suit in two, separating the claims against each defendant. The lawsuit against Mautz is still pending.

In the end, the jury found that NL Industries’ paint was a public nuisance but, because the act of giving out lead-based paint was not intentional, the company was not responsible for paying any damages to the city.

Milwaukee appealed but, in a 2-1 decision, the appeals court confirmed the jury’s verdict. According to the panel’s majority, it is feasible to have a public nuisance without being held liable.

But one Wisconsin attorney disagrees with that sentiment as well as the state’s Supreme Court decision on the case.

“It is my view that the clearly established law in Wisconsin recognizes that lead paint manufacturers may be held liable under theories of public nuisance for both intentional as well as negligent conduct that substantially contributes to the creation of a public nuisance,” said Peter Earle, a Milwaukee attorney who has worked on a number of lead paint cases on the plaintiffs behalf. “In fact, the jury in the Milwaukee case found that lead paint was indeed a public nuisance. The denial of review by the Wisconsin Supreme Court can only be interpreted to mean that there was some credible evidence during the trial, that when viewed in the light most favorable to NL Industries, supported a finding that NL did not cause the nuisance.”

The problem in holding NL Industries fiscally responsible for the clean up, some legal experts say, stems from the length of time that has passed since the manufacturer sold the lead-based paint to the city.

“The Wisconsin Supreme Court came to their decision because the connection to wrong-doing is very tenuous,” said Allison Barnes, a professor of law at Marquette University Law School. “Lead-based paint has not been used in many decades, so one would have to attribute wrong-doing to someone who is either no longer around or wasn’t during the time of the paint’s sale. It’s hard to make a decision of liability unless you have one continuous owner. In this case, you are talking about imposing liability on people who have really never sold lead paint to the city.”

Even still, Earle believes that the law is on the city’s side when it comes to collecting damages for the lead paint NL Industries sold to the municipality.

“The law of Wisconsin clearly allows public entities to pursue public nuisance claims against lead paint manufacturers and nothing decided by either the Court of Appeals or the Supreme Court diminishes that reality,” Earle said. “Given the seriousness of the potential harm that lead poisoning causes to thousands of children every year, the astronomical costs associated with comprehensive lead paint abatement and the unfairness of shifting those costs to the taxpayers, the story is not over in Wisconsin.”

Although it may seem unfair that today’s taxpayers have to foot the $53 million bill for the clean up of lead paint that was sold to the city decades ago, Barnes said that is just the nature of the beast; and does not make it permissible to hold the paint manufacturer financially liable.

“It’s terrible that the taxpayers have to eat the cost, but that’s just the way it goes,” said Barnes. “There are just some things that taxpayers have to pay, like the cost for massive pollution. We just have to clean it up; and in this situation there isn’t anybody that we can point the finger at and say ‘you oughta pay the cost or even some significant proportion of the cost’. The reason we can’t do that is because all of the purveyors of paint have changed and they stopped selling paint with lead bases in the 1950s. There are just a lot of tracing problems with this case when it comes to identifying who is responsible for paying for the clean up of lead paint.”

Georgia governor signs bill aimed at limiting public nuisance suits

2009-05-08T21:11:14Z

ATLANTA -- Georgia Governor Sonny Perdue signed legislation this week aimed at curbing public nuisance lawsuit abuse in the state.

Senate Bill 213 requires anyone suing a product manufacturer in the state of Georgia to prove credible harm.

The bill states that manufacturers cannot be held liable for the manufacture of a product "alleged to be defective based on...theories of industry-wide liability."

The Public Nuisance Fairness Coalition (PNFC) applauded the action calling the move a “true victory” for the traditional rule of law and all residents of Georgia.

“The Georgia legislature has demonstrated a clear understanding of the risk posed when public nuisance theory is used to displace traditional causes of action, such as product liability lawsuits," said Stan Anderson, executive chair for the PNFC.

The bill comes on the heels of a series of public nuisance lawsuits elsewhere across the country. Georgia lawmakers believe this measure will protect manufacturers from junk lawsuits.

State Senator John Wiles, the bill’s sponsor, said the law is a common sense approach to properly holding companies and corporations liable for actions that actually cause harm to consumers.

“It prevents blatant abuse of the system like the outrageous lawsuits we're witnessing throughout the country,” he said.

The bill also prevents lawyers from using industry liability claims such as public nuisance or enterprise liability as reasons for suit.

State Senator Judson Hill, one of the bill’s co-sponsor said he felt successful frivolous lawsuits were contrary to free market principals and were ultimately driving up costs for the taxpayer.

“The people of Georgia or any state win when we limit the ability for a select few to recklessly pursue at most marginally valid lawsuits,” Hill said.

Hill added that he hoped other states would follow Georgia's lead so economic development would not be stifled by enabling a select few.

“I applaud Governor Perdue for signing this legislation into law that ensures Georgia's courts are available for any of our citizens who have actually been harmed,” Wiles said.

Later this month, a California court will consider dismissing a suit brought against Exxon Mobil by the residents of Kivalina, a small Alaskan village. The suit claims Exxon has contributed to global warming, which has caused sea levels to rise and destroy the town.

Opponents of the Kivalina case claim the suit is based on exaggerated conspiracy theories that hold no credible evidence.

Motion to dismiss hearing set for this month in climate change suit

2009-05-06T00:14:43Z

OAKLAND -- A hearing is set for later this month to consider a motion to dismiss in the global warming case of Kivalina v. Exxon Mobil.

The 2008 law suit was filed by the residents of Kivalina, Alaska, who claim the oil company contributes to global warming with its gas emissions, a nuisance that is causing “severe harm" to the city.

According to the suit, the city in the Northwest Arctic is seeking approximately $400 million to transplant its residents elsewhere.

In its motion, Exxon argues that the citizens of Kivalina are not seeking an end to the "nuisance", rather they are seeking only monetary damages, which the Supreme Court has never held that a plaintiff can bring such an action that seeks damages rather than abatement.

"To the contrary," the motion states, "several precedents suggest that damages would not be available."

Exxon goes on to claim that plaintiffs make the causes of global warming clear, however, do not make clear that the oil companies directly cause global warming.

The motion states: “By plaintiffs’ own account, it is not the defendants’ own activities that have made the planet warmer – those activities are merely part of the 'human activity that releases greenhouse gases,' which, collectively over a period of two centuries, has been 'causing a change in the Earth’s climate.'"

“What they do not – and could not – allege is that this state of affairs can actually be traced to the handful of companies they name in their suit,” according to the Exxon brief.

In addition, the Defendants claim there is no basis for extending the federal common law of nuisance to a municipality and a Native tribe.

Kivalina is a 3.9 square-mile town with a population of around 399 people. It sits on tip of an eight-mile-long barrier island and is made up of predominately Alaskan natives.

The residents filed suit in federal court in San Francisco in February 2008 against Exxon Mobil, either other oil companies, 14 power companies and one coal company.

Residents claim over the years global warming has caused outlying sea levels to rise, causing damage to town property and land, rendering the area uninhabitable.

The motion to dismiss hearing is set for May 19 in the Northern District of California, Oakland Division.

Heartland Institute weighs in on California lead paint case

2009-05-05T18:01:05Z

CHICAGO -- A host of non-profit organizations have filed an amicus brief in a controversial lead paint case in California, arguing that a perilous precedent that would be set if public nuisance cases against manufacturers are allowed to go forward.

The brief was filed in support of the defendants in the case of County of Santa Clara vs. Atlantic Richfield Co., and contends that public plaintiffs ought to be barred from hiring contingent fee lawyers to prosecute public nuisance.

In the suit, 10 California cities and counties hired private attorneys to bring a lead paint public nuisance action against a group of manufacturers.

This newest brief argues that public nuisance cases against manufacturers are being used as an alternative to well-established and balanced product liability law principles.

Maureen Martin, senior fellow for legal affairs at The Heartland Institute and author of the brief, said lead-based paint is not a health hazard unless it deteriorates and creates lead dust.

"Calling the sale of a legal product a public nuisance -- which is what the plaintiffs' contingent fee counsel is trying to do here -- is a complete distortion of law, common sense and sound public policy," Martin said.

In its brief, Heartland stated:

"Heartland is particularly concerned about the perilous precedent that would be set if public nuisance cases against manufacturers are allowed to go forward in lieu of the well-established and balanced product liability law principles. Product liability laws are typically time-limited. Liability for public nuisances, on the other hand, is perpetual, and contours of this common law theory are too amorphous to be applied to products."

Heartland goes on to add that the only thing motivating these cases is the prospect of billions of dollars in contingent fees for private attorneys.

The contingent counsel in the Santa Clara case stands to receive $9.6 billion should the Supreme Court overrule a 1985 ruling, according to a report by the Heartland Institute.

In the 1985 case, People ex rel. Clancy vs. Superior Court, the California Supreme Court affirmed that attorneys must fundamentally be of neutral opinion if hired by the government.

Heartland's filing argues California law already gives local government bodies tools necessary to prosecute owners of property posing a health risk due to deteriorating lead paint or lead dust and should not seek the "private tort" remedy of public nuisance to supplement them.

The brief goes on to add that, "paint companies should not have liability for hazards they could not prevent."

“This [case] will result in devastating economic consequences, including impairing property values and thus the owners' abilities to refinance their mortgages and obtain insurance," Martin said. "Impaired property values will also hurt government entities relying on this tax for its revenues."

The Heartland Institute is a 25-year-old independent, non-profit, and non-partisan public policy research organization created to develop and promote free-market solutions to social and economic problems.

Rhode Island lawmaker, officials denounce McConnell nomination

2009-05-01T22:17:13Z

PROVIDENCE -- One Rhode Island lawmaker and several state party officials have called the nomination of attorney Jack McConnell to the federal bench “extremely disappointing.”

Providence GOP chair and former mayoral candidate, Dave Talan, said he doesn’t like the idea of judges making the laws around their own personal agenda.

“It’s a total abuse of the legal system. It concerns me that a federal judge would have that kind of irresponsible philosophy,” Talan said.

McConnell, who currently serves as state Democrat Party Treasurer, was recently recommended for the federal bench by U.S. Senators Jack Reed and Sheldon Whitehouse.

McConnell has been a long time political figure in the state party. Over the last several election cycles, McConnell and his wife have donated around $700,000 to Democrat candidates and left wing
organizations.

Recently, McConnell’s firm, Motley Rice, has taken on yet another lead paint case, this time in California in the case of County of Santa Clara vs. Atlantic Richfield Co., where 10 California counties and cities have filed suit against a group of lead manufacturers.

A similar suit, targeting Sherwin-Williams, was thrown out by the Rhode Island Supreme Court after the longest civil trial in state history.

“His [McConnell] involvement in the lead paint case suit totally abused the entire legal process,” Talan said.

“It’s amazing how things like this go un-noticed,” said Rhode Island Republican Party Chairman Giovanni Cicione. “This is disastrous.”

Cicione added McConnell’s record as a trial lawyer is well-documented and the cases he has handled is an indicator of his philosophy.

“He has a hidden agenda and this will be one of many ways to expose it,” Cicione said.

State Representative Joseph Trillo said he felt the entire nomination process was alarming.

“This is nothing more than political payback,” Trillo said. “This is a major disappointment to the people here in Rhode Island who are unaware of just who this guy really is.”

Trillo, who doubles as the Rhode Island GOP’s National Committeeman, added McConnell’s nomination sends a clear message of how the public doesn’t enjoy big political favors.

“Here is a guy who has donated a lot of money to the Democrat Party here in Rhode Island as well as nationally so they (Senators Reed and Whitehouse) want to seat him on a federal bench,” Trillo said. “It’s completely outrageous.”

Involvement of Erin Brockovich in public nuisance cases raises ethical questions

2009-05-01T20:47:01Z

NEW YORK -- New York-based law firm Weitz & Luxenberg has enlisted renown environmentalist Erin Brockovich to attract litigants in two high-profile public nuisance cases.

Brockovich, a former law clerk turned advocate, has been employed by the firm as a "consultant" in the case of North Carolina v. Tennessee Valley Authority and a potential case in Pompton Lakes, N.J.

In March, she made two trips to Roane County, Tenn., in an effort to increase the number of complaints against Tennessee Valley Authority (TVA) after 5.4 million cubic yards of ash erupted from a local holding cell near Kingston Fossil Plant and made its way into the Emory, Clinch and Tennessee rivers.

Brockovich also held meetings in Pompton Lakes, N.J., with Walter Mugdan, a director with the Environmental Protection Agency, and members of the local community to discuss the case of an DuPont explosives manufacturing plant that allegedly polluted the area for 92 years.

The appearance of Brockovich has raised questions regarding her expertise on the issue.

Doug Reynolds, an attorney and member of the West Virginia House of Delegates, questioned the move, calling it “completely unethical”.

“No law firm should be sending out a non-attorney to solicit clients,” Reynolds said. “Lawyers in my state have been disciplined by the attorney general for such actions.”

Reynolds, a Huntington attorney, has handled public nuisance cases in West Virginia, a state consistently rated a "judicial hellhole" by the American Tort Reform Association.

“It’s a fly by night situation where she [Brockovich] swoops in and signs up a bunch of people to see if the firm has a case or not,” Reynolds said.

Reynolds added that because Brockovich is a non-legal member of the firm it would be hard for disciplinary action to be taken, however, the lawyers who are paying her should be held accountable.

So far, more than 200 plaintiffs have filed in the TVA case with the possibility of an increase in the near future.

The 11 count grievance alleges TVA failed to inspect ash retention ponds, as well as violating state environmental laws to create a public nuisance.

According to the complaint (No. 3:09-cv-54) attorneys are seeking compensatory damages for devalued property and loss of use and enjoyment of that property; increased risk of future health problems; emotional distress, mental anguish and fear of cancer.

Brockovich was propelled to national stardom when she was the subject of a 2000 movie that shares her story and name. In the movie, she is portrayed as single-handedly bringing down a California power company accused of polluting the water supply of a local city.

In an April 2002 expose on Brockovich, the New York Times said, “The fact remains, though, that she has no real credentials except moxie and friendliness.”