I’m a trial lawyer for injured people and businesses at The Beasley Firm, founded in 1958. Our clients have been awarded over $2 billion through hundreds of verdicts and settlements in excess of $1 million. We’re listed in Super Lawyers, Best Lawyers in America, U.S. News’s Top Lawyers, et cetera. The [...]
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I write this blog primarily for lawyers and others interested in the law. If you’re looking for a lawyer, start with my legal services page or call my office at (215) 931-2634. I represent individuals in personal injury, wrongful death, and medical malpractice lawsuits. I also represent patients injured by medicines and medical devices, like Actos, Pradaxa, NuvaRing, Fresenius dialysis, and the erosion of implanted vaginal mesh.
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Can The City Of Philadelphia Be Sued Over The Center City Building Collapse?
Philly is still reeling from the horrific Center City building collapse last week. Every conversation I’ve had included both shock over the poor oversight of high-risk work like demolition and the conclusion that, surely, the City will be sued and will pay something towards the victims. Most everyone, including other lawyers who don’t do catastrophic injury work, are shocked to hear that it is unlikely that the City will be liable.
The primary cause of disaster is obvious: the work crew performed appallingly amateurish work. Taking down a building literally joined to other buildings isn’t rocket science, but it still requires structural engineering work. First, per OSHA, “an engineering survey shall be made, by a competent person, of the structure to determine the condition of the framing, floors, and walls, and possibility of unplanned collapse of any portion of the structure,” and then steps need to be taken to avoid such “unplanned collapses,” such as by braces, or shoring, or helical piers, or all three, and then, in all likelihood, the structure needs to be taken down manually.
What you don’t do is what property owner Richard C. Basciano apparently did: pay some bankrupt company $10,000 to rip the thing down with sledgehammers and an excavator, and then get it “expedited” by an architect who never bothers to review the demolition plan. The general rule is that “a landowner who engages an independent contractor is not responsible for the acts or omissions of such independent contractor or his employees,” Beil v. Telesis Const., Inc., 11 A.3d 456 (Pa. 2011), which would seem to absolve Basciano, but that rule is subject to a number of exceptions, like the “dangerous condition,” “retained control,” and “peculiar risk” exceptions. For a discussion of all three, see Farabaugh v. Pennsylvania Turnpike Com’n, 911 A.2d 1264 (Pa. 2006). It is in general hard to pin liability on a property owner, but this situation looks nothing like your typical by-the-book demolition. Continue reading
The Legal Fiction That GlaxoSmithKline Is In Delaware
Let’s take a refresher course on 1L Civil Procedure. The federal courts have limited jurisdiction; they don’t exist to hear every case, they exist to hear cases that arise under federal law. Additionally, the federal courts have “diversity jurisdiction,” a narrow addition created “to provide a federal forum for important disputes where state courts might favor, or be perceived as favoring, home-state litigants.” Exxon Mobil Corp. v. Allapattah Services, Inc., 545 US 546, 553–554 (2005). Diversity jurisdiction is disfavored — the federal courts aren’t supposed to be hearing garden-variety state-law tort and contract lawsuits — and since the founding of the country federal courts have been instructed to avoid diversity jurisdiction unless there’s really an obvious risk of home-state favoritism.
For example, “In a case with multiple plaintiffs and multiple defendants, the presence in the action of a single plaintiff from the same State as a single defendant deprives the district court of original diversity jurisdiction over the entire action.” Id., citing Strawbridge v. Curtiss, 3 Cranch 267 (1806). The Founders didn’t waste time clogging the federal courts with state-law tort cases, and would deny diversity jurisdiction to corporate defendants if even a single shareholder was in the same state as the plaintiff. See Bank of United States v. Deveaux, 5 Cranch 91–92 (1809)(“In conformity with the spirit of the constitution, the federal courts have always inquired after the real parties. Although the nominal parties are really persons competent to sue in those courts, yet they will inquire into the character of the real litigants, and if they find them unable to sue there, they will dismiss the suit. They will allow no fiction to give jurisdiction to the court where the substance is wanting.”) Applying the same rule today would preclude large publicly-owned corporations from forum shopping for federal court, and rightly so: does anyone really believe that, e.g., Wal-Mart needs the protection of the federal courts because it can’t get a fair trial outside of Arkansas?
In Glenda Johnson v. SmithKline Beecham Corp, decided last Friday by the Third Circuit Court of Appeals, a woman from Louisiana and a man from Pennsylvania born with birth defects caused by their mothers‘ use of thalidomide (more about thalidomide here) during pregnancy filed a state-law negligence and strict liability suit in Pennsylvania state court against several corporations, including GlaxoSmithKline LLC. The defendants removed the case to federal court.
As was undisputed, GlaxoSmithKline LLC is “a large pharmaceutical company that is responsible for operating the U.S. division of GlaxoSmithKline PLC, the British entity that is the ‘global head’ of the GlaxoSmithKline group of companies.” As the Court continued, “[GlaxoSmithKline LLC’s] headquarters is still in Philadelphia, Pennsylvania, where it occupies 650,000 square feet of office space and employs 1,800 people. Its management is substantively intact. .. [GlaxoSmithKline LLC’s] managers operate from … three [offices] in Philadelphia and a fourth in North Carolina.”
It’s an easy case, no? It’s a state-law tort lawsuit filed in Pennsylvania. One of the plaintiffs is from Pennsylvania. One of the defendants plainly has its “nerve center” in Pennsylvania, and so, under the “principal place of business” test established by the Supreme Court’s 2010 Hertz v. Friend decision, “the majority of [GlaxoSmithKline LLC’s] executive and administrative functions are performed” in Pennsylvania, and thus GlaxoSmithKline LLC is plainly a citizen of Pennsylvania.
The case was thus remanded back to state court, right? Continue reading
Lessons From The NHTSA vs Chrysler / Jeep SUVs Battle Over Rear-Impact Crash Fires
As was widely reported yesterday (e.g., USA Today, Bloomberg, LA Times), the National Highway Traffic Safety Administration (NHTSA) sent Chrysler a letter earlier this week asking it to recall the 1993-2004 Jeep Grand Cherokee and the 2002-2007 Jeep Liberty because they “performed poorly when compared to all but one of the 1993-2007 peer vehicles, particularly in terms of fatalities, fires without fatalities, and fuel leaks in rear end impacts and crashes.” Specifically, the NHTSA’s Office of Defects Investigation said:
In our tentative view, there is a performance defect and a design defect.
The performance defect is that the fuel tanks installed on these vehicles are subject to failure when the vehicles are struck from the rear. Such failure can result in fuel leakage, which in the presence of external ignition sources, can result in fire.
The design defect is the placement of the fuel tanks in the position behind the axle and how they were positioned, including their height above the roadway.
(Spaces added for clarity.) The NHTSA notes that, because of the defects, passengers “have burned to death in rear impact crashes, there have been fires (without fatalities) in these vehicles from rear impact crashes that have, or could have, led to deaths and injuries.” Compared to similar SUVs, the Grand Cherokee and the Liberty had roughly twice as many fatalities per million registered vehicle years (MRVY), a standard measure for vehicle safety over time. When it came to non-fatal fires, the Grand Cherokee was almost ten times as likely to be involved in a fire than similar vehicles, and the Liberty was nearly sixty times as likely.
In the face of that evidence, Chrysler said “no, we won’t recall it.” They put out their own paper claiming “NHTSA used an incomplete and unrepresentative group of comparison vehicles” and arguing that the fatal crashes weren’t representative because they all involved unusually high speed crashes. They also complained that the NHTSA hadn’t recalled other vehicles with higher MRVY rates of fatal rear-impact crashes with fire.
There’s a lot to learn from this battle. Continue reading
$44 Million Contingency Fee In Estate Litigation Thrown Out As “Unconscionable”
The incomparable ability of estate litigation to drag on is literally a joke, a joke so old and so well-known that more than 150 years ago Charles Dickens opened the novel Bleak House with reference to the fictional Jarndyce and Jarndyce estate proceeding that had been going on for generations.
Sylvan Lawrence was one of the largest owners of real estate in downtown Manhattan when he died in December 1981. Last week, a mere 31 years, 5 months, and 2 weeks later, an appellate court in New York decided the fee dispute between his estate and Graubard Miller, the firm his wife (who died in 2008) hired in 1983 to represent the estate in litigation against one of his partners (who died in 2003). New York Law Journal article here; New York Appellate Division opinion here.
By the end of 2004, Lawrence’s widow, Alice Lawrence, had paid approximately $22 million in legal fees on an hourly fee basis for the estate litigation. Though by that point there was a $60 million offer to settle the case, and her attorneys had internally valued the case at $47 million, Lawrence thought she deserved more, but she was tired of those bills and the uncertainty. Lawrence thus asked the firm to represent her on a contingency fee agreement (40%) and they agreed.
Five months later, in May 2005, after the firm had put another 3,795 hours into the case, the case settled for $111 million.
Lawrence refused to pay the 40%. I wrote about the case before, back in 2007, noting “Ms. Lawrence obviously had the funds available to hire a large corporate firm on an hourly (or flat fee) basis, and to pay all costs of the litigation herself upfront. In so doing, she would have borne all the risk of spending enormous sums of money without a guaranteed return. Instead, she contracted with a firm to bear all of that risk; within five months, it had achieved a result with which she was content.” Continue reading
A Litigator Reviews John Grisham’s The Litigators
A few months ago I was talking with a retired lawyer with a mass tort claim that fit squarely within our firm’s criteria. Given the details he provided, there really wasn’t a lot to do pre-suit, my next steps would be to get the medical records to confirm what happened, file the complaint, and then get to work.
Being a lawyer, he unsurprisingly wanted to know the whole process “from start to finish,” so we spent a while on the phone talking about short form complaints, plaintiff’s fact sheets, the plaintiff’s steering committee, the bellwether trials, and so on. The machinery of mass torts litigation isn’t an easy thing to explain; everybody knows (or thinks they know) what a class action is, but there aren’t actually any “class actions” for drug injuries, there’s just federal multidistrict litigation (MDL) and state consolidated litigation, both of which are strange hybrids between class actions and individual suits. When we finished up and I told him that we would get to work on his case, he said “and I’ll do my part by re-reading John Grisham’s The Litigators,” and we shared a laugh.
It seems like most of the lawyers I know disdain Grisham’s novels the same way doctors disdain ER and Grey’s Anatomy, and, quite frankly I had never read one nor had an interest in reading one. Like many lawyers, I find legal fiction — whether a novel, a TV show, or movie — painful. It’s either banal or unbelievable, and even the slightest misstep in the details ruins the suspension of disbelief. Most of it looks like this to me.
I hadn’t heard of The Litigators, but upon reading the blurb, I realized I was probably obligated to read it:
The partners at Finley & Figg—all two of them—often refer to themselves as “a boutique law firm.” Boutique, as in chic, selective, and prosperous. They are, of course, none of these things. What they are is a two-bit operation always in search of their big break, ambulance chasers who’ve been in the trenches much too long making way too little. …
[A] huge plaintiffs’ firm in Florida is putting together a class action suit against [Krayoxx, a cholesterol drug potentially linked to heart attacks]. All Finley & Figg has to do is find a handful of people who have had heart attacks while taking Krayoxx, convince them to become clients, join the class action, and ride along to fame and fortune. With any luck, they won’t even have to enter a courtroom!
It almost seems too good to be true. And it is.
I’ve written before about ambulance chasing lawyers, and how mass torts cases aren’t as easy as some lawyers claim, so onto the Kindle The Litigators went. I prepared myself for the worst, not least because of the blurb’s erroneous reference to “class actions” instead of “multidistrict” or “consolidated” litigation.
Surprisingly, I liked it, for the same reason I thought Boston Legal was the best of the TV lawyer dramas: Grisham doesn’t try for pure realism and fail, instead he satirizes mass torts (and injury litigation as a whole) by taking real themes and then exaggerating them. There are various inaccuracies and far-fetched plot devices, but they can be forgiven because the book rings true as it lampoons the field. Continue reading
Never Trust A Vampire Squid: Merger Clauses & Fraudulent Inducement
Rolling Stone’s Matt Taibbi described Goldman Sachs as “a great vampire squid wrapped around the face of humanity,” a phrase that, while defamatory of a uniquely adapted cephalopod minding its own business 3,000 feet under the sea, rang true. Yesterday, the intermediate appellate court for New York state agreed: Goldman Sachs is so obviously dishonest that you cannot sue them for fraud unless you get them to specifically agree that they aren’t lying to you.
First, the facts. In essence, Goldman Sachs brought in a hedge fund (Paulson & Co.) to put together a group of horrible investments (called “Abacus”) that they expected to fail — and even bet against — and then set about finding rubes to invest in it, thereby helping Goldman and Paulson make a tidy profit off the investor’s losses. One other banker who passed on the deal described it as “like a bettor asking a football owner to bench a star quarterback to improve the odds of his wager against the team.” (He’s quoted in the dissent.)
ACA Financial Guaranty Corporation was one of the rubes Goldman Sachs found. As Reuters reported, ACA’s lawsuit against Goldman Sachs “alleged that Goldman misrepresented the role of the hedge fund Paulson & Co, which supposedly selected underlying mortgage-backed securities that doomed the [collateralized debt obligation] to fail, thereby assuring Paulson of big profits on its undisclosed Abacus short.” The scam was so blatant the Securities and Exchange Commission brought its own case against Goldman Sachs, which settled for $550 million.
Sounds simple enough; as James Surowiecki wrote about the scandal three years ago, echoing the thoughts of many financial journalists, there was ample reason to believe that ACA was both a “dupe” hoodwinked by Goldman and a “dope” that failed to perform adequate due diligence on a complicated investment. Being a “dope” is a problem, but one would assume that a duped dope would be allowed to present evidence to a jury arguing that the fraud was a bigger problem than the lack of due diligence.
Except that the New York courts won’t let ACA get to a jury. Continue reading
Software Patents Are “The Plaything Of The Judges”
Last week, a bunch of banks won a major federal appellate court victory. That’s no surprise, of course, but the case nonetheless signals slow but steady progress in the otherwise dismal field of patent law, particularly as it applies to patents involving matters of abstract reasoning like computer software and business methods.
First, a refresher. Surely you remember how a bill becomes a law. But what happens when the bill doesn’t say much, and it’s left to the Executive Branch and the Judiciary to figure out what it means?
That, in a nutshell, is what has happened with the Patent Act. Congress passed a law way back in 1793 providing patent protection for “any new and useful art, machine, manufacture or composition of matter and any new and useful improvement on any art, machine, manufacture or composition of matter.” The only real difference after 1952 is the addition of the term “process” in lieu of “art,” with a definition of “process” so expansive — e.g., the “term ‘process’ means process, art or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material” — that it makes the word virtually limitless.
Back in 1952, Congress enacted a couple changes around the fringes — without reconsidering the core text of the statute — for a variety of reasons, including because, when it came to assessing whether an invention really deserved a patent, “judges did whatever they felt like doing according to whatever it was that gave the judge his feelings—out of the evidence coupled with his past mental conditioning—and then selected those precedents which supported his conclusions.” George M. Sirilla & Hon. Giles S. Rich, 35 U.S.C. 103: From Hotchkiss to Hand to Rich, the Obvious Patent Law Hall-of-Famers, 32 J. Marshall L. Rev. 437, 501 (1999). The 1952 Act was supposed to fix that by replacing judicially-created standards for “inventiveness” and the like with an objective test for “obviousness.”
That’s pretty much been the course ever since then: Congress hasn’t made much effort to define the limits of patent law, and so it’s determined by way of a strange triangulation between the U.S. Patent Office, which issues patents in the first place, the Federal Circuit Court of Appeals, the one and only court to which plaintiffs in patent cases have a right to appeal, and, the Supreme Court, which occasionally grants certiorari and gives the lower courts guidance. It is not a healthy way to run a patent system; neither executive agencies nor courts are particularly well-suited to consider and to address large societal changes like, say, the rise of the digital computer, which took place almost entirely after the last major revision to the Patent Act more than half a century ago.
Yet, somebody has to do the job, and the bulk of that work has fallen to the Federal Circuit. Last week, they issued a doozy of an en banc opinion in CLS Bank v. Alice Corp. The JURIST’s Paper Chase has links to the software patents at issue. Frankly, it’s hard to call any of them “inventions.” The “inventors” didn’t actually make anything; instead, they tried to shoehorn some ideas for software code — which is already protected by copyright — into the definition of a “process” or a “machine.” This is only allowed because courts have said it’s allowed, not because of any indisputable argument for calling a general description of software running on a computer a “process” or a computer with a certain type of software on it a “machine” in the same ways those terms were understood in 1952.
The opinion, in which seven of the ten Federal Circuit judges agreed the “inventions” in the patents weren’t really worthy of patent protection, has garnered significant press. It’s unfortunate that there wasn’t any agreement by a majority of judges for why the inventions weren’t eligible for patent protection, but it’s quite fortunate that a significant majority of the Federal Circuit held that the abstract claims at issue in the case — in essence, the “inventions” were nothing more than general descriptions of how to make software that help financial traders in particular circumstances — shouldn’t have been granted patents. Continue reading
WSJ Blames Mesothelioma Lawyers For Donating To Mesothelioma Research
As I’ve mentioned before, due to the ubiquitous presence of asbestos in certain industries all the way until the 1990s, we could see 60,000 or more new mesothelioma cases filed over the next few decades, and it seems there are still many big questions to answer through litigation. We should be talking about ways to streamline that process and, more than that, looking for ways to cure or to prevent mesothelioma.
Yet, when insurance companies and negligent corporations want to avoid responsibility for hurting someone, they try to change the subject by pointing the finger at the trial lawyers. Thus, earlier this week the Wall Street Journal had a long profile of the relationship between the lawyers who represent mesothelioma patients in their claims against the asbestos companies and the doctors who treat mesothelioma patients. In short, nobody funds mesothelioma research — not the government, not the big pharmaceutical companies, and certainly not the companies responsible for poisoning tens of thousands of workers — and thus much of the research money ends up coming from non-profits funded by mesothelioma lawyers who, having spent years watching their clients succumb to mesothelioma, felt compelled to put their own money back into improving treatments and, maybe, finding a cure.
But I bet you already knew where the Wall Street Journal was going with these donations:
The two have forged what has become an increasingly common relationship between a subset of cancer doctors and plaintiffs’ attorneys, sharing what for each is an increasingly scarce but valuable resource: victims of mesothelioma.
It is an unusual alliance in the world of medicine that some ethics experts say blurs ethical lines. This is particularly true when doctors refer patients to attorneys who provide financial support for their medical research.
And there you go: in one fell swoop, people dying of cancer caused by just going to work are reduced a “valuable resource,” and charitable giving is turned into an implied ethical violation, and the handful of doctors capable of treating these patients have a cloud of doubt cast over them. The WSJ then had a companion article about advertising for asbestos lawsuits that relies primarily on remarks by “a provider of Internet marketing software and services” and someone who “specializes reselling domain names he has purchased,” as if either of them had a clue about how mesothelioma clients actually find lawyers.
Let’s put aside the fact that the two WSJ articles reach opposite conclusions — one says the clients are passed along by nefarious doctors, the other says clients are “caught” through blanket television and web advertising — and go back to the accusation that there’s something wrong with mesothelioma lawyers putting money, with no strings attached, into non-profits that grant research funding, and that there’s something wrong with mesothelioma doctors accepting that money to conduct research. Continue reading
Why Startup Founders Should Hire Lawyers When They Deal With Venture Capital Firms
Earlier this week at DealBook, in a post about how “In Venture Capital Deals, Not Every Founder Will Be a Zuckerberg,” professor Steven Davidoff cites to research showing that “the dirty secret of venture capital is that the dream can be dashed as the venture capitalists make millions in a sale, leaving the founders with nothing.” Davidoff also references a study by Brian Broughman and Jesse Fried that found, in Davidoff’s words, “that founders who negotiated greater control rights ended up receiving on average $3.7 million more.”
I don’t doubt that’s true, and as I’ve explained on this blog before, despite strange claims by conservatives to the contrary, corporations put profits before everything else, and corporate executives and board members tend to put their interests before shareholders’ interests. The idea that venture capitalists are out to make money, including at the expense of startup company founders, really shouldn’t surprise anyone. If you want to make money from a corporation, you need control. Venture capitalists know that. Startup founders should know that.
But how do startup company founders maintain control of their company? They could spend a couple hours at night teaching themselves the finer points of fiduciary duties in Delaware and then try to outwit the investors (and their lawyers) who have done this a hundred times, or they could shell out their own money to pay for their own personal lawyers. Continue reading
NuvaRing Court Dismisses Bellwether Trials On Summary Judgment For No Good Reason
In case you missed it, last week I had a guest post up at TortsProf lamenting how recent changes in civil procedure law have created a situation in which judges are frequently deciding complex cases by improperly deciding for themselves what the true facts were, in advance of a jury trial, and sometimes on nothing but the initial complaint.
Unfortunately, we just had another example: the recent order in the NuvaRing litigation consolidated in New Jersey state court dismissing all of the bellwether cases, primarily on causation grounds. It’s not the end of the game — motions for reconsideration will be filed, as will an appeal, and it doesn’t affect the federal court MDL — but it’s disappointing nonetheless. There’s much to complain about (and, on appeal, to reverse), but I’m going to focus on the “learned intermediary” part. First, a little bit of background.
The most popular form of hormonal contraceptives are combined hormonal contraceptives (“CHC”), which use an estrogen (typically ethinyl estradiol) to prevent ovulation and thicken cervical mucus. Estrogen use, however, is correlated with an increased risk of venous thromboembolism, such as deep vein thrombosis, and thus pulmonary embolisms (blood clots in the lungs) and cerebral venous thrombosis (blood clots in the brain), so CHCs add a progestin to counterbalance that risk.
NuvaRing uses desogestrel as its progestin, making it a “third-generation” CHC. Since 1995 — six years before NuvaRing went on the market — it has been known that third-generation CHCs have a significantly higher risk of causing thrombosis and blood clots than second-generation CHCs. As the New Jersey court opinion recounts (based on the plaintiffs’ filings), by the time NuvaRing went on the market in 2001, 15 studies had examined that difference in risk, and 13 of those studies found an elevated risk, ranging between 1.4 times and 4 times greater risk of venous thromboembolism when using NuvaRing.
NuvaRing’s prescribing information and patient insert warned about the general risk of venous thromboembolism when using CHCs, but then hedged on the increased risk with vague, ambivalent language obviously written more for purposes of litigation than for informing patients and doctors about the risks of the product:
The use of combination oral contraceptives is associated with increased risks of several serious side effects, including blood clots, stroke, or heart attack. NuvaRing is not for women with a history of these conditions. The risk of getting blood clots may be greater with the type of progestin in NuvaRing than with some other progestins in certain low-dose birth control pills. It is unknown if the risk of blood clots is different with NuvaRing use than with the use of certain birth control pills.
The risk “may be greater” but “is unknown?” That wasn’t even accurate when NuvaRing was first put on the market, and now, more than a decade later, it is even less defensible: last year, a meta-study of 625 studies published between January 1995 and April 2010 found the risk of venous thromboembolism for CHCs that use desogestrel, like NuvaRing, was about double the risk of second generation CHCs. Yet, the manufacturer (Organon and Merck) have refused to update the label; perhaps it’s because they sell over $600 million worth of NuvaRings every year to over a million women. Continue reading
