June 2008


Story in the Boston Globe regarding a new settlement in the Station nightclub fire.  100 people died in the fire, the night of February 20, 2003, while watching a performance by the band Great White.  A roadie set off the band’s pyrotechnics, which caught insulation foam on fire.  The foam accelerated the fire, experts say it burns like gasoline, and soon the entire club was ungulfed in flames.

American foam sold the club $500 worth of foam insulation in 2000, pitching it as a way to keep down noise from the bands that played the club.  The settlement puts the amount of money offered on the case from all defendants at over $150 million.  Defendants who have already offered to settle include Anheuser-Busch Inc., The Home Depot, Clear Channel Broadcasting and several foam manufacturers.  Dave Kane, brother of one of the victims summed it up best when he said it isn’t about money, “It’s about saying to somebody else, ‘You better be more careful because if you do this, you’re going to pay.  In that sense, instead of threatening them with jail time, they’re threatened with financial ruin or financial responsibility.”

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The CPSC announced that Babies “R” Us has recalled 320,000 Jardine baby cribs sold from January 2002 through May 2008 at Kids Rold, Geoffrey Stores, Toys “R” Us and Babies “R” Us stores.  The cribs sold for between $150 and $300.  The wooden slats and spindles on the crib can break easily, causing a space where infants can get stuck, which poses a strangulation hazard.  There have been 42 reports of cribs breaking, including four incidents where children were entrapped and two incidents of children sustaining bruising and abrasions.   The Jardine recall website lists the model numbers of the cribs involved in the recall and the process involved in getting a voucher for a replacement crib.

There is a new article in the New York Times about the continuing tort wars.  The tort wars started as far back as the 1950s and 1960s when insurance companies began running ads warning of fraudulent claims and producing television shows about insurance fraud.  The purpose of the propaganda is to brand anyone making an insurance, even legitimate claim, as an insurance cheat.  The whole tort reform public relations campaign is focused on demonizing the injured and those who helped the injured, trial lawyers.  The modern tort reform agenda was started in the late 1990s.  The strategy involved spending money on advertising to influence voters in judicial elections, to ultimately by the type of judge who would rule in a business friendly manner, as well as lobbying lawmakers to pass tort reform bills.

The article quotes Thomas Donohue, chief executive of the US Charmber of Commerce on the work the Chamber has been doing in the tort wars, “(i)t took guts, bravery and vision to get behind what must have seemed like an insurmountable task — taking on the powerful trial bar…  We have succeeded beyond our expectations.” 

The article lists some of the victories the US Chamber claims: the 2005 Class Action Act, federal legislation that prevents a good number of class actions from being field in state courts; the number of personal injury lawsuits for cases involving things like car wrecks and medical malpractice declined steadily from 1995 to 2005; and the number of what the article calls “megaverdicts”, verdicts topping the $100 million mark, went down from 27 in 2000 to 2 last year. 

Tort reformers came up with an ad campaign which branded certain jurisdictions “judicial hellholes”.  The ranking, compiled from a survey of corporate attorneys by the American Tort Reform Association (notice it is not a survey of average citizens and is not balanced by the experience of the plaintiff’s bar), is purported to rank states in order of those most friendly to businesses to those that are least friendly to businesses.  The article states that Mississippi, which was ranked at the bottom of the list in the early 2000’s, enacted tort reform legislation recommened by ATRA, seemingly in response to the rankings.  The article quotes Lance Stevens, a Mississippi lawyer on the issue.  Mississippi has only moved up a couple of places since enacting sweeping reforms.  Mr. Stevens thinks that corporate lawyers are not critical of Mississippi because of the justice system in the state, but “it is the corporate lawyers for the Fortune 500 companies expressing their general disgust for Mississippi and their mistaken belief that we are culturally retarded.”    

Trial lawyers continue the battle on the other side of the equation.  The battle continues on the ground in different states across the country where lawyers are fighting unjust laws on constitutional grounds, lobbying state legislatures to repeal or amend unjust statutes, and push for laws that punish the insurance companies who unfairly deny claims, rather than the victims seeking compensation.  On the federal level, trial lawyers are pursuing federal legislation that would make it possible for consumers to go around arbitration agreements found in form contracts like those credit card companies require consumers to sign. 

Ultimately there are no winners in this war except the big business interests and insurance companies who shirk their responsibilities.  Victims have their rights taken away.  Is restoring a victim’s right to sue, when the right has been taken away, a victory?  Hardly.  

According to a story in the Missoulian, the US Supreme Court has denied the appeals of W.R. Grace and six of the companies’ executives who were trying to avoida criminal trial on charges that they violated the Clean Air Act by unleashing asbestos dust on the community of Libby, Montana, home to the W.R. Grace vermiculite mine. 

The Grace executives were indicted in 2005 for knowingly exposing the mine workers, as well as Libby residents.  To date 300 to 400 residents of Libby have died from asbestos related illnesses, and hundreds of other residents currently suffer from asbestos related disease.  The diseases caused by asbestos include mesothelioma, a cancer of the lining surrounding the lung called the pleura; various other cancers, including lung cancer; and asbestosis, a scarring of the lungs caused by exposure to asbestos.

Grace’s appeal centered on the argument that the EPA’s definition of asbestos didn’t include the asbestos fibers found in their vermiculite mine in Libby.  According to an article on the history of the mine, W.R. Grace bought the mine in 1963.  A month after the purchase was complete, a W.R. Grace executive wrote a memo stating that there was asbestos present at the mine and opined about possible ways to market the stuff. 

Throughout the 1960’s Grace conducted x-rays on employees and by 1969 over 60% of their work force was found to have abnormal x-rays evidencing asbestos exposure.  In addition, the local medical community in Libby told the company workers were getting sick.  Grace also conducted its own studies which found that the asbestos in the vermiculite caused asbestosis and cancer.

Grace executives could stand trial as early as this fall.

 

According to a story on Law.com, a jury in New Jersey awarded $6 million to plaintiffs in a lawsuit against Kia Motors America Inc. – because the braking system on their Kia Sephia sedans, which was produced in the late 1990s, is defective.  The lawsuit alleges that the braking system in the Sephias routinely overheated, causing the brakes to wear out quickly (pads and rotors wore down after only 10,000 miles), leading to expensive repairs for the owners of the cars. 

There were about 8,500 plaintiffs involved in the case and each plaintiff will receive about $750, the amount it costs to repair the defect.  Attorneys will receive almost $4million in fees.  Lawyers in Pennsylvania got a $5million verdict against Kia in 2005 on the same issue.  And a nationwide class action regarding the brake issue was previously settled as well, for a smaller amount.