Vested Interest - Tort Briefs - November 1997 Issue

Irish High Court Reforms Its Tort System

The Supreme Court of the Republic of Ireland announced new rules September 1 governing personal injury cases. The new rules are designed to expedite cases and ensure fairness to all parties to the dispute, and have been applauded by plaintiffs and defendants. The rules require both sides to file statements by expert witnesses prior to trial. Plaintiffs must file first, and defendants must reply within three months. Failure to file could mean that the side could call no experts on its behalf. The rules also allow experts to testify in writing, rather than in person. The rules apply only to cases in the High Courts, valued at more than Ir£30,000 ($45,000), although observers expected the Circuit Courts, which hear cases of lower value, would adopt similar rules. (Irish Times, September 15, 1997)

U.S. House Produces Draft of Product Liability Bill

Congressional supporters of federal limits on products liability have produced a draft bill. The draft includes limits on punitive damages against small businesses. It would also absolve sellers of liability unless they were involved in the manufacture of the product, impose a two year statute of limitations, and create penalties for parties who rejected settlement offers and then secured smaller verdicts. The punitive cap would limit such damages to $250,000 or twice compensatories against companies with annual revenues of less than $5 million or fewer than 25 employees. The bill would also allow separate trials for compensatories and punitives. A spokesperson for Public Citizen denounced the draft, noting that it "provides relief and protections for the industries lobbying for it [but] it offers nothing for consumers." (Liability Week, October 5, 1997)

Debunking File: Are Products Liability Suits Too Costly for Business?

Tort Deformers are trumpeting a new report by Jury Verdict Research (JVR) that, according to Pat Rowland of the Product Liability Coordinating Committee, provides "clear evidence that you don’t want to get sued in America." The report purports to show a 44% increase in products verdicts in just one year. But the Deformers are hiding a few important facts behind that incredible headline. First, JVR does none of its own research at trial courts, relying instead on lawyers to submit case summaries. That means that its collection of verdicts issued nationwide is not a statistically valid sample. Second, they don’t say that verdicts are only one point in the process of collecting benefits for victims, and plaintiffs rarely collect the whole verdict. A RAND study found that victims collect just 57% of punitive verdicts. Third, the report fails to note that the total number of products suits filed in some states, including Illinois, has declined, and fourth, that premiums paid by businesses for products liability insurance in some states, including Illinois, were lower in 1995 than in 1992, even without adjusting for inflation. (The JVR report is discussed in Best’s Review P/C, October, 1997)

Hooters Loses Its Grip on $3.75 Million to Settle Sex Discrimination Suits

The Hooters restaurant chain has agreed to pay $3.75 million to settle claims that it discriminated against men who applied for jobs. Hooters denied that its policy of hiring only women violated the U.S. Civil Rights Act since it is "in the business of providing vicarious sexual recreation", and that gender was therefore a legal occupational qualification. The case drew national attention when Hooters attacked the Equal Employment Opportunity Commission for its complaint against the chain with print ads featuring burly men in the Hooters’ waitress uniform and the caption, "Come On, Washington. Get A Grip." The EEOC drops its claims in 1996, citing other priorities. The settlement affects lawsuits filed by seven men in Illinois and Maryland. (AP, September 30, 1997)

Hoosiers Allow Cameras in Court

Following the lead of the Indiana Supreme Court, the Indiana Court of Appeals has changed its rules to allow media cameras in its courtrooms. Cameras will be allowed at the discretion of the court, and at the request of news media. No more than four cameras can be used at any one time, limited to two still cameras and two video cameras. Sound feeds for radio would be made available through a single microphone, unless the courtroom lacks the proper technology. The first case to involve cameras is a First District suit filed by prisoners who claim their imprisonment differs illegally from that of other convicts. (Chicago Tribune, October 9, 1997)

Federal Jury Issues $250 Million Verdict Against Chrysler Corp

The parents of a 10-year-old boy killed when the latch on the rear door of his family’s minivan popped open have obtained a verdict against the maker of the minivan for $12.5 million in compensatories and $250 million in punitives. Observers note that such high punitives are rarely collected, but the jury verdict sent a clear message that Chrysler’s actions are not to be tolerated. The jury heard evidence from several experts, including the former head of a Chrysler safety team, that the latch was the weakest on the market, that no other van had used such latches in 20 years, and that Chrysler knew of the dangers but deliberately used political muscle to avoid a recall. The punitive verdict represents about 3% of Chrysler’s profits from minivans between 1987 and 1994. (Various media reports)

Eddie Bauer Liable for $1 Million in Race Discrimination Case

A mostly white jury has issued a verdict for three black teenagers who were detained and stripped by a white security guard at an Eddie Bauer Outlet in Maryland who claimed the teens were thieves. The verdict included $850,000 in damages to Alonzo Jackson, who was forced to remove his shirt and leave it at the store when he could not produce a receipt. His two friends were issued $75,000 each, after they were falsely imprisoned and defamed by store officials. Security guard Robert Sheehan insisted that the teens were trying to steal the shirt, even though a sales clerk remembered selling the shirt to Jackson a few days earlier. Jackson returned later the same day with a receipt. Eddie Bauer officials admitted that the action was inappropriate, but claimed that the security guard was acting outside the scope of his employment. (AP, October 9, 1997)

$300 Million Settlement in Second Hand Smoke Case

Four tobacco firms have agreed to create a foundation funded at $300 million to conduct research to detect and cure diseases associated with second hand smoke in order to settle the class action suit filed on behalf of airline flight attendants. The settlement also calls for $3 million in court costs and $46 million in attorneys fees, and does not bar individual suits filed by members of the class. Payments will be made by Philip Morris, Reynolds Tobacco, Lorillard Tobacco, and Brown & Williamson. Exempt from payments is Liggett Group, which offered testimony on behalf of plaintiffs. (Reuters,October 10, 1997)

Supreme Court Affirms Financier Brennan’s Liability

Robert E. Brennan, former head of First Jersey Securities, found no relief from the U.S. Supreme Court, and will have to pay $75 million in damages to investors he swindled out of $123 million. The Securities and Exchange Commission secured a judgement that Brennan manipulated the price of penny stocks in the late-1980’s. Brennan claimed that the SEC lacked the authority to compel him to disgorge profits, but the Second Circuit disagreed, and the U.S. Supreme Court refused to hear his appeal. In addition, Brennan was barred from working with New Jersey gambling interests for five years, and forced to sell his controlling stake in International Thoroughbred Breeders, Inc. (AP, October 6, 1997)

O.J. Simpson: The Next Step

The legal guardian for O.J. Simpson’s children has filed a lawsuit against the Brown family, seeking to obtain profits generated by the sale of videos of Nicole Brown Simpson and other materials. The children seek $162,500 in profits from the sale of wedding videos, and $100,000 from the sale of their mother’s diary to tabloid TV programs and newspapers, as well as repayment of a $50,000 loan made by Nicole Simpson to her mother. Also named as defendants are the children’s aunts and one cousin, who variously sold their stories to tabloid TV and press. (Reuters, October 3, 1997)

Age Discrimination Suit Against Continental Airlines Settles for $7 Million

When Continental Airlines fired 207 of its most senior employees so that newer, younger workers at America West could do the same job, the senior employees cried foul. Continental claimed the change was routine, resulting from a new contract with America West under which the new airline would manage ground handling duties at several western airports. Workers were given a choice between applying for new jobs with America West, at half the rate of pay, or relocating to an airport not covered by the contract with America West. The workers claimed that Continental unfairly discriminated against them on the basis of age. The settlement calls for $6 million in payments and another $1 to $2 million in flight benefits. (AP, October 8, 1997)

Effect of Affirmative Action Repeal at Berkeley Law: Only One Black Student

After the Regents of the University of California scrapped affirmative action for graduate programs, admissions offers to minorities at Boalt Hall dropped 26%. Of the 15 blacks admitted, only one attended. "In my opinion, it’s important that the school have some African-Americans here, even if it’s just one," said Eric Brooks, the student. Others agree that racial diversity adds to the educational experience. Brooks joined Rev. Jesse Jackson’s march across the Golden Gate Bridge in protest of California’s recent end of all affirmative action programs. (Chicago Tribune, September 29, 1997)

Nestle Withdraws Dangerous Chocolates

Nestle Corp, once criticized for selling nutritionally unsound infant formula, has again been criticized for putting children at risk. In July, the company began selling chocolate candies with small toys embedded within. Nestle claimed that the toys were too big to choke small children, but Connecticut Attorney General Richard Blumenthal claimed, "Some of the toys barely, and I mean by a fraction of a little toe, pass the standard choke test." Nestle also failed to get FDA approval for the sale of food containing non-nutritional items. Nestle has agreed to withdraw the candies from the market place before any children are actually hurt. (Chicago Tribune, October 2, 1997)

Court Reporter Strike Stalls LA Law

The Court Reporters’ Association’s 450 Los Angeles members went on strike October 2, forcing delays and other problems for dozens of trials. The reporters, who have not had a raise since 1992, struck after rejecting a 10% increase. Some 40,000 other county workers were offered 12% hikes. "We find this a little humiliating to have to beg, to have to strike to get the court to treat us equitably," said a spokesperson for the court reporters. (Reuters, October 3, 1997)

New York High Court Unanimously Upholds Verdict Against School District

A trial jury issued a $3 million verdict to a sixth grade student who was raped in a Brooklyn park after being left behind after a field trip for a drug awareness program. Her teacher called the girl’s parents but failed to notify the school board that the student was missing. The school board appealed, and won reversal. But the New York high court has overturned the reversal and remanded the case for further hearings, finding that the teacher’s abandonment of the student at the park left her at undue risk. Appeals have taken up over 9 years since the rape occurred. The school district has not yet decided if they will press their appeals further. (AP, October 16, 1997)

ALEC Takes Stand Against Securities Suits in State Court

The American Legislative Exchange Counsel, a bipartisan group of state legislators, surprised observers by supporting a Republican measure in Congress requiring that securities litigation be limited to the federal courts, where a law passed over President Clinton’s veto would limit recovery. The group’s position was announced by Michael Hotra, head of ALEC’s Civil Justice Task Force. ALEC’s move was cheered by high technology firms who claim that they should not be liable for fluctuations in their share prices even when they withheld information from share holders. Consumer and investor groups denounced the move. (Reuters, September 25, 1997)