New Jersey High Court Should Do Away with Plaintiffs’ Lawyers’ “Want-Ad” Closing Arguments

jury boxThe Schindler Elevator Corporation recently petitioned the Supreme Court of New Jersey to rebuke the plaintiffs’ bar’s most recent attempt to circumvent the longstanding prohibition on “Golden Rule” arguments. During closing arguments in Tufaro v. Headquarters Plaza, et al., a personal-injury trial, plaintiff’s counsel asked the jurors to think of awarding compensation “in terms of putting a want ad in the paper.” The hypothetical want ad would describe a job offer, one in which the applicant’s only duty is to suffer the plaintiff’s specific injuries. The insinuation is simple: How much payment would the jurors require to voluntarily endure the plaintiff’s injury? In other words, plaintiff’s counsel asks the jury to award damages based on how much compensation they would negotiate ex ante before agreeing to suffer the plaintiff’s injuries. This is exactly the type of Golden Rule argument that courts have long forbidden. Continue reading

Eighth Circuit Properly Rejects “Fear of Nuisance” Suit Arising from Pipeline Leak

faulkFeatured Expert Column − Complex Serial and Mass Tort Litigation

By Richard O. Faulk, Hollingsworth LLP

Can a public-nuisance lawsuit be based solely on property owners’ fear that their property values will be diminished by proximity to an adjacent contaminated tract? The U.S. Court of Appeals for the Eighth Circuit recently—and correctly—rejected a creative, but flawed, attempt by landowners to recover damages for such claims in Smith v. ConocoPhillips Pipeline Co.

The use of public nuisance litigation to redress environmental claims has proven extraordinarily controversial—and generally unsuccessful. Perhaps the most famous failure occurred when plaintiffs employed nuisance theories to redress environmental contamination at Love Canal, in which case over a decade of litigation failed to produce a solution.1 Thereafter, appellate courts generally rejected the tort’s use for a wide variety of claims ranging from lead paint contamination to climate change.2 Continue reading

Litigation Targeting Trans Fat Stayed: A Bump in the Road or Something More?

davidwallacehsfcomLGSMKellyGuest Commentary

by David L. Wallace and Michael R. Kelly, Herbert Smith Freehills LLP*

Since the 1950s, partially hydrogenated vegetable oils (PHOs) have been used to produce all sorts of packaged foods. These ingredients increase food shelf life and flavor stability. They also contain artificial trans fats, which have been linked to various health risks, including cardiovascular disease. Despite these risks, PHOs were until recently “generally recognized as safe” (GRAS) for use as a food ingredient. The tide began to swing two years ago, though, when the Food and Drug Administration (FDA) tentatively proposed to withdraw GRAS status for PHOs “based on current scientific information” about the health risks of trans-fat consumption. It finalized this determination in a June 2015 order, declaring “that there is no longer a consensus among qualified experts that partially hydrogenated oils … are generally recognized as safe for any use in human food.”

Lawyers Running With Regulations

This regulatory action makes PHOs a “food additive” subject to pre-market approval by the FDA. Without FDA approval, foods containing PHOs would be deemed “adulterated” under both federal and state laws. The agency left industry breathing room, however, giving it until June 2018 either to comply or to obtain approval for certain uses of PHOs. But, like time, regulation-chasing plaintiffs’ lawyers wait for no one, and pounced on the agency’s new stance in the name of “consumer protection.” Before the FDA had even finalized its decision on PHOs, they had already installed trans fats as the latest bogeyman on supermarket shelves and the food-litigation landscape—alongside such hated fighting words as “natural,” “healthy,” “freshly baked,” and “handcrafted.”       Continue reading

Ninth Circuit Panel Eviscerates 2014 ‘En Banc’ Decision That Protects CAFA Removal Rights

9thCirCongress adopted the Class Action Fairness Act (CAFA) in 2005 in response to concerns that plaintiffs’ lawyers were gaming the system to prevent removal of class actions and “mass actions” (lawsuits with more than 100 named plaintiffs) from state court to federal court. CAFA provided state-court defendants the option of removing a case to federal court when the suit is both substantial and involves numerous plaintiffs, even when complete diversity of citizenship is lacking.

Immediately thereafter, the plaintiffs’ bar began to undermine CAFA by coming up with new ways to keep their mass lawsuits in state courts. Among other schemes, plaintiffs’ lawyers divided their clients (often numbering in the thousands) among multiple lawsuits in the same state court, thereby ensuring that CAFA’s 100-plaintiff threshold would not be surpassed in any one lawsuit. An excellent 2014 en banc decision from the U.S. Court of Appeals for the Ninth Circuit imposed strict limits on use of this removal-defeating tactic. The court held in Corber v. Xanodyne Pharmaceuticals, Inc. that if, after filing their separate lawsuits, the plaintiffs ask the state court to coordinate the cases for all purposes, the cases should be deemed unified and thus removable under CAFA’s mass-action provision. But a Ninth Circuit panel decision this month, Briggs v. Merck Sharp & Dohme, creates a roadmap that allows plaintiffs to coordinate their lawsuits yet avoid removal—thereby eviscerating Corber. The decision suggests that the panel (Judges Fletcher, Berzon, and Paez) feels free to thumb their collective nose at Ninth Circuit en banc decisions; it ought to be reversed. Continue reading

Fifth Circuit Requires Labor Department to Pay Attorneys’ Fees in Bad Faith Independent Contractor Suit

DOLGuest Commentary

By Rachael Stein, a summer law clerk at Washington Legal Foundation who is entering her third year at the University of Georgia School of Law this fall.

In recent years, federal and state workplace regulators have put intense pressure on employers to move away from the use of independent contractors. This pressure was thrown into sharp relief in a recent U.S. Court of Appeals for the Fifth Circuit decision, Gate Guard Services L. P. v. Perez, involving a highly-questionable investigation and lawsuit by the Department of Labor (DOL).

Gate Guard Services is a company that provides gate attendants to oil companies at remote drilling sites. Gate Guard classifies its attendants as independent contractors because the attendants find their own relief workers, are not evaluated based on performance, are not restricted from working for competitors, and are not supervised by Gate Guard. The federal investigation arose from a conversation DOL investigator David Rapstine had with a friend, who complained about the wages he received when formerly working at Gate Guard. Rapstine believed Gate Guard attendants were employees and not independent contractors, and therefore believed Gate Guard may have violated the Fair Labor Standards Act (FLSA) by not paying overtime or keeping accurate records of attendants’ working hours. Continue reading

Court Cuts Class-Action Firm’s Fees to $0 after Unveiling Concealed Settlement Scheme

Guest Commentary

by Chelsie Kidd, a 2015 Judge K.K. Legett Fellow at the Washington Legal Foundation and a student at Texas Tech School of Law.

A California Superior Court judge recently turned a class-action law firm’s worst nightmare into reality when she denied the firm over $5 million in attorneys’ fees. In Lofton v. Wells Fargo Home Mortgage, Judge Mary Wiss found that Initiative Legal Group (“ILG”) “attempted to arrogate to itself more than $5 million in class action attorneys’ fees without court approval.”

Source: WikiMedia Commons

Source: WikiMedia Commons

The events leading up to Judge Wiss’ denial of attorneys’ fees began in 2005 when ILG filed a wage-and-hour class action on behalf of home mortgage consultants against Wells Fargo in Mevorah v. Wells Fargo Home Mortgage. Plaintiffs asserted claims for unpaid overtime, meal- and rest-break violations, and waiting-time penalties. Ultimately, ILG failed to obtain class certification in Mevorah. Undeterred, ILG filed numerous additional class-action suits against Wells Fargo, but each action asserted claims that overlapped with those alleged in Mevorah. ILG was “on the verge of filing a new motion for class certification when Wells Fargo agreed to attend mediation.” In early 2011, only after ILG and Wells Fargo reached a claims-made, non-reversionary class settlement,the Lofton action was filed solely for the purpose of seeking court approval of the settlement. ILG encouraged and directed its clients to make claims from the Lofton settlement (even telling some of its clients to send form directly to ILG and not the claims administrator). Continue reading

Federal Judge, Referencing FDA Order on Trans Fat, Permits State-Law Class Action to Proceed

food-courtThe Food Court strikes again.

On July 15, U.S. District Court for the Northern District of California Judge William Alsup rejected Nissin Foods Company’s motion to dismiss a claim alleging that Nissin’s use of trans fat in its instant noodles was an unfair trade practice under California law. The decision comes just a month after the federal Food and Drug Administration (FDA) issued a Declaratory Order removing the generally recognized as safe (GRAS) designation from partially hydrogenated oils (PHOs), the main source of trans fat in Americans’ diets. Judge Alsup’s opinion is the first we know of to reference FDA’s order. Continue reading