The Latest on ALI’s Liability Insurance Restatement: Same as it Ever Was

scales of justiceWhen last we addressed the American Law Institute’s (ALI) proposed Restatement, Law of Liability Insurance, we reported that the organization decided at its May annual meeting to table final consideration of the document until 2018. One of the proposal’s chief Reporters, Professor Tom Baker, indicated that he and co-Reporter Kyle Logue would embark on a year-long listening tour and consider what they heard when looking anew at the Restatement draft.

It is quite curious then, considering Professor Baker’s statement as well as ALI’s declaration that the draft needed “another year of work,” that on August 4, the institute released Preliminary Draft No. 4—a mere 10 weeks after tabling Draft No. 3 at its meeting.  Even more remarkable are the fundamental similarities between the draft tabled on May 23 and the one released on August 4.

ALI’s haste in issuing another draft, and the Reporters’ obstinate refusal to address valid criticisms of Draft No. 3, are further evidence of an accelerating mission drift that could cause the legal community to lose respect for organization’s work. Continue reading “The Latest on ALI’s Liability Insurance Restatement: Same as it Ever Was”

D.C. Circuit Once Again Reminds EPA Which Governmental Branch Enacts Laws

Featured Expert Column – Environmental Law and Policy

sboxermanBy Samuel B. Boxerman, Sidley Austin LLP with Katharine Falahee Newman, Sidley Austin LLP

In recent years, either when Congress has chosen not to act on certain matters—or arguably does so without sufficient clarity—the Executive Branch has asserted the power to address issues through regulation. These agency actions, of course, run headlong into one of the core separation of powers under the Constitution—that Congress is empowered to enact laws while the Executive is tasked with implementing them.

Hence, not surprisingly, the judiciary has increasingly been asked to answer whether an agency had the statutory authority to issue a particular regulation—or whether the agency exceeded the power it had been granted by the Congress.

A recent decision of the U.S. Court of Appeals for the D.C. Circuit adds to that jurisprudence. On August 8, 2017, a three-judge panel ruled in Mexichem Fluor, Inc. v. EPA that the U.S. Environmental Protection Agency (“EPA”) exceeded its authority under the Clean Air Act (“CAA” or Act) when it issued a 2015 rule eliminating the use of hydrofluorocarbons (HFCs) in certain products (the “2015 HFC Rule”). Continue reading “D.C. Circuit Once Again Reminds EPA Which Governmental Branch Enacts Laws”

Drunk Suing, Another Round: Court Allows False-Labeling Claim on “Hawaiian Beer” to Proceed

indexWe have been covering a legal action against Kona Brewing Company (now renamed Broomfield v. Craft Brew Alliance), which is one suit in the larger trend of class actions against breweries alleging misleading or false labeling and advertising.  In that suit, Judge Beth Labson Freeman, who sits on the U.S. District Court for the Northern District of California (a.k.a. the “Food Court”), recently ruled on Kona’s motion to dismiss.

Though the court trimmed the complaint, dismissing several of the plaintiffs’ causes-of-action and requests for relief, it held that the crux of the allegations could proceed.  The result is that, through strategic pleading, Kona must spend its time and resources fighting a lawsuit with questionable merits.  Judge Freeman created perverse incentives for future litigants by choosing to become, in essence, a product-packaging regulator. Continue reading “Drunk Suing, Another Round: Court Allows False-Labeling Claim on “Hawaiian Beer” to Proceed”

Pending High Court Case Tests Congress’s Authority to Detain and Deport Criminal Aliens

supreme courtThe US Supreme Court on October 3, 2017 will hear oral arguments for the second time in an important immigration case, Jennings v. Rodriguez.  The Court was unable to reach a decision the first time around, apparently because it divided 4-4 on how to resolve the case.  A key issue in the case is which constitutional body—Congress or the federal courts—gets to make policy governing the treatment of aliens convicted of serious crimes.

An unbroken line of Supreme Court precedent (including 1976’s Mathews v. Diaz) provides a ready answer to that question: immigration policy is “so exclusively entrusted to the political branches of government as to be largely immune from judicial inquiry or interference.”  Congress determined that aliens convicted of serious crimes should be deported and should be detained pending final removal; courts should not be second-guessing that determination. Continue reading “Pending High Court Case Tests Congress’s Authority to Detain and Deport Criminal Aliens”

No “Daubert”-Style Gatekeeping in Alabama for Expert Testimony Based on Technical or Specialized Knowledge

Featured Expert Contributor, Judicial Gatekeeping of Expert Evidence

By Tager_09181Evan M. Tager, a Partner in the Washington, DC office of Mayer Brown LLP, with Carl J. Summers, an Associate with Mayer Brown LLP.

In federal courts, Daubert v. Merrell Dow Pharmaceuticals, Inc. applies not only to scientific testimony but also to technical and other specialized knowledge. That principle stems from the text of Federal Rule of Evidence 702(a)—which expressly references an “expert’s scientific, technical, or other specialized knowledge”—and the US Supreme Court’s holding in Kumho Tire v. Carmichael, which extended Daubert’s gatekeeping responsibilities to technical and specialized knowledge. Put simply, Daubert provides a generally applicable rule for how federal judges should ascertain the reliability of expert testimony.

The same is not true in Alabama. In 2011, the Alabama Legislature adopted the Daubert standard and modified Alabama Rule of Evidence 702 to provide: Continue reading “No “Daubert”-Style Gatekeeping in Alabama for Expert Testimony Based on Technical or Specialized Knowledge”

“U.S. v. Martoma”: Second Circuit’s Latest, but Perhaps not Last, Word on Insider-Trading Tippee Liability

Featured Expert Contributor, Corporate Governance/Securities Law

bainbridgeStephen M. Bainbridge, William D. Warren Distinguished Professor of Law, UCLA School of Law.

Matthew Martoma was a portfolio manager at S.A.C. Capital Advisors, LLC, a hedge fund owned and managed by Steven A. Cohen, which had been the subject of numerous insider trading investigations. One of those investigations resulted in Martoma being charged with insider trading on the stocks of a pair of drug companies developing a new Alzheimer’s disease drug treatment. Martoma had received tips of material nonpublic information about the treatment from two drug company employees. Martoma was convicted and appealed.

In a 2-1 opinion by Chief Judge Katzmann, the Second Circuit affirmed Martoma’s conviction. Its decision in United States v. Martoma is the first major interpretation of the Supreme Court’s decision in Salman v. United States, and the first effort to determine the remaining scope, if any, of the Second Circuit’s 2014 decision in United States v. Newman. Continue reading ““U.S. v. Martoma”: Second Circuit’s Latest, but Perhaps not Last, Word on Insider-Trading Tippee Liability”

Court Ruling in Pharma Case Calls into Question Consumer Expectations Test’s Use in Asbestos Suits

Featured Expert Contributor, Mass Torts—Asbestos

RobertWright

Robert H. Wright, a Partner with Horvitz & Levy LLP in Los Angeles, CA

A recent appellate decision rejecting the consumer expectations test for strict liability in a pharmaceutical case calls into question the use of that same test in cases involving low-dose exposures to asbestos.  Trejo v. Johnson & Johnson, 13 Cal. App. 5th 110, 117 (2017), petition for review filed, (Aug. 8, 2017) (No. S243672).

Much like in pharmaceutical cases, the trials in low-dose asbestos cases invariably center on competing expert-opinion testimony regarding scientific matters beyond the everyday experience of ordinary consumers.  As a result, such cases should proceed not under a consumer expectations theory, but instead under the alternative risk-benefit theory, which is recognized in many states and has long been applied to hold that a product is defectively designed if “‘the benefits of the challenged design outweigh the risk of danger inherent in such design.’”  Tabieros v. Clark Equipment Co., 944 P.2d 1279, 1310 (Haw. 1997), quoting Barker v. Lull Engineering Co., 20 Cal. 3d 413, 455-56 (1978); see, e.g., Lamkin v. Towner, 563 N.E.2d 449, 457 (1990) (applying Barker). Continue reading “Court Ruling in Pharma Case Calls into Question Consumer Expectations Test’s Use in Asbestos Suits”