Overlawyered: Chronicling The High Cost Of Our Legal System

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State AGs on drugs

Those who follow the activities of state attorneys general know of their interest in the pharmaceutical industry. Last week, Vermont AG William Sorrell was named president of the National Association of Attorneys General (NAAG) for 2004-05. In his presidential address, Sorell announced that “the issue of drug pricing” would be NAAG’s “particular focus” during his tenure. Sorrell raised the following questions:

“What drives our high drug prices? Is it true that the pharmaceutical industry is the most profitable industry in this country? Is it true that our national spending on prescription drugs more than tripled from 1990 to 2001? Do research and development costs explain the prices we pay? What are the effects of advertising and other forms of marketing on demand for prescription drugs and the amounts we pay for them? If it is true that industry direct-to-consumer advertising expenditures increased seven times between 1995 and 2001, why has this been so and how are prices affected by these increases?

“What about conduct by companies that have violated state and federal antitrust, consumer protection and other laws? Is this another cost driver? And how transparent is the prescription drug marketing and distribution system? Why are cheaper generic equivalents neither prescribed by more doctors nor desired by more patients?”

There is a NAAG meeting scheduled for Chicago in January on this subject.

For more on this subject, go to this post on Point of Law.

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On the importance of secure property rights

“Everyone knows” the institution of private proprety is important to a society, but proving just how important has, somewhat surprisingly, been tricky. A new paper by Daron Acemoglu (MIT), Simon Johnson (MIT), and James Robinson (Berkeley), makes the case that “differences in economic institutions appear to be the robust causal factor underlying the differences in income per capita across countries.” (Emphasis added.) The authors define good “economic institutions” as including “enforcement of property rights for a broad cross-section of society so that all individuals have an incentive to invest, innovate and take part in economic activity.” Additionally, there must be “some degree of equality of opportunity in society, including such things as equality before the law, so that those with good investment opportunities can take advantage of them.” In an earlier paper, the authors coined the term “institutions of private property” to cover this idea, and the term “extractive institutions” to cover situations where “the rule of law and property rights are absent for large majorities of the population.”

The paper, Institutions as the Fundamental Cause of Long-Run Growth, makes fascinating reading, even for a non-economist. It is available for purchase from the National Bureau of Economic Research (NBER subscribers can download it for free). A less-than-final draft, dated April 29, is also available on Professor Acemoglu’s webpage.

PointOfLaw.com now open

Point Of Law, the new site that the Manhattan Institute is launching with my assistance, has now opened its doors. There’s a lot to explore including a series of top-drawer reprints of great law review articles of the past. The center attraction, however, is a new weblog on which both Ted Frank and I will be posting, along with Jim Copland of the Manhattan Institute and some players to be named later. We’ve been putting up experimental posts for a couple of weeks now so there are dozens of them there now which have never appeared on this site; recent topics of discussion include the controversy over Judge Calabresi’s remarks at the American Constitution Society (posts by Jim Copland one, two); a report on the introduction of trial by jury into Japan; and tag-team coverage of New York Timesman Bob Herbert’s ineffably lame recent diatribes on medical malpractice (Frank, Copland, Olson).

Beyond that, we’ve enriched the site with selected highlights from the Overlawyered archives, including Ted’s must-save discussion of the Stella Liebeck versus McDonald’s hot coffee case. Many more features to come, and Prof. Bainbridge has already given the site a nice welcome, as have Prof. Grace, Prof. DeBow and “How Appealing”‘s Howard Bashman. Why don’t you give it a look/link now too?

P.S. In response to reader inquiries: no, I have no plans to scale back (let alone discontinue!) Overlawyered. PointOfLaw is separate and additional. (expanded and bumped 6/24).

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Muslim trucker: you can’t make me haul beer

In Nashville, Tenn., Ibrahim Barzinji has sued his former employer, Arkansas-based J.B. Hunt Transport Inc., on the grounds that asking him to transport alcoholic beverages violated his religious beliefs. Barzinji, who is representing himself in the case, “said he had just trucked a load of auto parts from Clarksville to St. Louis on June 26 last year when he was asked to pick up a return load at the Anheuser-Busch plant.” He informed his supervisor that he was refusing to handle the cargo, and was dismissed. “A local labor and employment attorney said that, to prove his case, Barzinji would have to convince a judge or jury that asking to be assigned a different load was reasonable and would not cause undue hardship on the company.” The issue has come up before in a somewhat different context: “Muslim cab drivers at the Minneapolis airport several years ago began refusing to pick up passengers who carried duty-free alcohol, said Ibrahim Hooper, spokesman for the Council on American-Islamic Relations, a Washington, D.C.-based advocacy group.” (Anita Wadhwani, “Fired Muslim truck driver sues employer”, The Tennessean, Jun. 23).

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Alabama has a new chief justice

Alabama governor Bob Riley this morning appointed Drayton Nabers to serve the two years remaining in the term of Roy Moore. (Moore, you may recall, was removed from the bench by the Alabama Court of the Judiciary for failing to comply with a federal court order to remove a Ten Commandments monument from the state judicial building.)

Nabers, a graduate of Princeton and the Yale Law School, clerked for Justice Hugo Black (1965-66) and practiced law in Birmingham for a number of years before joining Protective Life Corporation in 1979. He retired as chairman of the firm’s board of directors in 2003 and then joined the Riley administration as the state budget director. Nabers’s stature is such that a former president of the Alabama Trial Lawyers Association is quoted in the story linked above as saying, “”I believe he’s such a man of integrity that he will not put his personal background in the way of fairly dealing with each issue before him.”

Nabers has not decided whether he will run for re-election in 2006.

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Guest blogger of the week

My name is Mike DeBow, and I teach property and corporate law at the Cumberland School of Law at Samford University, in Birmingham, Alabama. I am also interested in state law reform and issues surrounding state judicial selection. During 2000-2004 I served part-time as a special assistant to Alabama attorney general Bill Pryor.

Readers who, unaccountably, want more info about me can click here or here. What doesn’t show up on either of those webpages is the fact that I’ve been a guest blogger at Southern Appeal for almost a year.

I am a long-time fan of Walter’s, and a diligent reader of Overlawyered. My thanks to Walter for the invitation to join him this week.

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Guest blogger coming tomorrow

It’s guest blogger season again, and our first guest blogger of the summer begins a week of posting tomorrow — be sure to stop by. We’ve lined up another distinguished guest who will be joining us next month, and more volunteers/nominations are welcome: just email.

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Massachusetts tobacco fees: “Greed on Trial”

“The question before the jurors was not whether legal fees amounting to $7,700 an hour were ‘unreasonable.’ It was whether the lawyer-plaintiffs should get $1.3 billion more.” Detailed account of tobacco-fee buccaneering and the resulting courtroom antics (complete with “trained-seal” expert witnesses) in one state. When contemplating the tobacco crusade, the chief of litigation at Brown Rudnick said, “I had dollar signs in my eyes, even back at that early stage. And I know that they were large dollar signs.” (Alex Beam, The Atlantic, Jun.). For our coverage of Massachusetts tobacco fees, see Nov. 4 and links from there.

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Baron to co-chair Kerry’s “Victory ’04”

Almost enough to make you want to vote for Bush: Dallas mass tort operator Fred Baron, poster boy for legal ethics and co-finance chairman of John Edwards’ presidential campaign (see Feb. 19), has been named co-chairman of Kerry Victory ’04, a joint effort by the Democratic National Committee and the campaign of presumptive nominee Kerry. “Baron says his contacts with contributors who can write big checks which, no doubt, include high-profile Texas plaintiffs lawyers were, in part, responsible for him getting the new post.” (“Texas Lawyer With Edwards Ties Joins Kerry Team”, Texas Lawyer/New York Lawyer, Jun. 2). More: detailed article on how Kerry, whose “voting record shows strong support for the plaintiffs bar”, has inherited the support of John Edwards’ trial-lawyer-based fund-raising machine (Lily Henning, “Edwards’ Army Recruited for Kerry Cash Push”, Legal Times, Jun. 18). Includes quotes from Washington mass tort attorney John Coale (“Kerry has just about a perfect record on issues that interest lawyers and trial lawyers,”) and our friend Lester Brickman. What if Kerry names Edwards as his v.p. pick? “If he’s on the ticket, you can reasonably predict that the amount of giving from trial lawyers will double or triple,” Brickman says. “They will unzip their wallets like they never had before. This would be unprecedented.” Yet more: the AP is on the story (Sharon Theimer, “Trial lawyers boost Kerry’s campaign effort”, AP/Houston Chronicle, Jun. 20)

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