“The $1 billion settlement of traumatic brain injury claims by retired NFL players is shaping up to be an important test of judicial power to regulate contracts between plaintiffs in multidistrict litigation and outside legal funders.” [Alison Frankel, Reuters]
Posts Tagged ‘litigation finance’
Liability roundup
- Hoping to blame Pacific Gas & Electric power lines for Northern California fires, lawyers from coast to coast descend on wine country [Paul Payne, Santa Rosa Press-Democrat]
- Courts should police lawyers’ handling of class actions, including temptation to sweep additional members with doubtful claims into class so as to boost fees [Ilya Shapiro, Trevor Burrus, and Reilly Stephens on Cato certiorari amicus in case of Yang v. Wortman]
- “Seventh Circuit Curtails RICO Application to Third-Party Payor Off-Label Suits” [Stephen McConnell, D&DL] “Here Is Why The False Claims Act Is An ‘Awkward Vehicle’ In Pharma Cases” [Steven Boranian]
- Litigation finance moves into car crash business [Denise Johnson, Insurance Journal]
- Slain NYC sanitation worker’s “frequent advice to Sanitation colleagues about how to save for the future helped persuade the jury that Frosch had a viable career ahead of him in financial planning,” contributing large future earnings component to $41 million award [Stephen Rex Brown, New York Daily News]
- “Ninth Circuit Overturns State Licensing Scheme Forcing Businesses to Incorporate in California” [Cory Andrews, WLF]
Liability roundup
- Multi-district litigation still a Wild West realm: “Lawyers for Civil Justice Urges Reform of MDL Procedures” [request for rulemaking via TortsProf] “Multidistrict Litigation Reform: The Case for Earlier Application of Federal Pleading Standards” [James Beck, WLF]
- Lawyer vs. lawyer: “Philadelphia Injury Firm Sues Morgan & Morgan for False Advertising” [P. J. D’Annunzio, The Legal Intelligencer]
- Trespasser injured climbing electrical tower loses suit against Metro-North railroad and utility [Robert Storace, Connecticut Law Tribune; Daniel Fisher, Legal NewsLine, earlier] “Ohl was walking along the train tracks with earbuds in on March 2”; family now suing CSX [Amanda C. Coyne, Atlanta Journal-Constitution]
- “The U.S. Supreme Court Reins in Discovery Sanctions” [Phil Goldberg and Kathryn Constance, IADC]
- Annual state lawsuit climate survey from U.S. Chamber is out; could be a “wake-up call” for Delaware, assumed to have pro-business courts [Zoe Read, Newsworks]
- Boom in third-party litigation finance continues apace [Longford Capital]
Liability roundup
- Uphill battle in Congress for bill to “prohibit federal courts from issuing awards that consider the victim’s race or gender, among other demographic variables” [Kim Soffen, Washington Post on “Fair Calculations Act”]
- Normalizing champerty, the Ann Arbor way: University of Michigan endowment to take stake in litigation finance fund [Janet Lorin, Bloomberg News]
- Lawsuit Abuse Reduction Act (LARA), restoring sanctions for groundless litigation, cleared House committee vote last month [@HouseJudiciary]
- “Lynch’s Doubling of False Claims Act Fines Could Be Bonanza for Trial Lawyers” [Joe Schoffstall, Washington Free Beacon]
- “Katrina victims shocked by small payments in levee failure case they ‘won’ – $118 each, on average” [David Hammer, WWL-TV]
- Advisory Committee on Civil Rules considers revising Rule 23 on class actions [Washington Legal Foundation comments]
December 14 roundup
- Irony alert: Get-money-out-of-politics measure passes 53-47 in Howard County, Md. after backers outspend foes 10-1 [Len Lazarick, Maryland Reporter]
- “Hershey’s Scoffs At Class Action Over Amount Of Kisses In Bags” [Dee Thompson, Legal NewsLine/Forbes]
- Philippines bar responds after president Duterte menaces lawyers of drug suspects [Tetch Torres-Tupas/Inquirer, InterAksyon and letter]
- What should Trump do re: conflicts? Richard Painter and David Rifkin discuss [Federalist Society podcast; earlier]
- Massachusetts Attorney General Maura Healey, lately seen in this space using subpoena power to go after political adversaries who hadn’t taken a dime from ExxonMobil, also known for curious assault on gunmakers [David Meyer Lindenberg, Fault Lines]
- “N.Y. Top Court Rules Litigation Finance Transaction Violates Champerty Doctrine” [Kevin LaCroix, Alison Frankel on Justinian Capital SPC v. WestLB AG] “An epic legal battle with big implications for litigation funding” [The Economist on Liberian insurance claims against Cigna]
English Court of Appeal: litigation funders on hook for fee shift
Casting aside traditional prohibitions on champerty and maintenance, the United Kingdom has of late thrown open its doors to “litigation finance” enterprises that fund legal actions as an investment in exchange for a share of the proceeds. But now a very important constraint may be developing as a corollary: backers of legal action may find themselves on the hook for the fee shifts that are payable to successful opponents under the country’s loser-pays (“costs follow the event”) rules. “Litigation funders will be liable for indemnity costs where these are awarded against their funded client, even if the funder itself has been guilty of ‘no discreditable conduct’, the Court of Appeal ruled today in Excalibur Ventures v Texas Keystone and others [2016] EWCA Civ 1144.” [Law Gazette]
Litigation roundup
- Settlement insurance, a new litigation-finance mechanism, can have the unintended result of casting light on just how little benefit some class actions provide to consumers [Ted Frank, CEI] Yet another new litigation finance mechanism: trial-expense insurance purchased by lawyers [Bloomberg/Insurance Journal]
- South Carolina law firm sues 185 different defendants in the average asbestos case it files, and it’s still far from tops in that department [Palmetto Business Daily]
- “Those terms and conditions (that nobody reads) could cost New Jersey retailers” [Tim Darragh, NJ.com on class actions under pre-Internet-era state consumer protection law]
- Some federal courts, while paying lip service to the important Rule 26 discovery reforms that took effect Dec. 1, continue in their old ways, “effectively applying the old standard” [James Beck]
- “Can Pokémon Go and Product Liability Coexist?” [Julie Steinberg, BNA/Product Safety & Liability Reporter, earlier]
- “How does privatization affect liability?” [Sasha Volokh]
Liability roundup
- Big win for Ted Frank’s objector project in Walgreens case: “Posner opinion blasts class actions that are ‘no better than a racket'” [ABA Journal, Kevin LaCroix/D and O Diary, Cook County Record]
- “It’s a bonus if they went [to the hospital] in an ambulance”: litigation funding moves into mainstream [Sara Randazzo, WSJ]
- Class actions and lawyer collusion: why the Supreme Court should review Schulman v. LexisNexis [Ilya Shapiro and Jayme Weber, Cato]
- “Should Judges Allow Juries To Hear A Windfall May Be Bad For A Plaintiff?” [Kyle White, Abnormal Use]
- California Supreme Court OKs basing class action fees on settlement size rather than hours worked [Alison Frankel, Reuters; earlier on Laffitte v. Robert Half International]
- “Contra Plaintiffs’ Bar, Registering to Do Business Does Not Create General Jurisdiction” [Mark Moller, Washington Legal Foundation]
Gordon Crovitz on “Peter Thiel’s Legal Smackdown”
The discovery that systematic lawsuit campaigns can be aimed at the press, and not just against every other institution, might be reason to rethink litigation-as-weapon [Gordon Crovitz, Wall Street Journal]:
Walter Olson, author of “The Litigation Explosion” (1991), explained in his Overlawyered.com blog that Mr. Thiel’s approach was predictable after maintenance “metamorphosed around the 1960s into what we now know as the public interest litigation model: foundation or wealthy individual A pays B to sue C. Since litigation during this period was being re-conceived as something socially productive and beneficial, what could be more philanthropic and public-spirited than to pay for there to be more of it?”
With maintenance decriminalized, Mr. Olson warns, “It will be used not just against the originally contemplated targets, such as large business or government defendants, but against a wide range of others—journalistic defendants included.”
Litigation funding, mass torts, and phantom clients
The Peter Thiel/Hulk Hogan story has brought the topic of litigation finance into the news, and a recent Alison Frankel column notes an alleged secret $10 million investment in the BP gulf spill case that might possibly have served as overstimulus: “Most of 40,000 seafood workers …turned out to be phantom clients…one, famously, was actually a dog.” [Reuters]