Posts Tagged ‘Oklahoma’

“That huge opioid verdict? Watch out — the energy industry is next”

Can the lawful sale of products be retrospectively declared a “public nuisance” and tagged with enormous damages, based on theories that the products caused harm after being used by third parties not in court? Before such theories succeeded in an Oklahoma courtroom against Johnson & Johnson over its promotion of opioid painkillers, they had been unsuccessfully deployed against the makers of guns used in crime, while another set of recent lawsuits attempts to deploy them in hopes of making the sellers of fossil fuels pay for the harms of climate change. Scott Keller, Houston Chronicle/Texans for Lawsuit Reform:

Public nuisance claims traditionally have been limited to conduct interfering with truly public rights. For example, courts for decades have recognized public nuisance claims brought by governments to remove impediments from their public highways or waterways. Even then, courts generally did not recognize such claims where a legislature or administrative agency had already regulated an industry. After all, if the political branches of government regulated an industry, then they were telling courts what did and did not qualify as an unlawful “nuisance.”

But a series of recent lawsuits wants courts to ignore these limits on public nuisance claims and obliterate entire industries. These lawsuits seek to massively expand what counts as a public right, and they want courts to destroy companies that are already complying with existing regulations.

Similarly: “’A loss on the public nuisance theory in the Oklahoma opioid public nuisance theory would have been a potentially devastating state court precedent for the climate change public nuisance cases now pending in state courts,’ said Richard Lazarus, a professor of environmental law at Harvard.” [Dino Grandoni, Washington Post]

Which raises a question: when trial lawyers were pitching Oklahoma politicos on the large sums to be gained by pursuing strained public nuisance theories against opioid makers, do you think they mentioned that the theories if embraced might work to shut down the locally popular oil and gas business?

Is Oklahoma AG sure he’s got the right Johnson defendant?

Dawn Kopecki, CNBC:

SC Johnson, maker of Drano, Pledge and other household products, is threatening to sue Oklahoma Attorney General Mike Hunter for citing the company’s slogan in the state’s opioid lawsuit against an unrelated, yet similarly named, Johnson & Johnson.

“I am writing to demand that you retract your statements that have appeared in both national and local media citing the SC Johnson tagline, ‘A Family Company.’ If you do not, we will have no choice but to bring suit,” Johnson CEO Fisk Johnson said in a letter to Hunter released Tuesday.

S.C. Johnson says that even after it wrote the Oklahoma AG to warn him he was quoting the wrong company’s slogan, he went on national television and repeated the talking point.

Not to say anyone should be suing over this, but if AG Hunter didn’t know the difference between New Jersey-based pharma giant Johnson & Johnson, which he was suing for $ billions, and Racine, Wis.-based S.C. Johnson, the family-owned Johnson’s Wax company, it kind of makes my point about the demagogic populism fueling these cases. [earlier] And maybe also my point about how the private trial lawyers on contingency fee, whose expectation for a multi-billion-dollar payday will have to be met if the mass litigation is to settle, are the real brains of the opioid-suit operation.

Oklahoma judge orders J&J to pay state $572 million over opioid sales

“A judge in Oklahoma on Monday ruled that Johnson & Johnson had intentionally played down the dangers and oversold the benefits of opioids, and ordered it to pay the state $572 million.” The state had asked for $17 billion. [Jan Hoffman, New York Times and sidebar on why J&J, the deepest pocket, was the only defendant left standing in the Oklahoma case; opinion; Paul Demko, Politico; Lenny Bernstein, Washington Post] Caleb Brown interviewed me for the Cato Daily Podcast:

For other skeptical views of the case, see Daniel Fisher, Legal NewsLine (“J&J had about 3% market share, sold abuse-resistant drugs, and Oklahoma didn’t present evidence of a single doctor who was misled by its marketing.”) and followup (problems with state’s legal theory), Jeffrey Singer/Cato, and Jacob Sullum, Reason (sweeping definition of public nuisance) and followup (other problems). [More: Jonathan Turley]

Particularly worth noting is Jacob Sullum’s account of the logical path traced by Judge James Hill in North Dakota in recently dismissing a suit against Purdue Pharma:

One of the claims against the company involved a public nuisance statute very similar to Oklahoma’s. Hill noted that “North Dakota courts have not extended the nuisance statute to cases involving the sale of goods.” He cited a 1993 case in which the Tioga Public School District #15 of Williams County, North Dakota, argued that the sale of acoustical plaster containing asbestos qualified as a public nuisance.

The U.S. Court of Appeals for the 8th Circuit, which handled the case because it involved an out-of-state defendant, observed that “North Dakota cases applying the state’s nuisance statute all appear to arise in the classic context of a landowner or other person in control of property conducting an activity on his land in such a manner as to interfere with the property rights of a neighbor.” The 8th Circuit worried about the consequences of venturing beyond that “classic context”:

To interpret the nuisance statute in the manner espoused by Tioga would in effect totally rewrite North Dakota tort law. Under Tioga’s theory, any injury suffered in North Dakota would give rise to a cause of action under section 43-02-01 regardless of the defendant’s degree of culpability or of the availability of other traditional tort law theories of recovery. Nuisance thus would become a monster that would devour in one gulp the entire law of tort, a development we cannot imagine the North Dakota legislature intended when it enacted the nuisance statute.

Hill said he “agrees with the reasoning of the Eighth Circuit in Tioga.” As in that case, he said, the state in its lawsuit against Purdue was “clearly seeking to extend the application of the nuisance statute to a situation where one party has sold to another a product that later is alleged to constitute a nuisance.” Hill added:

The reality is that Purdue has no control over its product after it is sold to distributors, then to pharmacies, and then prescribed to consumers, i.e. after it enters the market. Purdue cannot control how doctors prescribe its products and it certainly cannot control how individual patients use and respond to its products, regardless of any warning or instruction Purdue may give.

Judging from the cases cited by Judge Balkman, Oklahoma courts have not read that state’s nuisance law to cover situations like this either—until now.

 

Pharmaceutical roundup

September 5 roundup

  • Event barns booming as wedding venues, but some owners of traditional banquet halls want them to be subject to heavier regulation, as by requiring use of licensed bartenders [Stephanie Morse, Milwaukee Journal-Sentinel]
  • Protectionism and smuggling in ancien regime France: “Before Drug Prohibition, There Was the War on Calico” [Virginia Postrel]
  • Thread unpacks “Big Ag bad, family farms good” platitudes [Sarah Taber]
  • “An Oklahoma judge has agreed to resign after he was accused of using his contempt powers to jail people for infractions such as leaving sunflower seeds in his courtroom and talking in court” [ABA Journal]
  • Update: North Carolina gerrymandering plaintiffs back off, concede impracticality of using new maps in time for upcoming election [Robert Barnes, Washington Post, earlier]
  • “Aretha Franklin Died Without a Will, Bequeathing Estate Issues To Her Heirs” [Caron/TaxProf]

The wages of public sector unionism

From a new paper by Michael Lovenheim and Alexander Willen, via Tyler Cowen:

Our estimates suggest that teacher collective bargaining worsens the future labor market outcomes of students: living in a state that has a duty-to-bargain law for all 12 grade-school years reduces earnings by $800 (or 2%) per year and decreases hours worked by 0.50 hours per week. The earnings estimate indicates that teacher collective bargaining reduces earnings by $199.6 billion in the US annually. We also find evidence of lower employment rates, which is driven by lower labor force participation, as well as reductions in the skill levels of the occupations into which workers sort. The effects are driven by men and nonwhites, who experience larger relative declines in long-run outcomes.

Jon Gabriel discusses the current wave of teacher strikes, Caleb Brown notes that “Kentucky Teachers Have Had Enough” — but of what? — while this Twitter thread discusses the Oklahoma walkout. More: Eric Boehm on Kentucky’s efforts to shore up underfunded teacher pensions.

Oklahoma enacts loser-pays — by mistake

Is that good news, or not? My new post at Cato at Liberty:

According to news reports last week, the legislature in Oklahoma passed, and Gov. Mary Fallin then signed, a bill whose wording directs judges to award reasonable attorneys’ fees and costs in cases of civil litigation. The provision was part of a bill on certain child abuse lawsuits, and its Senate sponsor said it was believed that the fee provision applied only to those cases until on a closer reading “it seems evident that it makes all civil cases … loser pays,” said Sen. David Holt. “But nobody caught that.”

As someone who has been writing in favor of the loser-pays principle since my first book, The Litigation Explosion, you might expect my reaction to this news (once I stopped laughing) to be positive. After all, there’s nothing wrong with a legislature enacting good policies through inadvertence. (For some legislatures, that seems to be the only way they do enact good policies.)

Sober second thoughts, however, will be less cheerful….

Whole thing here. More: Lowering the Bar.

December 28 roundup

Frontiers of forfeiture: emptying pre-paid bank cards

The Oklahoma Highway Patrol has become the latest law enforcement body to begin using “ERAD readers,” devices that allow police to freeze and seize any funds on pre-paid debit and credit cards, now used by many poorer and younger persons as a favored financial vehicle. The devices also allow police to obtain some data about conventional credit and ATM cards, but not, it appears from coverage, to freeze and seize funds in those accounts on the spot. “If you can prove can prove that you have a legitimate reason to have that money it will be given back to you,” said a police spokesman. Oklahoma “is paying ERAD Group Inc., $5,000 for the software and scanners, then 7.7 percent of all the cash the highway patrol seizes.” [Aaron Brilbeck/News 9 Oklahoma, Clifton Adcock/Oklahoma Watchdog, Scott Greenfield (highway patrol’s views of what is and is not suspicious confer a great deal of arbitrary power), Justin Gardner/Free Thought Project last October on Arizona use]

Plus: “New Mexico Ended Civil Asset Forfeiture. Why Then Is It Still Happening?” [NPR] A car is stopped for “swerving,” and soon police have confiscated the $18,000 its owner was carrying for payroll and other expenses of her southern California janitorial business [ACLU of San Diego, p. 7, “It happened to me: Janitorial business”]