Posts Tagged ‘procedure’

Spreading the joy of American discovery

The United States legal system has traditionally permitted significantly more extensive pretrial discovery than other countries’ legal systems have. So what do you do if you’re engaged in litigation in a foreign country, and you want information you couldn’t obtain under their laws? Why, you simply get the U.S. courts to order those who have the information to provide it via American discovery rules, as this China Law Blog post by Dan Harris explains:

“In 2004, the U.S. Supreme Court issued the seminal decision interpreting §1782, construing the language liberally in favor of allowing discovery.  Among other things, it rejected the notion that §1782 was limited to the discovery of evidence that could be discovered in a foreign jurisdiction if the evidence was located there. Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004).

Ponder this for just a moment: The Supreme Court ruled that one could engage in U.S. discovery to gather information for a foreign litigation that one would not be allowed to gather in that foreign litigation.

And as everyone knows, if discovery is good, then more discovery is better, so, as Harris explains, the U.S. courts “tend to ‘interpret §1782 liberally in favor of permitting discovery in aid of foreign litigation.'” He gives examples, including this recent case:

In a further example of this trend, a district court in New York ordered McKinsey Company, the global consulting firm, to produce documents requested by a German litigant in aid of a lawsuit in Munich. In re Gemeinschaftspraxis Dr. Med. Schottforf, 2006 WL 3844464 (S.D.N.Y. Dec. 29, 2006). McKinsey argued §1782 did not apply because the documents were located outside of the United States. The district court disagreed, holding “Section 1782 requires only that the party from whom discovery is sought be ‘found’ here; not that the documents be found here.” Id. at 5. The court also rejected the argument that the production would be unduly burdensome because the documents would have to be translated from German into English so they could be reviewed by McKinsey’s non-German-speaking U.S. counsel.

In other words, Germans engaged in a lawsuit in Germany can obtain an order from a U.S. court to require an American company to turn over documents that aren’t even located in the United States, and that they couldn’t obtain from the German courts in which they’re actually litigating. That seems perfectly reasonable.

(Hat Tip: Ron Coleman, my co-blogger from Likelihood of Success.)

Selling an item on eBay…

…is not enough contact with the buyer’s state to subject you to the jurisdiction of its courts, according to a judge on Staten Island who ruled that even New York’s “long arm” law has its limits. (Mark Fass, “Contact Held Insufficient to Sue eBay Seller”, New York Law Journal, Mar. 7). I discussed the rise of long-arm jurisdiction, and the powerful impetus it can provide to litigation in many situations, in Chapter 4 (PDF) of my book The Litigation Explosion.

P.S. As commenter Elliot points out, “even” was not the mot juste in this circumstance; New York’s long-arm statute has never been interpreted as liberally as, say, California’s.

“A Generation of Lawyers who haven’t tried cases”

The Portland Press Herald reports on a legal debate allegedly going on in the state of Maine right now. (I say “allegedly” because the article relies on the tried and true journalistic tactic of describing what “some” say and what “others” and “critics” argue, while identifying only one or two people who take these positions.) The debate is over whether too many cases are settling out-of-court rather than going to trial; according to statistics cited, only about 2% of civil cases in Maine have made it to trial in the last two years.

Some see settlements reached by compromise as a better outcome than a trial, which is expensive and risky for both sides.

But others argue that the trend has moved justice underground. With fewer trials there are fewer public verdicts that set the legal boundaries for the rest of society. And without verdicts, there are no appeals, in which the state supreme courts make precedent-setting rulings that future decision makers can rely on.

As I mentioned, it’s unclear precisely who is taking these positions in Maine, but from the hints in the article, it appears to be trial lawyers complaining, and everyone else on the other side. The biggest complaint seems to be that cases don’t set monetary precedents that can be used to ratchet up the risks for future defendants, thus inducing them to settle for big money.

Want to be on my jury? Let’s see your handwriting

Oh well, at least it’s not as intrusive as driving around their neighborhoods and interviewing their acquaintances:

[Bob] Marx, a personal injury attorney at The Law Offices of Robert Marx in Hilo, Hawaii, regularly hires a handwriting expert to help him select a jury.

“I feel like it’s a significant competitive edge,” he said. “It’s not 100 percent accurate, but if you know some history or a little bit more about a potential juror together with this analysis, it helps a whole lot more.”

Since the mid-1990s, Marx has paid an expert to analyze jurors’ handwriting for all of his big trials. The findings help paint a picture of the jurors and point out characteristics such as whether they are likely to be leaders or followers, if they are analytical or visual, or toward which side they are likely to be sympathetic.

Marx’s last three juries awarded a total of $31 million, and he said handwriting analysis helped him.

(Vesna Jaksic, “Looking for Clues in a Juror’s ‘John Hancock'”, National Law Journal, Feb. 27).

Punitive damages and the Supreme Court

I have written a piece on the Philip Morris v. Williams case for the Business and Media Institute. For other views, see Anthony Sebok (Brooklyn Law), Alan Morrison (Public Citizen), and Adam Cohen (New York Times). Morrison argues that the federal courts have no role in reviewing state-court decisions, which makes one wonder what his position is on habeas corpus. Cohen’s op-ed misstates what happened in Andrade, which was a case of collateral (and thus limited) review, rather than a direct appeal, like Williams, where a civil defendant does not even have the option of collateral review.

Earlier on Point of Law (from which this was cross-posted): Oct. 12; May 30; Feb. 2.

Update: The American Constitution Society press briefing on Philip Morris v. Williams (in which I participated with Peter Rubin, Neil Vidmar, and Bill Schultz) is now online.

Update: Giving the state a share of punitives

Remember the legislation proposed in California by Gov. Arnold Schwarzenegger (Jun. 2, 2004), and passed amid much hoopla, asserting a claim by the state to 75 percent of punitive damage awards? It’s raised “not even a penny” for the state’s Public Benefit Trust Fund, reports John Howard for Capital Weekly (“Behind-the-scenes shell game marked punitive-damages plan”, Sept. 7). This is pretty much what I predicted in my WSJ op-ed at the time; it’s just too easy for lawyers to escape the law’s reach by settling cases before final judgment (if necessary, characterizing the sums that change hands as compensatory only). Decs and Excs Sept. 20 also points out peculiarities in the law’s specified time span of coverage that would have encouraged evasive action. Schwarzenegger has now vetoed a renewal of the law, but on grounds that the renewal had been saddled with amendments added without adequate discussion; he left the door open to reconsider the issue next year.

Jackpot justice: $20M for $25,000 insurance claim

Ted Fields was injured in an auto accident with Jimmy Woodley; Woodley’s insurer went bankrupt, so Fields, on January 30, 1997, asked Allstate to pay $25,000 in medical bills and lost wages. Allstate sent Fields forms to fill out, and he did so three weeks later; when Allstate didn’t pay instantaneously, he sued them in March 1997 for bad faith. Fields turned the discovery process into a far-reaching investigation of all of Allstate’s claim procedures; the judge refused to constrain irrelevant deposition questioning, at which point in 1999 Allstate offered Fields the full amount of his $50,000 policy limit rather than waste hundreds of thousands in trial. Fields refused; his attorneys filed several separate motions of default rather than litigate the underlying issues after the trial court denied a summary judgment motion. An appellate court found that Allstate was entitled to summary judgment because of the lack of any evidence of bad-faith in responding to Fields’s claims; the Indiana Supreme Court overturned that ruling on a procedural technicality that the appeal was premature.

The trial court ruled that Allstate was not allowed to present evidence that it was not liable for actual or punitive damages or that it acted “with anything other than dishonest purpose, moral obliquity, furtive design, and/or ill will.” A jury, hearing this one-sided sham of a trial, awarded $20 million in damages, though one would hope the Court of Appeals, hearing a timely appeal, makes the same decision it made before. Press coverage fails to mention that Allstate wasn’t allowed to defend itself at trial; the plaintiff told the jury that the dispute caused high blood pressure, heart problems, and a stroke, though then the question becomes why he isn’t suing his attorney. (Ken Kosky, “Valpo man wins $20 million verdict v. Allstate”, Northwest Indiana Times, Oct. 6).

Pelman v. McDonald’s going forward

The infamous class action litigation seeking to blame McDonald’s for the obesity of putative class members is going forward, having survived a third motion to dismiss. (Mark Hamblett, “N.Y. Judge Rebuffs McDonald’s Motion to Dismiss Deceptive Ad Claims”, New York Law Journal, Sep. 22). Judge Sweet’s opinion will be posted to the AEI Liability Project Documents in the News page later today. I discuss the Pelman case in my Taxonomy of Obesity Litigation paper. The failure of the motion means that, unless McDonald’s can persuade Judge Sweet to bifurcate discovery to resolve class certification issues first, the plaintiffs will be able to impose millions, and perhaps tens of millions, of dollars of litigation expenses on McDonald’s if they dare to defend themselves instead of buying off the class. Copycat litigation is likely.

Ironically, yesterday was the day that the folks at the Bizarro-Overlawyered site chose to attack pending legislation shutting down such ludicrous suits as “pure hype” because there supposedly were no such suits. (The House already passed the bill in a bipartisan 306-120 vote.) It’s a mystery to me why the special interest group of the litigation lobby is devoting so many resources trying to shut down legislation that they claim makes no difference. Earlier at Overlawyered: Apr. 20, 2005; Jan. 27, 2005; Sep. 4, 2003. Cross-posted at Point of Law.