Cal Biz Lit

More on Removal -- Not Always Protection Against Big, Big Verdicts

   

I blogged last week on whether removal to Federal court was the best idea for defendants in product liability cases, the short version being, generally, yes.

    But it isn't a panacea.   Pierson v. Ford Motor Co., 3:06-cv-06503-PJH was a crash-worthiness case brought by bay area indie musician Dax Pierson, who was rendered a quadriplegic in a 2005 roll-over accident.  Ford dutifully removed the case.  The jury dutifully rendered its verdict against Ford last month for $18,349,391.

Modesto Perchloroethylene Verdict: Sometimes You Win, Sometimes You Lose, Sometimes You Win And You Lose

    And I guess sometimes it's all a matter of perspective.  There's been a five month mega-trial in SF Superior  in a groundwater pollution case filed by the City of Modesto (in California's central valley) against Dow Chemical, PPG Industries and others.  The jury apparently deliberated for a month.  And with yesterday's verdict, either the City of Modesto won or Dow and PPG won:

    Per the Modesto Bee:  San Francisco jury awards Modesto $18.3 million in lawsuit.

    On the other hand, there's Law.com:  Chemical Companies Cleared in Calif. Groundwater Pollution Case.

    Apparently, the $18.3 million is less than the settlements Modesto has already collected, and Dow and Modesto dispute whether those settlements will offset the verdict.  Per Law.com, Dow was celebrating:  "Dow spokesman Jarod Davis wrote in an e-mail that the company was "pleased" by the verdict and that Modesto had failed to prove most of its claims."  So was Modesto's attorney:  "There's no question, overall, that the plaintiffs have been successful in this case."

    Meanwhile,  the same Dow that was partying over at Law.com was preparing its appeal over at the Bee:  "Michigan-based Dow Chemical said it intends to appeal the award, which it must split with PPG Industries of Pittsburgh."  And back at Law.com, Modesto's lawyer said they were going to the Court of Appeal as well.

Nine Votes. That's Nine Votes. On Every Question.

    Unlike the federal courts, where verdicts must be unanimous, California courts require that in Civil cases, 3/4 of all jurors agree.  That's Code of Civil Procedure section 618.  In most cases of any consequence, we use "special verdicts" -- a series of questions for the jury to answer, usually ending with questions to be answered -- if necessary -- about damages.  After the verdict is announced in open court, either side can request that the jurors be individually polled, and if nine of them don't each agree with the verdict's answer to each of the questions, back to the room they go.  (It doesn't have to be the same nine for every question.)

    In complex cases with multiple causes of action, the special verdict can have many questions and go on for pages.  Drafting special verdict forms (and arguing them to the jury) is therefore very much an art form. 

    In order to avoid confusion, many trial judges give each juror a colored copy of the verdict form to fill out with his or her final vote, so that each will have a "cheat sheet" when polled.  Some of the more creative judges hand out "yes/no" paddles for the jurors to raise indicating their vote on each question.

    In the case of Keener v. Jeld-Wen (May 7, 2009) ___Cal.4th___ (S16430), decided last week by the Cal Supremes, the trial court messed up the polling, neglecting to poll one of the jurors on the verdict question apportioning liability between the parties.  Since the verdict was over $4 million, and the verdict apportioned 80% of the fault to the defendant, this was of more than academic interest to both sides.  And the defendant thought it worthwhile to discuss the significance with the Court of Appeal and then the Supremes.

    Too bad for the defendant, who should have discussed it with the trial judge.  And before the jury was sent home.  Per the Cal Supremes:  the verdict is presumed correct.  And if the irregularity isn't raised in time to correct it, the irregularity is waived.

Skadden Arps Asbestos Litigation Report

    Skadden has just issued a "Trends" report on asbestos litigation, which reports, not surprisingly, that California is one of the leading jurisdictions for these cases.  Skadden notes that nationwide, the number of filings peaked at 80,000 in 2002, and the numbers are down dramatically.  But the drop-off is almost all in non-impaired, less serious claims.  Mesothelioma and other cancer claims keep plugging along. 

    This one surprised me:  according to Skadden, there were only forty trials (by which they presumably mean trials to verdict) in 2008.  If that's true, it's an astonishingly small number, and kind of a counterpoint to other data, discussed here, indicating that the civil jury trial is becoming a relic of the past.  And 90% of the verdicts were for mesothelioma cases.

    And, wow, those verdicts:  according to Skadden, "The average mesothelioma jury verdict in 2008 was approximately $7 million."  (From what we've seen, the verdicts forming the high-end of that equation are coming from California.) 

    And, predictably, settlements continue to increase.  "It is not unusual for a claimant in a mesothelioma case to receive more than $2 million in settlement from the various defendants."  Since most settlements are confidential (at least in California), the evidence for this is likely anecdotal, but I don't doubt it for a minute.

    And who are those defendants?  In many instances, they are not companies who ever considered themselves to be in the asbestos business;  that well dried up long ago.  Instead, "Formerly peripheral defendants are seeing an increase in the amounts they are paying in settlement."

   

Another Welding Rod Defense Verdict

    Not too long ago, it looked as though welding rod litigation might be the next big thing in mass / toxic tort litigation.  There were thousands of claims, many in the federal MDL, in which plaintiffs claimed Parkinsonism and other neurological symptoms from exposure to welding products.

    The second one of these went to trial last month in Alameda Superior Court, Thomas v. Lincoln Electric Company (Case No. RG0722122), and as with the first one, the jury came back -- yesterday -- with a defense verdict.

Why We On The Defense Side Like Removal Jurisdiction

    The latest California Verdict Search (reports available in paper version only) reports a defense verdict in the United States District Court for the Southern District of California (that's San Diego) in a case called Wawanesa General Insurance Company v. Applica Consumer Products, Inc.  The case is not one of great consequence -- a fire subrogation case involving a Black & Decker toaster, with about $266,000 at stake. 

    But the interesting thing is the report that

the court found that the fire experts retained by Wawanesa committed a spoliation of evidence by failing to retain other potential causes of the fire (the stove and appliances) for inspection by Applica and causing further damage to the Applica toaster oven by shipping the oven via UPS prior to allowing a joint inspection.  The jury was instructed that this destroyed evidence would have been favorable to Applica.

        This is the kind of sanction we are much, much more likely to see in Federal Court than in California state court.  You can see the defendant's two briefs on the spoliation issue here and here.  The proposed jury instruction (which the court evidently gave) is here.  You may not be surprised to learn that the jury deliberated 22 minutes before returning its defense verdict.  Maybe it was a long walk to the jury room.

Want A Great Big Verdict Against The State of Califoria? Go to Nevada

     I don't know how I missed this.  But Lawyers USA reports that the largest verdict in Nevada last year was against . . . the California Franchise Tax Board.  Under California law, the state and its agencies are immune from liability for tax collecting activities.  (They are also immune from punitive damages.)  In 2003, in Franchise Tax Board of California v. Hyatt (2003) 538 U.S. 488, the U.S. Supremes ruled that the Nevada courts did not have to extend full faith and credit to this statutory immunity.

    So this past August, after a four month trial, a Nevada jury awarded Gilbert Hyatt $388 million against the Franchise Tax Board for fraud, intentional infliction of emotional distress, abuse of process, breach of a confidential relationship and invasion of privacy.  Hyatt moved from California to Nevada before he began receiving millions of dollars in licensing fees from various inventions, but an allegedly over-zealous tax agent decided he still resided in California, vowed "to get that Jew bastard," went through his trash and mailbox, disclosed his Social Security and credit card information to third parties, etc.

    California has not had a balanced budget in nearly a year, and is getting ready to defer tax refunds and start paying creditors with IOU's.  So I suspect that Mr. Hyatt's collection efforts may stall for a bit.

Plaintiffs Lose Takada Seatbelt Buckle Case

    In the mid-1990's, the National Highway Transportation Agency and many of the automobile manufactures undertook a voluntary recall involving seat belt buckles manufactured by Takata, Japan's largest manufacturer of safety equipment.  As I recall, the recall involved the TK-52 buckle, which had a red "press" button that could break.

    Now this just in from Bloomberg:  plaintiff attorneys in Southern California tried to establish class-wide relief involving all purchasers of TK-52 buckles in California, seeking restitution of up to $247 million to replace them all. 

    No dice:

Los Angeles Superior Court Judge Maureen Duffy-Lewis rejected the claims Jan. 16, finding no violations of testing requirements, no evidence that Takata’s tests were inadequate and no evidence that consumers relied on the company’s tests. Lead plaintiff Lupe Zavala didn’t show evidence of actual injury, disqualifying him as representative of other consumers, she said.

“The plaintiffs failed to prove by a ‘preponderance of evidence’ that defendants engaged in unlawful, unfair or fraudulent conduct” concerning testing, Duffy-Lewis said in her six-page decision. “At no point in the trial did any witness suggest that the TK-52 buckle failed to work in the manner it was intended.”

    I'd be curious to know whether these were the same buckles involved in the 1995 recall.  It seems unlikely, since (a)  the recall had presumably been accomplished, and the work would have been done at no cost to the consumers;  and (b)  few of those recall vehicles (which were up to about 1991 models) would still be on the road.

Trial Court Reduces Punitive Award Against San Diego Gas & Electric

    Last September, CalBizLit blogged about a fairly shocking verdict against San Diego Gas and Electric.  In this wrongful death case, the families of four Camp Pendleton marines were awarded $14.2 million in compensatory damages and $40.4 million in punitive damages.  The marines had tragically been killed after the pilot of a marine helicopter ran it into an unlit utility tower which had been on the base for twenty-five years without incident.

    Looks as though the post-trial motions have just about wrapped, and so far, things have improved a bit for San Diego Gas:  the trial judge reduced the punitive component of the award down to a mere $8.5 million.  Hat tip to Horvitz & Levy's Punitive Damages, an Exemplary Blog.  And apparently H & L will be representing the utility on appeal.

Runaway Verdicts Just Aren't What They Used To Be

    Bloomberg reports that "the billion dollar verdict has disappeared from U.S. courtrooms."  Biggest reason seems to be State Farm v. Cambpell and its progeny.  Says Bloomberg "For the second time in the past three years, juries in 2008 issued no awards " of a billion or more.

In 2007, there was one such verdict, for $1.5 billion. In the previous 14 years there was at least one billion-dollar verdict a year and a total of 26. Six cases produced awards of more than $5 billion each.

    The largest verdict of the year did -- surprise! -- come from California.  It was the ICO v. Lockheed case CalBizLit blogged about late last year here, and a few days ago here.  A mere $606 million, or $630 million depending on the report you read.