Blog
Lawsuit Funders Accuse Lawyers of Fraud
The plaintiffs’ lawyers in a multibillion environmental lawsuit have been accused of defrauding the investors that were funding the suit, Roger Parloff reports in Fortune. In a letter to lawyers, the funders write “we believe that you and particularly your U.S. representatives engaged in a multi-month scheme to deceive and defraud in order to secure desperately needed funding, all the while concealing material information and misrepresenting critical facts in the fear that we would have walked away had we known the true state of affairs.”
CAFA Before the Supreme Court
The Supreme Court today will hear will hear oral arguments on “the lawsuit industry’s attempt to end-run Congressional limits on abusive class actions,” says a Wall Street Journal editorial. The court will decide whether plaintiffs can bypass the Class Action Fairness Act if they cap their damages at $5 million, the threshold for removing cases to federal court. “Congress has addressed this state-court abuse, and we hope the High Court protects the law that restored some sanity to class actions” concludes the Journal.
Asbestos Filings in MadCo Hit Record High
The number of asbestos lawsuits filed in 2012 in Madison County, Illinois reached an all-time high of 1,563, an increase of more than 600 from the previous year. Asbestos filings have steadily increased in Madison County since 2006, reports the Madison County Record. Madison Country was named the sixth most unfair and unreasonable jurisdiction in the nation in ILR’s most recent lawsuit climate survey.
FCPA Penalties Fall in 2012
Main Justice reports that the DOJ and SEC combined to collect $260 million in FCPA fines and penalties in 2012, down 60 percent from 2011. According to Gibson Dunn & Crutcher LLP’s 2012 Year-End FCPA Update, the drop is due to several big trials and the drafting of an FCPA guidance document that dominated staff time.
U.S. Chamber Film Spotlights How Lawsuits Closed a Manufacturing Icon
The U.S. Chamber Institute for Legal Reform (ILR) today announced the release of a first-of-its-kind short film spotlighting the last week in business for portable gas can manufacturer Blitz USA before frivolous lawsuits forced it to close. The short film, viewable at FacesOfLawsuitAbuse.org, marks the campaign's most aggressive effort to date in chronicling the toll lawsuit abuse takes on American small businesses and jobs.
Blitz USA's closure is emblematic of the real life consequences of lawsuit abuse because it was the largest company in its field, an anchor in its community, and provided 117 American manufacturing jobs. Sadly, when plaintiffs' lawyers sense vulnerability, it can set off a feeding frenzy of lawsuits and settlements that can cripple an employer and cost people their livelihoods in the process."
The short film is the centerpiece of a national media campaign starting this month and running into 2013.
At its peak, Blitz USA, the 50-year-old producer of three out of every four portable gas cans nationwide, employed 350 people in the small town of Miami, Oklahoma. But over the last decade, a wave of costly litigation took its toll, and lawsuits finally drove the company out of business.
As the cases mounted and Blitz was forced to empty more than $30 million from its coffers in defense and damage fees, the company had to declare bankruptcy, forcing its 117 employees out of work and sending more than 400 people into the community without health insurance.
ILR initiated the Faces of Lawsuit Abuse campaign to make the public more aware of the personal consequences that litigation brings to communities.
Since the site launched, Faces of Lawsuit Abuse videos have been viewed more than 10 million times, and garnered over 500 million paid advertising impressions since the campaign began. Some videos will be reformatted to run as 30 second TV ads, and some have been featured as movie theater trailers to run before feature films on nearly 300 screens.
Ending the Asbestos Racket
Ohio is on the verge of becoming the first state to clamp down on the abuse of asbestos bankruptcy trusts by requiring greater transparency from claimants. The trusts, established to compensate asbestos victims when defendant companies go bankrupt, risk being prematurely depleted when plaintiffs’ lawyer “double dip,” first making claims to the trusts and then filing lawsuits against solvent companies for the same injury, the Wall Street Journal reports.
Landmark Ohio Bill Will Curb “Double Dipping” of Asbestos Claims
A first of its kind bill that would prevent “double dip” claims against asbestos bankruptcy trusts and in the tort system is currently on its way to Governor John Kasich for signature.
Landmark Ohio Bill Will Curb “Double Dipping” of Asbestos Claims
A first of its kind bill that would prevent “double dip” claims against asbestos bankruptcy trusts and in the tort system is currently on its way to Governor John Kasich for signature.
This is an enormous development as Ohio will be the first state to pass an asbestos bankruptcy trust law. ‘As Ohio goes, so goes the nation,’ and we hope this will result in a domino effect with other states passing legislation to ensure that the tort and trust systems work together fairly to compensate asbestos victims.
This bill, HB 380, will go a long way toward eliminating fraud in asbestos litigation, discourage ‘double dipping’ by plaintiffs’ lawyers, and ensure that companies and bankruptcy trusts both pay their fair share of recoveries to claimants. It will also help Ohio manufacturing companies and protect jobs by ensuring that companies are not bankrupted by fraudulent claims.
We commend House Speaker Pro Tempore Louis Blessing, Jr. for introducing this legislation, as well as Senate President Tom Niehaus, Senate Judiciary Chair Mark Wagoner, and Senator Bill Seitz for their leadership on this issue. We are hopeful that Governor Kasich will promptly sign this bill into law.
FCPA Guidance An Important Step Forward In An Ongoing Process
Today, the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) released guidance on enforcement of the Foreign Corrupt Practices Act (FCPA).
We commend DOJ and the SEC for upholding their commitment to issue guidance this year under the FCPA and for hearing out the business community’s concerns. This is the first time the key enforcement agencies have produced a unified document outlining interpretations, rationales and overall guidance for compliance. As such, this document represents an important step forward in an ongoing process of providing much-needed clarity and certainty to the business community.
While it will take some time to fully digest the guidance, it addresses several areas of concern outlined by ILR and more than 30 trade and business associations earlier this year. Particularly, the guidance includes helpful hypothetical scenarios, case studies, and policy statements covering de minimis thresholds, the meaning of an ‘instrumentality’ as a defined component of a foreign official, the mens rea standard for corporate criminal liability, and the extent of liability for successor companies. It also includes a number of examples of cases the enforcement agencies have declined to pursue to date.
While guidance by definition can never provide the same certainty as an affirmative statute, we’re hopeful that this document will help companies seeking to comply with the law in good faith and prosecutors charged with enforcing it. The business community will continue to engage with the DOJ and the SEC as they enforce the statute consistent with today’s guidance.
In February, ILR and more than 30 trade and business associations sent a letter to DOJ and the SEC that identified numerous critical areas that the FCPA guidance should address. In April, ILR hosted a roundtable discussion with officials from DOJ and the SEC about the guidance on FCPA enforcement and the business community’s related concerns.
