LJN Newsletters

The decision by the Third Circuit Court of Appeals overturning confirmation of a Chapter 11 plan in the Combustion Engineering ("CE") bankruptcy case has significant consequences for mass tort bankruptcies, and especially for asbestos "pre-packaged" or "pre-pack" cases. While courts have traditionally given mass tort debtors some leeway and flexibility in applying the provisions of the Bankruptcy Code, this court was clearly troubled by the particular design of the CE pre-pack, a model that has been subsequently used in other asbestos pre-pack cases. In a lengthy and far-reaching opinion issued in December 2004, the Third Circuit's ruling in the CE case may have fundamentally changed the strategy, negotiation dynamic, and structure of pre-pack asbestos bankruptcy cases.

In an important recent Daubert decision, Judge Lewis A. Kaplan of the Southern District of New York ruled that plaintiffs in the Rezulin multidistrict litigation may not rely on proposed expert opinion testimony that the medication can cause liver injury to a patient who did not experience markedly abnormal liver enzymes while on therapy. In Re Rezulin Products Liability Litigation, MDL 1348, 2005 U.S. Dist. LEXIS 3790 (SDNY Mar. 14, 2005), hereinafter ("In Re Rezulin"). Apart from its profound implications for the Rezulin litigation, the decision has far-reaching significance for pharmaceutical and toxic tort product liability cases.

National rulings of interest to you and your practice.

Recent cases of interest.

Given the burgeoning use of mediation, it is likely that most litigators, and many legal dealmakers, will find themselves representing clients in this process. It is thus imperative to understand the mediation process, its goals and possibilities, and to be effective in that process, understanding what works and what can abort the process and its positive possibilities. It is just as important to understand what not to do in the mediation process. Here is a non-comprehensive list of 10 choices counsel or parties might make that reduce the likelihood of arriving at a mutually acceptable resolution through mediation.

Employees and job applicants are increasingly filing claims of discrimination based on their appearance or image. The future scope of such claims may hinge on the outcome of a case currently pending in the U.S. Court of Appeals for the Ninth Circuit.

With little or no incremental cost, companies can now store unfathomable amounts of data and information about their business. Documents, e-mails, and financial data all can be sent and retained indefinitely with the simple click of a mouse. As remarkable and efficient as these capabilities are, they create dramatic new challenges for individuals and organizations alike. Employers, in particular, are faced with new challenges involving the retention of electronic records and data. What should be saved? How long is long enough? And what obligations do employers have to preserve electronic records when faced with actual or threatened litigation?

The message from our plaintiffs' lawyer colleagues has been steady and direct: "Don't bother defending these cases — you're going to lose and you're going to lose big. Just pay us all lots of money now and save yourself a lot of pain and agony." And what other message would they send? Their goal is to reap the highest reward from the least amount of effort. Litigating every case on every level; financing and staffing hundreds of complex trials, and waiting for final appellate review of every verdict is no way to run a mass tort practice — at least not from the plaintiffs' perspective. Given this author's perspective, it makes sense to examine the options more carefully before deciding that the only way to avoid ruin is to wire massive sums into the trial bar's trust accounts.