The Class Action Fairness Act: Implications for MDLs
September 02, 2005
On Feb. 18, 2005, President Bush signed into law the Class Action Fairness Act of 2005 ("CAFA"). The primary purpose of this legislation was to reduce forum shopping in class action-friendly state courts by granting federal courts greater jurisdiction over class action lawsuits. It is this primary purpose that received most of the attention in the mainstream media and in legal analyses of this legislation.
Grable & Sons Reaffirms the Smith Approach to Federal Question Jurisdiction
September 02, 2005
The Supreme Court's recent unanimous decision in <i>Grable & Sons Metal Products, Inc. v. Darue Engineering & Manufacturing</i>, 125 S. Ct. 2363 (2005), put to rest almost 20 years of uncertainty regarding the scope of federal question jurisdiction. Responding to a split within the Courts of Appeals, the Supreme Court at long last addressed its holding in <i>Merrell Dow Pharmaceuticals Inc. v. Thompson</i>, 478 U.S. 804 (1986), that continued to baffle lower federal courts and legal scholars ' namely, whether <i>Merrell Dow</i> required a federal cause of action as a condition for exercising federal question jurisdiction. <i>Grable & Sons</i> not only responded with a resounding "no," concluding that federal question jurisdiction does not require a federal private right of action, but it also reaffirmed the Court's longstanding commitment to the broader and more flexible <i>Smith v. Kansas City Title & Trust Co.</i>, 255 U.S. 180 (1921), approach to federal question jurisdiction.
First Vioxx Ruling What Does It Mean for Merck?
September 02, 2005
Merck & Co., founded in 1891, has a slogan — what it calls its "guiding philosophy." That philosophy is, "patients first." In the first of many Vioxx trials expected to be litigated in state and federal courts across the country, the jury wasn't buying it. On Aug. 19, after a month-long trial, ten out of 12 jurors — the number needed to return a verdict of guilty — found Merck liable to the plaintiffs, survivors of a man who took Vioxx for pain relief. The damages award was staggering: $24.5 million in economic losses and compensation for mental anguish and $229 million in punitive damages.
Case Briefs
September 01, 2005
Highlights of the latest insurance cases from around the country.
Documentation Requirements: No Right for Excess Carriers to Second-Guess Primary Carriers' Settlement Payments
September 01, 2005
Since 2001, numerous insurance companies have sought to impose on asbestos liability claims so-called "Documentation Requirements" ("DRs"), seeking to limit coverage provided by its policies to those claims that meet certain criteria. Those insurance companies assert that the DRs are necessary to counter the growing number of unsubstantiated asbestos-related bodily injury claims brought against policyholders. Generally, the DRs require a policyholder to provide medical documentation and data to show each asbestos injury for each claimant, as well as provide product identification and exposure history. <i>See</i> Scott Moser, Mealey's Seminar, 16 <i>Mealey's Litig. Rep.</i> 12 (Dec. 11, 2001) (an attorney for Equitas speaking about the documentation requirements). The policyholders, on the other hand, see the DRs as unreasonable conditions to coverage that are not found anywhere in the policy language. They argue that in many cases it may be reasonable for them or for their primary carriers to settle or to have settled claims for which there is not yet fully developed information, to avoid, <i>inter alia</i>, increased defense costs and the possibility of a much higher judgment if the information developed is unfavorable.
Keeping Up With Keeping Up
September 01, 2005
Compliance -- dotting all the i's and crossing all the t's in a regulated business -- has always been difficult. The slightest error can lead to fines, a business shutdown or even jail time for executives.
Filtering Through Regulatory Compliance
September 01, 2005
The advantages of doing business in a digital economy -- paperless transactions, instant communication, effortless administration and reaching out across borders to far-away locations to collaborate with partners in a virtual community -- are precisely the risks of doing business in a digital economy.
Good Faith Lender Has No Fiduciary Duty to Other Creditors Or Its Borrower
August 31, 2005
The Second Circuit recently handed down a key creditors' rights decision <i>Sharp Int'l Corp. v. State Street Bank & Trust Co.</i> (<i>In re Sharp Int'l Corp. & Sharp Sales Corp.</i>), 2005 U.S. App. LEXIS 5241(2d Cir. Apr. 1, 2005). The court affirmed the lower courts' finding that a secured lender was <i>not</i> liable for aiding and abetting management's breach of fiduciary duty, and <i>not</i> liable for receiving a $12.25 million loan repayment from a closely held borrower it correctly suspected of engaging in massive fraud. The decision limits the scope of a lender's duties to its borrower and other creditors. Absent the lender's participation in its borrower's fraud, the lender should have no liability on a fraudulent transfer theory or on any other basis at least in New York, where <i>Sharp</i> arose.
