Evasion of Foreign Tax Can Be Mail Fraud
The Supreme Court has decided that the Federal mail and wire fraud statutes can be used in prosecutions involving schemes to defraud a foreign government of tax revenue. The April 26 decision, written by Justice Thomas, expansively interpreted the words of 18 U.S.C. '' 1341 and 1343 and narrowly interpreted the common law "revenue rule," which some courts had viewed as limiting the reach of these statutes in cases involving foreign tax evasion. <i>Pasquantino v. United States</i>, 125 S.Ct. 1766 (2005).
Key Creditors' Rights Decision
The Second Circuit handed down a key creditors' rights decision on April 1 in <i>Sharp Int'l Corp. v. State Street Bank & Trust Co. (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 not liable for aiding and abetting management's breach of fiduciary duty, and not 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 Sharp arose.
Using Daubert to Defeat Causation in the Delayed Diagnosis Claim
The old maxim, "the earlier the treatment, the better the outcome" has been a longtime staple in plaintiffs' collection of so-called "expert medical opinions." Let's face it -- the notion that earlier treatment is preferable, while imprecise, seems like a logical conclusion for most of us. However, the Eleventh Circuit's recent decision in <i>McDowell v. Brown</i>, 392 F.3d 1283 (11th Cir. 2004), establishes that such general medical principles, which are typically based on no more than the expert physician's common-sense and anecdotal experience, are far too speculative to overcome an evidentiary challenge pursuant to <i>Daubert v. Merrell Dow Pharmeceuticals, Inc.</i>, 509 U.S. 579 (1993) and therefore fail to establish causation in a medical negligence case. This is particularly so in those cases where the defendant medical provider maintains that the plaintiff's unavoidable and unpredictable underlying condition -- and not an alleged delay in treatment -- caused the plaintiff's injury, such that the plaintiff would have experienced the same level of injury despite any alleged delay.
Fen-Phen: The Never-Ending Story
The national settlement of the fen-phen lawsuits was intended, among other things, to help defendant Wyeth, one of the world's largest pharmaceuticals manufacturers, put the lawsuits behind it. However, the number of claimants who opted out of the settlement is huge, and many of their cases are now coming to trial, with mixed results. Recently approved changes to the settlement process are also altering plaintiffs' rights. In short, the last chapter of this epic litigation is a long way from being written. So, what is happening with the fen-phen settlement and litigitions?
Recoupment Revisited: Why the Majority Should Adopt the Minority Position
In its April 2005 issue, <i>ICLB</i> published an article discussing the varying approaches courts have taken when addressing whether an insurer may conditionally defend its insured and later obtain reimbursement of defense costs if it is determined that a claim is outside the scope of coverage. <i>See</i> Pastor, Sherilyn: Insurers' Rights to Recoup Defense Costs, <i>Insurance Coverage Law Bulletin</i>, Vol. 4, No. 3 at p. 1 (Apr. 2005). As the issue was going to press, the Illinois Supreme Court issued an opinion rejecting the purported right of recoupment. <i>See General Agents Ins. Co. of Am., Inc. v. Midwest Sporting Goods Co.</i>, No. 98814, 2005 WL 674685 (Ill. March 24, 2005). Noting that its position was the "minority" view, the court in <i>General Agents</i> declined to recognize the so-called "right of recoupment" both as a matter of contract law and a matter of policy. (For an in-depth review of the <i>General Agents</i> decision, <i>see</i> Case Notes at p. 7.) The court was right on both counts.
Practice Tip: Never Overlook 'Motive' When Trying Product Liability Cases
The poor trial lawyer sat dejected as he watched the mock jury deliberating his product liability case. He and his colleagues had spent the better part of 2 days presenting their evidence to a group especially chosen by a jury consultant to reflect the demographics of the actual jurors before whom the real dispute would shortly be tried.
Federal Pre-emption of Failure to Warn Claims in Recent Drug Cases
In 2004, four drug cases, which were decided in different jurisdictions, effectively split on the issue of whether FDA labeling regulations pre-empt state common law failure to warn claims. <i>Fisher v. Professional Compounding Centers of America, Inc.</i>, 311 F. Supp. 2d 1008 (D. Nev. 2004) and <i>Kurer v. Parke, Davis & Co.</i>, 272 Wis. 2d 390, 679 N.W.2d 867 (Wis. Ct. App. 2004) endorsed the view that FDA labeling regulations did not pre-empt common law failure to warn claims in drug cases, while <i>Dusek v. Pfizer Inc.</i>, 2004 WL 2191804 (S.D. Tex., Feb. 20, 2004) and <i>Needleman v. Pfizer Inc.</i>, 2004 WL 1773697 (N.D.Tex., Aug. 6, 2004) held that FDA regulations do pre-empt failure to warn claims, at least in certain circumstances.
Decision Excluding Causation Theory in Rezulin MDL Impacts Other Cases
In an important recent <i>Daubert</i> 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. <i>In Re Rezulin Products Liability Litigation</i>, MDL 1348, 2005 U.S. Dist. LEXIS 3790 (SDNY Mar. 14, 2005), hereinafter ("<i>In Re Rezulin</i>"). Apart from its profound implications for the Rezulin litigation, the decision has far-reaching significance for pharmaceutical and toxic tort product liability cases.
West Virginia Supreme Court Strikes Blow Against 'Drive-By' Class Action Certifications
Recently, the West Virginia Supreme Court of Appeals dealt a severe blow to class actions in that state. In laying the groundwork for a more stringent approach to class certification in West Virginia, the court in <i>State v. Madden</i>, 2004 WL 2750996 (W.Va. 2004), held that it was impermissible for a court in West Virginia, a state that was widely reputed to have the most liberal medical monitoring standards in the country, to include class members from states that have not adopted such liberal theories of recovery. The decision is also important for the court's admonition that classes should only be certified where all class members meet the criteria necessary for certification and its rejection of "drive-by" certifications.
