Jonathan B. Wilson

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Jonathan Wilson is an Atlanta attorney with more than 19 years of experience guiding growing private and public companies.  He currently serves as the outside general counsel of several companies and is the former general counsel of Web.com.com (NASDAQ: WWWW) and EasyLink Services (NASDAQ: ESIC).  He is also the founding chair of the Renewable Energy Committee of the American Bar Association's Public Utility Section.

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Wednesday, August 31, 2005

Editorials Against Lockyer's French Fry Suit
Debra Saunders, a refreshing breath of economic clarity among the editorial writers in San Francisco, weighs-in on the Lockyer French Fry suit:
AMERICA has become the country of the warning label. California is the warning-label state. Since California voters in 1986 approved Proposition 65 -- which mandates warnings when people are exposed to known carcinogens or chemicals that cause birth defects -- to live in California is to be warned. Most office buildings and parking garages post Prop. 65 warnings. When you fill your gas tank, there's a warning. When you go to a department store or a restaurant, there are warnings. Ditto the grocery store, where there are warnings not just about lighter fluid, nail polish and the effects of alcohol, but for fruits and vegetables, nuts and fish.
 
Now, if Attorney General Bill Lockyer has his way, you can expect warning labels for fast-food french fries and potato chips.
 
***
 
Ed Weil of the attorney general's office thinks the FDA is wrong. . . . Weil notes that the Environmental Protection Agency limits acceptable acrylamide amounts to .5 micrograms per liter of water, while the government found 40 micrograms in the average serving of chips or fries. . . .
 
Weil agrees there are too many warning signs -- although he argued that grocery stores, for example, post warning signs mainly to stop nuisance lawsuits. Lockyer is pushing the acrylamide issue, Weil said, because it is the government's job to dispense information and let consumers decide if they care about a possible carcinogen. (emphasis added)

Worth noting is the risible inaccuracy in Weil's statement.  If the AG's office were concerned with "dispensing information" it could have accomplished that with a press release.  Suing a handful of national restaurant chains has nothing to do with dispensing information.  It has everything to do with forcing private businesses to change their behavior and with adding leverage to civil class actions pending or threatened against those businesses.

And to what end does Lockyer intend this litigation?  Is he seeking "damages" from fast food restaurants?  (For what, I cannot fathom).  Is he seeking a court order that would compel the restaurants to post warning labels and signs?

Saunders continues:

Even Lockyer isn't that alarmed. In a press release announcing the suit, Lockyer said, "I am not telling people to stop eating potato chips or french fries."

Now I ask you: If people shouldn't stop eating these foods, why post a warning?

***

If Lockyer wanted to perform a true public service, he'd devise a way to whittle down the long list of Prop. 65 baddies. Instead he's fattening up the list.

Oddly, Lockyer is taking this stand as he begins his bid to become state treasurer in 2006. Some treasurer he'd make. With this lawsuit, I'm convinced of only one thing: That Lockyer knows how to waste money.

 
8:10 am edt 

Monday, August 29, 2005

California French Fry Suit
California Attorney General Bill Lockyer has filed suit against a number of national fast-food chains, alleging that their sale of french fries endangers public health.  (LA Times; Ted Frank). 
 
In particular, the suit claims that sellers of french fries and potato chips violate a California labelling law because these foods may contain acrylamide, a suspected carcinogen.  The 1986 California law requires businesses to post warnings about certain types of hazardous materials and the AG's suit claims that the restaurants are in violation of the law for failing to post warnings on french fries and potato chips.
 
Like many food-related lawsuits, the link between arcylamide and cancer is far from clear.  At least one researcher has concluded that "[r]ecent epidemiological studies failed to evidence an association of cancer incidence and dietary acrylamide exposure." 
 
What is especially noteworthy about the suit is that California's Office of Environmental Health Hazard Assessment was still in the midst of assessing the issue when the suit was filed.
 
What possible public benefit could accrue from filing this suit before the State's regulatory organs had completed their study and given the defendants an opportunity to comply?  Why bother having regulators if state attorneys general file suit at the first opportunity?
 
One suspects that Attorney General Lockyer, who has a track record of grandstanding with high profile litigation, is pursuing this suit (a) as a sop to his plaintiff lawyer supporters (who may recognize higher settlements on their own fast-food cases as a consequence) and (b) as a publicity stunt to benefit a future run for governor.
9:27 am edt 

Sunday, August 28, 2005

Are American Law Profs Too Liberal?

Am upcoming Georgetown Law Review article, previewed in the NY Times, examines political contributions by law professors at prestigious law schools and concludes that law faculties lean to the left:

The study, to be published this fall in The Georgetown Law Journal, analyzes 11 years of records reflecting federal campaign contributions by professors at the top 21 law schools as ranked by U.S. News & World Report. Almost a third of these law professors contribute to campaigns, but of them, the study finds, 81 percent who contributed $200 or more gave wholly or mostly to Democrats; 15 percent gave wholly or mostly to Republicans.

The percentages of professors contributing to Democrats were even more lopsided at some of the most prestigious schools: 91 percent at Harvard, 92 at Yale, 94 at Stanford. At the University of Virginia, on the other hand, contributions were about evenly divided between the parties. The sample sizes at some schools may be too small to allow for comparisons, though it bears noting that by this measure the University of Chicago is slightly more liberal than Berkeley.

 
Read the rest on PointofLaw
3:45 pm edt 

Ambush in Angleton
University of Chicago law professor Richard Epstein takes Mark Lanier and the Vioxx plaintiffs' lawyers to task in Saturday's edition of the WSJ:
I would like to send my message to Mr. Lanier and those indignant jurors. It's not from an irate tort professor, but from a scared citizen who is steamed that those "good people" have imperiled his own health and that of his family and friends. None of you have ever done a single blessed thing to help relieve anybody's pain and suffering. Just do the math to grasp the harm that you've done.
 
* * *
 
Much as I disapprove of how the FDA does business, we must enact this hard-edged no-nonsense legal rule: no drug that makes it through the FDA gauntlet can be attacked for bad warnings or deficient design. In plain English, Mr. Lanier, you're out of court before you make your opening statement. You've already proved beyond a reasonable doubt that the fancy diagrams that university economists use to explain why the negligence system maximizes social welfare is an academic delusion that clever lawyers use to prop up a broken tort system.
7:22 am edt 

Saturday, August 27, 2005

Class Action Against Milberg Weiss?
Washington Legal Foundation, a generally conservative think tank that often advocates litigation reform, is floating the idea of a class action suit against Milberg Weiss based on the allegations that have surfaced in a recent indictment of one of its clients.
 
As reported earlier (see coverage on Overlawyered), federal prosecutors have indicted Seymour Lazar, an attorney and frequent client of Milberg Weiss who has been the lead plaintiff in a number of securities suits handled by the firm.  Prosecutors believe that Lazar received kickbacks from the firm for acting as lead plaintiff in several of those suits.  Since Lazar's indictment, legal blogs have speculated on the possibility of an indictment of the Milberg Weiss firm. 
 
In a seminar earlier this week, Washington Legal Foundation executive Paul Kamenar raised the idea of a civil class action against Milberg Weiss, filed by its former class action clients.
 
Reporting in Law.com:
"To the extent that shareholders were either defrauded or misled," he said in an interview Wednesday, "or kickbacks were given, there should be some liability, to be sure."

For example, Kamenar said the former class members could sue over fraud claims, unjust enrichment, breach of fiduciary duty (if lawyers put lead plaintiffs' interests ahead of the rest of the class) and -- for good measure -- civil Racketeer Influenced and Corrupt Organizations Act violations.
One of the lessons taught by our legal system, unfortunately, is that if you can articulate a cause of action, there is probably a lawyer who will file it.  I would not be surprised to see such a claim filed in the coming months. 
 
Whether this bodes good or ill, I cannot say, although I must empathize with Kamenar that it would be "poetic justice."
7:21 am edt 

Holocaust Lawyer Sanctioned
Controversial lawyer Ed Fagan has been sanctioned by Southern Southern District of New York Judge Shirley Wohl Kram, as she dismissed his case against Austrian Bank Creditanstalt. 
 
Judge Kram dismissed Fagan's case, Association of Holocaust Victims for Restitution of Artwork and Masterpieces v. Bank Austria Creditanstalt, 04-3600, finding it to be "little more than an end run around" a $40 million settlement Bank Austria made in 2000 to resolve Nazi-era claims -- a case Fagan had also filed.
 
While the 2000 settlement purported to settle all claims "from the beginning of time" to the date of the settlement, Fagan's latest case purported to raise claims that were not included in the first settlement. 
 
Judge Kram  assessed attorney fees against Fagan, and also fined him $5,000, finding he had committed champerty and misled her.

As Walter Olson notes, Fagan's work has come under fire before.  (See links on Overlawyered.com). 
6:46 am edt 

Friday, August 26, 2005

Sharon's Strategy in Gaza
Victor Davis Hanson, writing in the Chicago Tribune, gets it right describing Prime Minister Ariel Sharon's long term goals with the Gaza pull-out:
Sharon's withdrawal policy from Gaza is thus a critical first step of turning the struggle from an asymmetrical war of terror back into a conventional standoff between delineated sovereign states. And that can only help a militarily superior Israel.
For too long the Israel/Palestine dispute has been described in the media in terms that depict the landless, state-less, resource-less Palestians as victims and the Isralies as agressors. 
 
Every Hammas rocket attack or suicide bomber brought stories about the "underlying frustration" of the Palestinians.  Every Israeli commando raid that killed or captured Hammas operatives became a description of heavy-handed tactics with questionable results.
 
While the origins of this reporting has been described by others far better than I could do here, at least part of the story derives from the ability of Yasser Arafat's PLO to manipulate the media and to manage its message. 
 
With millions of dollars in foreign aid (including money from the U.N.) and the willing compliance of friendly third-world governments who perceive themselves to be allies, the Arafat faction was able to take credit for every step toward piece taken by either party (Arafat won a Nobel peace prize) but take responsibility for none of the Palestinian peoples' problems.
 
Withdrawal from Gaza is a prerequisite to the creation of a Palestinian state, and the existence of a Palestinian state will begining of the end of the free ride Arafat's faction has had in the media.
 
With statehood comes responsibility and with responsibility comes compromise.  While the road to peace is far from clear in Palestine, that road will inevitably require more compromise from the Palestinians than they have displayed in the past.
 
Sharon's pull-back might have the superficial appearance of a public relations disaster (with weeping settlers being carried off by Israeli soldiers) but it is a necessary step towards the creation of a responsible negotiating partner for Israel.
12:59 pm edt 

Cindy Sheehan's Next Move
Fox News is reporting that Cindy Sheehan is contemplating a nationwide bus tour when her Crawford vigil ends this month.  In preparation for that media spectacle, the grandfather of spectacles -- the Rev. Al Sharpton -- is on his way to Crawford to meet with Cindy Sheehan.
 
And after the bus tour: Celebrity boxing with Tonya Harding.
7:21 am edt 

Thursday, August 25, 2005

Georgia Lawmakers Take Another Look at Tort Reform
Republican lawmakers in Georgia are musing publicly on the possibility of amending the tort reform legislation they passed just a few months ago.
 
According to reporting in The Fulton County Daily Report (not available online) Republican Wendell Willard of Atlanta has criticized the language -- though not the concept -- of S.B. 3's offer of judgment rule as being "too confusing as it's written now". The article cites UGA law professor Thomas Eaton as calling Georgia's offer of judgment rule "a drafting nightmare."
 
While the Republican Chair of the Senate Judiciary Committee, Preston W. Smith, has agreed to take a look at improvements, he cautions against making too many changes to Georgia's Rule 68 and warns against the motives of some lawyers who are advocating for change. "[Rule 68] encourages the settlement of claims and that interferes with their ability to make more money" he said.
 
The FCDR article mentions two other possible amendments to the 2005 reform legislation: revising a venue provision to circumvent a recent ruling that questioned the constitutionality of the 2005 reform and restrictions on lawyers' ability to earn contingent fees.
 
(Cross-posted from PointOfLaw). 
7:44 am edt 

Criminal Prosecutions for Frivolous Lawsuits
The D.C. Examiner is calling for criminal prosecutions of those lawyers and others involved in the now-debunked silicosis cases reported earlier.
 
(Tip: Walter Olson). 
7:28 am edt 

Tuesday, August 23, 2005

Vioxx Verdict an Argument for Tort Reform
The Financial Times writes in today's edition
The Vioxx verdict handed out by a Texas court last Friday underscores the need for far-reaching tort reform in the US. President George W. Bush has made an overhaul of the system one of the pillars of his second-term legislative agenda. Yet the pace of reform has been sluggish and even the proposed measures would barely touch on cases such as this.
 
***
 
Yet it is not the immediate costs to the company which are most damaging, but the crippling legal and financial uncertainty which is built into the system. Under the US's civil litigation system, companies and entire sectors can battle on for years, and indeed decades, as they defend suits case by case and state by state.
 
This prolonged uncertainty imposes huge costs on consumers and businesses, as well as shareholders. With the contours of liability uncertain, companies will tend to avoid risk, and with it investment. In the pharmaceutical industry's case, this may mean pulling back from research on drugs that are sold broadly to general practitioners and focusing on speciality areas like cancer drugs instead, where the public's tolerance for risk is higher.
 
The Vioxx verdict therefore underlines the need for more ambitious tort reform. On the specific issue of medical risk, it is appropriate that companies manipulating clinical trials, or withholding information about side-effects, should face sanction, and indeed possibly criminal charges. Merck for example was warned by the US Food and Drug Administration for misrepresenting Vioxx's safety profile. But when a company has faithfully adhered to the regulatory processes, it should enjoy a greater degree of protection from liability than it does today.
 
The Vioxx case is part of a peculiarly American system of regulation via the courts. It looks as if the balance of power between federal regulators and state court juries needs to be tilted back towards the regulators.
 
Sensitive though it is, Mr Bush should avoid the temptation to leave tort reform to the states, as the potential for inconsistent treatment across jurisdictions itself contributes to the legal uncertainty. He has so far trodden carefully, with a modest curb on class-action suits earlier this year. The fallout from last Friday should serve to embolden him.
3:14 pm edt 

Monday, August 22, 2005

Epstein on Ernst v. Merck
A must-read for students of tort reform. 
4:46 pm edt 

Vioxx Verdict Shakes Faith in Juries
nothing since the OJ criminal verdict has shaken my faith in juries as much as the details coming out of the recent verdict against Merck in the first Vioxx suit.
Clay Conrad, call your office. 
4:44 pm edt 

Fighting Fire with What?
Nashville, TN police officers, tired of responding to what they call "frivolous" citizen complaints, have begun responding in kind, filing civil suits for defamation and the like against the citizens who file complaints. 
4:39 pm edt 

Sunday, August 21, 2005

Roberts Hearings Set
The ranking members of the Senate Judiciary Committee have set September 6th for the start of the Roberts confirmation hearings, with the first day devoted to opening statements and swearing in the nominee.
 
The questioning will begin on the second day of hearings on September 7th.
 
7:25 am edt 

Saturday, August 20, 2005

Blog Coverage of Ernst v. Merck
Ted Frank has an excellent post that highlights the need for more rigorous enforcement of fraudulent joinder rules and Daubert
 
Professor Bainbridge has a round-up of earlier coverage and worries that these losses might lead to insolvency for Merck.  (I think that's very unlikely). 
 
Non-lawyers Derek Lowe and KevinMD also weigh in. 
 
Derek Lowe puts the jury's $253 million award in perspective:
"If you'd like a strictly utilitarian, economic response to that award, start by pricing out what $253 million dollars of life insurance will cost - that is, if you can get anyone to not hang up the phone on you."
7:25 am edt 

Friday, August 19, 2005

Ernst v. Merck Update
As Jim Copland points out, the jury awarded the plaintiff $229 million in punitive damages as part of its total $253 million award.
 
Among other things, the case will provide an object lesson in the merit of caps on punitive damages.  Texas has a fairly rigorous cap on punitive, or "exemplary" damages.  
 
The Texas statute provides:
 
Texas Civil Practice & Remedies Code 41.008.  LIMITATION ON AMOUNT OF RECOVERY.  (a)  In an action in which a claimant seeks recovery of damages, the trier of fact shall determine the amount of economic damages separately from the amount of other compensatory damages.   (b)  Exemplary damages awarded against a defendant may not exceed an amount equal to the greater of:(1)(A) two times the amount of economic damages; plus (B)  an amount equal to any noneconomic damages found by the jury, not to exceed $750,000; or (2) $200,000.
 
As a result, while the amount would still be staggering the court ought to reduce significant the punitive damages award prior to appeal.
 
3:33 pm edt 

Texas Jury Awards $253 Million in Ernst v. Merck Vioxx Case
In the first trial involving Merck's liability for its Vioxx painkiller a Texas jury has awarded the plaintiff $253 million in damages.
 
Merck issued a press release within minutes after news of the jury's verdict came out, indicating that Merck would appeal. 
 
According to the press release, Merck's appeal could involve:
Allowing opinion testimony to be given to the jury by unqualified experts,
 
Allowing opinion testimony that was not based on a reliable scientific basis as required by Texas law,
 
Allowing evidence with no relevance to the issues of the case, which unfairly prejudiced the jury, and
 
Allowing undisclosed surprise witness and expert testimony contrary to Texas law.

"We believe that we have strong points to raise on appeal and are hopeful that the appeals process will correct the verdict," said Kenneth C. Frazier, senior vice president and general counsel of Merck. "Our appeal is about fundamental rights to a fair trial" he said, promising to "vigorously defend" the thousands of other Vioxx cases already on file.

3:23 pm edt 

Decline in Number of Federal Trials Not Significant
The Washington Post has reported on a DOJ study that shows that the number of tort cases going to trial in federal court has declined over the past several decades.
 
The articles notes that there were 768 tort trials in federal court in 2003 down from 3,604 in 1985. The article does not comment on the number of cases filed, noting only that the average was 44,770 per year over the 33 years in the study and that there were 49,166 cases filed in 2003. 
 
Unfortunately, these statistics really do little to describe the state of play in federal tort litigation. 
 
The 2003 statistics indicate that, of the 49,166 cases filed, there were 768 trials, amounting to a 98.5% rate at which cases are disposed of before trial.  Using the 1985 trials number (3,604) in comparison to the average number of cases filed over the period (44,770) yields a disposition rate of 92%.
 
While it's clear that very few cases go to trial, and the article speculates this is because so many cases "settle", the statistics do not necessarily support that conclusion or tell us anything about the settlements.  We can't tell, from the article at least, whether the trial rate is affected by the settlement rate or by the number of cases dismissed on summary judgment or preliminary motions.
 
Even more important, however, is the fact that federal tort litigation amounts to less than 10% of all tort litigation country-wide.  More than 90% of all these cases get filed in state courts. 
 
The reason these statistics are important is because some media outlets (and some disingenuous advocacy groups) often try to draw conclusions from them.  I would not be surprised, for example, to see an article or newspaper editorial in the next few days suggesting that the decline in cases going to trial suggests a decline in frivolous litigation or the lack of a need for tort reform.
9:41 am edt 

Roberts "Well Qualified"
The American Bar Association, which has commented on the qualifications of judges and judicial nominees for years, has determined that Judge Roberts is "well qualified", its highest ranking.
 
The ABA has been criticized in recent years for the leftward slant of its politics and the politicization of its judicial qualification process.  Fortunately, that does not seem to  have affected its review of Judge Roberts. 
7:13 am edt 

Tuesday, August 16, 2005

Tort Reform Saves Lives
Martin Grace references a new article that makes this argument on PointOfLaw
1:11 pm edt 

Saturday, August 13, 2005

Public Employee Unions
Michael Barone speaks out on the ill effects of public employee unions. 
 
Union membership has been steadily declining in the private workforce and yet has either grown or remained constant among public employees.   
7:22 am edt 

Energy Deregulation
Nobel Laureate Vernon Smith argues that deregulating the energy industry is a prerequisite for innovation.  Innovation, in turn, will improve efficiency and lower consumer costs.
7:20 am edt 

The Theology of Global Warming
James Schlesinger, the first U.S. Secretary of Energy, raises some interesting questions about economic policies and global warming.  If we really don't know how global warming works, and whether it is the product of man-made greenhouse gases, how can we construct policies that try to regulate greenhouses gases?
7:18 am edt 

Friday, August 12, 2005

FCC Order on VOIP Wiretapping
The FCC recently ruled that the Communications Assistance for Law Enforcement Act extends law enforcement's traditional ability to wire tap telephones (with a court order) to VoIP telephony as well.
 
I'm quoted in eWeek to say that this isn't really all that surprising. 
 
While there will be technical hurdles to implementing CALEA for VoIP, those technical hurdles will be overcome, just as they were for traditional wireline telephony.
 
Most of the privacy concerns, in my view, are overblown.
3:18 pm edt 


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Jonathan B. Wilson is an Atlanta attorney at the law firm of Taylor English Duma LLP.  Jonathan B. Wilson provides legal advice to investors, companies and business executives involving corporate law, securities law, SEC matters, intellectual property, website and Internet legal issues, start-ups, limited liability companies, partnerships, 1934 Act matters, outsourcing, strategic alliance agreements, contracts, and other matters of importance to growing private and publicly-traded companies.