Woodworth & Frisella

It’s hard to think of much to talk about today other than Katrina. As a dedicated news junkie I was up off and on all night watching developments. I cheered around 3:00 AM when the storm veered slightly away from New Orleans – which probably only meant the difference between a 30-foot storm surge and a 15-foot storm surge. At some level it is so devastating it probably doesn’t matter much.

On a lighter note, I just heard a reporter report that he couldn’t tell us the wind velocity because his wind-velocity-measurer blew away.

We have a client in New Orleans. (I just checked and the link is currently down.) I wonder how long it will be before we hear from them.

As they say – our thoughts and prayers are with the victims.

There is a great deal of reaction to the VIOXX verdict here, here and here.

I’ve been involved in a lively discussion at Asymmetrical Information. Someone named “Dan” apparently disagrees with me. Here is his latest:

Jane Woodsworth,

If you devoted a thousand lifetimes to working for the betterment of humanity, you still wouldn’t be remotely close to matching Merck’s achivements in that area.

So you hate them because they have the nerve to make money while dramatically improving our lives. Whatever. The fact remains that if it the major pharmaceutical companies didn’t exit we would all lead shorter, more miserable lives. Whereas if you didn’t exist, who would care?

All that because I suggested that tort reform is less than palatable when the tortfeasor has an advertising budget for a prescription drug in the hundreds of millions of dollars. To add insult to injury he spelled my name wrong.

As I said previously, I am not sure how I feel about tort reform. Back in the ’80’s we had a lot of sizable verdicts in Massachusetts. Insurers countered with a marketing blitz which told consumers that every dollar paid in damages came out of their own pocket. The campaign was very successful and verdicts came way down. I’m a fan of market based solutions rather than government imposed solutions, so I’m not ready to jump on the tort reform bandwagon just yet.

It’s worth considering that juries award big money when one side angers them. I suspect that is what happened in the Merck case, and that is something the lawyers should contemplate going forward.

At any rate, the verdict will be reduced at judgment, due to the Texas law capping damages, and the trials will go forward. I believe the next case is in NJ – the home of Merck, which may put an entirely different emphasis on the issue.

Merck’s drug VIOXX faced its first litigation hurdle this week and lost big.

VIOXX is a painkiller prescribed for osteoarthritis. After its released as a painkiller, Merck tested the efficacy of VIOXX in preventing recurrence of colorectal polyps in patients with a history of colorectal adenomas. During that trial it was determined that VIOXX presented a greater risk for cardiovascular events after prolonged use. At that point Merck voluntarily withdrew the drug from the market.

Yesterday a Texas jury awarded the widow of Robert C Ernst, a Vioxx patient, $253 million. This was not a verdict Merck expected. Apparently Merck reserved millions of dollars to pay lawyers to defend the lawsuits against it, but reserved nothing to pay for losses. The adverse verdict also calls into question Merck’s decision to fend off a class action and try every case.

The Merck verdict once again raises the issue of tort reform.

I have mixed feelings about tort reform. On one hand I think juries can run out of control, although decreasingly so over the eighteen years I’ve been practicing law. On the other hand, I’m a fan of Learned Hand. Hand, a great Judge, believed that the assessment of risk, was best done by the marketplace: A company creates a bad product, people sue, the company makes changes. The market, left alone will be forced into the best decisions (or they will be sued out of existence.) There is nothing like a quarter of a billion dollar verdict to signal to a company that it is doing something wrong.

The second problem I have with tort reform is that it transfers the cost of injury away from the liable party to the taxpayer. If you cap the damages of a quadriplegic at $100,000, the responsible party is paying for about a teaspoonful of his life time care. The rest of the burden falls on you and I.

The third problem I have with tort reform is Bob.

You know Bob. He’s the guy who appears on your TV 5 times a day to preen about his natural male enhancement solution. I’m no prude but Bob bugs me.

Bob symbolizes a larger issue: Every time I see Bob I can’t help but wonder why drug companies are advertising prescription drugs on TV. If a drug requires a prescription, shouldn’t a doctor be the one to determine whether the medication is appropriate? And if so, why do I have to listen to dozens of Bob’s peddling dozens of drugs that only my doctor can prescribe? I can answer that question. Merck et.al. is hoping I will run to my doc, and demand some pill that suddenly will make some ache or pain go away.

I have neither osteoarthritis or heart disease (knock on wood) but I’ve known about Vioxx for longer than I care to remember. I know about it, because it was relentlessly advertised on TV until the day it was pulled. Merck’s advertising budget for VIOXX was $160.8 million.

That’s $160.8 million that could have been used to lower the cost of the drug, or speed up the research to determine it was hazardous, or pay part of the verdict in the Ernst case. That’s a solution that I suspect Judge Hand would have approved.

Beldar lost his trial. Well, his side lost. He talks about it cogently, something I find admirable in the immediate days after losing.

If your lawyer tells you he has never lost a trial, I’d advise you to find a new lawyer. Good lawyers have their share of losses, otherwise they aren’t trying the hard cases. And while it is important to know when to deal, and even when to fold, there are times when you have to roll the dice, for the client, for the law and for yourself.

The only saving grace a lawyer can find in losing is what he learns from that loss. And until you sort that out, learning from the loss is a gift that keeps on giving. It’s not a gift that feels all that great a bit like like a mammogram or a colonoscopy.

During the Case Management conference in my Nantucket case, the Judge, who presides at a District Court in my County mentioned that he had 5,000 PIP cases pending on his docket.

For those of you not in Massachusetts, PIP (Personal Injury Protection) is the mainstay of the no-fault law in Automobile tort cases. Essentially when a person is injured in an auto accident he must have $2,000 in medical bills (or one other criteria, death, dismemberment, disfigurement or a fracture) to bring a claim for his pain and suffering.

This obviously leads to some problems. Insurers want to cut off treatment before the bills reach that threshold, and injured people want to treat to the point where they have a claim for their pain and suffering.

As a result, a lot of litigation ensues. When a lot of litigation ensues, dockets get clogged.

(I have a background in personal injury law. Directly out of college I worked as a claims adjuster for Liberty Mutual Insurance Company. Two years later I was hired by Data General Corporation (now EMC2)as a Risk Manager. While pursuing my MBA I started my own firm evaluating liability and damages for personal injury lawyers. Once out of law school I worked first for a plaintiff personal injury firm, and shortly thereafter started my own personal injury litigation firm. It wasn’t until the late ’90’s when a colleague from law school who was Corporate Counsel for a large software company persuaded me to collect his company’s outstanding commercial debt.)

Currently I also work as an arbitrator/mediator for a couple of Alternate Dispute Resolution firms: ADR Equimar and Case Closed BDR. I like arbitrating, but the real magic comes in mediation, where if done properly, the parties fashion their own solution. A good mediated result is about as win/win as it gets in the world of litigation.

When the Judge commented on his blocked docket, I immediately thought of the mediation option.

Yesterday, Dave Babik of Case Closed BDR and I sat down and wrote the Judge a proposal to screen his 5,000 PIP cases to see if they would be appropriate for mediation/arbitration. I’m willing to donate one day a month of my time and it will lead to new business for Case Closed. It sounds like a win/win to me.

Not that far offshore really…

On Monday I was scheduled in Nantucket District Court. For those of you who don’t know Nantucket, it is a quaint little island of about 8,000 permanent residents located about 30 miles off of Cape Cod.

I have my share of clients there and they have a vibrant district Court with a fabulous clerk Roxana E. Viera who runs a very smooth ship. They also have a Superior Court which is open two – yes, two weeks a year.

Getting to the island is an event. My closest point of departure is 122 miles away. I traveled by car, shuttle, ferry, and foot to attend the motion session at 9:30, only to return by foot, ferry, shuttle and car, arriving back at the office at 4:00 PM. I did win my motion which was a bonus.

Trial is now set for October – my favorite time of year on the island.

Beldarblog has posted a few war stories.

We all have them, and the losing ones are probably the best learning experiences a litigator can have.

At the very least, like Beldar, most of us chew on them for a lifetime or two.

The first thing I did when I moved to Sturbridge was join Sturbridge Rotary. My broker, Lucie Lemke insisted I do so; her husband Bill was incoming president, and she thought it would be a great place to meet people.

She was right. It was also so much more. For those of you not familiar with Rotary, it is an international service organization involved with millions of projects world wide. Our motto is “Service Above Self”.

During the year, Rotarians work together to raise money for local, state, national and international projects. For example Rotary International, through its PolioPlus program has worked with the World Health Organization, the United Nations Children’s Fund, the United States Centers for Disease Control and Prevention, and governments around the world to achieved a 99 percent reduction in the number of polio cases worldwide.

On September 30th The Sturbridge Rotary is holding its 2nd Annual Golf Tournament at Cohassie Country Club in Southbridge, MA. It was a great time last year and we expect it to be even better this year. We are actively soliciting players, sponsors and items for our auction.

If you are interested in participating in any way please email me.

And thanks

We spend a lot of reviewing contracts for our clients. Often the contract is clear on “Choice of Law”, and less clear on “Jurisdiction”.

When a contract has a “Choice of Law” clause it is telling the Court which state law applies. So if my client in Massachusetts does business with a client in California the “Choice of Law” portion of the contract will dictate which substantive state law governs the contract (regardless of where the case is tried).

That is different from “Jurisdiction”. “Jurisdiction” determines what Court, in what state, the parties agree to have their case tried in.

Having the Jurisdiction in your favor can save you time, effort and money. It is also a bargaining chip. If you have a commercial debt collection case go to trial, it’s a lot easier when the location of the trial is close by. Conversely, the debtor, in order to defend will be forced to find an unfamiliar lawyer in an unfamiliar jurisdiction and fly his witnesses to the location of the trial. This will increase his costs considerably.

Because the goal is often to bring the other side to the table, contracting for your choice of jurisdiction is another arrow you want to have in your quiver.

I read Bob Woodward’s The Secret Man this weekend and was struck by the following description of his lawyer Robert Barnett:

When he is your lawyer, he devotes himself entirely to your interest. He has a framework for analyzing any problem: Everyone else has real or potential interests other than yours. His job is to identify your interests and yours alone. I wanted him to contemplate the question because I knew his mind would be circling around and around the issues during his non billable, off-duty hours.

When Amy first started to work with me, I often emphasized that it was as important to figure out how to win a case, as the relevant case law.

Commercial collections cases can raise interesting points of law, and Amy is a whiz at honing the legal arguments for our clients. But at least half the time, the sole issue is figuring out how to win.

I’ve had an old habit since my early lawyer days of taking a problem I’m working on, framing it, and symbolically putting it under my pillow when I go to sleep. Often when I wake up in the morning, the solution will have emerged.

My client’s interests, very often require an understanding of the defendant’s interests given my goal of getting my client’s debt at the top of the debtor’s pile of payables. There is a jigsaw puzzle worth of information that sometimes must be sifted through to get where we need to be. Like Barnett, I do some of my best work when I’m not working.