Tuesday, July 31, 2012

Former Citigroup Manager Cleared in Mortgage Securities Case - NYTimes.com

Citigroup's headquarters in Manhattan.Citigroup Global Markets sold derivative securities without disclosing that it was betting $500 million against them.  A jury has found that the bank's manager was neither negligent nor perpetrated a fraud in the sale of the securities.  To prevail SEC had to prove only that Stoker negligently made a material misrepresentation or omission.  But Stoker was able to rely on Citibank's vague warning that it might have "adverse interests" and the testimony of Credit Suisse and others that Stoker personally was not responsible - that control rested elsewhere. - GWC
Former Citigroup Manager Cleared in Mortgage Securities Case - NYTimes.com:

A jury on Tuesday cleared [Brian Stoker] a former Citigroup executive of wrongdoing connected to the bank’s sale of risky mortgage-related investments at the peak of the housing boom, dealing a blow to the government’s effort to hold Wall Street executives accountable for their conduct during the financial crisis.
In addition to handing up its verdict, the federal jury also issued an unusual statement addressed to theSecurities and Exchange Commission, the government agency that brought the civil case.
“This verdict should not deter the S.E.C. from investigating the financial industry and current regulations and modify existing regulations as necessary,” said the statement, which was read aloud in the courtroom by Judge Jed S. Rakoff, who presided over the trial.

“This verdict should not deter the S.E.C. from investigating the financial industry and current regulations and modify existing regulations as necessary,” said the statement, which was read aloud in the courtroom by Judge Jed S. Rakoff, who presided over the trial.

Stephen Plotnick, a partner at Carter Ledyard & Milburn who’s been following the case. His takeaway:

“It highlights one of the difficulties that the SEC faces in cases like these, which is that it’s difficult to get the Street to testify against the Street,” he said. A key witness in the case was a Credit Suisse collateral manager who testified that his firm had managed the collateral, Mr. Plotnick added. “It’s difficult to expect that Credit Suisse would concede, ‘We didn’t do our job.’”

SEC opposition to Stoker SJ motion

Stoker SJ motion

SEC v. Stoker - jury instructions by Jed S. Rakoff, D.J

For the complaint against Brian Stoker and other documents in the related SEC enforcement action against Citigroup Global Markets see  this page on Torts today

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Monday, July 30, 2012

Construction worker falls to death at Fordham Law School site

Construction Worker Falls Down Elevator Shaft at Fordham Law School Jobsite in NYC | Digital Wires from ENR.com | News McGraw-Hill ConstructionThe New York Post 
By Antonio Antenucci ; Jessica  Simeone; Larry Celona 

Preliminary reports are that the worker was wearing a harness which was not properly fastened.  The New York City Buildings Department has imposed a full stop work order at the site.  It issued three violations against the construction manager, Gotham Construction, which is responsible for safety under state and federal law. 
A hardhat barely survived a 75-foot plunge down an elevator shaft July 16 at the construction site of Fordham Law's new law school and dormitory complex. Anastassios Intzeyiannis, 41, was doing masonry work at 158 W. 62nd St. shortly after 11 a.m. when he lost his balance."

Mr. Intezeyiannis died on July 26, leaving his wife of two years Randi Intezeyiannis.  Rev. Joseph McShane, S.J. President of the University issued a statement mourning the worker's death.  A memorial service is planned by the University.

Thursday, July 26, 2012

Pfizer Paid $896 Million in Prempro Settlements - Bloomberg

Plaintiffs have won about half of their product liability actions against Pfizer.  Plaintiffs allege inadequate warnings of the cancer risk associated with the artificial estrogen replacement therapy.  Pfizer has won 8 of the last 10 trials.  Individual causation is a complex issue to establish. - GWC

Pfizer Paid $896 Million in Prempro Settlements - Bloomberg

by Jef Feeley 

June 19, 2012

"Pfizer Inc. (PFE), the world’s largest drugmaker, said in a securities filing that it has paid $896 million to resolve about 60 percent of the cases alleging its menopause drugs caused cancer in women.
Pfizer has now settled about 6,000 lawsuits that claim Prempro and other hormone-replacement drugs caused breast cancer, and it has set aside an additional $330 million to resolve the remaining 4,000 suits, according to a filing with the U.S. Securities and Exchange Commission."

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Monday, July 16, 2012

An Existential Crisis for Law Schools - NYTimes.com

Change or die?  But how? To what? Thanks to anti-tax ideology we have shifted the cost of public legal education to students.  `Why should I pay your kids college tuition?' has been the winning argument for university education and a wide range of public services.  "We take care of our own" sings Bruce Springsteen.  But not very well.  - GWC
An Existential Crisis for Law Schools - NYTimes.com:
by Lincoln Caplan
The number of law office jobs began to decline in 2004, well before the recession. And demand for new lawyers isn’t expected to grow much even when the economy recovers. Outsourcing of legal work to places like India and greater efficiencies made possible by smarter software to search documents for evidence, for example, are allowing firms to cut the positions of multitudes of low-end lawyers. In 2009, twice as many peoplepassed bar exams as there were legal openings — a level of oversupply that may hold up for years. There is, of course, tremendous need for lawyers to serve the poor and middle class, but scant dollars to pay them.

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Sunday, July 15, 2012

Some Hospitals in New York Lack a Malpractice Safety Net - NYTimes.com

Luis Hernandez, CEO, Interfaith Medical Center
 Some Hospitals in New York Lack a Malpractice Safety Net - NYTimes.com:
by Anemona Hartocollis
 "Every hospital makes mistakes. But some New York City hospitals may not have enough money to pay for them.

Several of the city’s most troubled hospitals are partially or completely uninsured for malpractice, state records show, forgoing what is considered a standard safeguard across the country.

Some have saved money to cover their liabilities, but others have used up their malpractice reserves, meaning that any future awards or settlements could come at the expense of patients’ care, and one hospital has closed its obstetric practice, in part out of fear of lawsuits.

Executives of these hospitals, most of which are in poor neighborhoods, say their dire financial circumstances and high premiums make it impractical to pay millions of dollars a year for insurance."

“From a kind of self-interest of the hospital, it seems if you’re a marginally capitalized hospital barely making it, it would be perfectly rational not to buy insurance,” said Tom Baker, a law professor at the University of Pennsylvania who has written about malpractice insurance.

“From a social perspective, it’s very irresponsible. They’re taking in these people knowing they’re not able to make good on the harm they caused. Even a really good hospital is going to have a certain amount of medical malpractice. It’s inevitable.”

Hospitals in New York do not need malpractice insurance to function, and they need not tell patients when going “naked” or “bare,” in industry parlance.
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Thursday, July 12, 2012

Penn State should borrow lessons from the BP oil spill fund in cleaning up the disaster caused by Jerry Sandusky’s sexual abuse of children - Slate Magazine

Penn State should borrow lessons from the BP oil spill fund in cleaning up the disaster caused by Jerry Sandusky’s sexual abuse of children - Slate Magazine:
by John Culhane
 "Understandably, the university is trying to get a handle on this public relations debacle. Almost immediately after the jury announced its verdict on Sandusky, Penn State issued an unusually direct and apologetic press release. Trying to get ahead of the flood of litigation about to drown what’s left of its reputation, the university offered counseling in its statement and mentions, vaguely, a “program to facilitate the resolution of claims against the University arising out of Mr. Sandusky's conduct.” It also recognizes the need to “address the victims’ concerns and compensate them,” and concludes by promising to get in touch with counsel for the victims “in the near future with additional details.”"

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Chinese fishermen affected by oil spill file suit in Texas

Chinese fishermen affected by oil spill seek justice through U.S. courts | Ultimate Memorial:
Thirty fishermen whose livelihood from the Bohai Sea have been destroyed by the 2011 ConocoPhillips oil spill have sought legal representation by Louisiana and Texas attorneys.
The move came after the Chinese fishermen learned of the ongoing legal fight by Louisiana and Gulf Coast fishermen affected by the 2010 BP environmental disaster. The group is now headed to U.S. District Court, Southern Division of Texas to seek relief.
The legal team assisting the fishermen is headed by Stuart Smith, Smith Stag LLC of New Orleans, and attorneys Tom and Kelly Bilek of Houston. Proceedings to help the fishermen have been filed despite ConocoPhillips issuing reports claiming no evidence of environmental pollution in the Bohai region.
The complaint for damages and injunctive relief  is lodged against Conoco Phillips - the U.S. owner of Conoco Phillips China.  Dan Harris at China Law Blog points out that this is a jurisdictional stretch (think International Shoe and forum non conveniens).  The operator of the leaking well is a Chinese corporation operating in China.  Harris points out in a July 15, 2012 post that last year the Supreme Court found that due process did not permit a state court to assert jurisdiction over a foreign subsidiary for out of forum conduct unless there was "continuous and systematic" contacts with the forum state.  Goodyear Dunlop v. Brown (2011)

Plaintiffs ask the court to pierce the corporate veil, averring that Chinese courts have failed to accept the cases filed by the fishermen - contrary to Chinese civil procedure law which requires the court to accept or reject the case within seven days of filing.  Conoco will doubtless argue that their subsidiary's settlement with the Chinese government contemplates compensation to harvesters and environmental restoration, so courts here should defer to the remedies available in China. 

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Sad story: Freeh report details Penn State's Failures to Protect Children from Sandusky

Coaches Sandusky and Paterno in 1999
Former FBI Director Louis Freeh's firm has issued its Report of the Special Investigative Counsel on the conduct of Penn State University officials to reports of sexual misconduct by Jerry Sandusky - the defensive coach at `Linebacker U'.  Now convicted of 45 counts of sexual abuse of children, the 30 year Penn State employee's conduct was ignored, denied, or slighted by those in authority at the University.  It is the latest event in the long, slow process of recognition that, like so many Catholic bishops, those in power too often act to protect their institutions rather than those they are sworn to serve.
According to the Times account Freeh concludes that "[t]he most powerful men at Penn State failed to take any steps for 14 years to protect the children who Sandusky victimized." The pattern of neglect and facilitation of Sandusky's predation will have a big effect on Penn State's  liability for emotional distress damages - though issues like allocation of fault, statutes of limitation, punitive damages, and determination of damages remain open.
Freeh's conclusions are blunt:
“One of the most challenging of the tasks confronting the Penn State community is transforming the culture that permitted Sandusky’s behavior, as illustrated throughout this report, and which directly contributed to the failure of Penn State’s most powerful leaders to adequately report and respond to the actions of a serial sexual predator,” Mr. Freeh wrote. “It is up to the entire University community — students, faculty, staff, alumni, the board and the administration — to undertake a thorough and honest review of its culture.”
See timeline of significant events from PennLive.com

Wednesday, July 11, 2012

In Rory Staunton’s Fight for His Life, Signs That Went Unheeded - NYTimes.com

In Rory Staunton’s Fight for His Life, Signs That Went Unheeded - NYTimes.com:
A 12 year old boy, injured when he fell diving for a basketball, die three days later.  The ER at NYU Medical Center missed the signs of sepsis - which has been the focus of recent training and attention.  Pulitzer Prize-winner Jim Dwyer reports.
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Tuesday, July 10, 2012

'Who Gets What': Putting A Price On Human Tragedy : NPR

Kenneth Feinberg speaks at a January 2011 town hall meeting for claimants of the BP oil spill compensation fund in Grand Isle, La.NPR's Neal Conan interviews Ken Feinberg about his new book. - GWC
'Who Gets What': Putting A Price On Human Tragedy : NPR: "When a tragedy like the Sept. 11 attacks or the Virginia Tech shooting strikes, shock and grief quickly give way to blame. And when it's time to figure out if and how victims should be compensated, lawyer Kenneth Feinberg's phone rings.

Over the past three decades, Feinberg has developed a unique specialty: overseeing compensation funds by doing the difficult, often contentious and politically charged work of figuring out who deserves payment — and often, how much they will receive."

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