Headliners Around the Nation

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					                          First Quarter • 2005

               Headliners                      and clients nothing, for finding some
                                               tiny arguable technicality and bringing
                                                                                               lawyers issued nationwide rulings.
                                                                                                   In California, however, where a large
                                               an unfair competition suit.”                    group of plaintiffs might still be alleged,
Proposition 64 Goes to Work
                                                                                               some observers say plaintiffs’ lawyers will
    The majority of appellate decisions        Federal Class Action Reform                     attempt to craft class actions that will
and, by a two-to-one margin, trial judges          The “Class Action Fairness Act”
                                                                                               continue to keep them in a state system
are saying Proposition 64 applies to active    of 2005 signed by President Bush on
                                                                                               that tends to routinely certify class action
cases filed before the landmark initiative’s    February 19 is the second blow of a
                                                                                               cases and offers only ineffective review of
November 3 effective date. The ultimate        one-two punch against lawyer-driven,
                                                                                               certification rulings.
decider will be the California Supreme         phantom client litigation in California.
Court. In the meantime, the “17200”                The long-awaited federal reform will                       Around the
legal community has been feasting
on theories and quotes on the so-
                                               send to federal court larger dollar ($5
                                               million and up) class action lawsuits
called “retroactivity” issue. The favorite,    with plaintiffs in different states. While      The President and Legal Reform
from the Civil Justice Association of          the basis for lawsuits does not change,             President Bush left no doubt that
California’s viewpoint, is the “epilogue”      it is expected that federal judges will be      legal reform is high on his second term
that 4th District Court of Appeal Justice      less tolerant of attorneys trying to cobble     agenda when he embarked on a January
David Sills attached to his opinion in the     money-making class action lawsuits where        multi-state tour to highlight excesses
infamous “six screws” case. In that lawsuit    common issues and questions of law do           in the system and his top priorities
(Benson v. Kwikset) plaintiffs lawyer Bill     not exist and where the benefits to lawyer-      for addressing them. A White House
Lerach’s firm continues its hunt for $3         identified plaintiffs would be marginal.         statement announcing the tour said:
million in attorney fees for its crusade           The first blow of the one-two                   “The costs of litigation per person
against Black & Decker for selling a           combination, CJAC-sponsored                     in the United States are far higher
“made in USA” lock that contained six          Proposition 64 on last November’s ballot,       than in any other major industrialized
screws from Taiwan.                            amended the state Unfair Competition            nation in the world. Lawsuit costs have
    Ruling that Proposition 64 applies to      Law (Business & Professions Code                risen substantially over the past several
the lawsuit, the court gave Justice Sills an   Sec. 17200) to stop private attorneys           decades, and a significant part of the
opportunity to restate his original outrage    from filing lawsuits “on behalf of the           costs from lawsuits goes to paying
over abuse of the unfair competition law       general public.” Now lawyers claiming to        lawyers’ fees and transaction costs – not
when the case first came before him. He         represent plaintiffs beyond their named         to the injured parties. This explosion
concluded his new opinion by saying:           client, will have to go to court and obtain     in litigation is creating a logjam in
    “I had hoped, as indicated in the last     class certification before their lawsuit         America’s civil courts and threatening
paragraph of my dissent written in June        can proceed. If their claim is above the        jobs across America. Small businesses
2004, that the excesses of the unfair          $5 million level and the class includes         spend, on average, about $150,000 per
competition law might be judicially            plaintiffs from other states, they will have    year on litigation expenses. The President
curbed by action of our Supreme Court.         to go to federal court.                         is urging Congress to pass legislation
Before that could take place, though, the          The federal reform includes a               that reduces the burden of frivolous
electorate took matters into their own         provision allowing a case to stay in            lawsuits on our economy. President Bush
hands. As things now stand, even if the        state court in some instances where a           supports enactment of medical liability
judgment in this case is ultimately upheld,    majority of the plaintiffs are in the state.    reform, class action lawsuit reform, and
this case represents what will hopefully       This change will block state suits in the       asbestos litigation reform to expedite
be the last of a breed of lawsuits against     notorious havens like Madison County            resolutions and curb the costs of lawsuits
businesses where lawyers make big bucks,       Illinois where judges friendly to plaintiffs’   for all Americans.”
BALANCE • First Quarter 2005                                                           CIVIL JUSTICE ASSOCIATION OF CALIFORNIA

                                                 Sturdevant, quoted by Recorder reporter           than injured people who do not hire an
               In the Courts                     Jeff Chorney.                                     attorney, according to a new study by the
                                                                                                   Insurance Research Council. Looking at
“Trivial Defects” Defense                                      Trial Lawyer                        people with the highest accident expenses
    Retail businesses and government
entities routinely hit with questionable
                                                               Watch                               and usually the most serious injuries, the
                                                 But He Wouldn’t Be One Today                      study found that two-thirds of those who
“slip and fall” claims may have received
                                                     Looking out your car window you               did not hire an attorney were satisfied
help from an appeals court’s ruling that
                                                 might see “Abraham Lincoln Was A Trial            with their total payment while fewer
common sense application of the “trivial
                                                 Lawyer” on a bumper sticker, but you              than four in ten of those who retained an
defect” doctrine can trump a plaintiffs’
                                                 won’t see the fine print saying this is the        attorney said they were satisfied.
lawyer’s “expert” witness.
                                                 work of the Association of Trial Lawyers              The study “Paying for Auto Injuries:
    The Second District Court of Appeal
                                                 of America. It’s a personal injury lawyer         A Consumer Panel survey of Auto
upheld (Caloroso v. Hathaway) a summary
                                                 attempt to convince us that if this earlier       Accident Victims,” is based on 3,000
judgment against the plaintiff, saying a
                                                 Republican president were in office               responses to a survey. More information
sidewalk crack was not significant despite
                                                 instead of the current one, he wouldn’t           is available at www.ircweb.org.
expert witness testimony that it was
dangerous.                                       be promoting civil justice reform.                                 CJAC Board
Design Engineers Protected                       Up Front on Fronting                                               Members
    The Fourth District Court of Appeal              The personal injury lawyers’ workers                            Delia M. Chilgren,
has ruled (Weseloh Family Limited                compensation branch (commonly known                                 We s t e r n R e g i o n a l
Partnership v. K.L. Wessel Construction          as “applicants attorneys”) admitted to the                          Counsel/California
Co., Inc.) that design engineers on a            Los Angeles Times that it is the funding                            Regional Counsel
commercial construction project owed             source of an organization named for                                 for Allstate Insurance
no duty of care to a property owner or           its web site WorkersInjuredAtWork.                                  Company, has been
general contractor regarding design of           org, dedicated to reversing the workers’          elected to the CJAC Board of Directors.
retaining walls.                                 compensation reforms promoted by the                  She joined Allstate in 1990, after
                                                 Governor and enacted with bi-partisan             serving four years as Vice President and
               Verbatim                          legislative support last spring.                  General Counsel for the Association of
                                                                                                   California Insurance Companies. From
A Better State                                                 Studies of Note                     1979 to 1996 she was Employment
    “Our business climate is improving.                                                            Counsel/Government and Industry
We passed workers’ compensation                  Less Satisfied                                     Affairs Counsel for Fireman’s Fund
reform. We took action to curb frivolous            People injured in an auto accident
                                                                                                   Insurance company.
and shakedown lawsuits. We killed                who hire an attorney are less likely to
                                                                                                       Ms. Chilgren is a Board Member of the
other measures that would discourage             be satisfied with their total payment
                                                                                                   California Insurance Guaranty Association
businesses from creating jobs here.”
— Governor Arnold Schwarzenegger,                                             CJAC in the News
State of the State Address, January 5.
                                                    ■ “So Long to Shakedowns” headlined the Wall Street Journal editorial noting the “tort
A 10 on the Spin Scale                              reform California-style” Proposition 64 win on the November ballot. After summarizing
    “... Sturdevant said that if the plaintiff      the lawsuit abuses under the state Unfair Competition Law, the Journal stated:
bar had the kind of control over the
Legislature that critics allege, it would               “Californians put a stop to all this in the recent election, with 59% voting to amend
have passed a legislative solution to the               the law. Citizens can still file lawsuits, only now the plaintiffs must show they
                                                        personally suffered physical harm or property damage. Credit for this bit of sanity
problems with the unfair competition
                                                        goes to the Civil Justice Association of California, a nonprofit group that’s been
law rather than see the proposal go
                                                        urging change for nearly a decade as well as to Governor Arnold Schwarzenegger,
before voters.” — 2004 plaintiffs’                      who gave vocal support to the initiative as part of his strategy to make California
attorney association past president James               more hospitable to job creation.”
BALANCE • First Quarter 2005                                                        CIVIL JUSTICE ASSOCIATION OF CALIFORNIA

and served as Chair in 2003–2004. She is
on the Advisory Board of the California                                     CJAC in the Courts
Organized Investment Network which
helps provide investment opportunities         Decisions Rendered…
in low-income communities.                     ■ California Supreme Court: By a 4-3 vote, the Court went against CJAC’s recommen-
    She received a B.A. in English and Art     dation and endorsed the “catalyst theory” of awarding attorney fees to a plaintiffs’ attorney
from San Francisco State University and a      in a private attorney general lawsuit that won no relief but arguably changed a defendant’s
law degree from Golden Gate University         behavior. The plaintiffs were awarded $800,000 for filing a lawsuit (most of the award was
                                               for litigating for fees) over a truck owner’s manual towing capacity misprint. The company
School of Law.
                                               had months earlier begun correcting the error and dealing with buyers. The lawsuit was dis-
                  Patricia A. Henr y,
                                               missed 18 days after its filing, but the judge awarded the fees, ruling that the lawsuit caused
                  Senior Vice President,       the company to start a buy-back program. While the Supreme Court majority ruled that the
                  Government Affairs,          plaintiff must make a reasonable attempt to convince the defendant to change its practices
                  ACE INA, has been            before filing suit, no definition of this “attempt” was provided except that it need not involve
                  elected to the CJAC          an attorney. The court also said attorney fees awarded for fee litigation should be lower than
                  Board of Directors.          the fees for the underlying litigation. (Graham v. DaimlerChrysler Corp.)
    Named to her position in 2002, she is      ■ Court of Appeal, 1st District: Siding with CJAC’s position, the court ruled in favor of
responsible for maintaining relationships      Gilead Sciences in requiring that derivative plaintiffs make a demand on the corporation’s
with local, state, and U.S. federal and        board of directors before filing a lawsuit on behalf of the corporation. (Gilead Sciences, Inc.
international government officials, and         v. Superior Court)
the ACE INA Foundation. She earlier            ■ Court of Appeal, 2nd District: In an important “junk science” decision, the court confirmed
was Vice President, Asbestos Issues            that trial courts have the authority to deny expert testimony on the basis that it is insufficiently
Management, of ACE USA’s Brandywine            supported to be introduced as medical causation testimony in a trial where the plaintiffs allege
Holdings Division.                             failure to warn of dangerous chemicals at Lockheed Martin’s former Burbank facility. (Aguilar
    Earlier she was Vice President of          v. ExxonMobil)
the Long Term Exposure Claims unit             Briefs Filed...
for Brandywine Holdings, managing a
                                               ■ California Supreme Court: In a case the CJAC brief says is critical to the future viability
department that handled asbestos issues        of California’s summary judgment law, the association asks the court to review an appellate
and other long-term claims.                    ruling that an alleged civil conspiracy can be prosecuted in reliance solely upon inferences
    Ms. Henry joined ACE USA (formerly         from conduct that is consistent with legal competition. (San Diego Gas & Electric v. Superior
CIGNA Property & Casualty)in 1992 in           Court)
its Long Term Exposure Litigation unit.        ■ California Supreme Court: The CJAC brief supports pre-dispute agreements to waive
She began her legal career with White          a jury trial. The case focuses on whether such agreements violate the California Constitution.
and Williams in Philadelphia. She is           (Grafton Partners v. Superior Court PricewaterhouseCoopers LLP)
vice chair of the Coalition for Asbestos       ■ Court of Appeal, 4th District: The CJAC brief explains the many reasons why Proposi-
Justice and a member of the American           tion 64 should apply to pending cases filed before the initiative’s November 3 effective date.
Bar Association Asbestos Task Force.           (Boling v. Santa Maria, et al.)
    She is a B.A. graduate of Williams
and Mary and received a law degree from
Villanova University School of Law.          states government relations. Before                     He later was Executive Director of the
                  James R. (Jim) Jinks,      joining USAA, he was an associate                    Alaska Miners Association.
                  USAA’s Assistant Vice      counsel for the American Insurance                      He received a B.S. degree in
                  President, Government      Association in AIA’s ten-state Western               Engineering from the Military Academy,
                  Relations, Western         Region.                                              attended graduate school in Political
                  Region, has been               After serving as an enlisted soldier             Science and Public Administration at
                  elected to the CJAC        in Korea, Jinks graduated from the U.S.              the University of Idaho, and received a
Board of Directors.                          Military Academy and progressed through              law degree from McGeorge School of
    He joined USAA in 1991 as Legislative    a military career, retiring from the Army            Law. He is admitted to the state bars of
Counsel and is responsible for western       as a Lieutenant Colonel in 1982.                     California and Texas.
BALANCE • First Quarter 2005                                                        CIVIL JUSTICE ASSOCIATION OF CALIFORNIA

                  James Keene,                    A graduate of the Georgetown                    She joined the company in 1984 as
                  Executive Director          University Law Center, he clerked in             an auto claims representative in Chicago
                  of the California           the Senate Judiciary Committee, the              and in 1995 became an auto claims
                  State Association of        Justice Department, and the Fifth                section manager in Minneapolis-St.
                  Counties (CSAC), has        Circuit Court of Appeals.                        Paul. She then became the company’s
                  been elected to the             He is a member of the Texas,                 public affairs manager for Minnesota
CJAC Board of Directors. Before               Louisiana, and Mississippi bars.                 and Wisconsin and later worked on
being selected late last year to head the                       Neal Rubin, Senior             special projects and as Learning and
statewide association representing all                          Litigation Counsel             Development Manager for State Farm
of California’s 58 counties, Keene was                          a t C i s c o Sy s t e m s ,   in five central states.
City Manager of Tucson and earlier,                             Inc., has been elected            She moved to the company’s law
from 1996 to 2000, of Berkeley. He                              to the CJAC Board              department in Sacramento in 2004.
was also County Manager of Coconino                             of Directors. He is               Ms. Schwamberger received a
County, Arizona.                              responsible for managing the company’s           degree in Business Administration
    He began his government career in         commercial litigation matters and                from Wesleyan University and a law
the Washington, D.C., area, working           business disputes.                               degree from Loyola University of
in Montgomery County, Maryland,                   H e m a n a g e s t h e c o m p a n y’s      Chicago. She is a member of the Illinois
Rockville, Maryland, and Loudoun              litigation world-wide and counsels               and California bar.
County, Virginia.                             Cisco’s business units on mitigating
    He is a fellow of the National            legal risk.
Academy of Public Administration and              Before joining Cisco in 2001, he was
served on the National Civil League’s         Assistant United States Attorney for the
                                              Northern District of California, where
                                                                                                    Civil Justice Association
Model Charter Committee.
    Keene is graduate of the University       he prosecuted Medicare fraud, arguing                       of California
                                                                                                 The Civil Justice Association is a non-profit,
of Maryland, where he received a B.A.         jury and bench trials, arbitrations, and           membership supported coalition of citizens,
in History and an M.A. in Urban               several appeals before the Ninth Circuit           taxpayers, businesses, local governments,
                                                                                                 professionals, manufacturers, financial
Studies in 1981.                              Court of Appeals.                                  institutions, insurers and medical organizations.
                                                                                                 Founded in 1979, CJAC is the only statewide
                  G. Edward Pickle ,              He began his legal career with                 association dedicated soley to improving
                  Senior Government           McCutchen, Doyle, Brown & Enersen                  California’s civil liability system. It is active in
                                                                                                 both the Legislature and the courts, working to
                  Affairs Counsel for Shell   (now Bingham McCutchen), where                     reduce the excessive and unwarranted litigation
                  Oil company, has been       his practice focused on intellectual               that increases business and government expenses,
                                                                                                 discourages innovation, and drives up the costs
                  elected to the CJAC         property and technology disputes,                  of goods and services for all consumers.
                  Board of Directors.         claims for violations of corporate
    He left private practice to join          securities laws, and environmental
the company in 1985 as a litigator            and employment disputes. For the
                                                                                                                Balance is published by the
handling antitrust, commercial, and           past three years, Rubin has been a Trial                    Civil Justice Association of California
mass tort cases. In 1997 he became            Advocacy and Moot Court Instructor                                1201 K Street, Suite 1960,
                                                                                                             Sacramento, California 95814
Associate General Counsel, responsible        at Stanford Law School. He received                              Telephone (916) 443-4900
for the company’s litigation.                 a B.A. in 1989 from Amherst College                               Facsimile (916) 443-4306
                                                                                                                   E-mail cjac@cjac.org
    Pickle has been active on legal reform    and a law degree in 1994 from the                                   Internet www.cjac.org
issues for more than a decade, serving        University of Southern California.                               John H. Sullivan, President
on the boards of the Texas Civil Justice                        Cathy Schwamberger,                     Jeff Sievers, Vice President, Legislation
                                                                                                Ronnie Corrick, Administration/Membership Coordinator
League, Product Liability Advisory                              Counsel for State Farm                    Fred J. Hiestand, General Counsel
Council, Lawyers for Civil Justice, and                         Mu t u a l I n s u r a n c e             For information on CJAC membership
the Civil Justice Reform Group. He is                           Company, has been                              please call (916) 443-4900
                                                                                                 Items in Balance may be reprinted without permission
Chair of the International Association of                       elected to the CJAC             but credit should be given to the Civil Justice Association
Defense Counsel’s Legislative, Judicial,                        Board of Directors.                                    of California

and Governmental Affairs Committee.

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