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 Nation 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 firstname.lastname@example.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.