Challenging Jurisdictions:

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1 Challenging Jurisdictions: I ve A Feeling We re Not In Kansas Anymore And This Is No Place Like Home PRESENTED BY Robert Scott, Blank Rome LLP Sue D. Rosenthal, Blank Rome LLP Lisa A. Ketai, Chevron Philips Chemical Company LP The Next Asbestos? Is Diesel Exhaust Carcinogenic? Sue D. Rosenthal, Blank Rome LLP 1

2 Hot off the Presses IARC Reevaluation of Diesel Exhaust IARC Reevaluation of Diesel Exhaust 2

3 International Agency for Research on Cancer Defined Carcinogenicity Classifications Group 1 Group 2A Group 2B Group 3 Group 4 Carcinogenic to humans Probably carcinogenic to humans Possibly carcinogenic to humans Not classifiable as to carcinogenicity to humans Probably not carcinogenic to humans 3

4 From a Plaintiff s Lawyer s Website Many people may be wondering... if they have a case Diesel particles made people with allergies more susceptible... From a Plaintiff s Lawyer s Website Before you dismiss any health complaints...contact us Almost any person exposed to diesel exhaust...isatrisk. 4

5 Challenging Jurisdictions: Toto, We're Not In Kansas Anymore PRESENTED BY Robert Scott, Blank Rome LLP Lisa Ketai, Chevron Phillips Chemical Company LP 5

6 U.S. Chamber Institute for Legal Reform 2012 State Liability Systems Ranking Study Conducted by Harris Interactive Interviews with national sample of 1, in-house GC s, Senior litigators and executives knowledgeable about litigation Public and private companies with annual revenues of at least $100 million of at least $100 million Phone and online interviews between March 19, 2012 and June 25, 2012 U.S. Chamber Institute for Legal Reform 2012 State Liability Systems Ranking Study Study concluded that California, Illinois and West Virginia have some of the worst legal climates in the country for businesses Rankings: West Virginia 50th Louisiana 49th Mississippi 48 th California 47 th 6

7 West Virginia Dead Last West Virginia Fifth consecutive time West Virginia has ranked last in country State has never ranked higher than 49th since the study s inception in 2002 West Virginia continues to suffer from outrageous verdicts, lack of meaningful appellate review, an overzealous attorney general s office, antiquated laws, and frivolous lawsuits. Lisa A. Rickard, President of the U.S. Chamber Institute for Legal Reform 7

8 Louisiana First Runner Up Louisiana No. 49 Louisiana s third consecutive year as number 49 State has never ranked higher than 47 since the survey s inception in 2002 Despite recent positive developments, Louisiana is still notorious for excessive verdicts, loose classcertification standards, and an unfair judiciary. Lisa A. Rickard, President of the U.S. Chamber Institute for Legal Reform 8

9 Mississippi Miss Congeniality at 48 Cities or Counties impact state rankings The worst local jurisdictions were: Chicago/Cook County, Illinois (17%) Los Angeles, California (16%) San Francisco, California (9%) Philadelphia, Pennsylvania (8%) To understand why respondents feel negatively about particular jurisdictions, a follow-up question was asked to those who cited a jurisdiction. A third (33%) of respondents mentioned that the reason why a city or county has the least fair and reasonable litigation environment is because of biased or partial juries/ judges. 9

10 California No. 47 California Los Angeles courts were the second worst in the nation for legal fairness San Francisco s courts were the fourth worst Plaintiffs lawyers bring cases in California because the state s courts rubber-stamp class actions and juries award outsized paydays Lisa A. Rickard, President of the U.S. Chamber Institute for Legal Reform 10

11 McWilliams v. Chevron Lake Charles, Louisiana February 2012 A trial with no defenses and very little evidence McWilliams v. Chevron Defendants, none domiciled in Louisiana, found liable to Texas resident for alleged conduct which occurred solely in the state of Texas $5.5 million in actual damages and $12 million in punitive damages Neither the trial judge nor the jury heard any evidence of negligence, much less intentional or grossly negligent conduct, by the defendants Neither jury nor trial judge heard any scientific evidence that benzene exposure caused the type of leukemia suffered by plaintiff or was capable of causing that type of leukemia 11

12 Court s July 28, 2011 Sanctions Order the defenses of defendants, Chevron, U.S.A., Inc., Texaco, Inc. and Union Oil Company of California ( UNOCAL ) be stricken under LCCP art leaving only the issue of damages. What does it mean to have your defenses stricken? Is Plaintiff required to put on any evidence, i.e., a prima facie case of liability and causation? Plaintiff not required but allowed to put on evidence (Chose not to do so) If Plaintiff offers evidence, Defendants not allowed to rebut Is Defendant allowed to put on any evidence? Not of liability or causation. Damage evidence not allowed if it would limit effect of sanction order 12

13 What does it mean to have your defenses stricken? If Plaintiff offers a medical witness who testifies that benzene caused Plaintiff s APL, may Defendant challenge thatt testimonyti as constituting no evidence under the Louisiana Daubert rule? NO! In damages only trial was jury informed of Plaintiff s unrelated health conditions? NO! Plaintiff diagnosed with prior colon cancer. Treating doctor testified was as likely to relapse as APL and would shorten his life expectancy. Long prior to APL diagnosis, Plaintiff underwent quadruple bypass. Treating doctor testified would shorten his life expectancy. 13

14 In damages only trial was jury informed of Plaintiff s unrelated health conditions? NO! Plaintiff had prior diabetes with severe cardiovascular disease. Treating doctor testified would shorten his life expectancy by 7.5 years. Plaintiff had a significant smoking history which would shorten his life expectancy. What does it mean to have defenses stricken? Over objection, Plaintiff s expert based future damage testimony on an admittedly false premise. Opinion assumed 51 year old plaintiff had a normal life expectancy of 28.5 years. Plaintiff s and defendant s medical experts would p have testified that because of health problems wholly unrelated to leukemia, Plaintiff s life expectancy was significantly less than normal. 14

15 These matters are to be taken by you as true and established facts in this case. It has been determined that the defendants, are solely responsible for Mr. McWilliams diagnosis of acute promyelocytic leukemia by exposing him to benzene. It has been determined that these defendants engaged in an intentional or wanton and reckless conduct that amounts to a conscious disregard for the rights of others. In determining the amount of punitive damages you may consider that before the time the defendants exposed Mr. McWilliams to benzene, defendants knew that exposure to benzene could cause leukemia, yet Defendants exposed Mr. McWilliams to benzene anyway, without any adequate warning, protection, or safeguards. Thomas Brown, Jr. v. Phillips 66 Company, et al Smith County, Mississippi 15

16 Thomas Brown Jr. Thomas Brown Jr., v. Phillips 66 Company, et al. Mr. Thomas Brown Jr. sued Union Carbide, Montello and Phillips 66 Company (Chevron Phillips Chemical Company) in Smith County, Mississippi claiming he developed asbestosis from exposure to asbestos contained in specialty drilling mud additives. Judge Eddie Bowen presiding. Jury selection lasted nine days Any jurors that t admitted d that; t they, or an immediate family member, had been screened in connection with asbestos litigation; filed an asbestos claim; or settled an asbestos claim were struck for cause. Called 1,150 citizens of Smith County 16,491) What we thought the jury heard The Evidence No asbestosis diagnosis by any treating physician Nine (9) doctors; two pulmonologists, one internist and six radiologists, all testified that the Plaintiff did not have asbestosis Diagnosed with Obesity Hypoventilation Syndrome Plaintiff also had a significant smoking history and continued to smoke despite his conditions and prescription of bottled oxygen Economic damage evidence No lost wages or diminished work capacity No past medicals $45,000 in future medical based on costs of medical monitoring 16

17 OUCH The Award $11 Million in future medical costs $11 Million for non-pecuniary (pain and suffering) $300 Million in punitive damages No witnesses No evidence of intentional acts; cause of action had been dismissed prior to trial Judge allowed Googled information of net worth Bad Judgment The Preliminary Judgment Mississippi Statutory Caps $1 Million for pain and suffering $20 Million for punitive damages Judge Bowen blatantly disregards statutory caps and Judge Bowen blatantly disregards statutory caps and signs preliminary Judgment for entire $322 Million 17

18 Loose Lips Sink Ships Post Script Discovered that Judge s father and mother had filed two asbestos lawsuits which involved Union Carbide and indirectly CPChem. One case had settled at the time of this trial and one was still pending Judge Bowen never disclosed these lawsuits to the parties in the case Supreme Court stayed the proceedings, removed Judge Bowen (ordered to recuse himself), remanded the case and appointed Judge Coleman to preside. Second trial resulted in defense verdict. Risk Management In-house perspective: Deciding to take a case to trial in a rough justice jurisdiction Risks Shareholders Brand Reputation Insurance Confidence in the law and confidence in the appellate courts 18

19 Risk Management In-house perspective: Deciding to take a case to trial in a rough justice jurisdiction Do you have a choice? Bellwether Case No reasonable settlement Plaintiff wants to try Judge wants to try No Surprises Reporting to Management What is the Judgment actually going to look like? Hard Caps Soft Caps Percentages of liability Advocacy Law Appeals 19

20 Corporate Media Responses Three responses No Surprises The Good The Kinda Bad The Ugly Have several options prepared Coach Outside Counsel on media responses Some of the benefits of rough justice jurisdictions Oh crunchy delight! so crispy, so juicy so deep fried with love it s like you ve been sent from way up above So easy to eat, and so quickly consumed can, though, sit in the stomach like a full blown balloon Take heed, dear gals, as you inhale this perfection as, minutes later, it might feel, quite like you re expecting Ak key component tto every frosh h15 it s also rumored to be polio s alternative vaccine A no finer snack can be found after midnight for locals and students needing assistance to stand upright 20

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