Insurance Blog

The number of federal securities class action filings continued to decline in the first half of 2010 due in part to a decrease in credit crisis-related litigation, according to two just-released reports.
A report prepared by the Stanford Law School Securities Class Action Clearinghouse and Cornerstone Research found a total of 71 federal securities class actions were filed in the first half of 2010, a 15.5 percent decline from the 84 filings in each half of 2009.
Credit crisis-related litigation accounted for only eight filings in the first half of 2010, compared with 37 filings in the first half of 2009 and 16 filings in the second half of 2009.
Stanford law school professor Joseph Grundfest said:
The securities fraud litigation wave stimulated by the credit crisis now appears to be history. We have an inventory of cases waiting to be dismissed, settled, or tried, but to borrow a phrase from the current Gulf […]

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In our PowerPoint report on the Deepwater Horizon disaster we note that one of the many likely legal avenues to be pursued in post-spill litigation includes health claims by workers assisting in the cleanup.
Given the sheer scale of the cleanup, the use of chemical dispersants and the numbers of workers involved in the Deepwater Horizon response, the potential for some type of work-related injury or illness claim appears inevitable. At last count, BP said approximately 43,100 personnel were involved in the response effort.
Now the Wall Street Journal law blog reports on a lawsuit filed by a Louisiana fisherman against BP calling for a court-monitored health monitoring program for volunteers and workers who say they have been exposed to the oil, fumes and other chemicals while cleaning up the spill.
According to the WSJ law blog, the fisherman filing suit (who apparently was hospitalized in late May for illnesses caused by the […]

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A lawsuit has already been filed in response to a new gun ownership ordinance approved by the Chicago City Council in the wake of last week’s U.S. Supreme Court ruling (McDonald v. Chicago) that limits local and state governments’ ability to ban handguns.
The Huffington Post has the lowdown on the lawsuit which was filed by the Illinois Association of Firearms Retailers and four Chicago residents against Chicago mayor Richard Daley and the City of Chicago, claiming the city’s gun ordinance violates their rights.
The responsible gun ownership ordinance was announced by Mayor Daley just three days after the U.S. Supreme court held that states must respect the federal right of an individual under the Second Amendment to keep and bear arms.
According to the Wall Street Journal Law Blog, the Chicago ordinance doesn’t mess around:
It bans gun shops in Chicago and prohibits gun owners from stepping outside their homes, even onto their […]

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The Wall Street Journal reports on the Obama Administration’s plans to ask BP to establish a fund to compensate victims of the Deepwater Horizon oil spill.
The fund would be independently administered, in effect taking some of the decisions about compensation out of BP’s hands. The WSJ article notes:
White House officials on Sunday said they wanted BP to put “substantial” funds into an escrow account to cover claims by Gulf Coast businesses and residents affected by the spill.
President Barack Obama plans to bring up the idea at a White House meeting Wednesday with top BP executives, including Chairman Carl-Henric Svanberg.”

The WSJ goes on to quote a spokesman for BP saying that the company expects to discuss the proposal with President Obama on Wednesday.
The article also cites legal experts saying that while other government-run funds exist (e.g. Superfund legislation, asbestos liability funds, and the 9/11 victims compensation fund), they differ from the proposal […]

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A federal judge has approved a renegotiated settlement to compensate about 10,000 workers whose health was damaged during the rescue and clean up at the World Trade Center following the terrorist attack of 9/11.
The new $712.5 million settlement increases payouts to those injured and caps the fees going to plaintiffs’ attorneys.
It comes a little more than two months after U.S. District Judge Alvin K. Hellerstein ordered the parties to renegotiate a deal saying that too much of the original $657.5 million settlement was going to plaintiffs’ attorneys and not enough to the victims.
Under the new deal plaintiffs’ attorney fees are capped at 25 percent, adding $50 million to the fund, the WTC Captive Insurance Co is paying an additional $50 million to $55 million in cash, and New York City is waiving certain workers’ compensation liens. As a result of those savings, the payout to WTC plaintiffs will increase by […]

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A federal judge has approved a renegotiated settlement to compensate about 10,000 workers whose health was damaged during the rescue and clean up at the World Trade Center following the terrorist attack of 9/11.
The new $712.5 million settlement increases payouts to those injured and caps the fees going to plaintiffs’ attorneys.
It comes a little more than two months after U.S. District Judge Alvin K. Hellerstein ordered the parties to renegotiate a deal saying that too much of the original $657.5 million settlement was going to plaintiffs’ attorneys and not enough to the victims.
Under the new deal plaintiffs’ attorney fees are capped at 25 percent, adding $50 million to the fund, the WTC Captive Insurance Co is paying an additional $50 million to $55 million in cash, and New York City is waiving certain workers’ compensation liens. As a result of those savings, the payout to WTC plaintiffs will increase by […]

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Just as litigation related to the subprime and financial crisis appeared to be on the decline, along comes an action that experts say could reverse the trend. Last Friday the Securities and Exchange Commission (SEC) announced that it is charging Goldman Sachs and one of its vice presidents with fraud in the structuring and marketing of a financial product tied to subprime mortgages as the U.S. housing market was beginning to falter. The news sent shockwaves through the financial markets and led to extensive media coverage over the weekend. In a comprehensive post on the Goldman fallout over at the D&O Diary today, Kevin LaCroix asks the question on everyone’s minds: will the SEC’s action against Goldman spawn further investor litigation? LaCroix cites several blog and press stories quoting plaintiffs’ attorneys eager to pursue claims against Goldman. He also observes that investors who lost money in other subprime-related investments now […]

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In a decision that legal experts say could open federal courts to more class actions, the U.S. Supreme Court yesterday ruled that states do not have the authority to limit the right to sue. The Court ruled 5-4 that a federal court rule – Rule 23 – controls when a class action lawsuit may be filed in federal court. According to SCOTUSblog, the real-world effect of the ruling in Shady Grove Orthopedic Associates, P.S. v. Allstate Insurance Co. seems clear: fewer state laws seeking to limit remedies available in federal court will now fall. The decision revives a class action lawsuit alleging Allstate failed to pay statutory interest penalties on overdue payments of insurance claims owed under no-fault auto insurance policies. Allstate won in the lower courts where the suit was dismissed as outside the scope of federal court jurisdiction. Check out our earlier blog post for more on this. […]

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Both the number and value of securities class action settlements increased in 2009 and as earlier predicted the upward trend is likely to continue in the year ahead as ongoing cases related to the financial crisis get resolved. An annual report by Cornerstone Research found that the value of cases settled in 2009 rose to $3.8 billion, an increase of more than 35 percent on 2008, while 103 settlements were approved in 2009, compared with 97 in 2008. Professor Joseph Grundfest, director of the Stanford Law School Securities Class Action Clearinghouse observed: “If a lawsuit is prosecuted by a large public pension fund, involves a parallel SEC proceeding, and alleges accounting violations, then defendants can expect to pay higher amounts.” He went on to note that because securities fraud litigation typically settles three to five years after the first complaint is filed, this year’s settlement activity reflects lawsuits brought roughly […]

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In the space of just two days two state supreme courts have issued rulings that signal an ongoing trend by the plaintiffs’ bar to erode damage caps. Yesterday the Missouri Supreme Court ruled that state caps on noneconomic damages in medical malpractice cases cannot be applied retroactively. A 2005 state law had capped noneconomic damages such as pain and suffering in medical malpractice cases at $350,000. The decision came just a day after the Georgia Supreme Court, in a unanimous 7-0 ruling, found a state law limiting damages awarded for pain and suffering in medical malpractice cases to be unconstitutional. The St Louis Business Journal reports that the Missouri court stopped short of declaring the caps themselves unconstitutional but mentioned the Georgia action in a footnote in the Missouri ruling. For more on the Georgia ruling check out the Fulton County Daily Report via law.com. The rulings follow last month’s […]

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