Lawsuit Reform Watch

Pay-to-play in PA update

Last year we wrote about the Bailey, Perrin & Bailey law firm, which made significant campaign contributions to the 2006 reelection campaign of Pennsylvania Governor Ed Rendell.  The firm was later awarded a no-bid contingency fee contract to sue Janssen Pharmaceuticals, a Johnson & Johnson subsidiary, over marketing of its drug Risperdal. 

Fortunately, this sort of eyebrow-raising partnership is not common in New Jersey, where the Corzine Administration operated in accordance with the Private Attorney Retention Sunshine Act (PARSA), throughout his administration.  NJLRA applauded the Executive Order issued by the Governor in late 2009. 

A judge dismissed the Commonwealth’s suit against Janssen, citing a lack of evidence.  While this is a step in the right direction for New Jersey-based Johnson & Johnson, there are other legal challenges ahead.  Businessweek reports that the same law firm will be representing the state of South Carolina against Janssen Pharmaceuticals., Litigation against its once-popular drug could cost the company billions of dollars.  The firm was a large financial contributor to state officials in South Carolina as well. 

Wrongful Death Expansion still a Threat

Medical associations, businesses, and local governments across New Jersey stood in opposition to S-763, the “More Lawsuits, Higher Taxes” act.  NJLRA and many others have been busy trying to prevent a last-minute effort to push this damaging legislation through during “lame duck,” as has been attempted in the past.  So far, it appears that our elected officials are listening.  S-763 is bad for taxpayers, businesses, school districts, local governments, and doctors across our state.  Its passage could have devastating consequences for many economic sectors, and contribute to the exodus of specialty doctors from our State. 

Today, however, NJLRA learned of a mailer being circulated by AARP of New Jersey, urging its members to call Senate President Richard Codey and ask him to post this legislation before the lame-duck legislature.  Presented as a moral effort to quantify the “worthiness” of children, the elderly, and disabled, the mailer expressly ignores that this bill would undermine the fairness of the courts by giving juries free rein to impose unlimited and highly-subjective awards.  It would invite abuse, and exploitation by ambulance chasers at the expense of New Jersey residents and businesses. 

So, let’s seize the opportunity, and call Senate President Codey to thank him for NOT posting S-763 during lame duck: 1-800-260-0130. 

Governor Christie

In light of former U.S. Attorney Christopher Christie’s election night victory over incumbent Governor Jon Corzine, we have posted the Governor-elect’s thoughts about civil justice reform below:

“The Christie administration will propose meaningful and fair changes to New Jersey’s legal liability policies to make our state more affordable for consumers and businesses. 

The ease with which lawsuits can be brought in New Jersey is encouraging attorneys from around the country to file lawsuits here.  Consequently, New Jersey residents and businesses must often wait in line behind out-of-state plaintiffs. 

New Jersey’s civil justice system discourages businesses from locating here and gives residents businesses a strong reason to relocate to other states. 

To end the abuse and manipulation of New Jersey’s civil justice system, Christie proposes to:

•    Make it more difficult for out-of-state plaintiffs to sue in New Jersey courts. 

•   Make it more difficult to file class action suits for frivolous reasons. 

•   Prevent the admission of flimsy and dubious testimony offered by expert witnesses. 

NJLRA looks forward to working with both the Legislature and the Christie administration to reform New Jersey’s civil justice laws. 

Next Administration Could Reshape the State Supreme Court

New Jersey voters are preparing to cast their ballots in one of the most hotly contested gubernatorial elections in recent memory.  In addition to the economy and social policy, it is important to note that the next governor will impact each of these – and much more – far beyond a four or eight year tenure in the governor’s office. 

The Star-Ledger’s Mary Fuchs  reports that the next governor will likely appoint four justices to the State Supreme Court.   In a body of seven, these new justices will have enormous power to render decisions impacting the way New Jersey companies do business and doctors care for patients for years. 

Justice Virginia Long will reach the mandatory retirement age of 70 during the next gubernatorial term.  Three others – John E. Wallace, Jr., Roberto Rivera-Soto, and Helen Hoens – will face reappointment hearings. 

In a too-close-to-call election like this one, it’s easy to overlook the impact the outcome will have on the Court, and neither campaign has dedicated advertising to it.  Fairleigh Dickinson University poll director Peter Wooley  may have summed up voters’ individual importance in this election the best.  He told Politicker NJ that “At this point, anyone who says their vote doesn’t count is mistaken.  And no one knows that better than the campaigns.”

So as we prepare for the final weekend of campaign advertising, keep in mind that the Governor’s office isn’t the only branch of government that will be effected by this election. 

Governor Corzine signs executive order backed by NJLRA

Kudos to Governor Corzine, who just signed Executive Order #157.  This E.O. affects the hiring of outside council to carry out the business of the Attorney General’s office. 

Like many states, New Jersey relies on contracts with private attorneys general to litigate the people’s business, as Attorney General’s offices everywhere face the difficult task of operating within tight budgets.  In New Jersey, an ever-expanding docket of lawsuits has created the need to hire private attorneys general to deal with such.  The Governor’s executive order restates his commitment to requiring New Jersey’s private attorneys general to be highly qualified and transparently selected.  For once, New Jersey’s hiring of outside council has positioned us to become an outlier on ethics – in a good way. Earlier this year, Pennsylvania Governor Ed Rendell found himself in political hot water for hiring private attorneys who donated substantial sums to his campaign.  NJLRA has maintained that citizens have the right to know why certain lawyers are selected to work on state contracts, how much money they are receiving for their services, and what matters they are pursuing.  Without the Governor’s Executive Order, the potential exists for pay-to-play. 

This is an excellent start for the taxpayers and businesses of New Jersey.  Hopefully the next legislature can work with the Governor – whomever he may be – to legislatively codify Governor Corzine’s Executive Order.

Will ‘lame duck’ be lame?

This morning, the New Jersey Business & Industry Association (NJBIA) held its “Meet the Decision Makers” breakfast.  Senate President Richard Codey and Assembly Speaker Joseph Roberts spoke at length about the challenges facing businesses in New Jersey and allowed for a Q & A session.  Marcus and I listened attentively as the legislative leaders were asked whether they believe the Wrongful Death Act – also known as the “More Lawsuits, Higher Taxes” bill – will re-emerge in the lame duck session of the Legislature. 

Senator Codey answered that when vetoing it last session, Governor Corzine “made it clear” that certain things needed to happen before the Governor would consider supporting the bill, whether in this lame duck or in future sessions.  Senator Codey was likely alluding to the inclusion of a clause which would require municipalities and local governments to pay virtually unlimited damages in wrongful death verdicts.  A multi-million dollar judgment against a smaller municipality, for instance, could have a severe crippling effect.  Including NJLRA and its members, many in New Jersey are opposed to this measure.  Just as consumers typically foot the bill for higher production fees, taxpayers will likely see their taxes rise in order for local governments to pay the bill. 

Both Senator Codey and Assemblyman Roberts, however, emphasized that they have not yet discussed their plans for lame duck, even with one another.  Assemblyman Roberts said that his members were far more concerned with “keeping their jobs” before deciding what to do once they’ve been hired.  Senator Codey noted that the gubernatorial election results would likely influence their legislative agenda. 

At this point, the bottom line is that the Legislature’s lame duck agenda is still anyone’s guess. 

Tonight is the first Gubernatorial Debate

Paul Mulshine suggests that the pressure is mounting on candidate Chris Christie to outperform incumbent Governor Jon Corzine.  Some of us will hear Independent candidate Chris Daggett’s voice for the first time.  No matter how well the candidates fair, here is one thing affecting New Jersey’s civil justice climate that none of them are likely to address tonight:

Montville has been spared pollution liability.  The Star Ledger reported yesterday that 14 families, who sued the builders, a real-estate firm and related home sales businesses in 2003 because their homes were built on pesticide-ridden farm land, lost a bid to find Township of Montville liable for their plight.  The plaintiffs contended that the municipality should have known that the land was contaminated.   All 14 families filed additional allegations against Montville contending the township had a duty to know of and warn the public of the potential for contamination on the land.  It’s worth noting that every entity connected to this land after 1970 was targeted for civil prosecution once the discovery was made.  Fortunately, Judge Dickinson Debevoise's ruling could protect all New Jersey municipalities from responsibility for polluted, private property within their borders, and refocus responsibility on the offending polluter.  This is encouraging, because it reaffirms that municipalities – and ultimately, tax payers – are not liable for contaminated private property within their borders. 

Gregory Coffey, Montville’s municipal attorney, was pleased with the ruling, saying that “It ratifies the long-held premise that the polluters pay, otherwise you’d have every municipality being sued for every contaminated property and taxpayers paying for cleanups.”

You can watch the debate live on NJN at 8:00 p.m. ET, just in case that site remediation makes its way into the limelight. 

NJLRA's Fall Membership Luncheon

Thanks to everyone who came to NJRLA's Fall Membership Luncheon.  It was great to see so many new faces in attendance. 

In case you missed it, NJLRA members heard from surrogates for the Corzine and Christie campaigns about legislative initiatives which may impact the business community and taxpayers alike.  Assemblyman John McKeon (D-West Orange) and Assemblyman Jay Webber (R-Whippany) each articulated their respective candidate's opposition to the "More Lawsuits, Higher Taxes" legislation.  McKeon noted that Governor Corzine vetoed this legislation last year, effectively saving the State and its businesses from being vulnerable to pay unlimited damages in wrongful death cases.  

Assemblywoman Caroline Casagrande (R-Freehold), who is a member of the Assembly Judiciary Committee, underscored concerns she had as a new mother about the most qualified doctors choosing to practice in less lawsuit-prone states. 

You can read more about Assembly McKeon’s speech on PolitickerNJ’s site, at http://www.politickernj.com/njdsc/33154/mckeon-good-governance-about-striking-balance. 

Pay-to-Play in Pennsylvania?

Readers of "Lawsuit Reform Watch" may recall our post earlier this summer about Governor Ed Rendell's office hiring a private firm with connections to the Governor to sue Janssen Pharmaceuticals, a J&J subsidiary. 

Yesterday LegalNewsline.com had a story about the suit, which is now before the Pennsylvania Supreme Court.  According to LegalNewsline, the Washington Legal Foundation has filed a amicus brief with the Court in support of Janssen's challenge of the Rendell contract.  Saying that it "takes pay-to-play to new heights," the WLF brief continues:

The retention of Bailey Perrin occurred in a manner that permits no one, least of all those responsible for that non-bid contract, to assert that the public interest or the taxpayers have been well served.

According to the story, the brief concludes that absent any public selection criteria, "there are no objective criteria that stand in opposition to the overpowering appearance of impropriety that exists here."

We at NJLRA will reserve judgment about whether Rendell acted in the public interest or if the selection of Bailey Perrin Bailey, which gave thousands to his re-election campaign, was untoward.  But at the very least this no-bid, unvetted contract to sue a corporation on behalf of the Commonwealth of Pennsylvania on a contingency fee basis (i.e. with money, not justice as the motivation) without a public selection process is unsound policy.

As we've noted before, we in New Jersey should be grateful that Governor Jon Corzine's administration is more enlightened on this note.  Corzine has adopted administrative policies requiring that these contracts with the State be awarded competetively and under public scrutiny.

NJ Hires More Private Attorneys in 2009

The Courier Post yesterday had an article entitled "Attorney General contracts not publicly bid" which detailed the NJ Attorney General's Office's routine practice of issuing State contracts without a public bidding process.  The list of so-called "waiver contracts" includes communications equipment and voter registration systems, but not the contracts for outside counsel.  According to the article:

Last year, the state spent $26.5 million on outside law firms, a 30 percent increase over 2007. Attorney General Anne Milgram said recently that staff cuts and a hiring freeze caused the increase, and warned that outside counsel costs could jump again this year. The amount includes $4 million shared by several firms for bond counsel work, $2.4 million for employment litigation, and $3 million for leftover costs connected to Gov. Jon S. Corzine's failed asset monetization plan.

We at NJLRA have no reason to suspect that anything untoward is happening with these contracts, as appears the be the case in Pennsylvania, but we think that the public deserves to know exactly how this money is being spent and to whom it is being given.  That insulates our public officials from any suspicion and gives voters piece of mind.