July 2010 Archives

The most recent Senate proposal to change maritime liability limits in response to the Deepwater Horizon disaster is a departure from the clear lifting of maritime liability immunities that the U.S. House passed on July 1 through the "SPILL Act," H.R. 5503. In an effort to persuade Senators from those states with strong commercial shipping and fishing interests, Senate leadership introduced S. 3663, the Clean Energy Job and Oil Company Accountability Act of 2010, which folds changes in maritime liability law into a broader energy bill. First, the good news about those sections in the Senate bill that end decades of discrimination between sea-based and land-based accidents:

1. The bill amends the Death on the High Seas Act to enable families to recover non-pecuniary losses, such as for the loss of a loved one and a decedent's pre-death pain and suffering, for victims of negligence on sea-based oil rigs and cruise ships. Victims of land-based oil rig accidents have never faced the federal limit in DOHSA suffered by sea-based victims, and this bill would end the inequitable treatment.

2. The bill repeals the maritime punitive damages ratio established in Exxon Shipping Co. v. Baker, 128 S.Ct. 2605 (2008), which unfairly limited punitive damages in general maritime law to a 1:1 ratio with compensatory damages.

3. The bill exempts oil spill claims from the liability limit under the Limitation on Liability Act.

Now for the bad news:

1. The Senate bill leaves the Jones Act intact and doesn't enable seamens' surviving family members to recover noneconomic damages for loss of care, comfort and companionship. This unfairly discriminates between workers in land-based shipping, who face no artificial federal liability limit, and seamen, who would continue to see their 7th Amendment rights obstructed by this special interest legislation.

2. The Senate bill completely exempts commercial fishing from any change in liabilitity limits. The CDC annually reports that commercial fishing is the most dangerous job in America, yet the bill discriminates against them. Commerical fishermen would thus also continue to see their 7th Amendment rights obstructed.

3. The bill doesn't repeal LOLA, not even for personal injuries and wrongful deaths,but merely increases the liability limit to an amount equal to three times the value of the vessel. But a maritime oil rig is completely worthless after it sinks, as indicated in a federal court filing by Transocean, claiming a rig value equal only to the costs of raising it from the ocean floor. By not repealing LOLA, the bill leaves open the possibility that the families of Deepwater Horizon workers killed in the rig explosion will receive no compensation. In essence, they might be able to exercise their 7th Amendment rights, but without an equitable remedy.

Few or no Republicans support S. 3663, because of the energy legislation in it. A month after seeing a voice vote on the floor of the House in support of the SPILL Act, we now have little momentum to pass this Senate bill or any other which would assist the BP victims and end the discriminatory maritime liability limits, a huge letdown. Here is a summary of the bill and a section-by-section analysis.

The prospects for passage of two pro-7th Amendment bills before the August Congressional recess are shinking rapidly. I wrote on June 29 about H.R. 4678, the bipartisan Foreign Manufacturers Legal Accountability Act, a.k.a. "the Chinese drywall bill," which would enable American consumers of defective foreign-made products to sue those makers in U.S. courts, instead of fruitlessly pursuing them in the host country. The House Energy and Commerce Committee approved the bill last week in a bipartisan vote, and proponents hoped for a floor vote in the House this week. Unfortunately, the bill isn't scheduled to be on the floor this week, the last for the House before the August recess, and foreign manufacturers have ginned up the lobbying machine to oppose the bill. Supporters will have to press their Congressmen to support the bill during the recess. As I wrote on July 21, this is a bill that "Constitutional conservatives" and Tea Partiers can support in defense of our Constitutional rights.

And the Senate version of the SPILL Act, which passed the House by voice vote on July 1 in response to the BP disaster, is suffering from serious opposition from commercial fishing, shipping and cruise line interests to the lifting of decades-old and unfair liability limits. It's been 100 days since the spill, but BP hasn't agreed to any legally binding agreement to pay anything to anybody for any damage (UPDATE: BP admitted on Monday, in a filing in federal court, that it hasn't signed any binding claims fund document). As I wrote on June 18, current federal law discriminates between oil rig accidents on land or in the air versus those occurring on a rig in federal waters. If that inequity is removed, but commercial and/or cruise ship employees and passengers are not allowed to seek a remedy in court for their injuries, another inequity will remain on the books - that of a difference in legal status between land-based workers and passengers in mass transport, versus those on sea-based mass transport. The pro-7th Amendment position would be to lift all maritime liability limits, as the SPILL Act does, and end the unfair discrimination between land-based versus sea-based workers and passengers, so all have an equal right to seek a jury trial for their civil suits. As with H.R. 4678, supporters of the 7th Amendment who recognize the Constitutionally conservative basis for the SPILL Act will have to press their Senators to back something as close as possible to the SPILL Act before the August recess.

A groundbreaking new study by Pediatrics, the official journal of the American Academy of Pediatrics, is raising new questions about the safety of medical devices in children by documenting thousands of injuries annually (download the study here). The study warrants a restoration by Congress of the right to hold implantable devicemakers accountable in a state court, a right which the Supreme Court ended in its 2008 Riegel v. Medtronic decision.

The study found that over 70,000 children and teens go to emergency rooms annually for injuries and complications from medical devices, with contact lenses responsible for one-fourth of the injuries. Quoting the Associated Press story on the report, "The most serious problems involved implanted devices such as brain shunts for kids with hydrocephalus (water on the brain); chest catheters for cancer patients receiving chemotherapy at home; and insulin pumps for diabetics. Infections and overdoses are among problems associated with these devices. Only 6 percent of patients overall had to be hospitalized."

Of course, we should all celebrate the life-saving experiences of many young recipients of implantable devices, but devicemakers should be accountable for negligence. Sadly, in the 2008 Riegel decision, the Supreme Court gave total immunity to certain implantable (FDA's "Class III") medical device manufacturers who fail to adequately warn consumers about device risks. As I discussed in my June 24 on the dangers of federal preemption, a 1976 law authorized the FDA to preempt the numerous state requirements only in statutory law, but the Riegel decision turned those preemption provisions into blanket immunity from any accountability, with no checks and balances. As the Pediatrics study reported, the percentage of injuries attributable to Class III devices is small, but those injuries tend to be the most serious and expensive to treat. They include many catheters, pacemakers and artifical joints.

The Medical Device Safety Act ("MDSA"), a bipartisan bill in the House designed to address the decision (H.R.1346), is still under consideration by Congress. The Medical Device Safety Act would restore the 7th Amendment rights of injured consumers to hold negligent Class III medical device manufacturers accountable when their products cause injury and death. The one-and-a-half-page bill simply does two things:
1) It restores Congressional intent by explicitly stating that actions for damages under state law are preserved.
2) It makes the amendment retroactive to the date of enactment of the Medical Device Amendments of 1976.

It's a "health care reform bill" that Constitutional conservatives can back. It doesn't increase the size or power of the federal bureaucracy and it doesn't create any federal regulatory powers over the health care industry. It not only doesn't increase federal spending, it will reduce it by reducing the demand for Medicare, Medicaid, and VA spending to rehabilitate victims of defective devices. The MDSA doesn't create a cause of action which didn't exist for 30 years before Riegel. It doesn't infringe on victims' rights to choose their own health care provider or method. The Riegel decision was opposed by scores of state Attorneys General, who filed an amicus brief with the Supreme Court prior to the decision. The Act's basis in states' rights is the reason why the National Conference of State Legisators support the Act.

Medical device companies are lobbying hard with Democrats and Republicans to stop MDSA, and thus far have succeeded in stalling any committee action in either house of Congress. With the new study documenting so many potentially serious injuries of implantable devices, it's imperative that Congress restore the 7th Amendment rights to the young victims' families and hold devicemakers accountable when necessary and enact the MDSA.

UPDATE, July 30: The University of Illinois caved and reinstated Professor Howell, a great victory for him, the Alliance Defense Fund, religious liberty, and the 7th Amendment.
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The great folks at the Alliance Defense Fund are showing why the 7th Amendment right to a jury trial in civil suits is the "sword and shield" of religious liberty in the U.S. today. Two cases illustrate the point:

(1) San Jose/Evergreen Community College District fired biology professor June Sheldon after she objectively answered a student's in-class question on the grounds that a different student claimed to be "offended" by her answer, even though the answer comported with the official curriculum and a district policy on academic freedom. ADF filed a lawsuit on her behalf in June 2008 with the U.S. District Court for the Northern District of California. The district argued that its professors have no free speech rights in the classroom, but a federal court rejected that argument. This week, the district caved, will remove Sheldon's termination from her record, and pay her $100,000 for lost work. Read more about this case and download the filings here.

(2) ADF is threatening to go to court to protect the religious liberty of University of Illinois Professor Dr. Kenneth Howell. The ADF website explains the issues:

Dr. Howell correctly explained the Catholic Church's teachings on homosexual behavior, i.e., that homosexual conduct is morally wrong, as set forth in the Catechism of the Church. He took care to explain the difference between same-sex attraction and homosexual behavior, and to frame the position in the context of natural moral law and Scripture. Later, he followed up his remarks with an e-mail to the students in the class further clarifying some of the points he'd made. Shortly afterward, university officials received an anonymous e-mail complaint from a student who was not even in Dr. Howell's class, who claimed to have been "offended" by what Howell said. Howell was never even given the chance to explain or defend what he'd said. Instead, he was summarily relieved from his teaching duties and dismissed from his teaching position. (At this point, the professor hasn't been technically dismissed but isn't teaching, either.)

The case is attracting attention from across the spectrum of political thought, but I don't see one obvious point: If it weren't for the rights enunciated in the 7th Amendment for the two professors to sue the two colleges, or if those rights had been compromised in some way, both professors would be out of their jobs, period.

And the cases raise the following questions: If the Supreme Court decisions in the Iqbal and Twombly cases to arbitrarily and severely restrict federal pleadings to something "plausible" had been in effect, would ADF have been able to file the suit that protected Professor Sheldon? If ADF files a suit to protect Professor Howell, will it be able to meet the new, restrictive Iqbal-Twombly standards, or will the suit be dismissed by a judge who decides on his own what is "plausible?" And is that really where we want to go in protecting religious liberty? Will Congress address the arbitrary decisions by the Court to restrict the pleading standard, as suggested by the Alliance Defense Fund, or will more Americans lose their religious liberty because their 7th Amendment rights are compromised?

Brenton Stransky has a great piece in American Thinker about the future requirement, buried in the so-called "stimulus bill," for all Americans to report their weight and body fat so Big Brother, I mean Uncle Sam, can tell us what to eat and what to avoid. The bill created a new "National Coordinator for Health Information Technology" (Orwell would love that title), and last week, HHS released new regulations about using that office to "monitor every American's body mass index, or BMI -- a measure to estimate healthy body weight" (quoting Stransky). Thus we see the creeping increase of excessive federal power that oozes from a huge, mostly unread law with a wonderful name (the "American Recovery and Reinvestment Act," another Orwellian masterpiece), and threatens to seep into every corner of our lives.

The Founding Fathers wouldn't be surprised at any of this; they had been there, seen that, done it, and they wanted nothing of it. That's why so many of our Founding Fathers warned that a new Constitution couldn't be ratified without a Bill of Rights, especially the right to a civil trial by jury. When proponents of the Constitution argued that "economic necessity" required swift ratification without a Bill of Rights, fiery Patrick Henry, he of "Give me liberty or death!" fame, responded:

You are not to inquire how your trade might be increased, nor how you are to become a great and powerful people, but how your liberties can be secured; for liberty ought to be the direct end of government. Is it necessary for your liberty, that you should abandon those great rights by the adoption of this system? Is the relinquishment of trial by jury, and the liberty of the press, necessary for your liberty?... Guard with jealous attention the public liberty. Suspect everyone who approaches that jewel..." (J. Kendall Few, In Defense of Trial by Jury, quoting William Wirt, The Life of Patrick Henry, pp. 289-90, by DeSilver, Thomas & Co., 1836)

And make no mistake, Patrick Henry and the Founding Fathers were clear that "trial by jury" was for civil claims as well as criminal cases. George Mason of Virginia, author of the Virginia Declaration of Rights (which included a mandate for civil jury trials), was the first delegate to the Constitutional Convention to recommend that the Constitution be prefaced with a Bill of Rights. He refused to vote to ratify the Constitution because it included no guarantee of individual rights, which for him specifically included, "trial by jury in civil causes." When James Madison presented his draft of the Bill of Rights to the Convention on June 8, 1789, he characterized the right to a civil jury trial as "one of the best securities of the rights of the people."

The Founders knew that each and every right enumerated in the first ten amendments to the Constitution is critical to maintaining individual freedom against an encroaching and suffocating federal government. Every American who cherishes our freedom and the Founders' legacy should recognize the 7th Amendment as a bulwark against Big Brother. Every time we compromise that right through federal preemption of state law with immunity from civil suits, or court decisions which arbitrarily limit our ability to file a civil suit in federal court, we invite Big Brother to dictate our weight, our Internet habits, and the full range of personal actions.

Today, by a bipartisan vote, the House Energy and Commerce Committee approved H.R. 4678, the "Foreign Manufacturers Legal Accountability Act of 2010." a bill supported by Republicans and Democrats, to enable American consumers to hold a foreign manufacturer accountable in U.S. courts for serious defects. I first wrote about the Act on June 29 and described the benefits to consumers who find themselves the victims of bad imported drywall, toys, food products, etc., but cannot sue the foreign maker here because of lack of minimum contacts. In this post I want to summarize the reasons why Constitutional conservatives and Tea Partiers should support the Act, as follows:

(1) The Act would force foreign manufacturers to play by the same rules as American companies. Foreign manufacturers are evading the U.S. legal system and forcing us to go to their home country and try to sue the company there, a costly and time-consuming process. Why should a consumer have to travel to China to serve the drywall maker, when the company does millions of dollars of business in the U.S. and already has an agent here serving as the importer? And why should we continue to allow Chinese law apply to us when we're injured in our own house by their drywall or toys? Under the Act, foreign manufacturers would be required to register an agent, located in the states in which the company does business, to accept service of process for civil suits. As a result, foreign manufacturers would no longer get a free pass, and would be more likely to send safer products into the U.S. Our businesses should not be forced to unfairly compete against foreign businesses that are easily skirting the law.

(2) Our companies are already often subject to jurisdiction overseas, where the injury occurs, so the Act simply closes that loophole by creating consistent jurisdictional rules. For example, a number of European countries and Japan already have an in-country jurisdictional mandate for persons injured by products manufactured in the U.S. Even China's new tort law recognizes jurisdiction where the injury or harm occurred. Closing the international loophole would give our consumers and businesses the same rights that foreign consumers and business enjoy.

(3) In many cases, the Act will actually decrease and even relieve liability for the U.S. companies which distribute and market foreign-made goods. When a foreign manufacturer cannot be located and sued, the U.S. seller may be the only party available to defend the lawsuit filed by the injured consumer. The Act would help our businesses because liability would either be transferred to or shared with the foreign makers, and not borne solely by the U.S. partner.

(4) Our Constitution isn't a ticket for foreign companies to come into our house, sell their defective products, and then thumb their nose at our legal system, especially if our companies are subject to their legal system. We've let them get away with this for too long. The best way to correct the trade loophole - the most "Constitutionally conservative" way to do it - is to let Americans injured by bad foreign products to take them into a local court and let 12 good and fair jurors decide the validity of the lawsuit, the way designed in our Constitution and in almost 800 years of American-British civil law.

So the conservative media is expressing alarm about the new Politico.com poll showing the stark, night-and-day difference between the Washington "elites" and average Americans, the "country" folk who live through loyalty to their faith, their Constitution, and their family. This isn't the first commentary on the cultural divide between Washington and the rest of the country. And I agree with the conservative media wholeheartedly - a Washington elite that isn't connected with and to the average American has no business over-governing and over-taxing us.

So why doesn't the conservative media see that federal laws that preempt state law and provide immunity to one or another group, from financial services to a proposed cybersecurity law, rip through the fabric of our Constitution and Bill of Rights? Why the obsequious bow to the crowd that demands a virtual end to the 7th Amendment right to jury trials for civil suits in the name of economic efficiency or market share? The Founding Fathers declared all Constitutional rights to be "unalienable" and therefore beyond subjection to a cost-benefit test (that didn't work for the gun control crowd against the Second Amendment, did it?). Solid, thoughtful conservatives, from the American Spectator to Rush Limbaugh and Liberty Central, reacted to the Politico poll by commenting on the tendency for mainstream Republicans to sometimes follow along blindly with the elitist mentality. But I doubt that even those conservatives realize the extent to which federal legislation which preempts state statutory and common law, and thereby immunizes corporations from accountability for their actions, routinely attracts numbers of self-described "conservative" Congressmen.

Ken Connor, longtime conservative activist, 7th Amendment defender, and Chairman of the Center for a Just Society, made several relevant points in a post on the CJS site yesterday:

The tort system promotes local control. Through the jury system, people at the local level decide what is reasonable behavior within their own communities. Ordinary citizens, applying a common sense standard of reasonable care, making decisions about acceptable and unacceptable conduct within their community - that is the essence of local government. And, as a result of those decisions, suppliers of goods and services within the marketplace will often modify their own behaviors (i.e., improve health care standards, place guards on dangerous products, protect against discharge of toxic pollutants) without the necessity of yet another costly and intrusive governmental bureaucracy...

With regard to other questions constitutional, conservatives (and libertarians, for that matter) argue that an exception should not be allowed to undo the rule. We shouldn't revoke the 2nd amendment just because some individuals commit crimes with guns. We shouldn't axe the 1st amendment just because some choose to exercise their free speech in a hateful manner. And we shouldn't do away with the 7th amendment just because some tort lawyers and their clients make frivolous claims in court.

Conservatives need to trust the Founders' wisdom and their trust in juries to rightly judge civil suits. Preemption and immunity turns over the authority to the elites. As I wrote on June 24, there's nothing "conservative" about giving some unelected, anonymous bureaucrat thousands of miles from an American hometown the authority to rule over what is safe, instead of letting a jury of 12 good Americans decide it.

It's been three months since the Deepwater Horizon explosion. I've searched the Internet, and to date, BP hasn't signed any legally binding comprehensive long-term claims agreement, and it hasn't agreed in writing to the Kenneth Feinberg-led claims payment mechanism. Nothing exists in writing to pay the oil workers who were laid off, even though BP promised such a fund a month ago (Feinberg said on July 4 that he was too busy to run such a fund). There's nothing in writing or in law to keep BP from offsetting payments already made against future payments or to keep company officials from changing course at any time in the future.

Fortunately, the Senate Commerce Committee on Thursday will take action on S. 3600, the Senate version of the House-passed SPILL Act, to lift liability limits and enable the injured to hold BP and other companies associated with the disaster accountable through the exercise of their 7th Amendment right to a jury trial for civil suits. Hopefully the full Senate will pass the bill before August and we can see a swift reconciliation with the SPILL Act in September.

"The right of trial by jury shall be inviolate, except that, in civil cases, laws may be passed to authorize the rendering of a verdict by the concurrence of not less than three-fourths of the jury." -- Ohio Constitution

"The right of trial by jury shall remain, but shall be waived in all civil cases unless demanded by one of the parties in the manner prescribed by law." -- Michigan Constitution

"Trial by jury is an inviolate right and shall be secured to all, but in a civil cause three-fourths of the jury may render a
verdict." -- California Constitution

"The right of trial by jury shall remain inviolate; but the Legislature may authorize the trial of civil causes by a jury of six persons." -- New Jersey Constitution

"The right of trial by jury shall remain inviolate, and shall extend to all cases at law without regard to the amount in controversy; but a jury trial may be waived by the parties in all cases in the manner prescribed by law. Provided, however, that the legislature may, from time to time, by statute provide that a valid verdict, in civil cases, may be based on the votes of a specified number of the jury, not less than five-sixths thereof." -- Wisconsin Constitution

(Sources: State websites.)

And see more quotes from state constitutions in Part I, posted June 29.

The newest edition of the official law journal of the Federalist Society, the Harvard Journal of Law and Public Policy, includes a criticism of the new federal pleading standards, based on a judge's determination of "plausibility," initiated by the Supreme Court rulings through the twin rulings of Bell Atlantic v. Twombly and Ashcroft v. Iqbal. Rajiv Mohan, one of the Journal's editors, titled his piece "A Retreat From Decision by Rule in Ashcroft v. Iqbal..." (available in paper only at this time; I'll update this post when it's posted online). Mohan introduces his analysis by criticizing the change in pleadings as "improperly undermin(ing) the virtues of formalism." Mohan promotes the principle of judicial "formalism," which "embodies the notion of decision by clear rule and has been touted for promoting uniformity, neutrality, and predictability," and cites the formidable conservative legal duo of Justice Scalia and Judge Frank Easterbrook as proponents. Nice start.

Mohan then echos the criticism of the Iqbal-Twombly pleading standards leveled by the Alliance Defense Fund, the Christian-based defenders of religious liberty, whose letter I highlighted in my post of July 12, Iqbal-Twombly Pleading Standards Could Also Threaten Religious Liberty. In the Fund's letter to the Senate Judiciary Committee on the rulings, counsel Gary McCaleb wrote, "(O)ur concern is that vague, malleable rules are bad news when it comes to orderly, reasoned processes... Worse, the virtually unbounded discretion built into the Twombly standard may encourage some overworked, harried judges to dismiss cases based upon their subjective notation of what is 'plausible,' and leave it to the appellate courts to sort out." In his Harvard Journal piece, Mohan writes, "Despite the appearance of a well structured, two-step inquiry, the Iqbal framework amounts to weakly constrained judicial discretion... Furthermore, the arbitrariness in Iqbal's new standard threatens to increase partiality in judicial decision making... For litigants, the upshot of Iqbal is tremendous unpredictability..."

Then Mohan goes further, saying that the unpredictability of the new standards aren't worth the trouble of overturning the long-standing notice pleading standard in Conley v. Gibson, because there's no real benefit to the federal litigation system. At the least, the Iqbal-Twombly standard is superfluous given existing means in the Federal Rules of Civil Procedure to challenge insufficient pleadings. And at worst, the unpredictable "plausibility" standard presents "a significant risk" to litigants that that claims could be "unduly dismissed" no matter how meritorious.

The new edition of the Harvard Journal also includes a longer article complimentary of the Iqbal-Twombly standards, co-authored by veteran tort reformer Victor Schwartz. But that article is inherently contradictory with respect to the extent to which the twin rulings change the pleading standards. In the first paragraph, the authors write, "With these rulings, the Court signaled a decisive break from the broad "notice pleading" standard..." But pages later, they write, "The Court did not reinvent or completely change pleading; it articulated the basic concept that a claim must meet a minimum threshhold..." Which is it?

And that is the problem the anti-7th Amendment community faces in defending Iqbal-Twombly: They don't want to admit that the new pleading standard was judge-made procedural law, fashioned without a deliberative process involving the peoples' representatives in Congress, the plaintiffs' and defendants' bar, and the federal judiciary (through the Judicial Conference). There's nothing "conservative" or democratic or even Constitutional about such an arbitrary change in federal civil procedure by one branch of government, regardless of impact. Congress should address and reverse the Iqbal-Twombly standard.

By the way, I'm a long-time member of and donor to the Federalist Society, and I served on the Executive Committee of one of its practice groups. I've spoken at its National Convention and other fora and invited policy experts of all stripes to speak at its functions.

I wrote yesterday on the recent court cases which leave non-state foreign terrorist financiers virtually immune from civil suit, and the proposed "Justice Against Sponsors of Terrorism Act" which would empower American terrorism victims to exercise their 7th Amendment rights in federal courts aginst such financiers. During today's Senate Judiciary Committee hearing on the issue and the Act, former senior officials of the Clinton and Bush National Security Council agreed that the court rulings were wrong; they urged the Congress to enact the Act to not only obtain compensation for deaths and injuries, but also to deter future attacks as a matter of counter-terrorism policy. On that last point, they differ sharply from some commentators who inexplicably see no benefit to easing the filing of civil suits against terrorists, an issue I discussed on June 28 in my post on recent changes in federal pleading standards.

Richard Klingler was Associate Counsel, and then Senior Associate Counsel to President George W. Bush from 2005 to 2007, and was also General Counsel and Legal Adviser on the National Security Council staff in 2006 and 2007. Now a partner at Sidley Austin LLP, he was one of the principal lawyers representing victims of the September 11, 2001 attacks in their suit, also discussed yesterday, against certain Saudi-based entitites and Saudi individuals. You can download his testimony from the Committee's website, and here is an excerpt of his comments on the Act:

The Act is an important counter-terrorism initiative and focuses on redressing injuries incurred within our borders, where our nation's sovereign interests are greatest. The Act is required in large part due to the Second Circuit Court of Appeals' unfortunate and clearly erroneous construction of the Foreign Sovereign Immunities Act ("FSIA") and application of the Due Process Clause, as well as by the Administration's narrow construction of a FSIA exception to sovereign immunity for suits addressing tortious acts, including acts of terrorism. The Act would ensure that victims of terrorism will secure redress for acts of terrorism committed on U.S. soil, even if initiated abroad, and would increase the prospect of holding those responsible to account for their actions. This applies not only to victims of past acts of terror, but also to those who are, unfortunately, very likely to join their ranks, and it applies to those who would foster and support terrorist organizations as well as to those who more directly commit acts of terror.

The Act would also increase the nation's ability to deter and prevent further attacks of terrorism. Although civil litigation plays only a small part in countering terrorism, relative to the efforts of our armed forces and intelligence, diplomatic, and law enforcement officials, its role is not negligible. The Act would increase the scope of civil litigation directed against those who materially support terrorism, which may prove especially effective when directed against the financiers of terror and by providing incentives to foreign states to ensure that those closely affiliated with them neither seek to harm expatriate communities within the United States nor further the efforts of terrorist organizations. And, the Act would increase the likelihood that federal courts will extend their powers broadly to entertain suits against those who would support terrorist actions directed against the United States and its interests.

Lee Wolosky served on the National Security Council during the Clinton and Bush Administrations. A partner at Boies, Schiller, & Flexner LLP, he is now assisting efforts to seek compensation from the Arab Bank for its involvement in funding Hamas terrorists. An excerpt of his comments:

Along with the threat of governmental fines and sanctions, the prospect of substantial civil damages can deter deep-pocketed corporations or individuals from doing business with terrorist organizations... Corporations, self-avowed charitable organizations, and other large entities will continue to provide material support for terrorist organizations until it is financially unpalatable for them to do so. Although government sanctions are clearly an integral part of the effort to stem the flow of funds to terrorist groups, civil litigation can substantially enhance the financial consequences that such entities face. This proposed bill will make it easier for litigants to sue those who provide support to terrorists who kill or injure Americans. It will thereby deter future such support.

Modern conservatives looooove Alexis de Tocqueville, and with good reason. This erudite French gentleman arrived to travel in 1831 in this country, which was so new and unknown to the rest of the world, and wrote so eloquently of the democratic and cultural institutions at the heart of our independence that he attracted a worldwide audience to his writings and to the United States. As a lifetime conservative Republican, I quote him and place his writings at the very top of my "must read" list for the young relatives in my family. But it's funny - I hardly ever see my favorite conservative commentators mention, let alone quote, de Tocqueville on the importance of the 7th Amendment right to a jury trial for civil suits. Yet he wrote copiously about it in Chapter 16 of his signature work, Democracy in America. Here's an excerpt with his thoughts:

When the jury is reserved for criminal offenses, the people witness only its occasional action in particular cases; they become accustomed to do without it in the ordinary course of life, and it is considered as an instrument, but not as the only instrument, of obtaining justice. When, on the contrary, the jury acts also on civil causes, its application is constantly visible; it affects all the interests of the community; everyone co-operates in its work: it thus penetrates into all the usages of life, it fashions the human mind to its peculiar forms, and is gradually associated with the idea of justice itself. The institution of the jury, if confined to criminal causes, is always in danger; but when once it is introduced into civil proceedings, it defies the aggressions of time and man...

I think that the practical intelligence and political good sense of the Americans are mainly attributable to the long use that they have made of the jury in civil causes. I do not know whether the jury is useful to those who have lawsuits, but I am certain it is highly beneficial to those who judge them; and I look upon it as one of the most efficacious means for the education of the people which society can employ."

Certainly this icon of modern conservative deserves to have these words treated with the same respect given to his writings on other aspects of American culture.

Tomorrow the Senate Judiciary Committee's Subcommittee on Crime and Drugs will hold a hearing to examine the potential impact of S. 2930, the "Justice against Sponsors of Terrorism Act". The bill was drafted in response to an August 2008 decision by the Second Circuit, of which one impact was to so limit the jurisdiction over individual (non-state) foreign terrorist financiers that they are effectively immunized from civil liability under the Due Process clause. (NOTE: The decision also addressed the immunity granted by the Foreign Sovereign Immunities Act to foreign officials for their terrorism financing activities, but this post will not address that issue). In 2009, the Supreme Court denied cert in the case, and last month a District Court recently issued a decision which only raises the bar to civil liability even further. The bill would provide a basis for a finding of in personam jurisdiction over individual terrorist financiers in federal court, and I've worked for its enactment by Congress for over a year.

Thousands of surviving family members of the 9-11 attacks represented by my clients at the Motley Rice law firm, were joined by insurers and owners of the properties attacked that day, and filed suit against a number of Saudi-based entities and individuals for alleged involvement in funding al Qaeda prior to the attacks. In 2006, a federal court dismissed claims against twelve of the defendants, and the plaintiffs appealed that judgment to the Second Circuit with respect to the Kingdom of Saudi Arabia, four Saudi princes, a Saudi banker, and a Saudi charity.

In its August 2008 decision, the Second Circuit affirmed the dismissals and, on pages 61 and 62, laid down the following test for jurisdiction over the princes in their nonofficial capacity - when you read this, think about how a defendant could gather the information required to meet the test:

Even if the Four Princes (defendants) were reckless in monitoring how their donations were spent, or could and did foresee that recipients of their donations would attack targets in the United States, that would be insufficient to ground the exercise of personal jurisdiction... Rather, the plaintiffs have the burden of showing that the Four Princes engaged in "intentional, and allegedly tortious, actions . . . expressly aimed" at residents of the United States... That burden is not satisfied by the allegation that the Four Princes intended to fund al Qaeda through their donations to Muslim charities. Even assuming that the Four Princes were aware of Osama bin Laden's public announcements of jihad against the United States and al Qaeda's attacks on the African embassies and U.S.S. Cole, their contacts with the United States would remain far too attenuated to establish personal jurisdiction in American courts. It may be the case that acts of violence committed against residents of the United States were a foreseeable consequence of the princes' alleged indirect funding of al Qaeda, but foreseeability is not the standard for recognizing personal jurisdiction. Rather, the plaintiffs must establish that the Four Princes "expressly aimed" intentional tortious acts at residents of the United States... Providing indirect funding to an organization that was openly hostile to the United States does not constitute this type of intentional conduct. In the absence of such a showing, American courts lacked personal jurisdiction over the Four Princes.

So the plaintiffs would have had to prove that the princes gave al Qaeda the money with the orders to use it for attacking Americans. I submit that is virtually an impossible standard to meet, not just by defendants in a lawsuit but by an experienced intelligence service (unless they are buried in the terrorists' headquarters). Unfortunately, the Supreme Court's denial of the cert petition last year left that standard in place.

When counsel thereafter asked the District Court this year to rule on motions to dismiss (for which there had been no action by the judge for years), the federal judge stuck the knife in deeper by adding details to the Second Circuit's standard. On pages 32 through 34 of the decision, issued on June 17, he basically issued a roadmap for non-state foreign terrorist financiers to follow in order to escape with no fear of civil liability in the U.S., as follows:

For years, the surviving family of an American soldier killed by a foreign contractor's gross negligence has been pursuing its 7th Amendment rights to hold the contractor responsible. Although the family's quest for justice appears to have ended with no personal relief, they've turned their grief into a larger cause that will hopefully benefit the thousands of Americans serving overseas.

Lt. Col. Dominic "Rocky" Baragona, a 1982 West Point graduate, was among the first wave of Americans entering Iraq in March 2003 as commanding officer of the 19th Maintenance Battalion. On May 19, 2003, he was leaving Iraq - an hour from an American base in Kuwait - when a truck owned and operated by Kuwait & Gulf Link Transport Company (KGL) sliced across the highway and struck the Humvee carrying Col. Baragona. He died instantly and with no detailed investigation of the accident at the time, leaving his grieving parents and siblings to start their own inquiries into KGL's operation of the truck. After trying without success to obtain an apology from KGL, the family's attorney filed a lawsuit in federal court, citing KGL's millions of dollars in contracts with the Defense Department as a basis for jurisdiction. After first obtaining a default judgment against KGL for almost $5 million when it failed to respond to the complaint, the family saw its pursuit of justice blocked when KGL responded to the judgement by citing a lack of in personam jurisdiction, and persuaded the federal judge to reverse the default judgment and dismiss the lawsuit. That dismissal was affirmed by the 11th Circuit Court of Appeals this January, and the Supreme Court denied cert in the case last month.

The family's attorney, Stephen Perles of Washington, sought my assistance beginning last year in an attempt to reach a legislative solution to the jurisdiction issues facing any American hurt or killed through the negligence of a foreign contractor. A bipartisan bill championed by Senators McCaskill and Collins to force foreign contractors to recognize the jurisdiction of U.S. courts eventually emerged from a Senate committee in June as S. 2782, the "Lieutenant Colonel Dominic "Rocky" Baragona Justice for American Heroes Harmed by Contractors Act." The bill may not be retroactive, so it might not help the Baragona family, but it can prevent other such situations, so we hope Congress will enact the bill soon.

Meanwhile, an issue involving KGL's business has already had a significant impact on American foreign policy and defense contracting law. Independent researchers have posted information on the Internet which showed that a unit of KGL is a business partner with Valfajr, an Iranian firm designated by the Treasury Department for its role in the proliferation of Iran's military goods, including ballistic missle technology. Although some of the links in that post have since mysteriously disappeared, the Arab Times website reported in March that, "The source affirmed KGL has enhanced its partnership in Iran through the establishment of Combined Shipping Company (CSC), a Kuwaiti shareholding closed company founded in 1996 as a joint venture between KGL Holding and the Iranian VALFAJR-Shipping Company, a subsidiary of IRISL Group - the main Iranian sea transporter for passengers and cargo in the Gulf region and worldwide." That relationship infuriated numerous Congresspersons who were deliberating on a bill to impose new sanctions on Iran. They eventually included a provision in Section 102 of the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010, which requires a certification from each prospective contractor that it does not engage in any activity for which sanctions may be imposed. So the new Iran sanctions law might pose a serious disincentive to any new Defense Department contracts for KGL and similar companies.

On June 28, I posted about the change in federal pleading standards brought about by the Supreme Court in the Iqbal and Twombly decisions, and how those decisions infringe upon the rights of American terrorism victims to sue terrorist financiers in federal court. Those decisions could also threaten every American's religious liberty through imposition of an uncertain "plausibility" standard, which invites "defensive lawyering" and subjective dismissals of complaints by individual judges. The Alliance Defense Fund, a Christian-based nonprofit which litigates religious freedom cases nationwide, criticized the Iqbal-Twombly standards in a a January 26, 2010 letter to the Chairman of the Senate Judiciary Committee. Here's what ADF said about the decisions:

"Our concern with this is not that the Twombly rule makes our plaintiffs work more difficult, or our defense work easier. Rather, our concern is that vague, malleable rules are bad news when it comes to orderly, reasoned processes. Already, the Twombly standard has unnecessarily complicated the early stages of litigation by encouraging "defensive lawyering." Plaintiffs' lawyers are now motivated to increase the complexity, length, and detail of their complaints, anticipating that their case will be one that needs "amplification" to become "plausible." In turn, defense lawyers now have to respond to these expansive "toss in the kitchen sink" pleadings, and are motivated to litigate motions to dismiss that they never would have invested in under the clear Conley standard. This is not speculation, but based on direct experience with Twombly in our cases. Worse, the virtually unbounded discretion built into the Twombly standard may encourage some overworked, harried judges to dismiss cases based upon their subjective notation of what is "plausible," and leave it to the appellate courts to sort out. The result, again, is further strain on judicial resources, and litigating matters that would not have been at issue under Conley."

The letter cited three cases in which ADF has already faced the impact of the Iqbal-Twombly decisions: Freedom from Religion Foundation, Inc. v. Obama, 617 F. Supp. 2d 808; Boardley v. U.S. Dep't of Interior, 605 F. Supp. 2d 8; and Creed v. Family Express Corp., 101 Fair Empl. Prac. Cas. (BNA) 609. And ADF concluded that it would be "prudent" for either the courts or the Congress to resolve the mess created by the new standards by returning to the practical, fair pleading standard employed for decades under the Conley case, also discussed in my June 28 post.

A second open letter to John Stossel of Fox News:

So you talked with one doctor at one hospital who told you that the "indirect costs (of lawsuits) are far higher because suits force doctors and hospitals to practice defensive medicine and do unnecessary tests." And you believed that ONE doctor in ONE hospital is the final source, the definitive word, on the costs of lawsuits to all medical patients. That's a piece of shoddy, biased journalism, with not even 30 minutes devoted to (a) some simple internet searches to find objective studies, or (b) a few phone calls to find different viewpoints and establish some objective credibility to your reporting.

If you cared about doing objective reporting, you would have found real studies cited in one article in the New Yorker in 2009, The Cost Conundrum, by Dr. Atule Gawande. He investigated why the border town of McAllen, Texas has become the country's most expensive place for health care, even after significant tort reform in Texas. Dr. Gawande found that such high costs are due, not surprisingly, to the profit motives of medical practitioners and inefficiency, and not liability. Some cogent points from that article:

• When asked whether lawsuits increased costs, "a general surgeon responded, 'We all know these arguments [malpractice arguments] are bull***. There is overutilization here, pure and simple.' Doctors, he said, were racking up charges with extra tests, services, and procedures...Before, it was about how to do a good job. Now it is about 'How much will you benefit?'... He knew of doctors who owned strip malls, orange groves, apartment complexes--or imaging centers, surgery centers, or another part of the hospital they directed patients to. They had 'entrepreneurial spirit,' he said. They were innovative and aggressive in finding ways to increase revenues from patient care.... he had often seen financial considerations drive the decisions doctors made for patients--the tests they ordered, the doctors and hospitals they recommended--and it bothered him."

• "In a few cases, the hospital executive told me, he'd seen the behavior cross over into what seemed like outright fraud. 'I've had doctors here come up to me and say, 'You want me to admit patients to your hospital, you're going to have to pay me...The amounts--all of them were over a hundred thousand dollars per year.'"

• "General surgeons are often asked to see patients with pain from gallstones... If there aren't any complications - and there usually aren't - the pain goes away on its own or with pain medication...But increasingly, I was told, McAllen surgeons simply operate. The patient wasn't going to moderate her diet, they tell themselves. The pain was just going to come back. And by operating they happen to make an extra seven hundred dollars."

John, that article cites case after case (none of which you cared to find and read) with the same conclusion: Eliminating unnecessary but profitable procedures and changing incentive systems will reduce medical costs and enhance the quality of medical care. It worked at the Mayo Clinic and in Grand Junction, Colorado, and had nothing to do with giving doctors immunity from their accountability to their patients.

John, try serious reporting based on real research, not anecdotes from one doctor.

An open letter to John Stossel at Fox News:

Read your column in the Washington Examiner in which you took off on trial lawyers and said that "for the majority of us, they make life much worse." Guess you're doing the same tonight on Fox News. Too bad you didn't ask the trial lawyers' national association, the American Association for Justice, if they have examples of how trial lawyers have improved Americans' way of life in some area (I asked them - they're my clients - and they said you didn't call). So much for objective journalism. Too bad you didn't think about balancing the business community's screams about trial lawyers with a recognition that the 7th Amendment to the Constitution enables consumers hurt by products that kill them to take the issue to court. Funny, I've never seen a juror enter a jury box and come out of it with his arm twisted behind his back. See, I trust my Constitution and I trust juries. So much for 232+ years of Constitutional law (you do remember the Founding Fathers, don't you, John) and your self-righteous and uninformed indignation.

Anyway, this image downloaded from the AAJ website (any Fox News intern could have found it) gives you a clear example of how the 7th Amendment right to a jury trial for civil suits has made significant improvements in the safety of the car you drive today. Air bags, seat belts, and side door protection are just some of the features in the car that YOU DRIVE TODAY that came about thanks to lawsuits filed under the 7th Amendment.

Now face it John, as a red-blooded American male, you've certainly run some red lights, busted some speed limits, and slammed on your brakes. So my guess is that all those lawsuits over defective auto safety, filed by the surviving families of killed and/or injured victims and their trial lawyers, have probably saved your life at one time or another. Think about that. And next time do your homework before you do an inaccurate, slanted hit piece on some other profession somewhere that saves lives.

P.S. That doctor you quoted in your article - the one moaning about the source of unnecessary procedures? - doesn't know what he's talking about. He didn't do his research either, and, of course, you never challenged his assertion. That's in my next letter.

Yesterday, the U.S. House passed, by a voice vote, the "Securing Protections for the Injured from Limitations on Liability Act," or "SPILL Act" (H.R. 5503), which enables the families of workers killed in the BP disaster and others injured by maritime disasters to hold those negligent responsible without outdated and inequitable limits on recoveries. Specifically, the Act enables victims of maritime accidents to recover damages in the same way as victims of accidents on land can in state courts, by:

(1) amending the Death on the High Seas Act to allow recovery of noneconomic damages for maritime death;

(2) repealing the 1851 Limitation of Liability Act, which allows Transocean to claim responsibility for only $27 million in damages, and;

(3) enabling seamens' surviving family members to recover noneconomic damages of loss of care, comfort and companionship under the Jones Act.

The SPILL Act is perfectly consistent with principles of Constitutional conservatism in that it (1) upholds the 7th Amendment rights of the injured to bring their civil cases to a jury for decision; (2) doesn't add a single dollar or bureaucrat to the federal budget; (3) doesn't add any federal enforcement mechanism, with the victims' rights to be enforced only in "the legal marketplace of ideas" before a jury of their peers applying state law.

House passage was the result of a combination of grassroots support and careful compromise by the bill's sponsors to win support from more Congressmen. The BP victims's families' contacted the Congress early and often, and their pleas for help were enforced by calls from residents in the Gulf Coast area and supportive letters from the National Organization of Parents of Murdered Children and the National Center for Victims of Crime. And Chairman Conyers of the Judiciary Committee removed two sections from the version approved by the Committee, in order to mollify concerns of various critics (some of which continued to oppose the bill anyway).

Now the action moves to the Senate. During a Senate committee hearing on Wednesday, prior to the House voice vote, two Republican Senators said they generally approved of enabling victims of maritime accidents to recover in the same way as victims of land-based accidents. I like the chances of passage of the SPILL Act, or something closely resembling it, by the Senate.

"In all civil cases, the right of trial by jury shall remain inviolate and our courts have scrupulously guarded this right against encroachment." -- Indiana Judge Harry J. Curtis, 1940

"In a trial by jury for injury to persons or property, the assessment of the plaintiff's damages is as much a part of the verdict for him as the finding of liability... This we regard as an essential part of the trial by jury intended to be secured by the Constitution." -- New Hampshire Chief Justice Ira Perley, 1868

"The right to a jury trial is a basic right in this state. The right to a jury trial remains inviolate." -- North Dakota Justice Robert Vogel, 1978

Source: In Defense of Trial by Jury, by J. Kendall Few and the American Jury Trial Foundation

Also see this summary of state court opinions, prepared by the Center for Justice and Democracy, ruling various attempts at tort reform unconstitutional under state law, and my June 18 post with quotes from U.S. Supreme Court Justices about the right to a jury trial for civil suits.