Lessons Learned

More than half of U.S. companies had at least one trial last year. Of those cases 40 percent went to verdict. These findings from Fulbright & Jaworski's Second Annual Litigation Trends Survey explain the difficulty we had in choosing just five cases to highlight in our annual list of the most significant verdicts of the year. Luckily, with the help of some of the country's top litigators, we were able to narrow the list to a manageable, but diverse group.

Plaintiffs range from the eminently sympathetic--a 69-year-old wife and mother of three who died of a rare blood disorder--to the less downtrodden--a billionaire who sold his Florida mansion for $69 million in 2004. Damages range from absolutely nothing to absolutely outrageous. Jurisdictions range from New York's business-friendly courts to the dreaded Madison County, Ill. Some are high-profile; others got little media attention. Four are cautionary tales, and one is a victory worth noting.

"This sends a very compelling message that corporate arrogance is simply not going to be tolerated by the civil justice system," Scarola says.

Judge Maass's pretrial ruling and the resulting verdict also send a message about the importance of retaining and being able to produce e-mails in litigation. More and more, courts are treating e-mail as "a window into the corporate consciousness," Scarola says. Morgan Stanley's fate was sealed, he adds, when "the electronic trail that existed in this case was obliterated."

Plaintiffs may be banking on two studies of Chinese workers from the National Cancer Institute that showed benzene, at certain levels, increased the subjects' risk of developing non-Hodgkins' lymphoma and blood diseases.

But corporations and corporate litigators are readying their defenses. An Associated Press story published in August 2005 revealed that a coalition of oil companies--including BP, ChevronTexaco, ConocoPhillips, ExxonMobil and Shell--had raised almost $27 million to fund its own benzene study in Shanghai. The research began in 2001, and the companies are expected to publish the findings in 2007. Meanwhile, corporate litigators have been sharing strategies in a series of benzene litigation conferences. Firms organized at least three such events in 2005, including one led by Allen.

"I knew all about the bad reputation, and the other big verdict in the last trial," she said. "I am so tired of people saying we're the lawsuit capital of the United States."

It's comments like these that have defense counsel cheering.

Although both sides were expressly prohibited from mentioning the September 11 terrorist attack, Hanly predicts this verdict will have a profound effect on September 11 suits.

"It strongly suggests that a jury may well assess liability for the failure ?? 1/2 to remedy the known defective fireproofing on the structural steel, to enlarge and reinforce the means of egress and to implement a coordinated exit strategy of the entire complex, thereby affording more tenants precious additional time to escape," he says. "The failure to take these steps before and after '93 led, in a not insignificant way, to the extent of loss on 9/11."

Scott Winkelman, co-chair of Crowell & Moring's tort practice, says legal departments will have to decide for themselves whether this strategy makes sense for their companies.

"Litigators and in-house counsel across the country will have to assess the difference in these verdicts," he says, "and answer the question: 'In this type of serial litigation, which case will set the price for future claims?'"?

staff Writer

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