June 2010 Archives

An epidemic of defective drywall imported from China has exposed the jurisdictional barriers that American consumers face when trying to hold a foreign manufacturer accountable for serious defects, and the number of those defects has sharply increased. For instance, according to a memo prepared for Members of Congress, "In the decade between 1998 and 2007, the import of consumer products into the United States more than doubled. This sharp rise in imported consumer products has been accompanied by an overall increase in product recalls and a disproportionate increase in the share of product recalls involving imported products - particularly products from China." In recent years, over 80% of all recalls of consumer products announced by the Consumer Products Safety Commission have involved products manufactured overseas. Yet consumers must travel to the country of manufacture, persuade the host government to serve the suit to the foreign company (and translated into the home language), and then try to establish jurisdiction over that company in the U.S., an incredibly time-consuming and expensive process. In one particularly egregious case, a retired police officer and his wife bought their "dream home," only to find it filled with extremely toxic Chinese drywall. Unable to afford the extensive replacement of the drywall, they lost the house and were forced to file for bankruptcy, all because they could not recover from the Chinese manufacturer. Other consumers are suing the U.S. distributors and shippers in a desperate attempt to collect whatever they can, which unfairly holds U.S. companies accountable for the defects caused overseas.

Bills in the U.S. Congress would close this gap in 7th Amendment rights and enable American consumers to sue in the U.S. and take the pressure off American companies which only ship and sell the products. The Foreign Manufacturers Legal Accountability Act of 2010 is supported by Democrats and Republicans in both houses. A House subcommittee is scheduled to debate and vote on the bill tomorrow, and the Senate version might be attached to other legislation in the near future.

"In civil cases where the amount in controversy exceeds two hundred fifty dollars, the right of trial by a jury of twelve is preserved to the same extent as it existed at common law." -- Alaska Constitution

"In all civil cases, the right of trial by jury shall remain inviolate." -- Indiana Constitution

"In all civil suits, and in all controversies concerning property, the parties shall have a right to a trial by jury, except in cases where it has heretofore been otherwise practiced..." -- Maine Constitution

"In all controversies concerning property, and in all suits between two or more persons, except in cases in which it has been heretofore been otherwise used and practiced, the parties have a right to a trial by jury, and this method of procedure shall be held sacred..." -- Massachusetts Constitution

"The right to trial by jury shall be and remain inviolate, except in civil cases wherein the amount in controversy does not exceed One Thousand Five Hundred Dollars... Provided, however, that the Legislature may provide for jury trial in cases involving lesser amounts." -- Oklahoma Constitution

(Sources: State websites)

For over 50 years, people wishing to file a lawsuit in federal court could simply submit a short and plain statement of facts in a complaint, in accordance with the Federal Rules of Civil Procedure. The Conley v. Gibson Supreme Court ruling in 1957 ensured that cases that might be difficlut to win, but meritorious nonetheless, could proceed to discovery ("a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief"). But the 2009 Ashcroft v. Iqbal and 2007 Bell Atlantic v. Twombly decisions by the Supreme Court made federal complaint standards much more restrictive. Now parties have to plead specific and concrete facts, often without having access to any of the information they need, or see their cases thrown out due to "implausibility." The Court's decision to implement the new standards without pursuing the usual course of action in amending the Federal Rules by requesting a change through the Judicial Conference of the United States.

The battleground for the impact of the Iqbal and Twombly cases includes an area overlooked and ignored by the proponents of the new standards, namely lawsuits filed by American terrorism victims against the terrorists and their financiers. Veteran attorney Steven R. Perles of Washington, who has represented thousands of terrorism victims over the past thirty years and is one of my clients, wrote to the U.S. Congress this past February, criticizing the Iqbal-Twombly standards and warning of its impact on the access to justice by terrorism victims. See the following excerpts and download the entire letter:

The practical effect on anti-terrorism litigation will be that state sponsors of terrorism, such as Iran, will now be able to enter and win litigation against those U.S. citizens seeking redress for their injuries, unless the U.S. citizens have been lucky enough to discover the critical facts that explain Iran's support for a particular terrorism attack prior to the expiration of the statute of limitations for their claims...

I was counsel for plaintiffs in two cases called Buonocore v. Libya and Baker v. Libya. In Baker, we filed a complaint against Libya for its support of the Abu Nidal Organization's hijacking of an airliner in November 1985, which left one American dead and two Americans severely injured. In Buonocore, we filed a complaint against Libya for its support of the Abu Nidal Organization's machine gun and grenade attack on the Rome and Vienna airports in December 1985, which resulted in numerous American dead and injured. Libya filed a motion to dismiss the complaint in both cases, but the court found the complaints sufficient under the Conley standard. It was only later in each case that we were able to locate the surviving terrorists in Austria, Italy and the United States in their respective prisons, who provided critical details in sworn statements regarding Libya's role in the attacks. This information contributed to the eventual settlement of both cases. Had the Twombly and Iqbal standards been applicable in those cases, Libya's chances of winning at the motion to dismiss stage--prior to our uncovering of critical evidence in our post-filing of the complaint investigation--would have been dramatically greater.

I would also cite two other victorious terrorism civil actions which might have been dramatically altered or lost if the Iqbal-Twombly standards had been in effect. In the first, the family of David Boim, an American killed by Hamas terrorists in Israel, successfully won a $156 million judgment against the Dallas-based Holy Land Foundation for its role as the biggest Hamas fundraiser in the U.S. The victory came only after extensive challenges to the introduction of evidence under the Conley standard, and those challenges might have been successful under the Iqbal-Twombly standard. You can read more about that suit on the Counterterrorism Blog. In the second, attorneys from the Motley Rice law firm (another client of mine) who are pursuing the Arab Bank in a civil suit for its alleged role as a conduit for terrorist funds were able to access information gathered by Israeli intelligence, as summarized in this post on the Counterterrorism Blog. I cannot imagine that the introduction of that evidence would have been so easily introduced under the Iqbal-Twombly standard.

Tomorrow I'll address, in more detail, the critics of legislation designed to repeal the Iqbal-Twombly pleading standard. But at the outset, they ignore the beneficial impact of the Conley pleading standard on terrorism victims' lawsuits, which often require the introduction of evidence obtained from overseas sources. Federal judges are far more likely to dismiss such suits prior to discovery for failure to meet the "plausibility" standard.

Today a conference committee of U.S. House and Senate members is meeting again to try to complete a single bill to markedly change regulation of financial institutions by the federal government in response to the Wall Street crash of 2008-9. This area of law has been only the latest in which those who disregard or minimize the 7th Amendment (and its "Constitutional cousin," the 10th Amendment) seek to preempt state statutory and common law, in this case through federal preemption of state banking and consumer protection laws. State officials, especially Attorneys General, and members of Congress assert that federal preemption hobbles the states' ability to protect consumers from the types of abusive lending practices which contributed to the financial meltdown. As one commentator noted, "In the run-up to the mortgage meltdown, federal bank regulators fought hard to pre-empt any state efforts to crack down on shady bank practices. A number of states, like North Carolina and New York, were trying to crack down on abusive mortgage practices by subprime lenders. But many of the lenders were subsidiaries of national banks, and the Office of the Comptroller of the Currency declared that states had no right to touch them whatsoever. The feds did absolutely nothing to stop the explosion of no-doc loans, option ARMs, deceptive teaser rates and hidden 'yield-spread premiums.'"

Federal preemption abrogates 7th Amendment rights by immunizing the affected industry from civil suits, with no accountability for negligence; it leaves injured consumers with no means of seeking recovery for injuries caused by the product or service. Federal bureaucrats love expanding their power and ensuring their permanency by preempting state law, and in recent years they've certainly exercised that power. Bureaucrats in the Food & Drug Administration (FDA), National Highway Traffic Safety Administration (NHTSA), Consumer Product Safety Commission (CPSC), Department of Homeland Security, Pipeline and Hazardous Materials Safety Administration, Transportation Safety Administration and Federal Railroad Administration have all joined in writing federal preemption into regulations.

The courts have joined in too, with the Supreme Court deciding in Riegel v. Medtronic that FDA approval of certain medical devices automatically preempted state common law, resulting in the dismissal of hundreds of lawsuits. The February 2008 decision ignored Congressional intent and disregarded 30 years of experience under the 1976 Medical Device Amendments (MDA), during which FDA regulation and state tort law worked together to protect consumers from dangerous devices. The Riegel decision gives total immunity to device manufacturers who fail to adequately warn consumers about device risks. In Riegel, the device that failed was a Medtronic balloon catheter used in heart surgery. Riegel needed additional surgery but eventually died. Now, thanks to the decision, Riegel's heirs are left holding the bag for the manufacturer's negligence. The MDA authorized the FDA to preempt the numerous state requirements only in statutory law. But the court decision turned the simple preemption provisions of the MDA into a vehicle giving total immunity from any accountability, with no checks and balances.

There's nothing "conservative" about giving a federal bureaucrat life-or-death power over the average American sitting hundreds or thousands of miles away. Federal preemption is a blank check for Washington bureaucrats to expand their sphere of influence and inject themselves into our lives. Real advocates for the 7th and 10th Amendments should recognize that trading they're trading freedom for a phony concept of "efficiency," something which the Founding Fathers rejected.

"Pronouncing that they had 'a free hand' to create a rule that would otherwise be within the legislative province of Congress, the Supreme Court announced that in Maritime cases, punitive damages verdicts would be forever capped to never exceed an equal amount of compensatory damages. Justice John Paul Stevens noted in his dissenting opinion that 'it is telling that the Court has failed to identify a single state court that has imposed a precise ratio.' Many state legislatures had taken up this issue, and through the representatives of the people of each state, they determined appropriate ranges for such punitive awards. Notwithstanding the observations of Justice Stevens, the Exxon v. Baker Court sidestepped the process of a representative legislature for the sake of corporate protectionism.

Moreover, no consideration was given to the value of the Constitution and the Seventh Amendment specifically. The jury, in itself a microcosm of democracy, had considered all of the facts and arguments by expert lawyers representing both sides, including Exxon. Upon the facts presented, the jury set the damages award. By changing the punitive award in this case, the Supreme Court rejected the value of the jury system established in the Seventh Amendment, an amendment so important to our Founding Fathers that it was placed alongside such venerated rights as the freedom to bear arms, the freedom of association, the freedom of the press, the freedom of religion, the right to due process, and the right to protect us as citizens against unlawful search and seizures."

Attorney Terence Perenich, writing on the Supreme Court's ruling in the Exxon Shipping v. Baker case that artificially limits punitive damages in maritime cases to a 1:1 ratio to compensatory damages.

The "Power Player of the Week" segment on yesterday's Fox News Sunday was devoted to a story about the group Constituting America, founded by actress Janine Turner, "to reach, educate and inform America's youth and her citizens about the importance of the U.S. Constitution and the foundation it sets forth regarding our freedoms and rights." I applaud her for founding the group and send best wishes for its success. The website and effort look promising, with links to hundreds of original documents on the origin and nature of our Constitutional rights. I only hope that Ms. Turner and her co-chair, who has a long and distinguished career in Republcian politics, are truly serious about promoting the 7th Amendment right to jury trials for civil suits without impositions on plaintiffs' rights. I'll reach out to them in the hope that we can work together to promote our 7th Amendment rights.

"One of the strongest objections originally taken against the Constitution of the United States was the want of an express provision securing the right of trial by jury in civil cases. As soon as the Constitution was adopted, this right was secured by the Seventh Amendment." -- Justice Joseph Story, 1830

"The right of trial by jury is expressly secured by the Seventh Amendment. The U.S. Supreme Court has always guarded this constitutional right with jealousy." -- Justice Stanley Matthews, 1885

"The founders of our government thought that trial by civil jury was an essential bulwark of civil liberty." -- Justice Hugo Black, 1939

"The right of trial by jury in civil cases is so fundamental and sacred to the citizen that it should be jealously guarded by the courts." -- Justice Frank Murphy, 1942

The U.S. House Judiciary Committee is tentaively scheduled to take the first action next week on a bill related to the liability of the companies which operated the Deepwater Horizon oil rig, by debating and voting on the "Securing Protections for the Injured from Limitations on Liability Act," or "SPILL Act," to lift outdated limits on liability for deaths caused by disasters such as the Deepwater Horizon explosion. The SPILL Act would enable the families of the 11 men killed on the rig to recover damages just as if the accident had occurred on land in the United States, a dichotomy that makes no sense but has never been redressed in federal law. Indeed, if the men who died on the rig had instead been seated in a helicopter five feet off the rig, and the chopper had exploded, the families would not now face the artificial limits on any recovery that they currently face under federal law.

Several federal laws govern that accident, and all are decades old, reflecting a world of days gone by not only without oil drilling in federal waters on enormous platforms built by multinational corporations headquartered anywhere in the world, but also without modern mechanisms of insurance or asset management. So, for instance, the 151-year-old "Limitation on Liability Act" (LOLA) limits the liability for accidents on "vessels" to the market value after an accident. Strangely, movable ocean rigs are considered "vessels" under LOLA. So Transocean, which owned the rig, has claimed in court that its liability is limited to the current market value of the destroyed rig on the ocean floor plus freight costs - about $27 million, a pittance for a disaster of this magnitude. Similarly, another law limits the amount due to the parents of one of the victims to $1,000, since he wasn't married and they were not his "economic dependents." Hopefully the Congress will repeal the antiquated and non-Constitutional liability limits in these laws. You can read a brief description of the SPILL Act on the Judiciary Committee's website and download a copy of the act from here.

If you doubt that the 7th Amendment is under attack, take a look at this presentation by a current federal judge, cited often in other articles on the need to maintain the right to a jury trial. U.S. District Court Judge William Young has been writing and speaking on the subject for several years, as typified by an article he wrote for the Suffolk University Law Review in 2006 titled, "Vanishing Trials, Vanishing Juries, Vanishing Constitution." Several paragraphs vividly describe the extent and impact of the degradation of the 7th Amendment (footnotes deleted for ease of reading) and summarizes a number of issues that I will address in individual posts on this website:

The jury system proves the wisdom of the Founders in their utilization of direct democracy to temper the potential excesses of the only unelected branch of government. According to one scholar, "the jury achieves symbolically what cannot be achieved practically--the presence of the entire populace at every trial." Through the jury, we place the decisions of justice where they rightly belong in a democratic society: in the hands of the governed. The very structural bedrock of our constitutional form of government confirms the centrality of the jury's role.

(I)t is fair to observe that for decades, business and insurance interests have disparaged our civil juries while the courts have failed to defend the single institution upon which their moral authority ultimately depends. As a result of their assault, the bipartisan majorities in the Congress have restricted access to the American jury severely. The most sophisticated recent analysis has led one commentator to conclude that "a civil justice system without a jury would evolve in a way that more reliably serve[s] the elite and business interests."...

Our pre-emption jurisprudence, long a matter for narrow construction, today is applied so broadly as to oust state courts (and juries) of their traditional areas of adjudication and replace them with less-protective federal standards, or no remedy at all. The Supreme Court has even preempted older, more comprehensive federal civil rights statutes with newer, more restrictive statutes. The Court also allows federal agencies to trump state laws that interfere with their domain. The judicial system's preference for arbitration also threatens the American jury. The Supreme Court, in building on a decisional edifice that most commentators consider shaky if not outright wrong, has interpreted the Federal Arbitration Act to supplant juries with arbitrators whenever possible. So, today, citizens cannot trade on the stock exchange, have long distance telephone service, or be employed in many necessary jobs and industries unless they surrender statutory and procedural rights (specifically, relinquishing the right to a jury decision and submitting instead to arbitration)...

Of paramount importance, however, is a matter neither of substance nor procedure, but culture. We federal trial judges appear no longer to revere the jury trial as the central and paramount goal of our American system of justice. We have so "deconstructed the role of the trial judge" that today far too many judges do not understand the concept.

Congress, by adjusting the jurisdiction of the lower federal courts, effectively strips disfavored classes from full access to justice. As a consequence, it restricts, if not extinguishes, cherished individual rights and liberties. This congressional maneuvering is known as "courts stripping." Because the practice does not implicate the American jury directly (it would be unconstitutional had it done so), Congress accomplishes it largely below the public's radar and without public debate.

I've watched the development of the new wave of grassroots "Constitutional conservatism" and the Tea Party movement with great interest and hope, and it reminds me of the rise of the Reagan Revolution, in which I participated as a campaigner in 1980 at Notre Dame Law School (where I met him) and then as a political appointee during his Presidency. The national debate over the increasing size and scope of the federal government, especially during enactment of the health care and stimulus bills, has sparked an entire movement dedicated to the rediscovery of the principles of limited government and individual rights. I agree with every word of the "Mt. Vernon Statement" and applaud the conservative activists who signed it. I invite them and all like-minded Americans to honor the 7th Amendment as a bulwark against an encroaching federal government that takes a bite from our wallets and steps on our hopes and dreams. On this website, I'm going to discuss, in detail, the ways in which the 7th Amendment is being attacked almost daily, from legislative proposals for federal preemption of state law and artificial liability limits, to court decisions with judge-made limits on the filing of civil suits. Defending our Constitutional rights requires a vigilant, principled defense of each amendment in the Bill of Rights - remember, the man who drafted the 2nd Amendment right to bear arms, James Madison, simultaneously drafted the 7th Amendment right to a jury trial in civil suits and called it "one of the best securities to the rights of the people."

I also invite Tea Partiers and Constitutional conservatives to submit their ideas, articles, and quotes in support of this website and will give you credit here. Stay in touch!

"Quote of the Day" will be a regular feature of the 7th Amendment Advocate, and we'll begin with quotes by the Founding Fathers voicing their dedication to a jury trial for civil suits. The Founders' quotes can be found in an outstanding two-volume set, "In Defense of Trial by Jury," assembled by South Carolina attorney J. Kendall Few and published by the American Jury Trial Foundation.

"The civil jury trial is preferable to any other and ought to be held sacred." -- Virginia Declaration of Rights, 1776

"In civil suits the parties have a right to trial by jury and this method of procedure shall be held sacred." -- Massachusetts Constitution, 1780

"Trial by jury in civil causes,... trial by jury in criminal causes, [and] the benefits of the writ of habeas corpus... all stand on the same footing; they are the common rights of Americans." -- Richard Henry Lee

"I consider [trial by jury] as the only anchor ever yet imagined by man, by which a government can be held to the principles of its constitution." -- Thomas Jefferson to Thomas Paine

"By a declaration of rights I mean one which shall stipulate freedom of religion, freedom of the press, trial by juries in all cases..." -- Thomas Jefferson to Alexander Donald

"The civil jury is a valuable safeguard to liberty." -- Alexander Hamilton

"In suits at common law, trial by jury in civil cases is as essential to secure the liberty of the people as any one of the pre-existent rights of nature." -- James Madison

"In suits between man and man, the ancient trial by jury is one of the greatest securities to the rights of the people." -- Virginia Bill of Rights, 1788

And finishing with this commentary by a contemporary jurist in the "conservative" camp: "The founders of our nation considered the right of trial by jury in civil cases an important bulwark against tyranny and corruption, a 'safeguard too prescious to be left to the whim of the sovereign.'" -- Chief Justice William Rehnquist, 1979

Welcome to a new website designed to inform Americans and influence policymakers about one of our basic Constitutional rights and the efforts to degrade that right. We want to educate the public and policymakers on the centuries-long history of the right enunciated in the 7th Amendment of the U.S. Constitution to a jury trial for civil suits, the accelerating erosion of our 7th Amendment rights, and the current issues illustrating the problem and need for restoration of the Founders' original intent. A string of court decisions and political developments are aimed at limiting the jurisdiction of the courts in civil suits; either limiting the role of the jury in civil suits or eliminating the jury altogether in favor of federal regulators through preemption; and/or unilaterally imposing onerous filing burdens on plaintiffs. Too often, discussions of these issues are trapped in the swirl of partisan politics without reference to the basic right, for which our ancestors fought and died for centuries, to seek redress over a civil wrong before a jury of peers. The limitation of Americans' 7th Amendment rights has practical implications for efforts in a broad range of activities, from the prevention of illegal discrimination and protection of religious liberty, to ensuring the safety of consumer products, and even battling international terrorism.

The vast majority of Americans apparently don't realize that the right to a civil trial by jury has its roots in the U.S. Constitution and the Bill of Rights, the first ten amendments drafted by Founding Father James Madison of Virginia, proposed to the states in 1789, and ratified in 1791. Madison drafted the Bill of Rights, including the 7th Amendment, in response to objections by delegates to the Constitutional Convention that the new Constitution did not protect certain basic human rights. The right to a civil trial by jury has its roots in almost 800 years of English law and is a corollary to the right to a criminal trial by jury. Article 39 of the Magna Carta, signed in 1215, can be translated as, "No free man shall be seized or imprisoned, or stripped of his rights or possessions, or outlawed or exiled, or deprived of his standing in any other way, nor will we proceed with force against him, or send others to do so, except by the lawful judgment of his equals or by the law of the land." With the ratification of the Constitution and Bill of Rights, the United States built upon the Magna Carta and expressly limited the powers of the sovereign in favor of the protection of "unalienable," meaning God-given, individual rights. The degradation of any Constitutional right enunciated in the Bill of Rights threatens the entire superstructure of American Constitutional law and individual rights.

We will mix the historical precedent with the current outcome, the theoretical basis with the practical impact. We will quote the Founding Fathers, legal scholars, advocates of open access to civil justice in accordance with the 7th Amendment, and knowledgable political figures. We will put our readers on notice about upcoming events, pending legislation, and judicial decisions. I would welcome additional Contributing Experts and invite anyone with expertise who would post often here to contact me. I'll also post guest articles and invite your submissions. We'll have Twitter and Facebook pages available to post quick announcements and build an online community.

This website is my idea and is personally designed and funded, with no impetus or influence from consulting clients or any entity. The views and information expressed here are solely the responsibility of the Contributing Experts who post here and myself. My bio, including a description of my consulting business, can be found by clicking the "About" tab, but in summary, I am a lifetime Republican and a "Constitutional conservative." I served as a political appointee of the Reagan Administration from 1983 until 1988; was a Republican counsel on Capitol Hill; and was nominated by President George W. Bush for a Presidential appointment, from which I withdrew after a Senate hearing. I'm dedicated to promoting the original intent of the Constitution and the Bill of Rights, and this website will serve that purpose. I look forward to your reasonable comments and suggestions.