LegalNewsLine.com

AG Hood's settlements unlawfully paid private lawyers, Miss. SC rules

John O'Brien (jobrienwv@gmail.com) — Thu, 24 May 2012 17:00:00 CST

JACKSON, Miss. (Legal Newsline) � The Mississippi Supreme Court has ruled that private attorneys hired by state Attorney General Jim Hood to sue MCI and Microsoft should not have received millions of dollars directly from settlements.

Instead, the court ruled Thursday, it was the job of the state Legislature to pay the attorneys because the $150 million paid in the settlements were public funds. Justice Jess Dickinson wrote that the court was not making a judgment on the reasonableness of the fee awards -- $24 million total.

"These rulings today are a victory for open government and transparency, as well as for the taxpayers of Mississippi," state Auditor Stacey Pickering said.

"These opinions set a clear precedent in Mississippi ensuring that the purse strings of the state of Mississippi are to be controlled by the Mississippi Legislature. These funds are public funds, subject not only to control by the Legislature but also subject to audit by the state Auditor's Office."

Pickering's predecessor, now-Gov. Phil Bryant, challenged the fee awards. Hazzard Law was hired by Hood on a contingency fee to sue Microsoft, which paid the State $50 million -- $10 million of which went to the private lawyers.

In the MCI case, the State agreed to a $100 million settlement over back taxes allegedly owed by Worldcom in 2005 and was represented by admitted felons Joey Langston and Timothy Balducci, both of whom have pleaded guilty to attempting to bribe a judge.

Pickering said the attorneys in the Worldcom case were paid about $2,000 per hour, based on the information he could gather. Pickering said Hood did not comply with a request for a complete listing of hours and work performed.

Hood refused to defend the Auditor's Office in the dispute with Langston and Balducci. Langston was a major campaign contributor of his.

Langston and Balducci pleaded guilty to judicial bribery schemes involving famed plaintiffs attorney Richard "Dickie" Scruggs.

"Because the $14 million Langston received was part of MCI's payment of its tax obligations, that money constitutes 'public funds' for the purposes of the Auditor's statutory authority to recover misappropriated public funds," Dickinson wrote. "Article Four, Section 100 of the Mississippi Constitution requires that those funds be deposited in the proper public treasury.

"And neither the Attorney General nor the Langston Firm provided sufficient evidence to establish that the Auditor waived the State's claim to the funds.

In the Microsoft decision, Dickinson wrote that the settlement language said the $10 million at issues was to be paid "to the State of Mississippi."

"That is where it must be paid � and distributed," Dickinson added. "The plain language of Section 7-5-7 mandates that outside counsel retained by the Attorney General be paid only from the Attorney General's 'contingent fund,' or from funds appropriated to the Attorney General by the Legislature.

From Legal Newsline: Reach John O'Brien by e-mail at jobrienwv@gmail.com.

McKenna, RealNetworks reach $2.4M settlement

Bryan Cohen — Thu, 24 May 2012 16:13:00 CST

SEATTLE (Legal Newsline) � Washington Attorney General Rob McKenna announced a $2.4 million settlement on Thursday with a Seattle-based digital media provider for allegedly violating the state's Consumer Protection Act.

McKenna's office and the Better Business Bureau received more than 500 complaints about RealNetworks Inc. over the last seven years. Consumers alleged they received strange charges on their credit cards and bills for monthly subscriptions for premium sports, television or game content they never ordered.

"Deceptive pre-checked boxes and fine print obligated consumers to not-so-free trials for subscription services they didn't want in the first place," McKenna said. "People were charged for months � sometimes years � paying hundreds of dollars for subscriptions they knew nothing about."

The lawsuit and settlement filed on Thursday in King County Superior Court seeks to end alleged deceptive and unfair practices by RealNetworks, including free-to-pay conversions in which free trials quickly turn into monthly charges unless consumers take fast action, McKenna said.

McKenna's office also alleged that consumers found it difficult to get RealNetworks to stop the charges and were pitched additional free trials when calling to cancel. In addition, consumers were allegedly refused refunds even when canceling the service prior to the expiration of the free trial.

Under the terms of the settlement, RealNetworks will provide consumers nationwide with restitution, comply with the federal Restore Online Shoppers Confidence Act by requiring a customer's express consent before being charged for a free trial that converts into a paid subscription, stop using pre-checked boxes to obtain consent from consumers to buy services or products, stop offering free-to-pay conversions that do not disclose all offer terms, including automatically charged subscriptions, provide an online cancellation method, send emails or other reminders that consumers are enrolled in a free-to-pay conversion with instructions on how to cancel, cancel subscriptions within two days of a consumer request and inform consumers who have called to cancel a subscription of other subscriptions on their account.

The settlement provides a $2 million claims-based pool to give full restitution to consumers who were victimized during the three year period before December 2009 when the alleged practices were most common. Consumers who unknowingly signed up using pre-checked boxes from January 2007 to December 2009 will receive a postcard indicating they are eligible for a refund.

RealNetworks will also pay $400,000 in attorneys' fees.

"The company has voluntarily made numerous changes since December 2009 to curb the practices that are at issue in the lawsuit and this, thankfully, has resulted in fewer recent complaints to our office," McKenna said.

McKenna's office previously brought a case regarding unauthorized charges by Intelius, an online merchant, but this is the first time a defendant in a state action was forced to comply with the Restore Online Shoppers Confidence Act.

Mass. AG reaches $750K agreement with hospital

Bryan Cohen — Thu, 24 May 2012 16:12:00 CST

BOSTON (Legal Newsline) � Massachusetts Attorney General Martha Coakley announced a $750,000 settlement with South Shore Hospital to resolve allegations that it failed to protect confidential and personal health information for more than 800,000 consumers.

In February 2010, South Shore Hospital shipped unencrypted back-up computer tapes with the personal information of more than 800,000 individuals off-site to be erased. Only one of the three boxes arrived at their Texas destination. The missing boxes have yet to be recovered.

"Hospitals and other entities that handle personal and protected health information have an obligation to properly protect this sensitive data, whether it is in paper or electronic form," Coakley said. "It is their responsibility to understand and comply with the laws of our commonwealth and to take the necessary actions to ensure that all affected consumers are aware of a data breach."

The hospital shipped the three boxes of 473 unencrypted back-up computer tapes to Archive Data Solutions to erase the back-up tapes for resale. The hospital allegedly failed to inform Archive Data that protected health information and personal information, including names, Social Security numbers, financial account numbers and medical diagnoses, were on the tapes.

South Shore Hospital also allegedly failed to determine if Archive Data had sufficient safeguards available to protect the sensitive data. After multiple shipping companies handled shipping the boxes of tapes, only one of the three boxes arrived at Archive Data, Coakley says. To date, there have been no reports of unauthorized use of the protected health information or personal information of individuals who were affected.

South Shore Hospital allegedly failed to implement appropriate procedures, policies and safeguards to protect consumers' information, failed to have a business associate agreement in place with Archive Data and failed to properly train its employees in connection with health data privacy.

The consent judgment, approved in Suffolk Superior Court, requires South Shore Hospital to make a $225,000 payment for an education fund to be used by Coakley's office to promote personal information and health information protection and a $250,000 civil penalty. The agreement credits the hospital $275,000 to reflect security measures it has taken since the breach occurred. The lawsuit was filed under the federal Health Insurance Portability and Accountability Act and the Massachusetts Consumer Protection Act.

Under the terms of the agreement, South Shore Hospital also agreed to take multiple steps to ensure compliance with federal and state data security regulations and laws, including requirements regarding contracts with third-party service providers and business associates engaged for the purposes of data destruction. The hospital will also undergo an audit and review of particular security measures and will report results and corrective actions to Coakley's office.

Mo. AG joins national settlement with Walgreens

Bryan Cohen — Thu, 24 May 2012 16:10:00 CST

JEFFERSON CITY, Mo. (Legal Newsline) � Missouri Attorney General Chris Koster announced on Wednesday that Missouri will participate in a national settlement with Walgreens that returns $42,000 to the state's Medicaid program.

The settlement with Walgreens resolves allegations that the company unlawfully offered gift cards and gift checks between Jan. 1, 2005, and June 11, 2010, to influence individuals participating in government healthcare programs like Medicare and Medicaid to transfer their prescriptions to Walgreens' pharmacies.

Under federal and state law, healthcare providers may not make any type of payment to induce participants in government sponsored healthcare programs to purchase particular services or goods provided under the programs.

Walgreens will pay the federal government and participating states $7.9 million in civil damages for the Federal Employees Health Benefits, TRICARE, Medicare and Medicaid programs. The settlement amount is based on the total that Walgreens offered in gift checks and gift cards. Medicaid programs nationwide will get $643,230 of the settlement and the rest will go to the other federal programs.

"All parties involved with the Medicaid program must follow the rules," Koster said. "I am pleased we were able to recover these funds and return scarce health care dollars to the state of Missouri."

The initial allegations were brought to the government by two whistleblowers in two separate lawsuits filed under the qui tam provisions of the False Claims Act and state False Claims Act statutes.

Ninth Circuit: Juice maker's naming, labeling claims barred

Jessica M. Karmasek — Thu, 24 May 2012 14:20:00 CST

SAN FRANCISCO (Legal Newsline) - A federal appeals court ruled last week that federal regulations bar a juice company's pursuit of name and labeling claims against beverage heavyweight Coca-Cola.

Plaintiff Pom Wonderful LLC sued defendant Coca-Cola Company LLC over a pomegranate blueberry juice blend that Coca-Cola markets and sells under its Minute Maid brand.

Coca-Cola's "Pomegranate Blueberry," which hit shelves in 2007, contains about 99.4 percent apple and grape juices, 0.3 percent pomegranate juice, 0.2 percent blueberry juice and 0.1 percent raspberry juice.

In its suit against the beverage maker, Pom alleged it was losing sales to the new juice blend and that Coca-Cola was misleading consumers to believe that the drink consists primarily of pomegranate and blueberry juices when it actually consists mainly of apple and grape juices.

Pom produces, markets and sells bottled pomegranate juice and pomegranate juice blends, including its own pomegranate blueberry drink.

The company took issue with the name, labeling, marketing and advertising of the Coca-Cola drink.

In particular, it claimed that Coca-Cola violated the false advertising provision of the Lanham
Act, which authorizes lawsuits against those who use a false or misleading description or representation about any goods.

Pom also claimed that Coca-Cola violated California's Unfair Competition Law, or UCL, and its False Advertising Law, or FAL, which prohibit deceptive practices and misleading advertising.

The U.S. District Court for the Central District of California ruled that Pom's Lanham Act challenge to the drink's name and labeling was barred because its suit "may be construed as impermissibly challenging" Food and Drug Administration regulations permitting the name and labeling that Coca-Cola uses, because Pom's claim could improperly require the court to interpret and to apply FDA regulations on juice beverage labeling.

The court held that Pom's Lanham Act challenge could otherwise proceed. Specifically, it ruled that, although Pom could not challenge the drink's name and labeling, it could challenge Coca-Cola's other advertising and marketing of the product because those components of the claim would not require the court to interpret FDA regulations.

In addition, the court held that the Food, Drug and Cosmetic Act expressly preempted Pom's state law claims to the extent the UCL and FAL impose obligations that are not identical to those imposed by the FDCA and its implementing regulations.

After Coca-Cola refused to respond to discovery requests, Pom amended its complaint to bring itself within the scope of the district court's ruling.

Coca-Cola moved to dismiss the amended complaint.

At this time, the court denied Coca-Cola's motion and ruled that Pom could conduct discovery to clarify which aspects of Coca-Cola's alleged conduct constituted labeling and which aspects constituted advertising or marketing.

Following discovery, the court partially granted summary judgment to Coca-Cola.

It reiterated that Pom's Lanham Act challenge to the drink's name and labeling was barred by the FDCA's implementing regulations, and eventually entered judgment for Coca-Cola.

Pom appealed.

The U.S. Court of Appeals for the Ninth Circuit said in its May 17 ruling that the district court was right to hold that Pom's Lanham Act claim against the drink's name is barred.

The same goes for Pom's labeling claim, the court said.

"In extensively regulating the labeling of foods and beverages, the FDCA and its implementing regulations have identified the words and statements that must or may be included on labeling and have specified how prominently and conspicuously those words and statements must appear," Judge Diarmuid F. O'Scannlain wrote for the Ninth Circuit.

However, in concluding that Pom's claims are barred, the court did not necessarily hold that Coca-Cola's label is non-deceptive.

But that isn't for it to decide, the Ninth Circuit said.

"If the FDA believes that more should be done to prevent deception, or that Coca-Cola's label misleads consumers, it can act. But, under our precedent, for a court to act when the FDA has not -- despite regulating extensively in this area -- would risk undercutting the FDA's expert judgments and authority," O'Scannlain wrote in the 14-page ruling.

As for Pom's state law claims, the Ninth Circuit vacated the district court's judgment and remanded the case for the court to rule on standing.

"If the district court concludes that Pom has statutory standing, it may need to address such issues as whether Pom's state law claims are expressly preempted and whether California's safe-harbor doctrine insulates Coca-Cola from liability on any of Pom's state law claims," O'Scannlain explained.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

R.I. SC: 'Shiny floor' allegation in suit against retailer not enough

Jessica M. Karmasek — Thu, 24 May 2012 12:45:00 CST

PROVIDENCE, R.I. (Legal Newsline) - The Rhode Island Supreme Court said last week that a lower court did not err when it ruled in favor of one of the nation's largest retailers of arts and crafts supplies in a lawsuit brought against the company for a customer's fall.

In its May 17 opinion, the Court said the Providence County Superior Court was correct in granting Michaels Stores Inc.'s motion for summary judgment because there was no issue of material fact about whether a dangerous condition existed at the time of plaintiff Maureen Habershaw's fall.

"To the contrary, there was a complete absence of any evidence upon which the defendant's negligence could be established," the Court said.

Habershaw alleges that while placing items she was about to buy on to the cashier's counter, her left foot slipped out from under her and she fell to the floor, landing on her left side.

After the accident, Habershaw says she noticed what she described as a "shiny floor."

She claims as a result of her injuries -- to her left shoulder, hip and foot -- she has incurred significant medical expenses and suffered physical and emotional trauma.

In her lawsuit against Michaels, Habershaw alleges the defendant owed her a duty to maintain its premises in a "good, clean and safe condition," that it failed to do so and that because of its negligence, she fell and suffered several injuries.

In response, Michaels filed a motion for summary judgment, maintaining that Habershaw cannot prove that a dangerous condition existed on its Smithfield store's premises at the time of her fall.

The superior court granted Michaels' motion in March 2010, finding that the plaintiff failed to present evidence that would suggest the shiny floor could lead to a reasonable inference that a dangerous condition existed at the time of her fall.

Subsequently, the court granted the defendant's motion for summary judgment on the breach-of-contract claim in January 2011.

Final judgment was entered in Michaels' favor days later.

Habershaw appealed to the state's high court, arguing that the lower court erred when it determined that there was no genuine issue of material fact about whether a dangerous condition existed at the time of her fall.

The Court, in its eight-page ruling, sided with Michaels.

"In this case, plaintiff has not alleged that it was raining or that any slippery substances were on the floor," Justice Francis X. Flaherty wrote for the Court. "The plaintiff did not testify that her fall was occasioned by any foreign substance on the floor, or that polish or wax had been negligently applied to the floor by defendant.

"The plaintiff has failed to produce any evidence that would give rise to a reasonable inference that a hazardous condition, created by defendant, existed."

In sum, Habershaw's allegation that the floor was shiny was not "competent evidence" and is nothing more than "conjecture or speculation," the Court said.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

International arbitration court awards Dow $2.16B

Michael P. Tremoglie (mike@pennrecord.com) — Thu, 24 May 2012 12:33:00 CST

MIDLAND, Mich. (Legal Newsline) - Dow Chemical Company announced Thursday that the International Court of Arbitration of the International Chamber of Commerce issued its findings in the arbitration case between it and Petrochemical Industries Company of Kuwait.

The case relates to the K-Dow transaction. It awards damages to Dow of $2.16 billion, not including interest and costs.

K-Dow was a proposed $17.4 billion, multinational 50/50 joint venture between Dow and PIC. The project was cancelled and Dow sued using a clause in the contract. The ICC says that PIC was liable. The two companies mutually agreed to resolve their contractual disputes through ICC arbitration.

The ICC is comprised of preeminent legal experts with experience in high-value commercial litigation. The award is final and binding.

"This outcome brings resolution and closure to the issue," said Andrew N. Liveris, Dow's chairman and chief executive officer. "We remain focused on continuing to move forward with our transformation and profitable business partnerships � both in Kuwait and around the world."

According to Dow, it has been doing business with Kuwait for nearly 40 years. Its partnership with Kuwait, which includes several industry-leading joint ventures, remains strong and will continue to benefit both parties, the company said.

Ohio SC upholds state's smoke-free workplace law

Jessica M. Karmasek — Thu, 24 May 2012 12:00:00 CST

COLUMBUS, Ohio (Legal Newsline) - The Ohio Supreme Court ruled Wednesday that the enforcement of the state's Smoke Free Workplace Act against a Columbus bar is not an unconstitutional "taking" of property.

The Court unanimously upheld a decision by the state's Tenth District Court of Appeals.

In their 27-page opinion, all seven justices rejected claims by the owner of Zeno's Victorian Village that fines assessed against the bar for violating the statewide ban on smoking in places of employment exceeded the state's legitimate police powers, or were an unconstitutional governmental "taking" of private property.

"The voters of Ohio also have a legitimate purpose in protecting the general welfare and health of Ohio citizens and workforce from the dangers of secondhand smoke in enclosed public places," Justice Judith Ann Lanzinger wrote for the Court.

In November 2006, Ohio voters passed a ballot initiative to enact the Smoke Free Act, which became effective December 7, 2006.

Subject to certain exemptions, the act prohibits proprietors of public places of employment -- including bars and restaurants -- from permitting smoking in their establishments, and authorizes the Ohio Department of Health and local agencies designated by the ODH to enforce the ban, including the authority to impose fines that increase in severity for repeat violators.

On 10 separate occasions between July 2007 and September 2009, Zeno's was cited by the Columbus City Health Department for violations and assessed fines, none of which were paid.

Zeno's did not file administrative appeals on eight of the citations. Two citations were appealed to the Franklin County Common Pleas Court, but the bar did not contest them and did not pursue further legal challenges to those citations or the resulting fines.

At that time, the ODH filed a complaint in the common pleas court, seeking preliminary and permanent injunctions ordering Bartec Inc., d.b.a. Zeno's Victorian Village, and Richard Allen, the CEO and sole shareholder of Bartec, to comply with the law and to pay all outstanding fines.

The bar's owners filed an answer, arguing the law was unconstitutional. They also filed a counterclaim, seeking a declaratory judgment and injunction against the ODH, invalidating the citations against Zeno's and vacating the resulting fines on constitutional grounds.

The common pleas court denied the ODH's requested injunctions, saying the rules and procedures adopted by the agency to enforce law exceeded its statutory authority.

The court vacated all of the citations and fines that the ODH had imposed against Zeno's.

The ODH then appealed to the Tenth District, which reversed the lower court's ruling and remanded with instructions to issue the injunction requested by the agency.

The bar's owners then sought and were granted review by the state's high court.

The Court said the constitutional arguments raised by the owners regarding the bar's past citations presented "as applied" challenges to the law, and such challenges must be advanced in administrative appeals to be preserved for appellate review.

"Because appellants failed to request an administrative hearing for eight of their violations and because they failed to prosecute the two administrative appeals they did request, appellants did not raise any constitutional challenge regarding any of its ten violations. Therefore, appellants failed to exhaust their administrative remedies, and this constitutional issue is not properly before the court," Lanzinger wrote.

There also is "substantial" evidence that the owners at least implicitly permitted smoking, the Court said.

"For instance, on Aug. 6, 2007, a Columbus City Health Department investigator witnessed two people smoking at Zeno's and observed cigarette butts in plastic cups filled halfway with water. On Nov. 29, 2007, another investigator found multiple Zeno's patrons who were smoking and who were using partially filled plastic cups as ashtrays," Lanzinger wrote.

"Although appellant Richard Allen was present at the time, the investigator did not witness him address any of the smoking patrons. On Nov. 6, 2008, a third investigator witnessed at least eight patrons smoking and using small plastic cups as ashtrays."

Under the law, proprietors are required to remove all ashtrays and "other receptacles used for disposing of smoking materials" from any area where smoking is prohibited, the Court noted.

As for the owners' claim that application of the ban constituted a governmental "taking" of Zeno's property -- or that the ban confiscated the owners' control of the indoor air -- the Court said, except for narrow exceptions that do not apply in the case, regulatory takings claims are governed by standards set in the U.S. Supreme Court's 1978 decision in Penn Central Trasportation Co. v. New York City.

"With a Penn Cent. regulatory taking, a court engages in a factual inquiry of the following three factors: '(1) the economic impact of the regulation on the claimant, (2) the extent to which the regulation has interfered with distinct investment-backed expectations, and (3) the character of the governmental action,'" Lanzinger explained.

"Appellants submitted evidence that their gross sales declined in 2009, but the Smoke Free Act became effective in December 2006, and in 2007 and 2008 appellants' gross sales actually increased. Furthermore, Columbus's smoking ban, found at Columbus Code of Ordinances Chapter 715, is very similar to R.C. Chapter 3794 and went into effect in January 2005. Still, appellants' gross sales increased in 2005 and 2006. Thus, appellants have failed to demonstrate that the Smoke Free Act has had a significant economic impact on their business."

The second and third factors also do not support finding a "taking" in the case, the Court said.

"The 'taking' of appellants' indoor air space is not the type of taking contemplated by either the Fifth Amendment to the U.S. Constitution or the Ohio Constitution, Article I, Section 19," Lanzinger wrote. "Appellants have also failed to demonstrate that the Smoke Free Act interfered with a distinct investment-backed expectation.

"The goal of this legislation is to protect the health of the workers and other citizens of Ohio. It does so by regulating proprietors of public places and places of employment in a minimally invasive way. We therefore hold that the Smoke Free Act does not constitute a taking."

Ohio Attorney General Mike DeWine praised the Court's ruling in a statement Wednesday.

"This is great news for the health of Ohioans and for the democratic process," said DeWine, whose office served as counsel for the ODH.

"The Ohio Supreme Court has upheld a law passed by a statewide majority of Ohio voters, and patrons and employees of Ohio businesses will continue to enjoy surroundings that are safer because they are smoke-free."

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

Facebook sued over IPO

Michael P. Tremoglie (mike@pennrecord.com) — Thu, 24 May 2012 10:28:00 CST

NEW YORK (Legal Newsline) - The premier social networking utility, Facebook, is being sued by shareholders.

Also named in the lawsuit were the company's executives and Morgan Stanley, which led the company's recent initial public offering. Stock in the company was offered to the public May 18.

Three shareholders, Brian Roffe, Jacob Salzmann and Dennis Palkot filed the lawsuit against Facebook, Mark Zuckerberg, Marc Andreessen and other executives -- as well as Morgan Stanley, Goldman Sachs, Merrill Lynch and Barclays Capital.

It was filed in the U.S. District Court for the Southern District of New York on Wednesday. It is a class action suit and the plaintiffs are demanding a jury trial. They allege violations of federal securities laws.

The specific allegations are that the registration statement and prospectus contained untrue statements and omitted statements regarding the projections for Facebook's profitability. The plaintiffs state that at the time of the initial public offering, the company had been experiencing a "severe and pronounced" decline in revenues as a result of people using the application and website on their mobile devices. Facebook said that such uses is an area where their "ability to monetize is unproven."

The plaintiffs also state that the underwriter knew this but only shared this information with "preferred investors." Estimates for the second quarter and full year were reduced by the underwriters this too was not disclosed to all potential investors.

Calls to Morgan Stanley and Goldman Sachs were not returned.

Pa. SC shoots down 'any-exposure' asbestos theory

Jessica M. Karmasek — Thu, 24 May 2012 10:25:00 CST

PITTSBURGH (Legal Newsline) - The Pennsylvania Supreme Court on Wednesday rejected the "any-fiber" theory of asbestos causation.

The Court, in its 53-page ruling, sided with Allegheny County Common Pleas Court Judge Robert J. Colville.

"In the present case, Judge Colville was right to be circumspect about the scientific methodology underlying the any-exposure opinion," the state's high court said.

"Simply put, one cannot simultaneously maintain that a single fiber among millions is substantially causative, while also conceding that a disease is dose responsive."

The lawsuit underlying the appeal was selected as a test case for the admissibility of expert opinion evidence to the effect that "each and every fiber" of inhaled asbestos is a substantial contributing factor to any asbestos-related disease, including mesothelioma, a type of cancer.

In February 2005, plaintiff Charles Simikian filed a product liability action against defendants Allied Signal Inc. and Ford Motor Company, and others, alleging that his exposure to asbestos-containing friction products, such as brake linings, caused his mesothelioma.

Simikian had worked for 44 years as an automotive mechanic.

After Simikian's death, his wife, Diana Betz, was substituted as the plaintiff.

The lawsuit was among a number of similar ones pending in the common pleas court.

Allied and Ford anticipated that the plaintiffs would rely on expert opinion that each and every exposure to asbestos -- no matter how small -- contributes substantially to the development of asbestos-related diseases.

This opinion often is referred to as the "any-exposure," "any-breath" or "any-fiber" theory of legal causation.

Seeking to preclude such opinion testimony, the defendants filed global motions challenging its admissibility under the litmus of general acceptance in the relevant scientific community applicable to novel scientific evidence.

They referenced a litany of techniques used for various purposes in science, arguing that none of these -- alone or in combination -- supports the any-exposure theory.

More specifically, the defendants contended that the methodology underlying the any-exposure theory is "novel" and "scientifically invalid."

Thus, they urged that the theory be deemed inadmissible at all trials of asbestos cases against them.

In its May 2006 ruling, the common pleas court -- while it did not discount that a single fiber may possibly increase the risk of developing a disease -- did not accept that an unquantified increase in risk could serve as proof that a defendant's product was a substantial cause of a plaintiff's or decedent's disease.

In an April 2010 ruling, the state's Superior Court ruled otherwise.

The majority regarded Colville's review of the mechanics of Dr. John C. Maddox's methodology, and the judge's decision not to address the epidemiological studies, as "inapt."

Maddox, a pathologist, was brought in by the plaintiffs as their primary causation expert.

The intermediate court also concluded that Colville had abused his discretion in ruling for the defendants.

According to the majority, the judge's approach violated the tenet that judges are to be guided by the scientists in assessing the reliability of a scientific method, not the reverse.

As a result, the superior court sided with the plaintiffs.

Allied and Ford appealed to the state's high court. A number of business groups and organizations, including the U.S. Chamber of Commerce, filed amicus briefs on their behalf.

Legal Newsline is owned by the U.S. Chamber Institute for Legal Reform.

Allied and Ford argued that the superior court "simply ignored" the extensive evidence, as well as the "strong logic" supporting Colville's ruling, and "improperly substituted" its judgment for his.

On appeal, they maintained that the any-exposure opinion remains a hypothesis, or assumption.

In a 6-0 ruling, the state's high court agreed.

"Colville spent considerable time listening to the attorneys' arguments but was unable to discern a coherent methodology supporting the notion that every single fiber from among, potentially, millions is substantially causative of disease. Moreover, he appreciated the considerable tension between the any-exposure opinion and the axiom (manifested in myriad ways both in science and daily human experience) that the dose makes the poison," Justice Thomas G. Saylor wrote.

"Contrary to the perspective of the superior court majority, Judge Colville was not misguided in his desire to probe how Dr. Maddox could simultaneously maintain that mesothelioma is dose-responsive and that each and every fiber among millions is substantially causative."

Saylor continued, "Given both the controversial nature of the any-exposure opinion and its potency in asbestos litigation, Judge Colville pursued the sensible course of permitting evidentiary development so that he could make an informed assessment."

The Court disagreed that the defendants could not address Maddox's methodology through the testimony of risk assessors, toxicologists and epidemiologists.

"Dr. Maddox identified himself as a community hospital pathologist 'try[ing] to present the medical literature as I understand it.' He did not indicate, however, that his opinion was based on a particular clinical diagnosis; indeed, he expressed no familiarity whatsoever with Mr. Simikian's individual circumstances," Saylor wrote.

"Instead, Dr. Maddox offered a broad-scale opinion on causation applicable to anyone inhaling a single asbestos fiber above background exposure levels. In doing so, he took it upon himself to address (and discount) the range of the scientific literature, including pertinent epidemiological studies."

The Court said Maddox's any-exposure opinion was not "couched" in terms of a methodology or standard peculiar to the field of pathology.

"Indeed, the pathologist acknowledged that the rendition of a broad and generally applicable opinion concerning specific causation was outside the range of his usual professional activities," Saylor wrote.

While the superior court was correct that Colville did not "embellish" his opinion with specific citations to the record, the judge's findings and conclusions are "amply supported," the Court said.

The Court reversed the superior court order and remanded the case "for consideration of whether there were remaining, preserved issues on appeal which were obviated by the intermediate court's approach to the common pleas court's ruling."

Justice Joan Orie Melvin -- who has since been suspended from the Court in the wake of charges that she allegedly used her staff to perform campaign work -- did not participate in the decision.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.