There'll Always Be Posner: Double-header

A great Chicagoan, Ernie Banks, was famous for saying “Let’s play two” – an expression of pure joy about the game of baseball. Another great Chicagoan, Judge Richard Posner, recently came out with a pair of opinions that brought us some joy and reminded us of what good legal reasoning and writing looks like. In both decisions, Judge Posner was on a panel with Chief Judge Easterbrook, so the intellectual lineup behind the opinions was as strong and fearsome as Billy Williams batting after Banks.

Let’s start with United States v. Muoghalu, 2011 WL 5866568 (7th Cir. Nov. 21, 2011), where a pharmacy director appealed from his conviction for extracting kickbacks from a pharmacy company. The basis for the appeal was the government’s failure to produce Brady (exculpatory) material until after trial. The pharmacy company paid Muoghalu $32,000 for 16 speeches he never gave. Muoghalu admitted he had never given such speeches, but claimed they were informal talks. Sadly, he had no documentation or corroboration of any sort. He was the only defense witness at trial. Posner makes it clear that this appeal is going nowhere: “[Muoghalu’s] guilt is so plain that we might stop here; none of the alleged trial errors could have affected the result of the trial, assuming, as courts do when assessing trial error, that the jury was reasonable (no one could predict what an unreasonable jury would do). But we’ll trudge on.” 2011 WL 5865658 at *1.

Posner says “trudge” but it’s really more of a glide. What was the alleged Brady material? The Department of Health and Human Services had prepared a memo summarizing an investigation of the pharmacy company for paying kickbacks. The prosecutor did not have the memo until after sentencing, so it did not withhold it. Moreover, the memo is not exculpatory. The memo fingered Muoghalu, among others. How is that exculpatory? The memo connected a pharmacy company employee – the recipient of the kickbacks – with off-label promotion that resulted in patient deaths. How is that exculpatory? According to Muoghalu, the memo frightened the pharmacy employee with the prospect of a homicide prosecution, so that employee had a strong incentive to cooperate and testify against Muoghalu. But if the pharmacy employee was connected to the deaths, so was Muoghalu.

It’s hard to believe that any sane defense lawyer would place the connection in front of the jury, just to secure whatever slight incremental impeachment value suggested by the memo. As Posner says, “Had Muoghalu’s lawyer told the judge and jury about the risk that his client had endangered lives, Muoghalu would now be arguing for a new trial on the ground of ineffective assistance of counsel.” Id. At *3. To assess whether evidence really falls within Brady – i.re., whether it would likely have increased the chance of acquittal – “the court has to determine the likely net impact of the evidence, with realistic awareness of prejudice as well as probativeness.” Id. at *4 (emphasis in original). The defense lawyer can make all sorts of creative, imaginative arguments on appeal about how a certain piece of evidence might have changed the outcome, but the court does not have to ignore reality. Here, reality resulted in an affirmance of the conviction.

The opinion in Gonzalez-Servin v. Ford Motor Co., 2011 WL 5924441 (7th Cir. Nov. 23, 2011), is about a lawyer who ignored reality – or, to be more specific, ignored controlling precedent. The opinion has gotten really famous really quick, so we’ll try to be quick in covering it. The issue is forum non conveniens in multidistrict litigation. The appeal is really two appeals: one from an order transferring to Mexico claims that tires installed on Ford vehicles in Latin America had caused vehicular accidents, the other from an order transferring to Israel claims that hemophiliacs in Israel were injured by blood products contaminated with HIV. After the appellants’ briefs were filed a couple of Seventh Circuit decisions came down – Abad v. Bayer Corp., 563 F.3d 663 (7th Cir. 2009), and Chang v. Baxter Healthcare Corp., 599 F.3d 728 (7th Cir. 2010) – that ordered FNC transfer under circumstances virtually identical to the case at issue. Understandably, the appellees discussed those cases in detail. Not so understandably, the appellants’ reply briefs completely ignored Chang and mentioned Abad in passing – and incorrectly, at that.

This is no way to impress Judge Posner, the Seventh Circuit, or any judge, for that matter. Needless to say, the transfers are affirmed and the appellants lose. But they do not merely lose; they are ridiculed. Judge Posner tells the appellants that their “advocacy is unacceptable” and that the “’ostrich-like tactic of pretending that potentially dispositive authority against a litigant’s contention does not exist is as unprofessional as it is pointless’” (quoting a case quoting another case). And then Posner administers the coup de grace: he attaches pictures of both an ostrich sticking its head in the ground (though Posner emphasizes that the “noble animal” does not really do that), along with a picture of a man sticking his head in the ground. It is a beat-down with visual aids.

Posner is having fun, and what’s wrong with that? Granted, the losing lawyer took little delight in this exercise, and has even gone so far as to suggest that it is Posner who is the ostrich. (Er, good luck on your next visit to the Seventh Circuit.) Another blogger has pointed out that this is not the first time that Posner has taken pains to point out that no ostrich really buries its head in the ground. This is also certainly not the first time that Posner has turned bad lawyering into a source of judicial mirth.

And we’re also sure it’s not the last time.

Imported Chinese Litigation Returned To Sender

We thank Eamon Joyce at Sidley for alerting us to an interesting forum non conveniens decision out of the Fourth Circuit:  Tang v. Syntura International, Inc., No. 10-1487, slip op. (4th Cir. Sept. 6, 2011).  We’ve had our own litigation interest in this subject for some time, as Dechert has been involved for more years than some of us care to count in the Blood Products multidistrict litigation (mostly) in Illinois.  That’s produced a number of favorable forum non rulings.  See Chang v. Baxter Healthcare Corp., 599 F.3d 728 (7th Cir. 2010) (Taiwanese cases sent back to Taiwan); Abad v. Bayer Corp., 563 F.3d 663 (7th Cir. 2009) (Argentinian cases sent back to Argentina); In re Factor VIII or IX Concentrate Blood Products Litigation, 484 F.3d 951 (7th Cir. 2007) (British cases sent back to the UK); In re Factor VIII or IX Concentrate Blood Products Liability Litigation, 2008 WL 4866431 (N.D. Ill. June 4, 2008) (Israeli case sent back to Israel); In re Factor VIII or IX Concentrate Blood Products Liability Litigation, 408 F. Supp.2d 569 (N.D. Ill. 2006) (Italian and German cases sent back to there respective countries), aff’d on somewhat other grounds, 484 F.3d 951 (7th Cir. 2007) (only the Brits appealed); Doe v. Hyland Therapeutics Division, 807 F. Supp. 1117 (S.D.N.Y. 1992) & Dowling v. Hyland Therapeutics Division, 767 F. Supp. 57 (S.D.N.Y. 1991) (both Irish cases sent back to Ireland).


See also Dowling v. Richardson-Merrell, Inc., 727 F.2d 608 (6th Cir. 1984) (DES – back to UK); Lin v. Ortho-McNeil Pharmaceutical, Inc., 2011 WL 3566855 (N.D. Ohio Aug. 12, 2011) (oral contraceptive – back to Taiwan); Lee v. Johnson & Johnson, 2011 WL 3566859 (N.D. Ohio Aug. 12, 2011) (same); In re Fosamax Products Liability Litigation, 2009 WL 3398930 (S.D.N.Y. Oct. 21, 2009) (Fosamax – back to England); Miller v. Boston Scientific Corp., 380 F. Supp.2d 443 (D.N.J. 2005) (stent – back to Israel); Ontario Ministry of Health v. Shiley, Inc., 858 F. Supp. 1426 (C.D. Cal. 1994) (heart valves – back to Canada); Ledingham v. Parke-Davis Division, 628 F. Supp. 1447 (E.D.N.Y. 1986) (dilantin – back to Canada); Stangvik v. Shiley Inc., 819 P.2d 14 (Cal. 1991) (heart valves – back to Scandanavia); In re Vioxx Litigation, 928 A.2d 935 (N.J. Super. App. Div. 2007) (Vioxx – back to the UK).

Tang is interesting because it involves the Peoples’ Republic of China, which has a few more people (potential plaintiffs) and larger economic footprint than most other countries.  That litigation stemmed from a rather well-published incident where infant formula contaminated with melamine (perhaps deliberately by entities at the base of the supply chain) killed or injured hundreds of babies in various parts of China.  Over a score of companies’ (all Chinese) products were implicated.  Among other things, the situation prompted unprecedented action by the Chinese government and court system, resulting in the establishment of a broad administrative compensation fund (accepted by 95% of those injured) and also the first Chinese mass tort that we’re aware of.  See Tang, slip op. at 7-9.

Still, some enterprising lawyers tried to make that litigation the latest Chinese export to the United States.  Because one of the 22 companies whose products had been contaminated was a sub- subsidiary of an American holding company, a bunch of plaintiffs brought suit in Maryland, where the holding company was based.

The defendant filed a forum non motion to put these plaintiffs on a slow boat, or a fast plane, back to China.  The question posed was whether the Chinese legal system had modernized sufficiently that, to what the Chinese might have characterized forty-some years ago as an “imperialist running dog” court, it would now be considered an “adequate forum.”

Welcome to the twenty-first century.  The answer is “yes.”

The test is trifold:  the Chinese civil justice system must be: “(1) available; (2) adequate; and (3) more convenient in light of the public and private interests involved.”  Tang, slip op. at 11.  The defendant must establish the first – essentially that it is subject to jurisdiction in the overseas forum.  Id.  Then, if the plaintiff makes a prima facie showing that implicates elements 2 and 3, the defendant must rebut that showing.  Id. at 14.

Perhaps the most interesting aspect of the Tang decision is its holding that more than just litigation opportunities factor into whether an overseas forum is adequate.  The existence of the Chinese government’s fund for contamination victims must also be considered – litigation is not the be all and end all:

[T]he forum non conveniens doctrine does not limit adequate alternative remedies to judicial ones. I ndeed, the reach of the doctrine extends to nonjudicial alternative remedies such as the Fund, which was established to specifically redress the grievances of contaminated formula victims.

Tang, slip op. at 15.  Where have we heard this before?  We think it’s the same rationale, in a much different context, expressed by Judge Easterbrook in his recent Aqua Dots class certification opinion – where he held that, at times no litigation at all is the preferable route, and lawyers who stirred up litigation couldn’t be adequate class representatives.

Beyond that, the Fourth Circuit also held that the judge got the public/private interest factors right.  There was no way to litigate a case about Chinese goods, sold to Chinese people in China from a forum half a world away.  There was no way to compel witnesses to show up, or to produce documents.  Chinese law was unfamiliar to American courts.  Further, as a practical matter, litigating the case in the United States would cost an unnecessary fortune in interpreter’s fees.  Tang, slip op. at 17-18.  This was a Chinese controversy – not one to “saddle” the people of Maryland with:

China has a greater interest in this dispute – the contaminated formula products were distributed through the channels of Chinese commerce and consumed by Chinese citizens. Maryland’s residents should therefore not be saddled with resolving the conflict.

Id. at 18.

We agree whole-heartedly.  China is now one of the greatest economic powers in the world.  It is ready, willing, and able to provide a forum for the legal redress of its own citizens.  It would be presumptuous for our courts to rule otherwise.