Could it be true? Is there actually some good news to report on the employment front?

With the economic downturn gripping the nation, it’s not surprising to learn that recruitment and retention of minority lawyers stalled, or even took a step backward, in 2009. However, there may be some hope yet glimmering on the horizon, both for economic recovery in the legal profession and for minority lawyers in particular, who were hit disproportionately hard by the failing economy. Vault.com, a source for employer rankings, ratings and insight into multiple industries, including the legal industry, has partnered with the Minority Corporate Counsel Association (MCCA), a leading advocate for the hiring, retention and promotion of minority attorneys, to compile and post the results of this year’s Law Firm Diversity Survey. The findings can be perused in the Law Firm Diversity Database, which provides data on over 300 law firms, showing how well firms have been able to develop and sustain a diverse workforce.

The good news is that, while overall hiring remained below 2007 levels, there at least appears to have been some improvement in the numbers as compared with 2010, and firms also seem to have been able to retain more of their attorneys. As for minorities, their hiring and attrition levels returned to pre-recession levels, with the numbers of minority equity partners growing. In fact, the percentage of minority equity partners has grown to its highest rate (6.29 percent) since 2003 when the Law Firm Diversity Survey was first launched. With the never ending barrage of bad news on the economic front, it’s refreshing to learn of some positive momentum, which we hope continues.

Of course, the picture is still not completely rosy. The path to partner status remains an uphill battle for women and minorities, in particular. Rather than promoting from within, more law firms found new partners outside of their own associate ranks through lateral hires. Not only did more firms gain partners via lateral moves but, of those associates who did make partner, the majority were while males. That fact remains despite the ever increasing numbers of women and minorities in the law firm population. In fact, women and racial minorities together have made up more than half of law firm associates over the last eight years. Yet, partnership ranks remain dominated by white males, who make up more than 75 percent of partners and more than 78 percent of equity partners.

We are hopeful that the findings on partnership do not represent a lack of appreciation of the importance of diversity among the law firm ranks. Attorneys attending many of the national conferences, whether they be those sponsored by the ABA, DRI, or other organizations, have no doubt heard diversity presentations.  These seminars  highlight how corporate clients value diversity not only within their own ranks, but in the ranks of any vendors with whom they choose to do business, including their law firms. One message we have heard loud and clear: it is  important to demonstrate diversity by showing who you have on the payroll but also by ensuring that minorities are an integral and active part of the practice. We have certainly found that diversity offers an opportunity to benefit from countless advantages, from new attitudes to increased creativity (just to name but a couple).

We are glad to see that Vault.com and MCCA have continued to closely monitor these developments and will look forward to checking back in after 2011 draws to a conclusion with some optimism that we have continued to move in the right direction.

Bath Salts: Calling It Like It Is

Last week, I came across news reports from neighboring Spartanburg County about two arrests. One person had been arrested for reportedly discharging a firearm into his house; the other, under unrelated circumstances, for allegedly harassing her neighbors. The common thread between these arrests was that both suspects were allegedly under the influence of the same, unusual drug at the time of their offenses: bath salts. Later in the same afternoon, a friend told me that he had recently fired an employee because she showed up to work high on — what else? — bath salts.

Now, I will be the first to admit that when it comes to being informed about trends among the drug culture, I’m not exactly on the cutting edge. First and foremost, I don’t take baths. I’m more of a shower-man myself. I’m not really familiar with bath salts, even when used as intended. So certainly, I had no idea that bath salts could be used as drugs, let alone that bath salt abuse is becoming a matter of national concern.

At first, the idea of abusing bath salts seems kind of comical. Before doing much research, I assumed that the demographic of the average bath salt abuser was a bored, suburban high schooler who had grown tired of sniffing magic markers and glue. I imagined it was inexpensive, recreational, and ultimately non-threatening. I mean, it’s bath salt. How dangerous can it be?

Turns out, my initial impression was almost dead wrong. I was right about the inexpensive part. The market rate for a hit of bath salts appears to be $20. However, by all accounts, the high is incredibly powerful, and therefore, incredibly dangerous. Common side effects include increased heart rate and blood pressure, agitation, and chest pains that mimic heart attacks. And these are the more pleasant side effects. Other common side effects include delusions, hallucinations, and extreme paranoia, all of which cause the user to experience a form of self-destructive psychosis. For example, there are reports that one user, acting under a psychotic delusion, tried to carve his own liver out of his body with a mechanical pencil. These are in addition to adverse effects to the user’s heart, brain, and kidneys.

Now before you’re tempted to clean all bath salts out of your home, here’s the good news. There are true bath salts and there are dangerous bath salts. Many bath salts are appropriate for their intended use and cannot be used as a cheap high. We’re not talking about those bath salts. By contrast, the bath salts that are the problem – which we will call “dangerous bath salts”  —  are not really bath salts at all. They have no effect if they’re poured into your tub and cannot be used as bath salts. In fact, in addition to being improperly marketed as “bath salts,” the very same dangerous bath salts are sold as plant food, pond scum cleaner, and insecticide (it’s not clear whether these are effective uses or just other pretexts to sell the purported bath salts for a more sinister reason). As a general rule of thumb, if you’re trying to buy real bath salts, you probably can’t buy them at any place that sells dangerous bath salts, and vice versa.

So what makes the dangerous bath salts dangerous? Typically, there are three active ingredients: (1) mephedrone; (2) pyrovalerone; and (3) methylenedioxpyrovalerone (MDPV). These stimulants share many of the same adverse side-effects as cocaine, meth, and LSD. In fact, the dangerous bath salts are generally referred to as synthetic cocaine. These sinister ingredients are not in the true bath salts.

The dangerous bath salts are also of concern because of their easy availability. It is not unusual to find the dangerous bath salts for sale at malls, convenience stores, and “modern” smoke shops (which generally sell no tobacco). And of course, the dangerous bath salts are widely available on the Internet, making their purchase very easy indeed.

The dangerous bath salts apparently burst onto the drug scene roughly seven years ago, making their first wide appearance in European clubs. More recently, as in the past two years, the dangerous bath salts have jumped the Atlantic and taken the United States by storm. States are beginning to prohibit the dangerous bath salts, to the extent they contain any of the chemicals identified above. And effective this first week of October, the federal Drug Enforcement Administration is instituting an emergency nation-wide ban on the same chemicals. Normally, I consider “I’m from the Government, and I’m here to help” to be one of the most alarming phrases in the English language. But in this case of these dangerous bath salts, government action cannot come fast enough.

As if the inherent risks presented by the dangerous bath salts are not disturbing enough, we have the audacity of the manufacturers’ marketing strategy. Many packages of the dangerous bath salts come marked with the phrase “Not Intended for Human Consumption.” It’s easy to find this warning disingenuous.  Since the dangerous bath salts have no bath-related use, we must presume they are intended for consumption.  Other than the disclaimer, we are not aware of any other warnings on the packaging that inform users of the foreseeable adverse side effects of ingestion, such as psychotic delusions, suicidal tendencies, or the urge to carve your vital organs out of your body, even though these side effects are well-known.

Not surprisingly, products liability litigation is beginning to spring up around the country. See, e.g., Vance v. K&B Quick Stop, Inc. et al., 11-C-32 (Lincoln County, W.V.).  It should be noted that under conventional theories of product liability, it is not just the manufacturers of dangerous bath salts who can be sued; it may also be those who are involved in distribution or sales.

The manufacture and sale of the dangerous bath salts complicates the business of the legitimate bath salt industry.  There may be people — kids or other risk seekers — who want to experiment with bath salts, but don’t know that there’s a difference between hygiene-related bath salt and drug-related bath salt.  They may think it’s all the same.  And consequently, they may want to try to ingest legitimate bath salts.  The manufacturers and sellers of those salts must now be mindful of the reasonably foreseeable possibility that their products may be ingested, even though it’s not an intended use, and take precautions against that risk.

Ultimately, we are hopeful that state, local, and federal policy initiatives will stem the rising tide of bath salt drug abuse, and that the use of bath salts can be restored to its rightful and exclusive venue, in the bathroom, right next to our rubber duckies.

Rewriting David and Goliath: Plaintiffs’ attorneys get payoff in Vioxx litigation

On August 9, 2011, the Eastern District of Louisiana approved the distribution of attorneys’ fees following the global settlement of litigation involving Merck’s troubled drug Vioxx in In re Vioxx Product Liability Litigation, — F.3d — , No. 2:05-MD-01657, 2011 WL 3563004 (E.D. La. Aug. 9, 2011) [PDF].    Developed and marketed to treat arthritis, menstual pain and migraine headaches, the drug was approved for sale by the Federal Drug Administration on May 20, 1999.  Merck pulled the drug off the market on September 20, 2004, after a clinical trial found that the drug increased the risk of cardiac incidents like stroke and heart attacks.

As expected, thousands of individual cases and multiple class actions filed against Merck in the aftermath of the recall.  Eventually, those cases filed in federal court were consolidated in an MDL in the Eastern District of Louisiana.  It was estimated that more than 50,000 claims were filed against Merck after 20 million patients took the medication.  After consolidated discovery, several trials commenced before the parties started talking about a global settlement.  Those talks were successful, and a Settlement Agreement was entered.   See Settlement Agreement, In re Vioxx Prods. Liab. Litig., MDL 1657 (E.D.La. Nov. 9, 2007), available at http://www.browngreer.com/vioxxsettlement.

The Settlement Agreement gave people the ability to opt-in to resolve their pending or tolled cases against Merck, and the total amount set aside for the payment of claims was $4.85 billion.  With a “b.”  Apparently, according to the August 9 order, the settlements went smoothly from a logistical standpoint:

The Settlement Program proceeded at a very rapid rate and Merck made additional payments in order to ensure that the claimants would receive funds in a timely fashion. . . . [I]n only 31 months, the parties to this MDL case were able to reach a global settlement and distribute Four Billion, Three Hundred and Fifty-three Million, One Hundred Fifty-two Thousand and Sixty-four Dollars ($4,353,152,064) to 32,886 claimants, out of a pool of 49,893 eligible and enrolled claimants. This efficiency is unprecedented in mass tort settlements of this size. It was due in large part to the ability, industry, and professionalism of the attorneys for both sides, the plan administrators, the lien administrators, the pro se curator, and the special masters.

With the payments to the claimants completed, it was time to pay the lawyers who had displayed such commendable “ability, industry, and professionalism.”  A Fee Allocation Committee was convened, and they had their work cut out for them.  The court quoted a prior pretrial order regarding reimbursement for expenses:
“[A]ny attorney wishing to have their time considered for an allocation of any common benefit award” was directed to submit a three-page written affidavit to the FAC articulating their contribution, with emphasis on factors including “substantial contribution to the outcome of the litigation,” quality of work, “consistency quantum, duration, and intensity of … commitment to the litigation,” “level of partner participation,” committee membership and leadership positions, the “jurisdiction in which non-MDL common benefit work occurred,” “[a]ctivities surrounding trials of individual Vioxx claimants, including bellwether trials and non-MDL trials that impacted proceedings on a common benefit level,” participation in ongoing work for the common benefit, involvement in Vioxx litigation prior to withdrawal of Vioxx from the market or the MDL, contribution to funding of the litigation, commitment to the litigation after adverse verdicts, and any other relevant factors.
Over one hundred firms or attorneys submitted almost twenty-four hundred pages of affidavits and supporting documentation, all of which were entered into the record.  Although they requested 8 percent, the Court approved a compensation of 6.5 percent of the final settlement for the plaintiffs’ attorneys, a total of $315,250,000.00.  Oh, and just a side note: that was in addition to their fees.  In the end, 108 law firms were granted monetary awards from the common benefit fund.
There is an old saying: you have to have money to make money.  Usually, it’s used in the conext of investing.  But this case demonstrates that the same is true in litigation.  Just seeing a few of the reimbursement amounts –$500,000 to one law firm, $4 million to another — proves that in many cases, only the large plaintiffs’ firms who could front those kinds of expenses could take these cases, which were ultimately quite profitable once the underlying settlements  and attorneys’ fees were approved.  So the next time a plaintiff’s attorney plays the David and Goliath game at trial against your firm, remember this case.  Sometimes,you have to be Goliath, too.

FTC Cracks Down on False Advertising

My grandfather lived by the adage, “If a product was any good, the company wouldn’t have to advertise.”  As a child, I never knew if he took the saying seriously, or if it was simply a means to justify his incessant channel surfing.  Today, as an adult, I think about his proverb every time I turn on the television.  It is amazing the lengths to which companies will go for a 30-second window in which to pitch their products.  Advertisements make outstanding claims, leading viewers to believe a product is a life necessity.  If all products worked as advertised, we would live in a commercial utopia.  Unfortunately, we can’t believe everything we see.

Recently, the Federal Trade Commission filed a complaint against Reebok International, Ltd. in the Untied States District Court for the Northern District of Ohio regarding advertisements for its EasyTone and RunTone line of athletic shoes.  According to the complaint, Reebok engaged in “unfair or deceptive acts” by representing in both television and print media that

laboratory tests show that when compared to walking in a typical walking shoe, walking in EasyTone footwear will improve muscle tone and strength by 28% in the gluteus maximus, 11% in the hamstrings, and 11% in the calves.

and that

running in RunTone shoes will tone and strengthen the legs and butt more than running in a typical running shoe.

According to the FTC, these allegations cannot be replicated in independent laboratory settings.  You can view one of the allegedly “unfair and deceptive” commercials here.

While we must commend the FTC for promoting truth in advertising, this lawsuit raises a number of issues.  First, if the shoes do not tone and strengthen by 28%, what do they do?  The complaint is silent as to the results of the FTC’s study.  If the shoes only increase muscle tone by 25%, is it really necessary to hold Reebok accountable for false advertising?  Even if the shoes increase tone and strength by a marginal percentage, customers still gain a net benefit versus conventional shoes.  We doubt the average consumer is overly concerned about the exact percentage points.  If the shoes actually decreased muscle tone and strength, then this lawsuit may be necessary.

Second, how have the consumers been harmed by Reebok’s advertisements?  FTC alleges that consumers have suffered from “substantial injury.”  However, the complaint neglects to mention any specifics.  In fact, consumers may have actually derived a benefit from the shoes.  Aside from the aforementioned increase in tone and strength, the shoes may have provided consumers with added incentive to walk or run.  As we here at Abnormal Use can attest, we could all benefit from more exercise.

While the allegedly deceptive advertisement may have had little, if any, effect on consumers, FTC’s complaint had a major effect on Reebok.  Shortly after FTC commenced its lawsuit, Reebok settled with the FTC for $25 million.  As a part of the settlement, the FTC has arranged for those affected by Reebok’s “deceptive act” to request a refund.  In order to receive the refund, consumers are not required to demonstrate a lack of increase in muscle tone.

Was my grandfather correct?  Are advertised products less effective than the non-advertised competition?  While we here at Abnormal Use can not attest for the sufficiency of EasyTone shoes, we do believe advertisements are prone to some embellishment.  As consumers, we have come to temper our expectations. As for Reebok?  Following the settlement, it issued a statement, saying, “Settling does not mean we agree with the FTC’s allegations; we do not.”