Peter J. Henning follows issues involving securities law and white-collar crime for DealBook’s White Collar Watch. As Congress works on the final version of the financial regulatory bill, a major change in liability for corporate law firms, accounting firms and investment banks has been inserted into the measure. House members of the conference committee agreed to add a provision offered by Representative Maxine Waters, Democrat of California, to restore aiding and abetting liability for private securities fraud cases.

The impact of the amendment is significant because it expands the potential defendants in securities fraud class actions to include more than just the company accused of making misstatements or omissions, and these are defendants with deep pockets.

BP said Tuesday it has accelerated its process of approving payments for commercial claims related to the Deepwater Horizon oil spill, but two Miami law firms representing fisherman said the oil company’s claim forms are flawed.

BP said it approved initial payments toward 90 percent of commercial large-loss claims that have been filed as a result the ongoing oil disaster. The U.K.-based oil giant said it approved payment of 337 checks for a total of $16 million to businesses that have filed claims in excess of $5,000.

This week, the two firms, Grossman Roth, P.A. and Bilzin Sumberg Baena Price & Axelrod LLP, began representing 600 fishermen from the Florida Keys Commercial Fisherman's Association. They warned that BP’s oil spill claim forms are seriously flawed.

“The claim form that BP put on its website is inadequate under the federal Oil Pollution Act,” said Andy Yaffa of Grossman Roth.

A federal appeals court on Wednesday upheld the city of Redondo Beach's ordinance allowing for the arrest of day laborers who approach automobiles soliciting work.

A divided three-judge panel of the 9th U.S. Circuit Court of Appeals reversed a lower-court decision.

The appeals court said the city's ordinance, modeled after a Phoenix law upheld by the same court, was a reasonable response to traffic problems that officials said day laborers soliciting work caused at two city intersections. The 2-1 majority noted that Redondo Beach allowed the day laborers an alternative forum to seek work such as passing out literature on sidewalks and in parking lots.

Judge Sandra Ikuta wrote for the majority that "we conclude that the Redondo Beach ordinance is narrowly tailored to serve Redondo Beach's significant interests in traffic flow and safety."

Three appeals court judges said in an unanimous decision that because Afghanistan is a war zone and that the United States in effect has sovereignty over Guantanamo Bay swing the balance against the detainees.

Unlike Guantanamo Bay, "it is undisputed that Bagram, indeed the entire nation of Afghanistan, remains a theater of war," the judges said in turning aside the requests of a Tunisian and two Yemeni prisoners.

In the case of Guantanamo Bay detainees, who do have the right to challenge their confinement in U.S. courts, the United States has maintained its total control of the Guantanamo Bay facility for over a century, even in the face of a hostile government, the court noted.

CDC, COUNTY AND ILLINOIS STATE HEALTH DEPARTMENT REPORTS ARE “INADMISSIBLE,” JUDGE RULES;

A state court judge is barring from evidence studies by the U.S. Centers for Disease Control (CDC), Illinois Department of Health, and the McHenry County Health Department in what is believed to be the largest brain cancer cluster cases in the U.S. courts. The first trial in the group of 31 cases is to begin here on June 7.

Court of Common Pleas Judge Allan Tereshko last week ruled against Rohm & Haas/Dow Chemical, the defendant, deciding that the public health epidemiological studies are “irrelevant” to the case and “can only serve as a source of confusion and misdirection.”

The brain cancer cluster victims from McCullom Lake, Illinois, are asserting that Philadelphia-based Rohm & Haas, a wholly-owned subsidiary of Dow, poisoned the air and groundwater in the McCullom Lake community with vinyl chloride (among other toxic chemicals) discharged from its chemical-manufacturing plant into an unlined waste pit near their homes. The Plaintiffs allege that prolonged exposure caused them to contract rare malignant brain cancers and brain tumors; 10 of the victims have died.

The first three brain cancer victims – next-door neighbors who were each diagnosed with malignant brain cancer within the same year – filed suit in April 2006.  Less than a month later, the McHenry Health Department, using outdated cancer-rate data (based on zip codes) for the area that includes McCullom Lake, told local residents there was no epidemiological evidence of a brain cancer cluster.  McCullom Lake’s population is only about 1,000 people; the population of its zip-code region is roughly 50,000.   Later, the state Department of Health announced that more recent data showed that there was no epidemiological evidence of a brain cancer cluster in McHenry County – population more than 300,000.  Under public pressure, the county government then asked the CDC to review the analyses of the two health departments. 

The Court’s order comes after attorneys for Rohm and Haas/Dow have claimed in pre-trial proceedings and in the news media that no public agency has found a brain cancer cluster in McCullom Lake.  Their statements rely on the flawed studies that the judge has now ruled inadmissible, according to Aaron J. Freiwald, lead trial attorney for the plaintiffs.

“The studies cited by the defendant were about as valid in this case as if you did a study of brain cancer rates in the entire state of Illinois or in all of the Western Hemisphere,” Freiwald said.  “They, too, wouldn’t tell you anything about brain cancer rates in McCullom Lake. When you do the math, using reliable, objective data, there is no escaping the fact there was and is a cancer cluster in McCullom Lake Village.”

The trial Court, in granting Plaintiff’s Motion to Preclude evidence of the studies, noted that the studies supported by the defendants “do not attempt to discretely address the pattern of brain cancer represented in the significantly smaller subset which is the Village.”

The first brain cancer cluster case to go to trial will be on behalf of Joanne Branham, who lived with her husband Franklin Delano Branham in McCullom Lake for 30 years.  Mr. Branham was diagnosed with glioblastoma, a lethal form of brain cancer, in 2004, just a few years after he and Joanne relocated to Apache Junction, Arizona, near Phoenix. He died just one month after brain surgery. 

Jury selection is scheduled for June 3rd. 

Contacts:
Aaron J. Freiwald, Esq.
ajf@layserfreiwald.com
215.875.8000
Stephan Rosenfeld (for Layser & Freiwald)
215.514.4101
steph@idadvisors.com