Overlawyered: Chronicling The High Cost Of Our Legal System

Archive for April, 2006

Update: Jury clears Diaz of tax evasion charges

In the latest chapter of the long-running Mississippi judicial scandal (Dec. 10, etc.), a jury has cleared Mississippi Supreme Court Justice Oliver Diaz Jr. of federal tax evasion charges. (Jimmie E. Gates, “Jury clears Diaz”, Jackson Clarion Ledger, Apr. 28; Julie Goodman, “Diaz acquittal fuels election questions”, Jackson Clarion Ledger, Apr. 29). Earlier, a jury had acquitted Diaz of corruption charges while failing to resolve charges against several other figures in the long-running case, who face retrial in August.

“Assistant U.S. Attorney Don Burkhalter said loans backed by prominent attorneys Richard Scruggs and Paul Minor were not repaid by the Diazes, ‘who used substantial amounts of the money for personal use. They didn’t put it on their tax return.'” (Shelia Byrd, “Diaz attorney says client didn’t deliberately withhold tax information”, AP/Biloxi Sun-Herald, Apr. 25). “Defense attorneys described Diaz as a disorganized fellow who left details such as taxes and finances to his wife and who would not knowingly hide income from the government.” (“Jury acquits Diaz in tax case”, AP/Biloxi Sun-Herald, Apr. 27; Jimmie E. Gates, “Prosecutor: Diaz didn’t report all funds to IRS”, Jackson Clarion Ledger, Apr. 26).

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Latest newsletter

Isn’t it time you signed up to receive our free periodic newsletter? The latest installment went out to subscribers Friday afternoon, summarizing highlights of recent postings in terse yet wry style. To read the latest issue — or to join or leave the list, change your address, etc. — visit this page (requires Google registration).

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“Shaking down the defendants for ubiquitous trivia”

Guestblogger Peter Morin earlier this month took note of a bracing decision by Judge David Sills, presiding justice for a California court of appeal, overturning a $540,000 settlement in a Proposition 65 toxic-warning case filed by what he called “bounty hunters”. The National Law Journal has followed on with more details of the case, Consumer Defense Group v. Rental Housing Industry Members, in which a law firm, acting on behalf of a supposed consumer group and complainant, “sued 170 apartment building owners around California and the Rental Housing Industry trade association for failure to warn of the danger of cigarette smoking by tenants anywhere in the building and parking lots where auto exhaust might expose tenants to carcinogens. … the ultimate global settlement included a promise to post a generic warning on buildings and a laundry list of potential sources of cancer provided on a Web site, including furniture, paint, construction materials, cleaning supplies, swimming pool chemicals, pest control and landscaping.” It gets better:

“Trade group wanted to buy its peace and was willing to pay off the law firm to obtain it, in return for which the owners would also get a favorable deal with regard to any future litigation concerning Proposition 65 violations,” Sills wrote. But he saved his wrath for Graham & Martin. “Consumer Defense Group and McKenzie are simply straw plaintiffs set up to enable the law firm of Graham & Martin to obtain legal fees in Proposition 65 litigation. We will therefore refer to the ‘plaintiffs’ by the title most substantively accurate: Graham & Martin,” said Sills.

For our earlier coverage of Prop 65 bounty-hunting, see May 26, 2005 and links from there (Pamela A. MacLean, “Calif. Judge Blasts Firm in Toxic-Warnings Case”, National Law Journal, Apr. 13).

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Deep Pocket Files: Anthony Pellicano fallout

Like libertarian blogger Amber Taylor, I’ve been enjoying the DVD of the show “Veronica Mars.” Kristen Bell plays a perky private eye who uses bugs and stolen medical records to solve cases. I just have to suspend my disbelief, and understand that Mars lives in a fictional world like that of Bruce Wayne where the laws that would have her sued into oblivion for her wiretapping and HIPAA violations don’t exist.

The Pellicano scandal (Apr. 3 and links therein) shows the real-world results. It’s natural that wiretapping victims are suing Pellicano and the law firms that hired him over his alleged wiretapping and bribery tactics.

But plaintiffs’ lawyers aren’t stopping with the egregious wrongdoers. For example, Craig Stevens pled guilty to taking bribes to run searches on Pellicano clients—a sign of Pellicano incompetence, since the data would be available from public databases on the Internet. (Want to know who’s in jail?) Stevens has resigned from the Beverly Hills Police Department, but the city (along with Los Angeles, who allegedly had their own bribed cops) is being sued for failure to stop their officer from being bribed. Los Angeles attorney Kevin McDermott predicts that the telephone company will also be sued for not doing enough to stop Pellicano wiretapping and, sure enough, Lisa Bonder Kerkorian has sued AT&T. In the Vanity Fair article, don’t miss the bit about how Daniel and Abner Nicherie allegedly used a blizzard of over a hundred lawsuits to protect a $40 million swindle. (Bryan Burrough and John Connolly, “Inside Hollywood’s Big Wiretap Scandal”, Vanity Fair, June 2006; Gabriel Snyder, “Names take aim at Pellicano article”, Variety, Apr. 28 (via Defamer); Greg Krikorian and Andrew Blankstein, “Filmmaker Says He Lied in FBI Probe”, Los Angeles Times, Apr. 18).

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Dept. of Intimidating the Little Guy: Maine Board of Tourism

Lance Dutson of the Maine Web Report had the temerity to note that an expensive advertising agency published a phone-sex number instead of the correct line for the Maine Office of Tourism. For this, and other criticisms, Warren Kremer Paino Advertising is suing Dutson for millions. The plaintiff’s lawyer is Portland attorney Alfred Frawley III, who alleges that an opinion that a state agency is “pissing away” money is legally actionable. Dutson has numerous links for this ludicrous lawsuit. Greenberg Traurig is once again stepping up to protect free speech in defense, in conjunction with the Media Bloggers Association. (via Lattman)

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What plaintiffs’ lawyers really care about, part 376

Allegations of misconduct pop up as lawyers fight over a $1.5 billion pot and how much should go to which attorneys and how much should go to class members, deposing each other in the process to gain ammunition for their arguments for freezing particular firms out. The story is complex; unfortunately, space limitations in the Daily Business Review prevent more than a cursory discussion. (Carl Jones, “Millions in Fees in ExxonMobil Case Delayed Amid Lawyer Misconduct Claims”, Apr. 28).

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Don’t

More things not to do if you’re a practicing lawyer, all from recent Law.com reports: Don’t abscond with the down payments that your real estate clients have laid down on houses, as 19 New York attorneys apparently could not resist doing last year (John Caher, “Light-Fingered Lawyers Cause Spike in Client Fund Payouts”, New York Law Journal, Apr. 17). Don’t “[hum] ‘The Twilight Zone’ theme song to imply a client’s ex-wife — seated at the same table during a post-judgment divorce proceeding — is mentally unstable,” which drew a reprimand for Torrington, Ct. attorney Steven H. Levy (Douglas S. Malan, “Attorney Gets Static for ‘Twilight Zone’ Rendition During Divorce Proceeding”, Connecticut Law Tribune, Apr. 13). And if you’ve gotten caught in a colorful episode of legal malpractice in which you falsely claimed (among other things) to have founded an L.L.M. program at New York University School of Law, don’t engage in “elaborate and sometimes fraudulent efforts” to avoid paying the judgment to your former client, for which offense federal judge Denise Cote requested that the U.S. attorney’s office prosecute New York lawyer David A. Dorfman (Tom Perrotta, “Federal Judge Requests Prosecution of Attorney for Criminal Contempt”, New York Law Journal, Apr. 19). More in our “Don’t” series: Aug. 3 and Sept. 13, 2005; Jan. 20 and Apr. 12, 2006.

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