Chronicling the high cost of our legal system
From the monthly archives:
My latest Liability Outlook looks at the abusive litigation created by a statutory drafting oversight: a bill designed to protect against identity theft has instead become a mechanism for the entrepreneurial plaintiffs’ bar to attempt to bankrupt innocent businesses that haven’t harmed anyone.
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Harry Potter and Photoshop are involved. (Alan K. Henderson, Oct. 31).
“Dragging phone companies through protracted litigation [over complying with NSA requests for surveillance help] would not only be unfair, but it would deter other companies and private citizens from responding in terrorist emergencies whenever there may be uncertainty or legal risk. … Without [the companies' voluntary cooperation], our intelligence efforts will be gravely damaged. Whether the government has acted properly is a different question from whether a private person has acted properly in responding to the government’s call for help. … For hundreds of years our legal system has operated under the premise that, in a public emergency, we want private citizens to respond to the government’s call for help unless the citizen knows for sure that the government is acting illegally. If Congress does not act now, it would be basically saying that private citizens should only help when they are absolutely certain that all the government’s actions are legal.” (Benjamin Civiletti, Dick Thornburgh and William Webster, WSJ/OpinionJournal.com, Oct. 31). More here (fifth item) and here.
P.S. Commenters argue in response that the telecoms are sophisticated and had plenty of time to consult counsel, and point out that Qwest did in fact turn the government down. More: Bader, CEI (with arguments from Sen. Rockefeller).
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Is it legal? (Torie Bosch, “The Explainer”, Slate, Oct. 30).
If the Cape May, N.J. school district was really going to punish a 7-year-old just for making a drawing of such a thing, with no actual water gun in sight, shouldn’t maybe the punishment have been to make him draw a stick figure of a little boy getting an overly-harsh suspension? (Zincavage, Oct. 21; Charles Sykes, “I Have Zero Tolerance for Zero Tolerance Policies”, American Thinker, Oct. 30).
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Dwayne Dail spent 18 years in a North Carolina prison on false charges of rape. When he got out based on new DNA findings, his ex-girlfriend promptly sued him for child support. (Mandy Locke, “Dail, expecting $360,000, sued by ex-girlfriend”, Raleigh News & Observer, Oct. 24; “Wrongly Convicted Man Sued for Child Support”, WRAL, Oct. 23; “Prosecutor: Wrongful Conviction Is ‘Nightmare’”, WRAL, Aug. 29; “Dwayne Dail responds to lawsuit”, Goldsboro News-Argus, Oct. 28).
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Thanks to Jason Barney, from the Seattle area, for filling in while I met a deadline. Remember, if you’re interested in guestblogging, that it’s fine to approach us well in advance; we’ll probably need some help before and during the holidays, for example.
Which has merely induced Dan Kennedy (Oct. 27) to reproduce the thing as a public service (Jim Rutenberg, “Student Paper Upsets the Edwards Camp”, New York Times, Oct. 26). The Streisand Effect strikes again…
$600 per class member for defective brakes; $4.1M attorney fee claim
See this story via Law.com. No problem with consumers getting a few hundred dollars to offset the cost of a brake job. A healthy $5.6M verdict provides such remedy for over 9,000 class members. The rub? A $4.1M attorney fee claim, which according to my arithmetic is ten lawyer-years in work, at a respectable $200/hr. Oh, and check out the defendant attorney’s brilliant lawyering in his appeals brief, referring to the trial judge as the “Red Queen” from Alice in Wonderland. It wouldn’t be so bad had the appeals court not remanded the attorney fee issue back to that very trial judge.
Mean-spirited protest of funeral for fallen United States Marine prompts suit
The story is here. That anyone would express their protest in this manner is truly shameful. Update: $10.9M verdict!
Law says wife is husband’s property
Slighted spouse sues his wife’s lover for “alienation of affection.” Law says wife is a man’s “property.” Story via ABC.com.
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You may recall that a couple of Yale Law School students sued the administrator of a law-school bulletin board because they blamed silly gossip about them on the board for costing them job offers. (The administrator himself lost his job offer in response to the uproar.) If so, how come their Yale Law classmate Elizabeth Wurtzel—whose topless photos decorate the Internet, who wrote about her own cocaine and Ritalin addictions, and who was fired from a newspaper for plagiarism—was able to get a job offer from WilmerHale? More on Wurtzel: Taylor; Lat; Bonin, all talking about this NY Times piece. Previous skepticism about the lawsuit: Ilya Somin.
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In an unusual order, with seven of the nine Justices not taking part, the Court summarily upheld a D.C. Circuit Court ruling that those Justices had immunity to a civil damages claim of $75,000 by a Washington, D.C., attorney who has challenged the Court for an earlier refusal to hear his case. Since those seven members of the Court were directly sued, they were recused; under federal law, when the Court does not have a quorum (six Justices minimum), the effect is to affirm the lower court ruling. The attorney, Montgomery Blair Sibley, had sued the Justices after they had denied review of a case involving a domestic relations and child custody dispute. In Monday’s order, no Justice made any comment on the Circuit Court ruling being affirmed.
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Stuart Taylor, Jr. on the Exxon Valdez and telecom-surveillance cases (National Journal, Oct. 29 — will rotate off free site, so catch it now). P.S.: Ted has more on the high court’s grant of cert in the Exxon case.
In UAW v. Johnson Controls, 499 U.S. 187 (1991), the Supreme Court held that sex discrimination laws prohibited employers from making decisions about fetal safety that took the choice to work in dangerous conditions away from pregnant women. Still, even though the Supreme Court held that “Decisions about the welfare of future children must be left to the parents who conceive, bear, support, and raise them rather than to the employers who hire those parents,” and the Supreme Court rejected the idea that civil liability could be an issue for such employers, state courts are still holding employers liable when women claim their unborn children suffered injury while they were working. Michael Starr and Christine Wilson look at the issue in the October 29 National Law Journal.
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Writes Jack Bogdanich (Oct. 25): “‘Sam Adams’ is a very, very, very common name. People who brand their companies with a very, very, very common name have to live with the consequences. Letting supporters of a real politician named Sam Adams express their support for him with an appropriately named web domain or two is just something that Boston Beer is going to have to live with.” More: Lattman, Oct. 25.
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Sens. Chuck Schumer (D-N.Y.), Tom Harkin (D-Ia.), Arlen Specter (R-Pa.) and Thad Cochran (R-Miss.) have teamed up to co-sponsor a proposed constitutional amendment that “would overturn U.S. Supreme Court decisions that limit Congress’ power to regulate the funding of political campaigns. … the amendment would repeal the 1st Amendment as it relates to campaign finance. This would be the first time in our history that we altered the Constitution to curtail liberties protected by the Bill of Rights. It would also have the effect, not accidental, of protecting incumbent members of Congress from being unseated at the polls.” (Steve Chapman, Chicago Tribune/syndicated, Oct. 28).
P.S. Then there’s the possibility that the talk-radio-stifling Fairness Doctrine will be reintroduced in 2009 or after (John Fund, OpinionJournal.com, Oct. 29). And while “Crooked Timber” may be a pleasantly evocative name for a weblog, would arch-liberal Isaiah Berlin really have been so keen to use the state’s coercive power against unwanted speech? (Sullivan, Bainbridge)(& welcome Salon Blog Report readers).
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I previously posted on Washington’s Insurance Fair Conduct Act, known as Referendum 67. If passed by the voters, it would allow first party claimants to recover triple damages and attorney fees for those claims “unreasonably” delayed or denied.
Existing law already allows a wronged insured to bring three separate causes of action against his/her insurer for such claims: breach of contract, bad faith and violations under Washington’s Consumer Protection Act (CPA). Such existing remedies often yield bizarre results as we saw in the Woo v. Fireman’s Fund case.
The Supreme Court’s knuckleheaded 5-4 ruling upheld a judgment to pay Woo $250K he paid to settle an underlying suit, plus $750K in emotional distress and attorney fees. Obviously, there are already plenty of incentives for an insurer to avoid these judgments by acting fairly, and under this legislation Woo could have received three times more as punitive damages in addition to the “emotional distress” damages which have a punitive measure built into them. And in case you are wondering, Fireman’s Fund coverage position was perfectly reasonable.
The television ads for the Approve 67 camp are demagogic and misleading, if not outright lies. The worst has to be the ad featuring Tiffany Forslund whose father, firefighter David Potter, died allegedly because an insurer delayed payment for necessary health treatment. Forslund says:
My father would have given his life in the line of duty, turns out the insurance company took it instead.
What tripe. Not only would R-67 not apply to her father’s claim (it is intended to benefit auto, home and property policies–not health insurance) it’s not true according to the mayor of the city for which Potter worked, who said it would be covered as a workers’ compensation claim or through the city’s health plan. But the attorneys promoting this legislation could not resist such a sympathetic story of a firefighter allegedly killed by an insurance company, even if it’s entirely off-point and probably untrue. Demagoguery at its finest. And, if the claim is true Potter’s family already has remedies under existing law for emotional distress, which, for a lost loved one are rightfully substantial and the threat of such judgments deter wrongful insurer conduct. Why shall we now triple those damages?
Attorney fees are typically one-third of the gross recovery. So if the gross recovery is tripled it equals a bigger fee. But let’s say the insured prevails but the gross recovery is small? No problem. Just submit your fee request to the court on an hourly basis if it provides a greater recovery for the attorney. And, here’s another little tidbit: the attorney fee provision is mandatory but the triple damages are at the court’s discretion. Who’s looking out for who here, really? And, that the triple/punitive damages are for the deliberately vague “unreasonable” and not for criminal, willful or wanton conduct as you would expect (and would be deserved) to award punitive damages makes for a juicy tidbit indeed.
And, there’s no crisis in the first place. Check out this link from the Insurance Commissioner of Washington State showing the number of complaints against individual insurers. In 2006, Private Passenger Auto Insurance Complaints averaged one complaint for every $1.5M in premium and Homeowners Insurance Complaints averaged one complaint for every $2.5M in premium. Hardly a crisis, and nothing worthy of threatening triple damages in every instance.
This legislation will enrich those attorneys bringing these suits, bring a windfall to a small number of insureds at the greater expense of all who pay insurance, directly or indirectly.
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Scotland: “A woman who falsely accused her father of rape after undergoing a discredited form of therapy has received an out-of-court settlement.” Katrina Fairlie underwent “recovered memory” therapy in Perth and proceeded to level unfounded allegations of sexual abuse at her father, an elected official. “She later said those claims were completely untrue and a police investigation found there was no evidence of abuse,” but in the mean time the allegations “had ruined her and her family’s lives”. The father sued the National Health Service-run psychiatric hospital but a court dismissed his case on the grounds “after ruling that the trust did not owe a duty of care to Mr Fairlie as a relative of a patient”. Ms. Fairlie was more successful in her claim, netting a reported £20,000, though the NHS admitted no liability. (“Settlement for bogus abuse woman”, BBC, Oct. 20).
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Individual liberty, free markets, and peace: the world's premier libertarian think tank. Publishes Cato at Liberty, where I blog on contemporary policy issues.
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