Overlawyered

December 5 roundup

Walter Olson — Fri, 05 Dec 2008 05:08:53 +0000

You are cordially invited to a fishing expedition for lawsuits over energy drink/alcohol mixes. RSVP: Center for Science in the Public Interest [Balko, Reason "Hit and Run"]
Recent Overlawyered guestblogger Victoria Pynchon mediates an ADA claim against a Long Beach motel owner. Extortion? Fair compromise? Both? Neither? [Settle It Now, scroll]
19-year-old Ciara Sauro of Pittsburgh is disabled, in medical debt, and waiting for transplant, crowning touch is the $8,000 default judgment RIAA got against her for downloading 10 songs [Ambrogi]
“It does not take a graduate degree to understand that it is unacceptable to hide evidence and lie in a deposition” — Seventh Circuit sanctions Amtrak worker for dodgery in workplace-injury suit [Ohio Employers' Law; Negrete v. Nat’l Railroad Pass, PDF]
New Richard Nixon tapes: “I can’t have a high-minded lawyer … I want a son-of-a-b—-.” [Althouse]
Aramark suit documents unsealed: girl paralyzed by drunk driver got $25 million in suit against New York Giants stadium beer vendor [AP/Vineland, N.J. Daily Journal, earlier]
New York high court bounces Alice Lawrence/Graubard Miller fee suit back to lower courts, says more info needed [NYLJ, earlier]
Couple claims retention of $1,075 rental security deposit was racially motivated, seeks $20 million [WV Record; Martinsburg, W.Va.]

Tags: ADA filing mills, ADR, alcohol, Aramark, damages, railroads, RIAA and file sharing, Victoria Pynchon, West Virginia

When a ploy doesn’t work

Walter Olson — Fri, 05 Dec 2008 03:00:52 +0000

“A New Orleans attorney who pleaded guilty to stealing millions of dollars from one of the city’s most prominent law firms has dropped a racketeering lawsuit he filed against the firm after his indictment.” (AP/KATC, Dec. 4; James Perdigao, Adams & Reese).

Tags: New Orleans, racketeering and RICO

ABA Journal “Blawg 100″ — go vote for us

Walter Olson — Thu, 04 Dec 2008 18:52:54 +0000

I’m very pleased to announce that this year, as last, the American Bar Association’s ABA Journal has named Overlawyered as one of its “100 best Web sites by lawyers, for lawyers”, and I’m not going to quibble about that wording, even though I’m not a lawyer nor (I believe) are the majority of the site’s readers.

So much for the introductory pleasantries. Now for the main task at hand, which is to win.

Readers may remember that last year Overlawyered lost its run for first place in its category by only a handful of votes, perhaps because we were relatively shy and diffident about urging people to go vote for us. This year the ABA Journal has placed us among ten blogs in the “niche” category, where we face competition from some very high-quality blogs, but, with all due respect, not from any whose readership levels and outside recognition we think exceed ours.

If you go there to vote, you will notice that the popular patent-law blog Patently-O has evidently been whipping its supporters to go cast their votes immediately, and is, for the moment, far in the lead. The ABA Journal says that last time it checked, “Patently-O’s Facebook group had more than 800 members,” which is very nearly the number of votes that blog has received so far. The other possible reason for Patently-O’s huge overnight vote surge, of course, is that they’ve invented some sort of bot to stuff the ballot box by impersonating real voters. But that couldn’t be the right explanation. These are patent lawyers we’re talking about. No way could they invent something.

Anyway, go there and vote for Overlawyered and your favorites in the other categories.

Tags: accolades, on other blogs, patent law

“5 minute after” suits and the Wal-Mart trampling

Walter Olson — Thu, 04 Dec 2008 15:52:33 +0000

Ron Miller at Maryland Personal Injury thinks the filing of suits only days after an event like the Long Island Wal-Mart trampling, at a point when key facts relevant to the nature and extent of liability have yet to be brought out, “don’t help the clients and also don’t help the general public perception of personal injury lawyers or their clients.” There are, of course, numerous tactical reasons for a race to the courthouse in various legal situations, particularly in likely class actions where lawyers who file early may seize control of the management of a collective suit. Where class action handling of cases is unlikely, however, as in the trampling case, I’ve long suspected that the main reason for the race to the courthouse is that it enables the lawyer to get his own name in the papers, thus pulling in other claimants, including some who might otherwise have signed up with less noisy lawyers.

Bill Childs at TortsProf speculates that another reason is to obtain discovery immediately before memories fade or evidence becomes unavailable in some other way. Again, I’m sure there are some cases where this factor is at work, but I also suspect there are many where the lawyer does not follow up on the hasty filing by plunging into discovery as rapidly as is practicable.

P.S. Some new reporting out on the events leading up to the shopper crush that morning, and a blog roundup from Carolyn Elefant. At “Freakonomics”, Ian Ayres: “To say that the low prices were a but-for cause of this man’s death is not to say that Wal-Mart should be legally or morally culpable for low prices.” And from commenter “Dan”, a naughty suggestion for how to treat the claims from not-especially-injured crowd members:

…how about this idea. Everyone who self-identifies as being in the trampling crowd so they can share a jackpot for the psychological horror of it also gets put on the list of people included in a share of a manslaughter charge. Seems like a good trade; a coupon for $10 off your next Wal-Mart purchase in exchange for a few years in prison. Any takers?

Tags: chasing clients, race to the courthouse, Wal-Mart

Microblog 2008-12-04

Walter Olson — Thu, 04 Dec 2008 13:40:23 +0000

MDs retreating from hospital-based practice for many reasons, including legal [Happy Hospitalist]
Mark Twain: “It usually takes me more than three weeks to prepare a good impromptu speech.” Know that feeling [h/t @lawfirmblogger]
Among Murdoch properties, stolid WSJ has begun sharing stories with tabloid NYPost, think of the satiric possibilities [Calderone/Politico]
Oral history of libertarian magazine Reason over 40 years, lots I didn’t know about its past [Brian Doherty and many others]
As rescuers neared, “immaculate” champagne service: sang-froid of staff and guests under Taj siege [Daily Mail] Security at Mumbai’s Oberoi hotel couldn’t get gun permits from gov’t [WSJ] Tunku Varadarajan: What India must do now [Forbes]
Good! Obama camp hedging support for EFCA (card-check, imposed union contract) bill [Las Vegas Sun h/t @Eric_B_Meyer]
Lap dancing “is not sexually stimulating”, British parliamentary committee is told [Guardian via Feral Child]

Tags: hospitals, India, strippers and exotic dancers, United Kingdom

No decent interval for Eliot Spitzer

Walter Olson — Thu, 04 Dec 2008 13:01:41 +0000

Yes, he’s going to be back, as a columnist for Slate instructing the world on matters of government, regulation and finance. Perhaps one of his early columns will be on the topic “Why it’s a bad idea to lead a public crusade to toughen penalties for a particular legal offense if you yourself are an ardent repeat committer of it.” Prof. Bainbridge has some further thoughts, along with a collection of Jay Leno jokes.

Tags: Eliot Spitzer

From comments: lawyer referral fees

Walter Olson — Thu, 04 Dec 2008 05:46:56 +0000

Reader Phil Grossman, in comments to yesterday’s post about the hawking of injury case leads to lawyers, advances some interesting contentions, including some I’m not knowledgeable enough to evaluate, about lawyer referrals and fee-splitting:

…Lawyers are the only professional group that considers it ethical to pay referral fees. The bar associations allow and approve referral fees as long as they are paid only to other lawyers.

In the sort of mass tort lawsuits that this company is dealing in, it is extremely common for ‘clients’ to be bought and sold, sometimes multiple times, with a typical referral fee being around a third of the contingency fee. The general public doesn’t realize that the lawyer advertising on TV or out on the Internet for mass tort clients is usually just a marketer, selling all the clients he collects to other lawyers. It is actually more lucrative to advertise for clients and then sell them to other lawyers than to do the actual work of representing clients.

If, for example, someone is injured in an auto accident, it is common for a relative or friend who happens to be a lawyer to offer to refer the victim to a “good personal injury lawyer”. But the victims aren’t aware that their relative or friend is probably making money off of their accident by collecting around a third or so of the contingency fee from the lawyer they have been referred to. Although bar association rules usually say the referral fee and its amount should be disclosed to the client, in practice it is always kept secret from the client, who thinks his or her lawyer relative or friend is just being altruistic.

But it appears that this company might be trying to collect money up front from its targeted lawyers, rather than taking the normal percentage payment of their referral fees from the contingency fees after the fact. If so, the targeted lawyers need to be very cautious indeed.

And:

Ron Coleman has asked if anyone has metrics on “marketer” lawyer referral fee income. I think hard figures would be difficult to obtain since lawyers don’t want their clients to be aware that they are being bought and sold and, despite bar association regulations, rarely let clients know that referral fees are being exchanged, never mind the amount of those referral fees. Lawyer referral fees are a well kept secret.

However there is lots of indirect evidence of how lucrative collecting referral fees is. For example, by far the most expensive Google adwords are those used by marketer lawyers, with many of them costing those lawyers over $50 per click compared to just cents per click for typical Google adwords. And just spending a bit of time watching daytime TV will show you that [law-related?] advertising on daytime TV is dominated by marketer lawyer advertising (with companies providing cash in exchange for assignments of lawsuit structured settlements also prominent there).

But beyond the bulk advertisements of the mass marketers of lawsuits, many individual lawyers, who are not practicing trial lawyers, but make their income in other ways, such as employees of corporations, supplement their incomes, often substantially, by referring relatives, friends, and coworkers to personal injury lawyers in exchange for referral fees (which they keep secret from those being referred as you can understand).

In fact politicians, such as state and federal legislators, who are also lawyers, can supplement their incomes very substantially by referring constituents who are involved in accidents to personal injury lawyers in exchange for secretive referral fees. And the fact that these referral fees from tort cases are so profitable to lawyer legislators is one of the reasons why tort law reform is so difficult to achieve.

It is interesting that the going rate for referral fees is around a third or so of the contingency fee. On first hearing of referral fees, one would assume that referral fees would be much lower, perhaps around 5% or 10% or so of the contingency fee. But referral fees are so high because contingency fees themselves are so incredibly lucrative that the lawyer handling a case can easily afford to give away a third or so of his or her contingency fee and still have lavish amounts of money left over for himself or herself.

Now you would think that since referral fees typically amount to about a third of the contingency fee, a savvy consumer could approach directly a tort lawyer who he or she wants to handle his or her case and negotiate a contingency fee which is up to a third less than the standard contingency fee, saving a lot of money, with the lawyer still making the same income or more as if he or she had to pay a referral fee. But the bar associations, in a rather perverse application of logic, forbid this discounting since “it wouldn’t be fair to the client coming in through a referral to pay more than a client coming in without a referral.” The US Justice Department has convinced other trade associations to change other similar restraint of trade rules and one would hope that the Justice Department might similarly convince the bar associations to change this rule. But with an incoming Democratic administration, heavily financially supported by trial lawyers, that isn’t likely to happen.

I suspect some of the lawyers among our readership will want to take issue with some of these assertions. When they do, I hope they will also share their opinions on the key charge that Grossman levels here: is it in fact common for lawyers to conceal from clients the existence and magnitude of referral fees, or to bury the information in a form or location where they hope the client doesn’t notice it? If this is in violation of bar regulations, are there ever stirrings in the bar to crack down and enforce the rules? And what, if any, antitrust scrutiny has the federal government applied to bar rules in this area, including the sort Grossman describes, forbidding the discounting of fees for non-referred clients? I once looked into some of these questions, but that was quite a long time ago, and I don’t mean to prejudge the current answers.

P.S. In comments, Ted Frank and Phil Grossman note earlier coverage of “chicken catchers” vs. “chicken pluckers” here and here. And for a different ethically troublesome scenario arising out of referral fees, check out this 2004 story from Illinois.

Tags: antitrust, attorneys' fees, bar associations, chasing clients

When you hear “monster”, they want you to think of them

Walter Olson — Thu, 04 Dec 2008 05:15:53 +0000

Back in April we had occasion to note the aggressive intellectual property stance of a company called Monster Cable, which had drawn a memorably tart riposte from the recipient of one of its nastygrams. We didn’t catch a wider aspect of the story, noted by Engadget in May, which is that Monster Cable goes around demanding that a wide range of businesses stop using the word “monster” in contexts far removed from its own line of work (audio/video cables); it reportedly has demanded cash from such businesses in exchange for calling off its lawyers. One of its targets, a miniature golf operation called Monster Mini Golf, is now trying to bring the story to public attention (TechDirt, Dec. 3).

Tags: miniature golf, nastygrams, trademarks

Claim: You rated our constituents as too creditworthy

Walter Olson — Wed, 03 Dec 2008 16:48:19 +0000

“In what appears to be the first legal action of its kind, an association of community-based organizations has filed a federal civil rights complaint against two of the three largest Wall Street ratings agencies, charging that their inflated ratings on subprime mortgage bonds disproportionately caused financial harm to African American and Latino home buyers.” (Kenneth Harney, Washington Post, Nov. 29; Hans Bader, CEI “Open Market”, Nov. 30).

P.S. Mickey Kaus (permalinks gone again, scroll to Dec. 1):

Hmmm. Didn’t community-based organizations push for exactly this sort of reverse-redlining? I think they did. It’s one thing to argue that they maybe weren’t the major cause of the subprime meltdown. It’s another for them to pose as victims wronged by the very system they worked hard to set up (including the securitization that enabled banks to keep up “reverse redlining”).

Tags: discrimination law, mortgages

Advice for frivolous pro se litigants

Walter Olson — Wed, 03 Dec 2008 15:53:12 +0000

If you’re hoping to get the judge to take your complaint seriously, it’s best not to list your home address as “1600 Pennsylvania Avenue”, Washington, D.C., as did Ernest L. Dixon. (Mike Doyle, Suits and Sentences (McClatchy newspapers law blog), Dec. 2).

Tags: pro se

Overlawyered

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From comments: lawyer referral fees

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