Jenna Greene reports in the National Law Journal (reg) on the Judgment Fund, an obscure entity within the federal government that last year paid to settle more than 5,000 lawsuits against federal agencies. For the most part, its payouts are not subtracted from agency budgets, and overall dollar figures tend to be dominated by a few special situations such as (most recently) lawsuits by utilities over alleged Energy Department breach of contract for nuclear fuel storage, and by Indian tribes against the Department of the Interior and Department of Agriculture over financial mismanagement and alleged discrimination. A smaller, but controversial, category of payouts that has attracted Congressional attention consists of settlements with “cause” organizations such as environmentalists that sue to force policy change.
“The strange thing is the lack of transparency,” said Walter Olson, a senior fellow at the Cato Institute’s Center for Constitutional Studies. “Settlements deserve scrutiny.…There’s no reason why as a public process there shouldn’t be fine-grained disclosure.”
In April, Rep. Darrell Issa (R-Calif.) introduced the Judgment Fund Transparency Act of 2011, which would require Treasury (unless barred by a court order or law) to make public the names of plaintiffs and counsel, plus a brief description of the facts that gave rise to the payments and a breakdown of principal and attorney fees.
However, Greene reports, the Issa measure has attracted no co-sponsors and is stuck in House Judiciary with no apparent plans for action.
“Oil giant BP’s $20bn (£13bn) fund to compensate those hit by the Gulf of Mexico spill has been frozen, following a court order that all claimants must share the cost of the legal team leading the action over the disaster – whether or not they pursued their claim through the courts.” [Telegraph]
American legislatures since the 1970s have widely employed “one-way” fee provisions — under which courts award fees to prevailing plaintiffs, but not to prevailing defendants — as a way of encouraging plaintiffs and their lawyers to bring a maximum of legal action; especially when the fee shifts are generously calculated, such provisions also put strong pressure on defendants to settle potentially defensible cases rather than take the risk of a big fee award that may exceed the sums in controversy. Now Wisconsin lawmakers are thinking of making the playing field a bit more level by reining in one-way awards, especially those that exceed the underlying dispute; another way of approaching the issue, of course, would be to make the shifts two-way. [Rick Esenberg]
The New Jersey Supreme Court is being asked to review a case against a car dealer in which the plaintiff’s lawyer obtained a $99,000 fee award; the client’s actual recovery was $650, and the underlying disputed charge was $51.50. In a companion case, a complaint over inadequate handicapped parking won a $2,500 payout for the complainant and $74,000 for her lawyer. The cases could determine whether New Jersey retreats from a relatively liberal formula in which courts enhance many fee awards to prevailing plaintiffs above market rates. [New Jersey Law Journal]
As Gideon Kanner points out, you don’t need to be a property rights advocate to see the California Environmental Quality Act as a lawsuit-intensive mess (quoting Prof. Robert Freilich):
Many attorneys, planners, architects, engineers, scientists, developers, small businesses, business associations and governments in the state, and many environmentalists are agreed that CEQA needs major reform. Delays in the system are causing projects to suffer delays of 2 to 9 years to get EIRs approved, especially for (but not limited to) the failure to compare the project with all “feasible” alternatives, establish vague baseline analysis for existing mitigation, and the tricky determination as to which parts of regional, general and specific plan EIR findings can be incorporated, to eliminate duplication of effort and cost. The law is so confused on these points that it is a miracle that any EIR can survive its first round in the courts without a remand to do it over again. Complicating this result is the establishment of a specialized group of attorneys that initiate litigation at the drop of a hat, primarily because the statute authorizes attorney’s fees for any remand or reversal. Many community associations and no growth environmentalists use the EIR litigation process to delay and in many cases kill projects for little or no environmental substance.
I’ve got a new post up at Cato at Liberty about the convenient symbiosis between the EPA and advocacy groups it funds that sue it demanding that it regulate new things. “Sweetheart” or otherwise, the resulting legal actions help deploy taxpayers’ money in service of the relentless expansion of the regulatory state. More: Bader.
With “one-way” fee entitlements — plaintiffs collect if successful, but do not pay if they lose — it is no wonder that the California Environmental Quality Act [CEQA] attracts tactical and opportunistic litigants, including some whose interest seems to lie more in legal fees than in environmental reform. “Unfortunately, it is not uncommon to see CEQA used by competitors to block new businesses from coming into their market or by unions trying to force businesses to accept labor agreements. Neither represents what CEQA was intended to do, and there should be protections so the law cannot be [hijacked] for such purposes.” [Cynthia Kurtz, Whittier Daily News via Todd Roberson, CJAC]
Opelousas, Louisiana: “The attorney who filed the original desegregation lawsuit against the St. Landry Parish School Board in 1965 is seeking nearly $10 million in legal fees for his work on the case over the past 46 years.” [AP/Daily World, Baton Rouge Advocate]
Just for fun — or maybe that’s the wrong word — this website allows you to noodle around to estimate how much money is flying out the window as lawyers quibble at your meeting or phone call.
“Bookworm,” the Bay Area-based blogger, tells the story of what happened in a case on which she worked, which arose after an employer encountered the interaction of two California laws, one requiring that final wages be paid within three days, another tilting attorneys’ fee awards toward employees in disputes with employers. A highlight: when the California Supreme Court attempted to correct some of the most extreme unfairness arising from the fee rules, it got overridden by the state legislature. [Bookworm Room]
Ted Frank, who’s challenging the Cobell (Indian trust) class action fees as part of his work with the Center for Class Action Fairness, catches out a lawyer who claims to have worked for more than nine hours a day on the case for 14 years, including a 7-year stretch in which he purportedly worked “an average of eleven hours a day, every day seven days a week without a single day off.” [Above the Law, earlier]
According to Todd Roberson at CJAC, a federal court’s ruling in a 14-year dispute over street curbs and sidewalks in Riverside, California has headed off a potential “avalanche of lawsuits.” U.S. District Judge R. Gary Klausner ruled the complainant in the case “had failed to demonstrate that Riverside as a whole is inaccessible to the disabled.”
Riverside’s City Attorney, Greg Priamos, was quoted in the Daily Journal saying the suit was “about money, not accessibility…The only hangup to a settlement earlier in the case was the amount of attorney’s fees. I’m offended by that.”
Venture capitalist Fred Wilson thinks that’s too high a fee in a case where standard forms were employed and the other party wasn’t represented by counsel. Is it? Are there reasons to suppose a competitive market for a widely replicable legal service wouldn’t converge on some sort of market-clearing rate? [Above the Law]
More: Max Kennerly offers one lawyer’s view.
Plaintiff’s lawyers agreed to seek a maximum of $99.9 million in fees in the settlement of the Cobell class action over federal mismanagement of Indian tribal trust funds. Now, however, a different number has suddenly appeared on the agenda: $223 million. [National Law Journal]
A man says that he secured a $900,000 settlement from the Roman Catholic church over his abuse by a priest, but “alleges that attorneys who represented him in the case managed to claim $877,000 of the settlement, leaving him with no more than $23,000.” The man switched attorneys 2 1/2 years into the case and subsequently lost a case filed by the first attorney saying he had been deprived of his rightful fee. His new suit contends that he was wrongly advised to fight the first lawyer’s suit every step of the way. [Oregonian]