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feeing frenzy

Berman DeValerio Pease and other class action lawyers in the settlement of a case against Xerox want reimbursement of about $500 an hour for time spent by temporary attorneys who say they were getting $35/ and $40/hour. “Documents in the Xerox case also suggest the plaintiff lawyers spread the markup on temp attorneys among themselves, sometimes in puzzling ways. Partners at Bernstein Litowitz, a big New York class action firm, spent less than 20 hours on the case, according to court reports. Yet the firm wants $7.5 million for the 15,000 hours” its temps put in. (Daniel Fisher, Forbes, Dec. 8). Eight years ago we recounted how Maryland tort magnate Peter Angelos was expecting to reap between $15,000 and $30,000 an hour on legal work a large chunk of which had been carried out by $12/hour lawyer temps.

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October 27 roundup

by Walter Olson on October 27, 2008

  • NYC judge tosses injury suit against Lawyers Athletic League filed by a player on Milberg’s team [NYLJ]
  • Kentucky fen-phen lawyers Gallion and Cunningham disbarred [Lexington Herald-Leader]
  • Worker’s comp doc claims he noticed abnormal lab result and told patient to check with his primary doc. Patient didn’t and harm ensued. Malpractice? [CalLaw Legal Pad, KevinMD, Happy Hospitalist]
  • Federalist Society publishes text of Judge Dennis Jacobs’s speech on pro bono, but Chemerinsky digs in rather than apologize [PoL]
  • Are HIPAA privacy rules suspended during emergencies? No, and what lovely situations that’s likely to cause [HIPAA blog, more]
  • One of the more unusual personal injury lawyer websites is “like a touchy-feely hybrid of Myst and The Office” [Above the Law]
  • Gold-collar criminal defense work? McAfee decides $12 million too rich a sum for defending CFO Prabhat Goyal [Bennett & Bennett, Greenfield]
  • Sounds promising: “Texas Supreme Court decision could end peremptory strikes in jury selection” [SE Texas Record]

Ron Coleman is still puzzling over the size of the legal fees (at least $93 million) in the Mattel/MGA Bratz doll trademark litigation (Oct. 16).

Coughlin Stoia Geller Rudman & Robbins, formerly of Bill Lerach fame, and other law firms sued to pin the blame on banks, auditors, and other outside deep-pocket third parties, as well as on directors; defendants collectively paid $7.2 billion. Giving the plaintiff’s lawyers $688 million of that is very “fair and reasonable” and involves no “windfall”, per U.S. District Judge Melinda Harmon. (Bloomberg, Sept. 8).

More: OK, so maybe Brian Baxter of AmLaw Daily is just pursuing a reasonable news angle when he quotes the Coughlin Stoia lawyers doing a little victory lap and waving to the crowd. But if he’s going to quote Prof. John Coffee at such length as his big authority in support of the fee’s fairness, shouldn’t he go beyond identifying Coffee as “a professor at Columbia Law School and frequent class action critic” to spell out a little more explicitly that, you know, Coffee was hired by the plaintiff’s lawyers in this case to defend their fee request? Doesn’t that make it less surprising that Patrick Coughlin “welcomes the positive feedback” from these supposedly “unlikely legal circles” to support his case? (more background, yet more).

Update Thurs. a.m.: by yesterday evening American Lawyer had substantially “updated [the post] with new information” to reflect the Coffee relationship, and Prof. Obbie is kind enough to give me some credit for that happening.

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August 29 roundup

by Walter Olson on August 29, 2008

  • One for your “firefighter’s rule” file: firefighter perishes in blaze, his widow sues security alarm company [SF Chron, San Pablo, Calif.]
  • And another: Nassau County, N.Y. cop injured by drunk driver while on duty is suing the county over Long Island Expressway design and signage [Newsday; Kenneth Baribault]
  • Stop fighting over the $60 million in fees, judge tells feuding lawyers, your lawsuit has been over for four years now [Legal Intelligencer, corrugated paper antitrust class action]
  • Public-health prof: red-light cameras “don’t work” and instead “increase crashes and injuries as drivers attempt to abruptly stop” [Bruce Schneier via Instapundit]
  • Criminal prosecution of political attack ads? Time to rethink campaign finance law [Bainbridge]
  • Teenagers send each other racy cellphone videos, and then their legal nightmare begins [Des Moines Register]
  • Sounds interesting but haven’t seen a copy: “How To Get Sued: An Instructional Guide” by well-known blawger J. Craig Williams [Giacalone, Ambrogi]
  • Mississippi AG Hood goes after MillerCoors over caffeinated alcohol drinks, but Anheuser-Busch hired Mike Moore and sprang big for DAGA, hmmm [Alan Lange, YallPolitics]

July 13 roundup

by Walter Olson on July 13, 2008

  • Nothing new about lawyers stealing money from estates, but embarrassing when they used to head the bar association [Eagle-Tribune; Lawrence, Mass., Arthur Khoury]
  • Unusual “reverse quota” case: black job applicant wins $30K after showing beauty supply company turned her down because it had a quota of whites to hire [SE Texas Record]
  • Who knew? Per class action allegations, pet food contains ingredients “unfit for human consumption” [Daily Business Review]
  • U.K.: “A divorcee who won a £1.4million payout from her multi-millionaire husband is suing her lawyers because she claims she should have got twice that amount.” [Telegraph]
  • UW freshman falls from fourth-floor dorm window after drinking at “Trashed Tuesday”, now wants $ from Delta Upsilon International as well as construction firm that put in windows [Seattle P-I, KOMO]
  • After giant $103 million payday, current and former partners at Minneapolis law firm are torn by feuds and dissension — wasn’t there a John Steinbeck novella about that? [ABA Journal and again, Heins Mills]
  • Small firm that used to make Wal-Mart in-house videos sets up shop at AAJ/ATLA convention hawking those videos for use in suits against the retailer [Arkansas Democrat Gazette, earlier]
  • When the judge’s kid gets busted [Eric Berlin; Alabama]

Louisville Courier-Journal:

After 52 hours of deliberation over eight days, a federal jury yesterday declared it was hopelessly deadlocked in deciding whether attorneys William Gallion and Shirley Cunningham Jr. defrauded clients of $65 million in Kentucky’s 2001 fen-phen settlement.

After the judge declared a mistrial, the jury foreman, Donald Rainone of Erlanger, said jurors were stuck at 10-2 to acquit the defendants, and had been at that vote for much of their deliberations.

“We felt the prosecution just didn’t have a strong enough case,” Rainone said in a phone interview in which he strongly criticized the prosecution for being unprepared and focusing its case on only Gallion, Cunningham and a third lawyer, Melbourne Mills Jr.

“There’s a lot of people that had their hand in this,” he said. “There’s a lot of people that should have been on trial that weren’t.”

Rainone declined to say who else should have been on trial, saying he didn’t want to “get sued.”

Of course, that the prosecution failed to indict participants in the fen-phen scam who also stole from tens of thousands to tens of millions doesn’t explain why one votes to acquit the criminal defendant attorneys who stole millions–except for the fact that the defendants were able to blame the empty chair for their actions. If the defendants’ allegations about Stan Chesley’s role are half true, the question remains why Ohio disciplinary authorities have not so much as opened an investigation, much less failed to disbar him. But we will perhaps learn more as the civil trial progresses. Meanwhile, as Peter Bronson writes, “giving immunity to someone so powerful, wealthy and politically wired was everything that destroys public trust in the justice system.”

Judge William O. Bertelsman, who has taken senior status, has recused himself from the retrial; the new judge, Danny Reeves, will likely be requested to lower the eight-digit bond for Gallion and Cunningham, who remain in jail. Melbourne Mills, who was acquitted, says he has already spent the $20 million he was paid for his role in the case–a case his lawyer told a jury that he was too drunk to work on and didn’t understand the underlying law. Nice work if you can get it.

Off-the-record reports I am receiving about the trial blame prosecutors’ performance (such as failing to object to defendant expert opinion that contradicted the facts) and Judge Bertelsman’s instructions to the jury; it also seems to me that the defendants were given far too much leeway to argue the law before the jurors when the judge should have given a straightforward instruction that the underlying case was or was not a class action covering all future Kentucky claimants rather than allow argument over that simple legal question. (Answer: it wasn’t. The settlement with AHP explicitly says it’s a lump-sum settlement for existing plaintiffs requiring the attorneys to comply with Rule 1.8, and there is no indemnification provision contrary to defense testimony arguing otherwise.)

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Melbourne Mills’s defense that he was too drunk to know what was going on when he and two other attorneys stole tens of millions of dollars appears to have created reasonable doubt in the mind of a Kentucky jury.  Mills may have been helped by the revelation that his two co-counsel tried to hide $50 million from him, too, permitting his attorney to more plausibly blame the scheme on others.   Or the jury may have believed the argument of Mills’s attorney that the three attorneys were too stupid to understand the settlement agreement and didn’t intend to steal any money (though they transferred a lot of money from their personal account to their clients when they learned the bar was investigating, and lied to the bar about how much money their clients received).  (Jim Hannah, “One cleared in diet drug case”, Cincinnati Enquirer, Jul. 2; Beth Musgrave, “Fen-phen lawyer Mills is found not guilty”, Lexington Herald-Leader, Jul. 2; Beth Musgrave, “Jury hears closing arguments in fen-phen trial”, Lexington Herald-Leader, Jun. 24; AP/Kentucky Post, Jun. 23).  The jury, today in its seventh day of deliberations, claims a deadlock on the other two attorneys, no doubt confused by why Judge Jay Bamberger and co-counsel and Democratic bigwig Stanley Chesley have not also been indicted. Defendants Cunningham and Gallion have sought to blame the tens of millions they stole on the fact that Bamberger (who was indirectly paid millions) judicially approved the settlement and Chesley (who was directly paid tens of millions) was allegedly the architect of the settlement that ensured lawyers would get far more than their contracts with their clients provided. Since there is no dispute that those two were indeed intimately involved in the scheme, the jury isn’t the only one confused why the Kentucky fen-phen three are being treated differently than the judge, the judge’s former law partner, and Stan Chesley, who all profited mightily.

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June 12 roundup

by Ted Frank on June 12, 2008

  • As I type this post, I’m listening to Andrew Frey argue Conrad Black’s appeal before Judge Posner and the Seventh Circuit. Posner seems to be confused over whether incorrect jury instructions can be prejudicial in a general verdict. [Bashman roundup; earlier]
  • “For years families bogged down in Harris County [Texas] probate courts have accused judges of bleeding estates of tens of thousands of dollars to pay high-priced lawyers for unnecessary work.” [Houston Chronicle; Alpert v. Riley (Tex. App. Jun. 5, 2008) (via)]
  • Company sets policy. Employee violates policy. Is corporation criminally responsible for employee’s act? [POL; FCPA blog; Podgor]
  • Merrill Lynch banker asks for investigation of Enron Task Force withholding of exculpatory evidence [Bloomberg]
  • When calculating the costs of medical malpractice suits, let’s not forget the noneconomic costs. “In the [John] Ritter case, the jury agreed with the defendant physicians and exonerated them of any liability. They were lucky. How lucky? They were able to spend four years with attorneys worrying about their future, including the potential that they would be ordered to pay tens of millions of dollars and be left penniless. So, they didn’t really win. They just lost less.” [EM News via Kevin MD via Dr. RW]
  • Nor should we forget the defensive medicine costs. [Kevin MD]
  • Legal reform = job creation. [American Courthouse]
  • According to Justinian Lane, if you’re reading this post, you’re a “spineless sycophant.” [Bizarro-Overlawyered]

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Full proof that I don’t think all pro se representation is a bad thing: Following up our previous discussion of the GTA class action settlement and my objection: This morning, Friday, June 6, I filed this brief (which unlike the previous brief, I wrote myself), in opposition to the plaintiffs’ motions for court approval of the settlement and attorneys’ fees, in the Southern District of New York and served it upon counsel. With luck, I didn’t file the wrong brief.

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The press is starting to catch on to the scandal of Judge Bamberger not being charged in the Kentucky fen-phen settlement scandal, and we have criminal trial updates after the jump.

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Judge Joseph Bamberger rubber-stamped a Kentucky fen-phen settlement agreement where plaintiffs’ attorneys cheated class members out of tens of millions of dollars. In the process, his former law partner was paid millions by the settlement, which he used to buy a Florida house with Bamberger, and Bamberger himself received a $5000/month sinecure. At trial of the three lead attorneys yesterday, jurors were shown a videotape where one of the plaintiffs questioned the judge on how low her settlement was and the validity of her release; the videotape shows Bamberger browbeating the plaintiff, but then awarding her an additional $100,000 and a $1200/month life annuity on the condition that she cease talking about the settlement and her objections to it. (Jim Hannah, “Judge dressed down victim”, Cincinnati Enquirer, May 24) (h/t R.U.). For some reason yet undisclosed by prosecutors, Bamberger is on the witness stand rather than in the dock with Gallion, Mills, and Cunningham.

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We now know how many people signed up for the Grand Theft Auto: San Andreas class action settlement out of the millions of members in the purported class.

Tier 1 (up to $35.00) (no exchange required): 416
Tier 2 (up to $17.50) (exchange required): 22
Tier 3 ($10.00) (exchange required): 131
Tier 4 ($5.00) (no exchange required): 2,050
Disc Exchange w/o cash: 57

2676 total claimants, receiving a total cash value of at most $26,505, though likely even less than that, given that the plaintiffs’ attorneys record no actual cash distribution.

The seven “representative” class members are asking for approval to receive another $24,500, or nearly half of the total cash recovery.

Of course, as we’ve discussed, none of these people had a legitimate cause of action or suffered any legally cognizable injury. But how much are the plaintiffs’ attorneys (from thirteen different offices of twelve different law firms!) asking for for this travesty of a lawsuit and settlement–one that was entirely redundant of the taxpayer-funded investigation conducted by the Los Angeles district attorney? They claim their time devoted to the litigation was worth $1,317,433, but are “generously” claiming a 28% discount for a total fees-and-costs request of $1 million.

Recognizing that this 3774% contingent fee looks fishy to the least scrutinizing of judges applying Rule 23 review, the plaintiffs have sought to inflate the appearance of accomplishment through a $870,000 cy pres award to the National PTA and ESRB. (As I’ve discussed, cy pres awards that do not directly benefit class members should not be used to justify fee awards.) They also inflate the award by claiming that the costs of notice, administration and disk replacement should be attributed to the size of the accomplished result, thus puffing matters up to over $2 million, consisting nearly entirely of empty calories for the plaintiffs they purport to be representing.

Alas, I was the only class member to docket a formal objection to this rip-off. (While it was my idea to object, I can take no credit for the objection brief, which was written by my attorney, Larry Schonbrun.) On Thursday, the plaintiffs’ attorneys filed a brief defending the settlement, with many cites to Overlawyered as ad hominem attacks on the objection. The court’s hearing is June 25.

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Here’s your $3 million bonus, young man, and whatever you do, don’t tell the clients how much the case settled for (Jim Hannah, “Fen-phen lawyer details bonus”, Cincinnati Enquirer, May 15; earlier)(via Slater, WSJ law blog).

Disbar Dickie Scruggs?

by Walter Olson on April 2, 2008

Not so fast, he says — the Mississippi Bar didn’t file a “certified copy” of his guilty plea. (Patsy R. Brumfield, “Dickie Scruggs files to dismiss attempt to have him disbarred”, Northeast Mississippi Daily Journal, Apr. 1).

David Rossmiller has ten unanswered questions about loose ends in the Scruggs scandal (Mar. 24) which elicit responses in turn (and more unanswered questions) from NMC and Lotus at Folo (plus an NMC update). These latter bloggers, by the way, have shed their anonymity and stand revealed as Oxford, Miss. lawyer Tom Freeland (NMC) and retired lawyer Jan Goodrich, now of New Smyrna Beach, Fla. (Lotus), now also joined by Jane Tucker.

Is it okay for the University of Mississippi (Ole Miss) to take Scruggs’s money? “It depends on what the felony is…” Chancellor Robert Khayat is quoted as saying (Folo/NMC, Apr. 1; more). Gulfport M.D. Bill Hemeter, in a letter to the editor printed in the Biloxi Sun-Herald (Mar. 19), is claiming prescience: “I sent Chancellor Khayat the book ‘The Rule of Lawyers’ by Walter Olson several years ago, with a warning not to take money from plaintiff attorneys.” Earlier, when Scruggs pled guilty, another university official was heard from:

“My initial reaction is one of sadness,” said Samuel Davis, dean of the University of Mississippi Law School, Scruggs’ alma mater. “I’ve known and been friends with Dick and Diane Scruggs almost 50 years now going back to our days in Pascagoula, and I feel a great sense of compassion for him and his family. And that’s just a very personal reaction. I haven’t really thought about the implications for the legal community or the legal profession.

Davis, who also directs the Ole Miss Law Center, said not everybody who pleads guilty is guilty and that Scruggs might have had other reasons for the move. If that were the case, Davis said, the reasons likely were good ones.

(emphasis added by an understandably astonished Lotus @ Folo; many, many comments follow).

And from Sid Salter of the Jackson Clarion-Ledger (Mar. 19): “In spite of their insistence that there were no ethical lapses in their behavior on the tobacco suit, [former attorney general Michael] Moore and Scruggs still owe the taxpayers of Mississippi an accounting of the lawyers’ fees and expenses that accrued from that litigation.”

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Not Not Guilty Guilty!!

by Peter Morin on February 27, 2008

Overlawyered reported last summer on William Ross’s findings about the double billing of clients, and Ted opined on it at Point of Law.

Cameron Stracher’s book (his second) entitled Double Billing: A Young Lawyer’s Tale Of Greed, Sex, Lies, And The Pursuit Of A Swivel Chair is careful not to assert that there was double billing going on in his fictional New York white shoe law firm, but there was certainly plenty of churning, redundant/unnecessary work, etc., the ethics of which is comparably impugned by the principles behind the rule against double billing.

In light of Judge Matsch’s repudiation of Big City trial counsel’s conduct in the Medtronic Case, I got to thinking about unethical lawyer conduct, and asked myself this:

Aside from the obvious business remedy available to the client, does trial counsels’ misconduct excuse the client from paying their bill (or enable them to recover the fees paid)? Does the answer to that depend on whether the client was complicit in the unethical strategy?

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January 24 roundup

by Walter Olson on January 24, 2008

  • Longtime Overlawyered favorite Judy Cates, of columnist-suing fame, is using large sums of her own money to outspend incumbent James Wexstten in hard-fought race for Illinois state judgeship; Democratic primary is Feb. 5 [Belleville News-Democrat, Southern Illinoisan]
  • City council told: we’ll cancel your liability coverage if you throw all meetings and city records open to public [Seattle Times]
  • Attorney member of Canadian Senate in spot of bother after revelation that she billed client for 30 hours in one day [Vancouver Province, edit]
  • A public wiki just for Scruggsiana? After Keker’s minions swoop in to do their edits, the Mississippi attorney may wind up portrayed as the next Mother Teresa, and not the Hitchens version either [WikiScruggs]
  • Same general category of point, my Wikipedia entry now suddenly describes me as “controversial”, when but a month ago I wasn’t;
  • $28 to $52 million in 18 months for serving as a DoJ “corporate monitor” sounds like nice work if you can get it, and former AG Ashcroft got it without competitive bidding [Lattman, St. Pete Times edit, PolitickerNJ, NJLJ]
  • The Amiable Nancy (1818), admiralty case that could prove crucial precedent in Exxon Valdez punitive appeal, has nothing to do with The Charming Betsey (1804), key precedent on international law [Anchorage Daily News; Tom Goldstein/Legal Times]
  • “First do no harm… to your attorney’s case” [Cole/Dallas Morning News via KevinMD]
  • Probers haven’t come up with evidence of more than middling tiger-taunting, and attorney Geragos says he’ll sue zoo’s p.r. firm for defaming his clients [KCBS; SF Chronicle; AP/USA Today]
  • UK’s latest “metric martyr” is Janet Devens, facing charges for selling vegetables in pounds and ounces at London’s Ridley Road market [WSJ; earlier]
  • Lawyer can maintain defamation suit over being called “ambulance chaser” interested only in “slam dunk” cases, rules Second Circuit panel [eight years ago on Overlawyered]

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The lead plaintiff had claimed losses of $25 million, but settled for zero plus some corporate-governance changes that, as a Rutgers professor notes, probably would have happened anyway. But a settlement approved by a New Jersey federal judge in a shareholder suit against Schering-Plough awarded $9.5 million in attorneys’ fees, even applying a multiplier to lodestar hourly rates. [New Jersey Law Journal/law.com; In re Schering-Plough Corp. Securities Litigation, Case No. 2:01cv829 (D.N.J.)] Paying for those fees: shareholders, who also paid for what were likely multi-million dollar defense costs of litigation. Judge Katharine Sweeney Hayden, when certifying a single class in 2003, rejected arguments that there was an inherent conflict between class members that had already sold their stock and class members who continued to hold stock; she was appointed by Clinton in 1997.

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