As good an argument for the Class Action Fairness Act as any: Trial lawyers sued Compaq in Texas over an allegedly defective disk controller, though none of the plaintiffs had ever suffered a malfunction or a loss of data, alleging a violation of Texas consumer fraud law on behalf of a nationwide class.  No dice: the Texas Supreme Court threw out the case, noting that Texas law did not permit the sort of nationwide class action contemplated by the plaintiffs.  End of story?  Nope: the same trial lawyers filed the same complaint again, this time in Oklahoma state court, and asked the Oklahoma state court to apply Texas law to a nationwide class.  “Sure thing!” the court rubber-stamped–applying an ersatz version of Texas law rejected by Texas courts.  The forum-shopping was able to extract $40 million in attorneys’ fees from a questionable coupon settlement, as an Overlawyered post noted August 6.  The Summer 2008 issue of State Court Docket Watch includes my essay discussing why this is a constitutionally problematic set of decisions by Oklahoma courts–written before, though published after, the Anthony Caso analysis for WLF.

Two readers have written to alert us to this settlement (PDF), including frequent commenter Todd Rogers:

I received notice in the mail [this month] that I’m party to a class action suit against VW USA. I drive a Passat with a “Smart Key.” According to the suit, VW has been naughty because they did not make the key duplication apparatus available enough to locksmiths, third party key duplicators, and the like, in the event that I (we) want to make another key. What would my settlement be? I’m the benefactor of “greater communication” from VW USA.

What do you know…owners of Mercedes Benz suffered the same injury and it was the same firm, Lurie & Weiss, who helped make them whole, as well. Who’s next?

Objections and requests for exclusion must by filed by the end of August, and a fairness hearing is scheduled for Sept. 22 in the courtroom of the Hon. Audrey B. Collins in federal court in Los Angeles.

• Beck and Herrmann fisk a NEJM anti-preemption editorial. [Beck/Herrmann; NEJM]
• Lessons of the Grasso case. [Hodak]
• You think BigLaw has it bad? Plaintiffs’ attorney who invented the benefit-of-the-bargain theory for pharmaceutical class actions where no one has suffered any cognizable injury, has made his firm tens of millions, but still hasn’t made partner. “Zigler said he never meets most of the people he represents in these high-profile cases.” [St.L. Post-Dispatch; related analysis from Beck/Herrmann]
• Speaking of harmless lawsuits, “an atrocity in Arkansas,” as Arkansas Supreme Court ignores basic principles of due process and civil procedure to certify an extortionate pre-CAFA class action from MIller County. [Hmm, that's Beck/Herrmann again; General Motors v. Bryant; related from Greve]
• Speedo competitor: unfair competition to say your innovative swimsuit has an advantage just because 38 out of the last 42 world records (as of June 30) were broken in the suit. [Am Law Daily]
• Background on bogus shower curtain scare story (earlier). [NYT; related AEI event]
• EMTALA-orama: don’t discuss payment in the emergency room if you don’t want to get sued. [ER Stories]

Walter’s post about Tehmina Haque’s lawsuit against American Airlines over her “fear” of an unrealized peanut allergy is not the first time her attorney, Kenneth Mollins, has attempted such a tactic.

Continue Reading »

Tehmina Haque’s four-year-old son apparently did not suffer any allergic reaction, but mom got really stressed about the possibility he would so she’s suing American Airlines anyway. The airline says it never promises peanut-free flights, if only because it cannot keep other passengers from bringing their own peanut snacks on board. (Zachary R. Dowdy, “LI woman sues over in-flight peanuts”, Newsday, Jun. 2).

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.

• Contriving to give Sheldon Silver the moral high ground: NY judges steamed at lack of raises are retaliating against Albany lawmakers’ law firms [NY Post and editorial. More: Turkewitz.]
• When strong laws prove weak: Britain’s many layers of land use control seem futile against determined builders of gypsy encampments [Telegraph]
• “U.S. patent chief: applications up, quality down” [EETimes]
• Plenty of willing takers for those 4,703 new cars that survived the listing-ship near-disaster, but Mazda destroyed them instead [WSJ]
• “Prof. Dohrn [for] Attorney General and Rev. Wright [for] Secretary of State”? So hard to tell when left-leaning lawprof Brian Leiter is kidding and when he’s not [Leiter Reports]
• Yet another hard-disk-capacity class action settlement, $900K to Strange & Carpenter [Creative HDD MP3 Player; earlier. More: Sullum, Reason "Hit and Run".]
• Filipino ship whistleblowers’ case: judge slashes Texas attorney’s fee, “calling the lawyer’s attempt to bill his clients nearly $300,000 ‘unethically excessive.’” [Boston Globe, earlier]
• RFK Jr. Watch: America’s Most Irresponsible Public Figure (r) endorses Oklahoma poultry litigation [Legal NewsLine]
• Just what the budget-strapped state needs: NY lawmakers earmark funds for three (3) new law schools [NY Post editorial; PoL first, second posts, Greenfield]
• In Indiana, IUPUI administrators back off: it wasn’t racial harassment after all for student-employee to read a historical book on fight against Klan [FIRE; earlier]
• Fiesta Cornyation in San Antonio just isn’t the same without the flying tortillas [two years ago on Overlawyered]

For being the first Overlawyered blogger to have a post cited in a federal case. In Taylor v. XM Satellite Radio, Inc., 533 F.Supp.2d 1151 (N.D. Ala. 2007), XM argued that the class action demanding a refund for a 24-hour outage was moot because they offered refunds well before the class certification motion was made. Plaintiffs disputed this, arguing they did not know about the refund offer until after they moved for class certification. One questions the relevance of the time of the certification motion (and, indeed, the court found this factual claim irrelevant) given that the refund offer was to the entire class rather than just to the named plaintiffs, but one reason that the court expressed skepticism at the attorneys’ claims was the existence of an Overlawyered post by David discussing the refunds and the ludicrousness of the suit. Case dismissed for mootness, though the court also noted that XM had no contractual obligation to provide continuous uninterrupted service.

The National Law Journal gets around to discussing the problem of FACTA lawsuits in the April 7 issue; Overlawyered readers are well ahead of the curve. See also my Liability Outlook on the subject.

• Judge expresses surprise at how many law firms want in on fees in Visa/MasterCard issuer settlement [NYSun]
• Mississippi bill would require a lawyer’s presence at real estate escrow closings; so rude to cite the profession’s self-interest as a factor [Clarion-Ledger]
• Following Coughlin Stoia’s lead, Mark Lanier announces he’s expanding into intellectual property litigation [The Recorder]
• Maryland legislation would require state-aided colleges and universities to report on what they’re doing to advance “cultural diversity” [Examiner via Bader/Open Market]
• New era at UK pubs? Under new directive, “employers will risk being sued if a bar worker or waitress complains of being called ‘love’ or ‘darling’, or if staff overhear customers telling sexist jokes.” [Daily Mail]
• ACLU just sued city of San Diego and snagged $900K in legal fees, but that’s no impediment to the city’s council’s enacting a special day of tribute to the group [House of Eratosthenes]
• George Wallace, who’s guestblogged here, hosts twin editions of Blawg Review #153 at his blogs Declarations & Exclusions and A Fool in the Forest, on piratical and Punchinello themes;
• Obama won’t support lowering drinking age [Newsweek]
• Such a shame for entrepreneurial plaintiffs, post-Proposition 64 if you want to sue a California business you might actually need to have been injured [CalBizLit]
• Time mag appeals $100 million Suharto libel ruling [IHT]
• Hey, no fair enforcing that fine print disclaiming liability for sweepstakes misprints [three years ago on Overlawyered]

• Remember those class actions against tech manufacturers for allegedly misstating the capacity of hard drives? Another one just settled, with buyers in for coupons and discounts, lawyers for $1.78 million [The Register, Cho v. Seagate Technologies settlement website]
• Watch what you say about lawyers, cont’d: Erie, Pa. paper thus far has fended off libel suit by Pittsburgh attorney over coverage of his run-ins with authorities over client treatment [Post-Gazette via Ambrogi]
• New at Point of Law: suicide risk of anticonvulsants?; Ohio AG Dann rebuked on foreclosure activism; simultaneous asbestosis and silicosis happens all the time at some law firms; Bush nominates an ATLA/AAJ member to a federal judgeship; and much more.
• Has a prominent investor with close ties to President Bush set up shop as an East Texas patent troll? [Troll Tracker, The Recorder]
• Embattled Tom Lakin and Lakin Law Firm, once high on the Madison County heap, fight to overturn $3.7 million legal-malpractice judgment [MC Record]
• Brent Coon suing former colleagues at Beaumont’s Provost Umphrey over division of billions in tobacco-fee booty [Texas Lawyer]
• UK judge criticizes “barking mad” human rights rules after prisoner refuses to leave his “comfy” jail cell to attend hearing [Times Online, Telegraph]
• “Six years after Enron, executives face greater risks—but investors are no safer.” [Gelinas/City Journal]
• United Farm Workers union threatens to sue over unflattering coverage [two years ago on Overlawyered]

Back in 2005, when the first lawsuits were filed over the Grand Theft Auto hot coffee mod, I wrote:

Me, I’m just amused by the thought of class action attorneys trolling for a named plaintiff parent who will testify that, while she was okay for her little Johnny to buy a game involving drug dealing, gambling, carjacking, cop-shooting, prostitution, throat-slashing, baseball-bat beatings, drive-by shootings, street-racing, gang wars, profanity-laced rap music, violent homosexual lovers’ quarrels, blood and gore, and “Strong Sexual Content,” she is shocked, shocked to learn that the game also includes an animation at about the level of a Ken doll rubbing up against an unclothed Barbie doll with X-rated sound effects…

Alas, Take Two games has given in to the blackmail and settled the case, but a sense of how frivolous it was can be seen from the following deposition excerpt of lead plaintiff Brenda Stanhouse, a schoolteacher in Belleville, Illinois, who will receive $5000 for her role in the litigation. Recall that Mrs. Stanhouse is alleging she was defrauded because she would not have bought a game that could be modified to include “pornography,” but take a look at pp. 67 ff. of the deposition, where she makes clear she didn’t have the faintest idea what was in the game that she did buy. Readers: type your favorite Stanhouse deposition excerpts in the comments.

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.

• Tab Turner’s Pearsonesque $2 billion lawsuit over Ford Explorer SUVs proceeds in California state court in Sacramento. [Sacramento Bee; earlier, June 18]
• West Va. judge holds hearing over YouTube videos disclosing plaintiff depositions. [AP/Insurance Journal; earlier, August 4]
• On Point has the complaint from Leroy Greer’s suit against 1-800-Flowers for failing to do enough to keep his wife ignorant of his flower purchases for his mistress.
• Movable Type appears to have swallowed several comments from earlier this month (including at least one comment from me). Apologies to everyone affected.

As I have repeatedly noted, the only reason the Chungs can be said to have been vindicated is that Judge Roy Pearson is more delusional and less sinister than the typical trial-lawyer extortionist. Had Judge Pearson accepted the $12,000 settlement the Chungs felt forced to offer between the expense of litigation and the small risk of Pearson mounting a case that successfully resulted in the giant fines imposed by DC consumer-fraud law, Pearson would have had a five-digit profit, and the Chungs would be out tens of thousands of dollars in litigation and settlement expense without any hope of recoupment. As Michael Greve demonstrates in “Harm-Less Lawsuits”, this is more than hypothetical: in consumer-fraud lawsuits alone, billions of dollars have been extracted from innocent defendants.

DMI’s Kia Franklin’s defense of her claim that the travesty of justice we have seen in Pearson shows that the system works? “Now, had Pearson collected the $12,000 settlement, we would have a whole new hypothetical and a whole new set of questions about the terms of the settlement (Would we have known the settlement amount? Would they have been able to publicize this? What were the lawyers’ strategies?) and the consequences thereof. So we can’t prematurely say that it would pay off for him.” Franklin goes on to deny that trial lawyer abuse even exists—a perhaps necessary position for her to take, given that the top of any list of abusers would include the indicted law firm Milberg Weiss, which funds her fellowship, in part from the successful extortion of billions of dollars using the same in terrorem tactics as Pearson.

As Peter Nordberg notes in the Overlawyered comments, “If [Pearson] is indeed representative, there should be thousands of cases just like it, and we may as well get to discussing those.” And indeed we should.

The Ford Explorer is a sport utility vehicle. Judge Roy Pearson, excited by the $67 million he anticipates receiving for his pants, is bringing a lawsuit in California claiming that every California Explorer owner is entitled a total of $2 billion from Ford because the Explorer is allegedly prone to rolling over, using the California version of the law that Pearson is bringing his pants-suit over. Note that the damages are not for an actual rollover, just damages because of the “fraud” that the vehicle might roll over, though at least some models of the Explorer are in fact less dangerous than an average SUV in rollovers, and safer than the average vehicle in other types of accidents. (IIHS reports that the average fatality rate for mid-sized 2-door SUVs is 63 per million vehicles, and the average fatality rate for the 2-door Ford Explorer is 49 per million vehicles—and that latter number includes crashes caused by defective Firestone tires. Note that this is publicly available information: where is the fraud?)

Oh, sorry, it’s not Roy Pearson, it’s Arkansas attorney Tab Turner who is bringing the lawsuit. [Hudson Sangree, "SUV rollovers put Ford's future in judge's hands", Sacramento Bee, May 24; official class notice from Sacramento County Court]

But because ATLA and Kia Franklin have condemned Roy Pearson’s lawsuit as a frivolous abuse of justice, I am sure that they will have no compunction against issuing the same criticism against millionaire trial lawyer Tab Turner for bringing a much larger and socially harmful lawsuit that might bankrupt Ford on the same bogus “consumer fraud” legal theory that Pearson used. Of course, there’s a difference between Pearson and Turner: Turner is asking for more money, and his claim has less factual basis.

A reader asks about yesterday’s post:

• Shouldn’t the 85-year-old grandmother &/or the 14-year-old’s parents (where are the 14-year-old’s parents, please?) be hauled into court and charged with contributing to the delinquency of a minor? If this was a grandfather, he likely would be in court on charges ….
• Has anyone asked the 14-year-old how, where, or from whom he got the extra scenes for the game??
• Said grandmother is now lead plaintiff in class-action lawsuit against game’s maker and others, claiming . . . what?
• How soon will this lawsuit be thrown out; how soon will it be declared “frivolous,” and how soon will the lawyers and the legal firm who filed this suit be either disbarred or sanctioned (or should they be punished at all)?

1. There’s no reason to charge anyone with delinquency of a minor. One can question the grandmother’s or parents’ wisdom, but they’re allowed to expose their kids to R-rated material. The distributors of the modification to the game might have trouble if they aren’t screening for age, but no one seems to seek to go after the shallow pocket.
2. The complaint makes no effort to claim that the kid ever had or accessed the extra scenes. I suspect the lawyers will claim that they don’t need to prove that to collect damages. They’re alleging the grandmother was deceived, that the defendants engaged in false advertising, that she wouldn’t have purchased a game if she had known about the hidden sex scenes, and that disgorgement of profits is appropriate—and not that the grandmother or the grandson was actually harmed in any way. I’ve made the nine-page complaint available on the Documents in the News page on the AEI Liability Project web site.
3. One hopes the lawsuit will be thrown out eventually, but the Pelman decision (Jan. 27) means that the lawsuit almost certainly won’t be held frivolous or result in sanctions or in anyone being disbarred. But that says more about Pelman and the sorry state of the law than the value of this lawsuit. See Michael Greve’s discussion of the issue in “‘Harm-Less’ Lawsuits?”

As we predicted on July 16, the ridiculous lawsuits over the Grand Theft Auto video game “scandal” have begun. The lead plaintiff in the putative class action is an 85-year-old grandmother, Florence Cohen, who bought the game for her 14-year-old grandson, who may have his own claims for emotional distress when his ninth-grade classmates beat him up. I suspect the eventual lead-plaintiff deposition I imagined is likely to be more entertaining than the game itself.

“Laurence D. Paskowitz, the lawyer who filed the lawsuit on behalf of Cohen, said no parent would knowingly buy an adult-only video game for their children.” Because a “M-for-Mature” 17-or-over game featuring graphic violence, profanity, and “strong sexual content” is so much more appropriate. The sex scenes that are the subject of the lawsuit are only available by taking affirmative steps to download a modification from the Internet and install it: if her 14-year-old grandson has that much freedom with a computer to be able to experience the pixeled sex (an allegation that is missing from press accounts), what else is he downloading?

The Class Action Fairness Act is already paying dividends; the case was filed in federal court, which increases the likelihood that federal judges will correctly decide that class certification is inappropriate. (AP, “Grandmother sues maker of ‘Grand Theft Auto’”, Jul. 27; hat-tip to W.F. and A.B.). Update: Jul. 28.