Posts tagged as:

legal extortion

July 22 roundup

by Walter Olson on July 22, 2014

  • Facebook fought dragnet-with-gag-order subpoena in NY police/fire disability-fraud case [Mike Masnick, TechDirt]
  • Two lawyers charged in alleged plot to extort millions from wealthy sheik [ABA Journal]
  • Judge declares mistrial, plans new trial date in case of allegedly faulty guardrails [Bloomberg, more, background]
  • Last year Overlawyered made the “Hall of Fame” and from now through Aug. 8 you can nominate other sites for the ABA’s annual Blawg 100 honor;
  • Supreme Court, which seldom grants cases raising non-delegation doctrine, agrees to hear Dept. of Transportation v. Assn. of American Railroads [Roger Pilon/Cato, Gerard Magliocca] And Prof. Philip Hamburger, author of bracing new book Is Administrative Law Unlawful (earlier), has just guest-blogged about it for a week at Volokh Conspiracy, and has a related podcast at Law and Liberty;
  • David Henderson writes rave review of new Peter Schuck book Why Government Fails So Often [Regulation, PDF; excerpts also at Econlib and more, earlier on Schuck book]
  • Legal academia stunned, in grief after highly regarded criminal law specialist Dan Markel is murdered in his Tallahassee home [PrawfsBlawg, Dave Hoffman, Marc DeGirolami]

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June 26 roundup

by Walter Olson on June 26, 2014

  • Court slaps “nightmare” Sacramento litigant Raj Singh with sanctions [KXTV, auto-plays, earlier]
  • Child overprotection: “I don’t think they even drink liquid soap, the gateway drug for sunscreen.” [Lenore Skenazy, Free-Range Kids]
  • Three-fer: personal injury, qui tam lawsuits against guardrail maker coordinated by disappointed patent litigant [Insurance Journal]
  • Donald Trump hit with sanctions in lawsuit for not disclosing insurance policy [South Florida Business Journal, our Trump coverage]
  • On AirBnB and sharing services, it’s lefty economist Dean Baker (con) vs. David Henderson (pro). Go David! [EconLib] London black cabs seek level playing field with Uber. Good idea, let’s deregulate ‘em both [Matthew Feeney, Cato]
  • Waffle House chairman claims attorneys committed extortion in ex-housekeeper’s sex lawsuit [Atlanta Journal-Constitution]
  • “Tenth Circuit Says No to ‘Death by Discovery’ in Dispute over Agreement to Arbitrate in Class Action” [Lars Fuller, Class Action Blawg on Howard v. Ferrellgas Partners LP]

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In a menacing letter that included the draft of a complaint, well-known entertainment lawyer Martin Singer informed his target that “I have deliberately left blank spaces in portions of the complaint dealing with your using company resources to arrange sexual liaisons with older men such as ‘Uncle Jerry,’ Judge ——, a/k/a ‘Dad’ (see enclosed photo), and many others. When the complaint is filed with the Los Angeles Superior Court, there will be no blanks in the pleading.” Now California appeals court judge Steven Suzukawa has ruled that the threatened disclosure was appropriately related to the financial dispute at issue and did not constitute extortion as a matter of law. [Hollywood Reporter, earlier]

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August 10 roundup

by Walter Olson on August 10, 2010

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“A Louisville police detective testified Monday that she was surprised to see television reporters outside the police station when Karen Sypher arrived to file a rape report last year against University of Louisville basketball coach Rick Pitino.” [USA Today, more] A year ago Sypher’s lawyer wrote Pitino a letter demanding $10 million on threat of suit. Sypher is now on trial for alleged extortion and her then lawyer has given testimony for the prosecution. [ABA Journal]

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The lawyer is a prominent figure in Orange County, Calif. politics. As usual, the tricky part comes in distinguishing between actual extortion and the way lawyers are often known to behave in ordinary, garden-variety settlement talks [Newport Beach Daily Pilot via ABA Journal]

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Updating our March 2008 coverage: The New Hampshire Supreme Court ruled last month that an attorney could properly be convicted of extortion for sending a demand letter threatening patently baseless litigation. The lawyer had sent the letter (which included a demand for monetary payment) to a hair salon threatening litigation over its purportedly discriminatory setting of different rates for men’s and women’s haircuts. A crucial element in the decision was that the lawyer did not in fact have a client in hand with a potential complaint as an actual customer of the salon. [Eugene Volokh, Above the Law; State v. Hynes, PDF] “Assistant Attorney General Elizabeth Baker said Hynes sent letters to at least 19 salons in the state.” [Concord Monitor 2008 coverage]

Prominent Austin, Texas lawyer and judicial candidate Mina Brees, who died Aug. 7, is the target of a probe by the state’s attorney general after sending scores of letters to Houston and Dallas area restaurants advising them that their business name registrations had expired and that they could buy them back by dealing with her at a cost of $20,000 or $25,000 each. The letters informed them that a client, Chicksports Inc., had taken possession of the names, but did not mention that she herself was the president of Chicksports or that it operated from the address of her solo-practice law firm. The Texas Restaurant Association had advised its members not to pay and said under state law lapses in name registrations do not deprive restaurants of their legal rights to their distinctive names. Brees had been on strained terms with a famous son, NFL quarterback Drew Brees. [Mike Tolson, Houston Chronicle/KHOU, Austin American-Statesman, more Houston Chronicle, Tex Parte, DeadSpin] Per the Austin American-Statesman, “Brees received the Austin Bar Association’s 2005 professionalism award for legal ethics and professionalism.”

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“The first time we ever lost a case in trial, it was 2001. We tried it in Beaumont, Texas, and lost $7.5 million. . . . The judge sat there through the trial reading a newspaper. At one point an objection was made, the bailiff taps him on the shoulder and says ‘judge, objection is being made.’ He looks at our lawyer and says ‘overruled.’ The plaintiffs’ lawyer raises his hand and says ‘no, judge, it was me.’ He says ‘sustained’ and goes back to reading the paper.” …

[U.S. Silica CEO John A.] Ulizio shares a memo that plaintiffs’ lawyer Joe Gibson sent to silica defendants in 2004 with a blunt offer: Settle our 9,000 cases for $900 million, or pay $1.5 billion in pretrial discovery alone, plus an even bigger verdict. “That’s the genius of the economics of litigation from the plaintiffs’ perspective. Sue a lot of people, sue on behalf of a lot of plaintiffs, get into an adverse jurisdiction, and then don’t make too big of a demand, so you can settle it for a relatively small percentage of the cost of defending the case,” Mr. Ulizio says.

Kim Strassel has a must-read account of how U.S. Silica beat a mass-tort fraud attempting to steal its solvency—and did so almost entirely by the luck of the MDL draw, as a different judge might have refused to conduct the hearings that exposed the wrongdoing. (See also Michael Krauss at Point of Law.)

Note that that $900 million proposal for 9000 bogus cases works out to $100,000/case—which is exactly what the Vioxx litigation settled for.

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Overlawyered readers may remember the problem of FACTA lawsuits when a poorly drafted federal law led to attorneys seeking $1000 for every occasion when a credit-card slip showed an expiration date.

Stroock & Stroock’s Daniel A. Rozansky and Scott M. Pearson have an op-ed in today’s San Francisco Chronicle discussing problems with a similar California law. California prohibits businesses from requesting or requiring “personal identification information” while accepting a credit-card payment; this includes address and phone number, but doesn’t specify what else. Entrepreneurial trial lawyers are asking courts to hold that it includes harmless information like ZIP codes: since the statute provides for $1000/violation damages in the absence of a showing of harm without a cap, extortionate lawsuits are easy to create–and a further drag on the already-suffering California economy.

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Readers may remember the episode in which Michael Flatley, impresario of the “Riverdance” and “Lord of the Dance” Irish extravaganzas, was falsely accused of rape by a woman who then demanded money. After the California Supreme Court, in a pioneering ruling, found that Flatley could countersue for extortion, he obtained a large default judgment against Tyna Marie Robertson, who, as noted in a news report we quoted at the time, “had dated other wealthy and well-known men through the years — relationships that sometimes ended in litigation”.

Now Robertson is back in the news leveling bizarre charges against another of her former paramours, Chicago Bears linebacker Brian Urlacher. Lowering the Bar has details (Dec. 14).

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The WSJ Law Blog reports that the two Yale Law women suing AutoAdmit/XOXOHTH posters are “seeking to resolve their claims against these defendants” without amending the complaint to name their identities, obtained over the course of a variety of subpoenas.  Thus, the recent amended complaint named only a single AutoAdmit poster, Matthew C. Ryan, who had apparently refused to settle–perhaps because while Ryan’s comments were obnoxious, they were not legally actionable.

Someone correct me if I’m wrong, but isn’t it historically the case that someone who says “Pay me money or I will file a lawsuit and issue press releases that reveal private facts you find to be embarrassing” guilty of blackmail or extortion in other contexts?  What distinguishes this case–especially when the underlying allegations are so legally flimsy?

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Sealed Air makes polyethylene foam for packaging material. The Great White plaintiffs allege that polyethylene foam in the soundproofing was part of the reason the Rhode Island Station nightclub fire spread so fast, killing 100–though they have no evidence that Sealed Air manufactured the foam in the club, not to mention the fact that the packing foam was never intended to be used as building material. Not to worry: with joint and several liability in Rhode Island, Sealed Air faced billions of dollars of potential liability because all of the other deep pockets (dozens of defendants ranging from a radio station to four other foam manufacturers to Anheuser-Busch to the bus that transported the band to the concert to a television station that covered the fire) have settled, Sealed Air couldn’t risk being held even 1% liable, especially given that at a trial plaintiffs would have no incentive to blame empty-chair or empty-pocket or settling defendants. Sealed Air will pay $25 million in protection money. (AP; Providence Journal; TortsProf). The miscarriage of justice continues, but the remaining defendants are apparently judgment-proof.

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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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If you wonder why insurance fraud and insurance expense are so high in New York state it’s because of opinions like AA Acupuncture Service v. State Farm Mutual Insurance Company. (The fact that the plaintiff is a quack-upuncturist immediately suggests problems, no?) Civil Court Judge Arlene P. Bluth agreed that there was “uncontradicted, overwhelming circumstantial evidence” that an accident had been faked. But State Farm was still not entitled to summary judgment on the litigation of bad-faith claims by three medical providers who insisted that State Farm was liable as the insurer of the woman who claimed to have been injured in the accident. (Plaintiffs deny fraud, though apparently wasn’t able to rebut the evidence of fraud at the motion stage.)

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Lisa Brockington hired employment-discrimination firm Tuckner, Sipser, Weinstock & Sipser to represent her in a discrimination lawsuit, and was impressed with her resulting settlement enough that she joined the firm as an office manager. But now Brockington is suing Tuckner, Sipser, Weinstock & Sipser on sexual harassment grounds, making a number of lurid accusations about the firm and about Jack Tuckner’s sexual practices (which the New York Post and Above the Law are kind enough to highlight for one’s titillation). Either the allegations are true, in which case the firm suffers from severe hypocrisy problems in addition to its legal troubles, or the allegations are false, in which case the firm wins settlements for plaintiffs who make false claims. Tuckner’s attorney, David Berlin, does indeed say the claims are false. More precisely, he says “[T]hese irrational and untrue charges are a reflection of the person bringing the charges.”  Brockington’s attorney is Louis Pechman. Tuckner regularly appears on television as a talking head on harassment law.

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Public Citizen’s attack on arbitration highlights the case of Alex Karakhanov. Public Citizen’s take on the anecdote demonstrates why Public Citizen has no business calling itself a consumer advocacy group.

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AP reports a Texas court has thrown out the infamous Ernst $26 million judgment; a New Jersey court has tossed $9 million of the judgment in McDarby. More details on Point of Law as available.

Ernst was the first Vioxx suit to go to trial. A jury awarded $253 million. Mark Lanier waited months before asking for a final judgment; at the time, I suggested that this was because he knew the case would be reversed on appeal, and did not want the bad publicity. Indeed, the appellate decision perhaps comes too late for Merck: the number of lawsuits increased from 6000 to 60000 in the months following publicity over the jury verdict, costing Merck billions of dollars in the later extortionate settlement.

With these two decisions, only three plaintiffs’ verdicts in favor of Merck remain.

Update: I still haven’t seen the McDarby decision, but an updated AP story indicates that it upheld the compensatory damages of $4.5 million, overturned the $9 million punitive damages verdict, and overturned the consumer-fraud judgment (which also saves Merck millions of dollars in plaintiffs’ attorneys’ fees).

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