“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.
Tagged as:
legal extortion,
mass tort fraud,
silicosis,
South Texas,
Texas
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.
Tagged as:
California,
class actions,
harmless lawsuits,
legal extortion,
privacy
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?
Tagged as:
AutoAdmit,
law schools,
legal extortion,
libel slander and defamation,
online speech,
technology
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.
Tagged as:
deep pocket,
fires,
legal extortion,
Rhode Island,
Rhode Island Station nightclub fire,
shotgun defendant selection
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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Tagged as:
class action settlements,
class actions,
cy pres,
feeing frenzy,
Grand Theft Auto,
legal extortion,
Ted Frank
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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Tagged as:
bad faith,
insurance,
insurance fraud,
legal extortion,
New York state,
procedure,
State Farm
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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Tagged as:
for me but not for thee,
harassment law,
legal extortion,
scandals
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).
Tagged as:
junk science,
legal extortion,
Mark Lanier,
New Jersey,
pharmaceuticals,
product liability,
Texas,
Vioxx
A customer complained to the staff that a man was in the women’s restroom in the Greenwich Village restaurant Caliente Cab Co. Given the risk of multi-million dollar liability of failing to act in the face of a warning if a customer were assaulted by a man in the women’s restroom, a restaurant bouncer ejected Khadijah Farmer, Khadijah’s girlfriend, and a third in their dinner party.
Unfortunately for the restaurant, Khadijah Farmer was not a man, but an extraordinarily masculine-looking lesbian (who says she is mistaken for a man on a “daily basis”).
Further unfortunately for the restaurant, New York City has an unusual law prohibiting discrimination on the basis of “sexual stereotyping.” Further further unfortunately, Ms. Farmer wasn’t satisfied when the restaurant offered her a free meal in response to her complaint, and went straight for the lawyers. Further further further unfortunately, a top-tier law firm agreed to work the case “pro bono,” assigned three attorneys to it, and ran to the courthouse, even after the restaurant agreed to sensitivity training for its employees.
Let’s agree: the bouncer made a mistake and should have taken the opportunity to look at Farmer’s ID. Women shouldn’t be thrown out of women’s restrooms for looking like men, though one who looks as masculine as Farmer has to reasonably expect questioning unless we’re going to go the unisex bathroom route.
Damned if it does, damned if it doesn’t; up against a law firm using a bazooka to kill a mosquito; and in a neighborhood where being on good terms with the gay community is important for business relations, the restaurant, facing weekly pickets from the Queer Justice League, rolled over and settled for $35,000 + $15,000 in attorney’s fees, which will eventually be extracted from the restaurant’s clientele in the form of higher prices. (Jennifer 8. Lee, “Sexual Stereotypes, Civil Rights and a Suit About Both”, NY Times, Oct. 10; Jennifer 8. Lee, “Woman Wins a Settlement Over Her Bathroom Ouster“, NY Times, May 14; Andy Humm, “Calls to Boycott Caliente Cab Company”, Gay City News, Jul. 19).
I ate at the Caliente Cab Co. on Bleecker in the summer of 1988 when I lived on 12th and University; next time I’m inclined to eat there, I’ll let them throw me out of the restaurant for a fraction of what they paid Ms. Farmer. (Similarly: Gothamist commenters.)
The good news is that the legal problems of New York’s poor and non-profits have been so thoroughly resolved that a law firm can devote substantial pro bono resources to punitively harassing a small business over a bouncer’s not especially unreasonable misunderstanding, and has successfully trained a couple of young associates that they can file a lawsuit to extract tens of thousands of dollars over a $50 dispute. Do Morrison & Foerster’s clients know that this is the kind of litigation they’re subsidizing?
Previously on pro not-so-bono: October 2004.
Tagged as:
Caliente Cab,
eat drink and be merry,
Khadijah Farmer,
legal extortion,
Morrison & Foerster,
pro bono,
restaurants,
sexual stereotyping,
sued if you do
- Easterbrook: “One who misuses litigation to obtain money to which he is not entitled is hardly in a position to insist that the court now proceed to address his legitimate claims, if any there are…. Plaintiffs have behaved like a pack of weasels and can’t expect any part of their tale be believed.” [Ridge Chrysler v. Daimler Chrysler via Decision of the Day]
- Retail stores and their lawyers find sending scare letters with implausible threats of litigation against accused shoplifters mildly profitable. [WSJ]
- Kentucky exploring ways to reform mass-tort litigation in wake of fen-phen scandal. [Mass Tort Prof; Torts Prof; AP/Herald-Dispatch; earlier: Frank @ American]
- After Posner opinion, expert should be looking for other lines of work. [Kirkendall; Emerald Investments v. Allmerica Financial Life Insurance & Annuity]
- Judge reduces jury verdict in Premarin & Prempro case to “only” $58 million. And I still haven’t seen anyone explain why it makes sense for a judge to decide damages awards were “the result of passion and prejudice,” but uphold a liability finding from the same impassioned and prejudiced jury. Wyeth will appeal. [W$J via Burch; AP/Business Week]
- Judge lets lawyers get to private MySpace and Facebook postings. [OnPoint; also Feb. 19]
- Nanny staters’ implausible case for regulating salt. [Sara Wexler @ American; earlier: Nov. 2002]
- Doctor: usually it’s cheaper to pay than to go to court. [GNIF BrainBlogger]
- Trial lawyers in Colorado move to eviscerate non-economic damages cap in malpractice cases [Rocky Mountain News]
- Bonin: don’t regulate free speech on the Internet in the name of “campaign finance” [Philadelphia Inquirer]
- “Executives face greater risks—but investors are no safer.” [City Journal]
- Professors discuss adverse ripple effects from law school affirmative action without mentioning affirmative action. Paging Richard Sander. Note also the absence of “disparate impact” from the discussion. [PrawfsBlawg; Blackprof]
- ATL commenters debate my American piece on Edwards. [Above the Law]
Tagged as:
campaign regulation,
Chrysler,
Colorado,
Facebook,
fen-phen,
Frank Easterbrook,
free speech,
Kentucky,
Kentucky fen-phen settlement fraud,
legal extortion,
MySpace,
nanny state,
nastygrams,
online speech,
Philadelphia,
Premarin,
Prempro,
racial preferences,
remittitur,
Richard Posner,
salt,
Wyeth
My latest Liability Outlook is on the Patent Reform Act of 2007:
Despite some in the media calling patent reform dead, on January 24, 2008, the Senate placed S. 1145, the Patent Reform Act of 2007, on the general calendar. The next few weeks will be critical to the legislation, which the House passed in September. Although much of the discussion has focused on the different perspectives and concerns that the high tech and the biotech/pharma industries have about the legislation, the fact remains that the patent litigation system is broken. Congress should make every effort to fix it by writing into this legislation reasonable formulas for damage awards and venue rules that discourage forum-shopping. …
Affiliates of Erich Spangenberg’s Plutus IP have sued 476 different defendants in 42 lawsuits. The vast majority of those lawsuits allege infringements of patents that Plutus IP purchased for $1,000. The use of invalid patents in litigation is more than theoretical. Philip Jackson sued his attorneys, Chicago plaintiffs firm Niro, Scavone, Haller & Niro, for malpractice after his $12.1 million jury verdict against Glenayre Electronics Inc. was reduced to under $3 million; Niro challenged the malpractice suit by claiming that th e patent Jackson had successfully enforced was invalid. In 2006, approximately 6,000 defendants were sued in 2,800 patent cases; in 2007, the six thousand mark was reached in early October, implying a 30 percent increase in patent litigation in a single year. Such litigation stifles substantial technological innovation. Patent trolls claim to block entire fields, and one cannot hope to innovate in these areas without the financial capital to handle the threat of patent litigation. IBM has 370 corporate patent attorneys, not just to avoid the pitfalls of infringement, but to create a patent portfolio that can provide counterclaims (or cross-licensing opportunities) if a commercial entity were to sue them for infringement. Since the late 1990s, patent litigation costs have outstripped patent profits.
Tagged as:
Eastern District of Texas,
legal extortion,
Liability Outlook,
patent trolls,
technology,
Ted Frank,
tort reform
(Updating and bumping Feb. 4 post about to roll off bottom of page because of new comment activity)
- Judge Fallon denied the motion of Florida plaintiffs to expedite a hearing on their inclusion into a settlement when they did not even bring suit (Jan. 30). Merck and the PSC are required to respond Feb. 15, and the hearing will be Feb. 21, where one can expect the motion to be denied.
- At Point of Law, I comment on the recent grand jury investigation into Merck marketing of Vioxx.
Update, Feb. 8: separately, Merck yesterday settles for $650 million different Medicaid fraud allegations over the marketing of Vioxx and other drugs. The qui tam relator will get a jackpot award of $68 million. [WaPo; DOJ; Merck] The pricing theories at the center of these lawsuits—which hold Merck liable for purportedly charging too little—definitely deserve longer discussion another time.
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Tagged as:
forum shopping,
Illinois,
legal extortion,
Madison County,
Manhattan Institute,
New Jersey,
pharmaceuticals,
product liability,
qui tam,
Vioxx,
Wyeth
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.
Tagged as:
baseball,
class actions,
Grand Theft Auto,
harmless lawsuits,
Illinois,
legal extortion
Libertarian medical school blogger “Frommedskool” has been critical of the Vioxx litigation (regularly citing to our coverage at Point of Law). An April 2006 post about the Cona/McDarby case, however, appears to have generated a December 2007 comment from someone calling himself Mark Lanier, the plaintiffs’ attorney in the case:
Third, there was a huge amount of info Merck had that it never gave the FDA, there were smoking gun memos and emails, and there was huge harassment of the medical community done by Merck. For example, Merck did a full meta-analysis of placebo trial that showed a statistically significant increase in heart attacks, but Merck excised that from the report given the FDA. Even Merck’s head admtted they should have given the analysis to the FDA.
(Point of Law discussed the so-called withholding of the meta-analysis back in 2006. It wasn’t all that.) Fascinatingly, this comment immediately provokes comments from another lurker (just two hours later?!) claiming to be a plaintiff, reasonably asking why, if the evidence was so good, Lanier was agreeing to settle 47,000 plaintiffs’ cases for under $5 billion, essentially a nuisance settlement given that victorious plaintiffs were being awarded in the millions and tens of millions.
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Tagged as:
legal extortion,
Mark Lanier,
New Jersey,
product liability,
Vioxx
