According to the U.S. Chamber-backed Legal NewsLine, the litigation lobby is quietly preparing to push through a $1.6 billion (with a “b”) tax break that would let contingent-fee lawyers deduct expenses as made, rather than in the year of settling a suit. American Association for Justice lobbyist Linda Lipsen says Sens. Harry Reid and Max Baucus and Reps. Nancy Pelosi and Charles Rangel are among those on board, as well as “some Republicans”, but “the problem is there is not a tax vehicle yet,” — “You cannot have a stand alone bill to help lawyers … so we have to tuck it into something.” [cross-posted, and slightly adapted, from Point of Law; updates and additional links there]
Tagged as:
AAJ,
Charles Rangel,
Harry Reid,
litigation lobby,
Nancy Pelosi,
taxes
Given that nearly every member of Congress voted for CPSIA last year, it’s not surprising that that body of lawmakers was slow to respond to reports of the law’s catastrophic consequences. It’s beginning to happen now, though. Republicans have been in the lead, the latest sign being a strong letter from ranking House Commerce minority members Reps. George Radanovich (R-Calif.) and Joe Barton (R-Calif.) asking for a hearing. The motorcycle/powersports issue has also kindled widespread interest from Hill members (example: Rep. Michael Simpson, R-Idaho).
On March 4 there was a welcome break in the ice on the Democratic side as well. Rep. John Dingell (D-Mich.) sent a letter to the commissioners of the CPSC that, although cautiously worded, acknowledges many of the reports of calamitous consequences from around the country, something that his colleagues Rep. Henry Waxman (D-Calif.), Rep. Bobby Rush (D-Ill.) and Rep. Jan Schakowsky (D-Ill.) have been unwilling to do (when not dismissing those reports as based on misinformed or uninformed rumor). Of course, there is famously no love lost between Dingell and Waxman, who ousted him as Commerce chair. But Dingell’s stand could give cover for other Democrats to join in heeding the public outcry as legitimate. That letter in turn has prompted many CPSIA critics to write Dingell letters in hopes of arming him with more facts and arguments on the law’s ill effects: see in particular Rick Woldenberg and Wacky Hermit.
Waxman, for his part, has announced his intent to hold no hearing on the law until the Obama Administration installs a new chair at the Consumer Product Safety Commission. That serves the multiple functions of 1) stalling (while more small enterprises are driven out of business and thus are neutralized as political threats); 2) reinforcing the impression that the ball is in someone else’s court on addressing the law’s harms; 3) assisting in orchestrating whatever hearing is eventually held, since he expects an ally of his own to be installed as CPSC chair (the ultimate nightmare for CPSIA critics in that job would be someone like Pamela Gilbert, the class action lawyer, former plaintiff’s-lawyer lobbyist, and longtime Litigation Lobby figure who ran the Obama transition effort for the agency).
The membership of the House Energy and Commerce Committee, by the way, is listed here (hit “membership”; scroll to “Subcommittee on Commerce, Trade, and Consumer Protection” to find the members most directly involved). The membership of the Senate Commerce Committee is listed here and that of the Subcommittee on Consumer Protection, Product Safety and Insurance here.
Some miscellaneous weekend reading about the law: John Markley, Bureaucrash; Michael Maletic (Weil Gotshal & Manges), Republican National Lawyers Association; Ed Driscoll, Pajamas Media.
Public domain graphic: Grandma’s Graphics, Ruth Mary Hallock.
Tagged as:
CPSC,
CPSIA,
CPSIA and Congress,
Henry Waxman,
Jan Schakowsky,
litigation lobby,
PIRG,
Public Citizen
Add the August 28 LA Times to the list of newspapers looking askance at Joe Biden and his family’s cozy relationship to judicial-hellhole asbestos attorneys, in this case Madison County’s SimmonsCooper. (Chuck Neubauer and Tom Hamburger, “Business dealings of Biden family could be problematic for him”, Aug. 28). Unfortunately, the article somehow manages to miss the rationale for creating the trust fund, which was the degree to which so much asbestos litigation in the country is abusive.
Update: also, Am Law Daily.
Tagged as:
asbestos,
Biden,
Joe Biden,
litigation lobby,
Madison County,
politics
Daniel Fisher usually understands legal issues and has done some good reporting about trial-lawyer abuses, so I was very disappointed in today’s Forbes.com story (which quotes me about Obama and CAFA). Most notably, it’s not true that tort reform is a “catchall phrase for legislative measures designed to make it harder for individuals to sue businesses”–many tort reforms make it easier for individuals with legitimate claims to sue businesses. Tort reforms are simply measures to improve the accuracy and efficiency of the civil justice system; they’re opposed by trial lawyers because they derive billions of dollars of wealth from inaccuracies and inefficiencies in the civil justice system, and supported by businesses and consumers that are the victims of such inaccuracies and inefficiencies.
The article also inaccurately characterizes the Obama-Clinton medical malpractice legislation, and furthers the idea of “Kennedy is a moderate,” blurring the role of the Supreme Court by implicitly endorsing the liberal idea of it as a political superlegislature rather than a judicial body with an obligation to follow the law. The focus on anti-preemption legislation, as opposed to some of the dozens of other pro-trial-lawyer-lobby bills pending in this Congress and likely to be renewed next Congress, is unusual. (Separately, I disagree with Jim Copland; I don’t think McCain would hesitate to veto the giveaways to the trial-lawyer lobby if they’re in single-purpose bills and not attached as hidden amendments to omnibus legislation.)
I’m less surprised than Fisher and Bill Childs that Obama is getting money from defense firms, or, more accurately, attorneys who work at defense firms. The legal establishment is overwhelmingly liberal (hence the 3:1 fundraising advantage Obama has), and many defense attorneys are perfectly happy with a status quo that requires companies to pay them millions of dollars to continue doing business. (Some are too happy, and have vocally supported ABA resolutions that would harm their clients–something their clients should pay closer attention to.)
Kirkland & Ellis may have tobacco and asbestos defense in its portfolio, and many alumni in the Bush administration, but most Kirkland attorneys are doing other things, and a disproportionate number of them at the Chicago-based firm are going to be former classmates of or students of Harvard Law graduate and Chicago Law lecturer Obama, and have the six- and seven-digit incomes to give maximum contributions–and it only takes a few dozen $4600 contributions to make a firm look like a big contributor. (And, on the other hand, as if to demonstrate the bipartisan nature of most law firms, John McCain turned to a Republican attorney, former Reagan White House Counsel A.B. Culvahouse, at the largely Democratic O’Melveny & Myers to lead his vice presidential search.) During the primaries, the trial lawyers were giving most of their money to Edwards, Clinton, and Biden, but those fundraisers are now doing business with Obama, as the recent press coverage of Fred Baron shows.
But the article is correct that the outlook for federal tort reform is grim, and that reformers are looking at rearguard actions defending against numerous attempts to make the system worse.
Tagged as:
Barack Obama,
Biden,
Joe Biden,
John McCain,
litigation lobby,
politics,
Ted Frank,
tort reform,
trial lawyer earmarks
- Raelyn Campbell briefly captured national spotlight (”Today” show, MSNBC) with $54 million suit against Best Buy for losing laptop, but it’s now been dismissed [Shop Floor; earlier]
- Charmed life of Florida litigators Stanley and Susan Rosenblatt continues as Miami judge awards them $218 million for class action lawsuit they lost [Daily Business Report, Krauss @ PoL; earlier here, here, and here]
- Lerach said kickbacks were “industry practice” and “everybody was paying plaintiffs”. True? Top House GOPer Boehner wants hearings to find out [NAM "Shop Floor", WSJ law blog]
- It’s Dannimal House! An “office rife with booze, profanity, inappropriate sexual activity, misuse of state vehicles and on-the-job threats involving the Mafia” — must be Ohio AG Marc Dann, of NYT “next Eliot Spitzer” fame [AP/NOLA, Adler @ Volokh, Above the Law, Wood @ PoL; earlier]
- Sorry, Caplin & Drysdale, but you can’t charge full hourly rates for time spent traveling but not working on that asbestos bankruptcy [NLJ] More: Elefant.
- Fire employee after rudely asking if she’s had a face-lift? Not unless you’ve got $1.7 million to spare [Chicago Tribune]
- Daniel Schwartz has more analysis of that Stamford, Ct. disabled-firefighter case (May 1); if you want a fire captain to be able to read quickly at emergency scene, better spell that out explicitly in the job description [Ct Emp Law Blog]
- As expected, star Milberg expert John Torkelsen pleads guilty to perjury arising from lies he told to conceal his contingent compensation arrangements [NLJ; earlier]
- Case of deconstructionist prof who plans to sue her Dartmouth students makes the WSJ [Joseph Rago, op-ed page, Mindles H. Dreck @ TigerHawk; earlier]
- How’d I do, mom? No violation of fair trial for judge’s mother to be one of the jurors [ABA Journal]
- First sell the company’s stock short, then sue it and watch its share price drop. You mean there’s some ethical problem with that? [three years ago on Overlawyered]
Tagged as:
asbestos,
attorneys' fees,
bankruptcy,
Best Buy,
Bill Lerach,
Caplin & Drysdale,
Connecticut,
Dartmouth,
disabled rights,
Eliot Spitzer,
firefighters,
jackpot justice,
John Torkelsen,
kickbacks,
litigation lobby,
Marc Dann,
Milberg Weiss,
Ohio,
roundups,
Stanley and Susan Rosenblatt,
tobacco
We’ve previously covered the Senate’s boon to trial lawyers at the expense of consumers and shareholders, the Consumer Product Safety Commission Act, S. 2663: Feb. 20; Feb. 25; Mar. 5. (The bill was amended somewhat since we complained but Democrats, on a party line vote, tabled critical amendments to prohibit the use of contingent-fee attorneys and permit prevailing parties to recover attorneys’ fees.) The House passed a somewhat more sensible version of the bill unanimously, but Pelosi, for some reason, is trying to bypass her chamber’s proponents in constructing the “conference committee” that will work out the differences between the bills in favor of those of trial lawyers. Today’s Washington Examiner has the unholy details.
Tagged as:
CPSC Act,
litigation lobby,
Nancy Pelosi,
politics,
trial lawyer earmarks
The Civil Justice Association of California says it so well, we might as well just quote them:
“Fee arbitration offers cheaper, faster alternative to litigation.” Where did that headline run? Give up? In the California Bar Journal, the “Official Publication of the State Bar of California! The story beneath it praises fee arbitration between lawyers and clients, saying that arbitrators are reporting that their work “gives people immediate results, unlike protracted litigation.”
The Bar’s presiding arbitrator, Arne Werchick, is quoted as saying: “It’s a neutral program that gives everyone a fair shake.”
We hope Mr. Werchick, who was president of the trial lawyers association in 1980, sends copies of the article to personal injury and other plaintiffs’ lawyers in Sacramento and Washington. They are once again firing up their endless campaign to block people’s constitutional right to contract to settle future disputes by arbitration rather than going to court.
Separately, ABC News parrots the trial-lawyer line with misleading coverage of another arbitration involving Tracy Barker: they falsely report that Barker’s lawsuit was “killed” (when it will in fact be heard in the forum that Barker contractually agreed to litigate in), that the proceedings will be “secret” (when Barker has the right to publicize them the same way she can publicize a trial), and waits until deep into the story to acknowledge that the arbitration clause does not prohibit the employee from bringing litigation against her alleged rapist. Where’s John Stossel and “Give Me A Break” when you need him?
For more on the litigation lobby’s battle against arbitration, see the Overlawyered arbitration section.
Tagged as:
arbitration,
for me but not for thee,
John Stossel,
litigation lobby,
media bias
Amid deep and growing divisions among Senate Democrats, Senate Majority Leader Harry M. Reid (D-Nev.) last night abruptly withdrew [the Foreign Intelligence Surveillance Act that would have also] granted the nation’s telecommunications companies retroactive immunity from lawsuits charging they had violated privacy rights.
(Jonathan Weisman and Paul Kane, “Telecom Immunity Issue Derails Spy Law Overhaul”, Washington Post, Dec. 18). Reid had previously promised to pass the bill this month, but a handful of Democratic senators, most notably Dodd and Kennedy, threatened to block the bill because of the immunity provision. Reid had the votes to pass it (a filibuster attempt failed 76-10), but chose not to. Earlier: Nov. 5 and Oct. 31.
Update: Were the government’s actions were illegal? Maybe, though reasonable minds can differ. But the question is different from the one of the dynamic consequences of finding private liability here. If corporations are held liable every time they agree to cooperate with the government on a national-security issue that is potentially ambiguous, they just won’t cooperate at all without a court order. Perhaps that is the rule we want going forward. But if so, that policy choice should be the decision of Congress, not of unaccountable trial lawyers—and if it is the rule Congress wants, they should state it explicitly, so voters can hold them accountable for the consequences, rather than hiding behind trial-lawyer surrogates that later reward them for the earmarks to the trial bar. Should trial lawyers make terrorism policy?
Tagged as:
FISA,
Harry Reid,
litigation lobby,
politics,
telecom immunity,
terrorism
Let us imagine a writer for a left-wing magazine, we’ll call her Mephanie Stencimer, who wants to buy a car. But she has particular tastes: she doesn’t just want any old car. She wants a three-wheeled vehicle, perhaps because the feng shui is better, perhaps because she wants to spend less money on tires forced upon her by Big Rubber. She goes from car-dealer to car-dealer around town, but every single one of the dastardly businessmen insist that her only choice is a four-wheeled vehicle. She patiently explains the aesthetics of the triangular approach, but they shrug their shoulders and tell her it’s out of their hands and she has to have a four-wheeled car or nothing. Finally, she surrenders her preference for the three-wheeled vehicle, and takes a model with the extra wheel.
If you were to take seriously the arguments of Stephanie Mencimer at Mother Jones and the commenters there, and perhaps the occasional judge, this is an outrageous “contract of adhesion” that should be outlawed: Stencimer didn’t have a choice, didn’t have the bargaining power to make the auto-dealer sell her a three-wheeled car, and was forced to buy an extra wheel. But is this really a problematic failure of the market that requires government intervention?
[click to continue…]
Tagged as:
arbitration,
contracts of adhesion,
governors,
litigation lobby,
Michigan,
Public Citizen,
Stephanie Mencimer,
West Virginia
You remember last year, when the Association of Trial Lawyers of America tried to hide their identity and changed their name to the considerably less accurate American Association for Justice. (Aug. 2006; July 2006, etc.) Well, a new organization, led by J. Keith Givens, a former partner of the late Johnnie Cochran, has attempted to usurp the old acronym with an organization called The American Trial Lawyers Association, arguing that ATLA abandoned the name. “The name defines who we are and what we do,” which is very similar to the remark made by AAJ when they surrendered the Trial Lawyer title. Litigation, of course, ensued. (Jeffrey H. Birnbaum, “A Case of Trial Lawyers v. Trial Lawyers”, Washington Post, Nov. 30; commentary from Murnane, Lattman, Adler @ Volokh, Scheuerman). The Association of Trial Lawyers of America surrendered the American Trial Lawyers Association name decades ago when the American College of Trial Lawyers complained it was too similar, and the ACTL is also unhappy with the new ATLA’s use of the name. The fact that the previous sentence is so confusing suggests that the plaintiffs have a point.
Tagged as:
AAJ,
litigation lobby,
politics
Bill Childs notes a Baylor Law Review study polling Texas judges on whether they think there are problems requiring tort reform based on what they see in their own courtroom.
I can’t imagine why anyone thinks such a study will produce useful results. The study has typical issues, such as the typical anti-reform eliding of what “frivolous” means, ignoring that the state-law definition of “frivolous” differs from the common-sense meaning of the word used by many politicians. Another question asks whether judges have recently presided over cases where compensatory damages awarded were too high, but excludes cases where compensatory damages were required to be reduced by statutory limits, and the authors draw opinions from this intentionally biased question.
But there’s a larger problem with the very nature of the study. Judges who correctly run their courtroom and follow the law are generally not going to have runaway juries, so they are likely to say (and even say correctly) that their juries generally don’t produce outlandish results. The problem requiring reform are judges who are in the pocket of the plaintiffs’ bar, and create judicial hellholes, and let Mikal Watts and Mark Lanier run wild. If such judges thought there was a problem requiring tort reform, they wouldn’t let plaintiffs’ attorneys get away with what they get away with. Most reasonable judges would find it problematic if a plaintiff loaned money to a juror and had phone conversations with them during trial when a jury came back with an implausible multi-million dollar verdict for an overweight 71-year-old man’s second heart attack when he wasn’t even taking Vioxx, but the Starr County judge in Garza v. Merck signed off on the judgment: of course he doesn’t think anything’s wrong with that if he’s polled by professors, but that doesn’t make him correct.
Polling judges in judicial hellholes to find out whether there is a need for legal reform is like polling O.J. Simpson to find out if there’s a problem with domestic violence.
Nevertheless, expect to see the poll widely used by the litigation lobby and their academic water-carriers in upcoming months and years.
Post updated 10:30 PM to clarify nature of questioning.
Tagged as:
litigation lobby,
politics,
problem jurisdictions,
Texas
Yes, we’ve run several critical items on presidential fundraising lately (disclaimer), but this added bit seemed worthy of note:
…More than half of the Edwards donors who listed their occupations said they are attorneys, and they have given seven times more than any other profession, according to an Associated Press analysis of campaign finance data. …
In the first six months of the year, Edwards raised $23 million. But without the roughly $7 million collected from donors identified as attorneys, his numbers would fall closer to that of lower-tier candidates, such as New Mexico Gov. Bill Richardson and Connecticut Sen. Chris Dodd.
It should be noted that “donors identified as attorneys” is a term of art. Many donations from, e.g., lawyers’ family members or persons whose livelihood derives from litigation support services will not be so identified. Candidates Clinton and Obama have raised about one-sixth of their funds from donors identified as attorneys. (Mike Baker, “Attorneys still bankroll Edwards effort”, AP/Seattle Post-Intelligencer, Aug. 1). More on Edwards’ fund-raising here, here, here, here, here, etc.
P.S. I see the Times is also tackling the subject today: Leslie Wayne, “Lawyers’ Dollars? Not Just to Edwards”, New York Times, Aug. 9. (& welcome readers of Prof. Bainbridge, guestblogging at Andrew Sullivan’s).
Tagged as:
litigation lobby,
politics
Second Milberg Weiss Justice Fellow, same as the first? Bizarro-Overlawyered twists itself into contortions over the infamous $54 million Judge Pearson pants-suit. Cyrus Dugger’s replacement as Milberg Weiss Justice Fellow, Kia Franklin, recognizes that the anti-reform cause can’t be seen endorsing the patently-ridiculous lawsuit that is the laughingstock of the world. So, she dances over the issue: yes, this case is frivolous, but frivolous cases are rare, so there are no lessons to learn from the fact that a small business was forced to pay tens of thousands of dollars litigating an overbroad consumer-fraud claim, to the point that it was willing to pay $12,000 over a pair of pants to make the lawsuit go away and stop the financial bleeding.
Her evidence is a Public Citizen study—but she ignores our 2006 post noting that Public Citizen got its math wrong, and even distorts the distorted statistic beyond what Public Citizen claimed. (Public Citizen gerrymandered its claim to falsely say businesses were 69% more likely to be sanctioned for frivolousness than individual tort plaintiffs, but Franklin misreads that to say individuals, which is false even by Public Citizen’s numbers, which found by its own measure that individuals were sanctioned for frivolousness 86% more often than corporations. Note also the difference between the inaccurate “more likely” and “more often.”)
The really funny thing is that, under the Public Citizen narrow definition of “frivolous lawsuit” used in its study, Judge Pearson’s suit is not frivolous! When politicians speak of “frivolous” cases, they use it in the everyday English sense of “silly”: they mean the meritless cases, where, because of far-fetched legal theories, junk science, or overbroad liability rules, plaintiffs seek or realize recovery far beyond what makes good social policy—cases like Roy Pearson’s. Public Citizen’s study, however, in a typical litigation-lobby bait-and-switch (see, e.g., the Kerry/Edwards malpractice reform plan), defines “frivolous” with the narrow technical legal definition so that it can conclude (like Franklin) that frivolous litigation is “rare” and thus not a problem. (Amazing how many problems disappear when you assume them away.) The definition is so narrow that Pearson’s suit is outside of it: Pearson defeated motions to dismiss and for summary judgment, and received a $12,000 offer of judgment. (Pearson is apparently sufficiently emotionally troubled that he thinks he has a better shot seeking tens of millions from a couple of immigrant Korean dry cleaners than the thousands of dollars offered in settlement for a pair of pants, even though the judge who will be ruling on his case has given him plenty of hints that he has no hope of success.) The Pearson suit would have been excluded from Public Citizen’s count of frivolous suits for a second reason: Public Citizen ignored pro se lawsuits brought by attorneys like Pearson in its count of frivolous suits, as it had to to deflate the number of sanctions issued against individual tort plaintiffs and falsely claim that corporations are sanctioned more often.
We’re excited to see Franklin join the world of reformers and recognize that many more lawsuits are frivolous than what Public Citizen recognizes. We encourage her to read the data and arguments of those she mistakenly claims to oppose, and to scrutinize those she mistakenly thinks are her allies a bit more closely. Why is it alright for wealthy white trial lawyers to extort billions from big business using the same ad terrorem tactics (and even the same consumer-protection laws!) as a poor African-American pro se did to extort $12,000 from a small business? We encourage Franklin to examine the Association of Trial Lawyers of America’s racial double-standard.
And since Franklin agrees that the Pearson lawsuit is frivolous, we are eager to hear how she would define a frivolous lawsuit, and hope that she uses that definition consistently for both the Milberg Weisses of the world as well as African-American city employees.
Tagged as:
AAJ,
Kia Franklin,
legal extortion,
litigation lobby,
loser pays,
pro se,
Public Citizen,
Roy Pearson
