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nonmonetary costs of litigation

Lessons from Bernie Marcus of Home Depot, who at age 49 was fired from a job in violation of what he considered his rights under a contract:

[Price Club founder Sol] Price told Bernie: “Why are you spending your young life suing somebody? Why don’t you just forget about it and go on and live your life? Otherwise, you’re going to end up with a room like this [in your home filled with legal papers].”

The next morning when Bernie woke up, he said he “really woke up. I called the attorneys and said, ‘You’re off the case. End the litigation. I’m going on with my life.’”

Just where did Bernie go? One year later in 1979, he and Arthur Blank launched The Home Depot, which became the fastest growing retailer in U.S. history.

[Harvey Mackay, Orlando Business Journal]

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Medical roundup

by Walter Olson on April 8, 2013

  • “It Didn’t Feel Like a ‘Win’” ["Birdstrike, M.D."/White Coat]
  • Federal ban on long shifts by hospital residents may have harmed safety, in part because it drove up number of patient handoffs [USA Today]
  • N.J. bill would narrow chance for suits against first aid, ambulance and rescue squads [NJLRA]
  • Bill in Georgia legislature aims to apply workers’-comp-like principles to med-mal [Florida Times-Union]
  • I mostly agree that med-mal reform is for states to decide, but Ramesh Ponnuru may underrate Washington’s legitimate role in prescribing legal consequences when it pays for care [Bloomberg/syndicated]
  • Shift burdens through price control: NJ assemblyman’s bill would prohibit insurers from considering docs’ claims experience except for cases that result in actual court findings [NJLRA]
  • Someone’s hand stuck in the sharps box again? Sixth time this month [Throckmorton]

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I’ve wrapped up my Big Questions Online discussion of litigation and humility with a concluding post here. Big Questions Online is published by the Templeton Foundation, and you’ll want to check out some of the other discussions led by interesting authors and thinkers.

What does the pursuit of litigation do to litigants’ characters? What does it do to the character of organizations and whole societies? Does it undermine the humility that some (though not all) of us deem an important virtue in persons and institutions?

This week I’m leading a discussion on that subject at the John Templeton Foundation’s Big Questions Online. It starts with a brief essay in which I note the older view, held by many religions and philosophical schools but now out of favor in much of academia, that litigiousness is a kind of vice, to which people are perhaps peculiarly susceptible if they take to an extreme what is otherwise the virtuous impulse to pursue justice. I cite familiar sources (Abraham Lincoln, Bleak House) as well as those perhaps less familiar (Kleist’s Michael Kohlhaas) that shed light on how pride in one’s own quarrels, even (especially?) those that are rightful, can distort perceptions and harden sympathies.

My observations, however, do no more than scratch the surface of a big subject on which there is much to say. It’s a moderated discussion and your comments are welcome through the week. And please pass on word to others who might be interested.

January 3 roundup

by Walter Olson on January 3, 2010

  • “A Patient Dies, and Then the Anguish of Litigation” [Joan Savitsky, NYT, more]
  • “Kern County’s Monstrous D.A.” [Radley Balko]
  • “Former N.Y. Judge Sentenced to 27 Months in Jail for Attempted Bribery” [NYLJ]
  • “ADA Online: Is a Website a ‘Place of Public Accommodation’?” [Eric Robinson, Citizen Media Law, background here and here]
  • “The New Climate Litigation: How about if we sue you for breathing?” [WSJ editorial]
  • Saratoga school district agrees to overregulate, rather than ban, students’ bikes [Free-Range Kids, earlier]
  • “Head of BigLaw pro bono department fails to pay income taxes for 10 years? How’s that happen?” [WSJ Law Blog]
  • Municipal subprime suits: “The Most ‘Evil’ Lenders Are Also, Conveniently, The Richest” [Kevin Funnell; more at Point of Law]

When the wrong defendant is named in a civil complaint — wrong in the sense of being “different guy with the same name” — you might think it would be relatively routine to order the complainant to compensate the bewildered target. But it’s actually unusual enough to rate news coverage. [Jim Dwyer, "Hello, Collections? The Worm Has Turned," New York Times]

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I’m scheduled to be on the John Gambling show on WOR-710AM at, er, 7:10 AM on Wednesday the 3rd, discussing my recent Congressional testimony on the costs of the litigation system.

Update: a podcast of the segment is available under “June 3″ on the WOR website.

I summarize my recent testimony on the Hill in today’s American:

As I discussed in recent testimony on Capitol Hill, if one takes conservative estimates from these economic studies and adds it all up, the total cost to the economy from excessive litigation can be estimated to be between $600 billion and $900 billion a year, the vast majority of which is simply wealth destruction. That is between 4 and 6 percent of GNP, a tort tax of between $8,000 and $12,000 a year for an average family of four.

The entire hearing is on YouTube, or you can watch a highlight reel.

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California has a double-digit unemployment rate, and it’s certainly not helped by regulatory red tape. The disabled now have equal access to Kirk’s Steakburgers in Cupertino, a supposedly otherwise-profitable business that closed rather than spend tens of thousands of dollars to come up to Americans with Disabilities Act compliance, not to mention lose three parking spaces in its tiny parking lot. (“Kirk’s Steakburgers closing its West San Jose location”, Cupertino Courier, Mar. 16 (h/t D.R.)).

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Today I testified before the Senate Republican Conference about the effect on the economy of excessive litigation. A podcast is available on-line and, for the insomniacs among you, the hearing will be broadcast on C-SPAN tonight at 10:56 PM Eastern and again at 2:09 AM Eastern. Also testifying was Life Without Lawyers author Philip Howard; Crystal Chodes, who lost her job because of the expense of a meritless ADA filing mill suit; Texas doctor David Teuscher; and arbitration expert and University of Kansas law professor Christopher Drahozal.

If you just prefer reading what I have to say, my written testimony is on-line also:

The total loss to the economy from excessive tort litigation above and beyond a baseline of an employment at will regime and an average industrialized tort system can be estimated at between over $600 billion and over $900 billion a year, 4.3% to 6.5% of GNP, or a tort tax of between $8,000 and $12,000/year for an average family of four. And this is very much a conservative estimate, as other economists find much stronger effects than I have estimated here, as I have not tried to estimate a number of identifiable secondary and tertiary effects of excessive tort litigation on allocation of economic resources, and as I have not tried to estimate the likely effect of recent Congressional expansions of tort liability in the last twelve months.

I was pleased to hear from multiple Congressional staffers who are regular Overlawyered readers: one even surreptitiously added the website into my official biography. Carter Wood talks about the hearing and Senator Cornyn’s remarks over at Point of Law.

Update: video on-line at C-SPAN; my segment begins at 43:15 or so. And C-SPAN2 is rebroadcasting at 4:16 pm Eastern on Tuesday, March 17, which suggests that my appearance will be at about 5 pm Eastern.

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Justinian Lane crows: Pfizer fined by an Australian trade group! Indeed it was; drug reps went off the reservation of what they were supposed to talk about without telling managers, and exaggerated the health effects of a competing drugs for personal profit. (Note that there was no need for a regulator or plaintiffs’ attorneys to get involved; this was entirely an Australian free-market self-policing arrangement through contractual agreements that fined Pfizer. Lane forgets to mention that part.)

Lane thinks this is a just result worth noting. So let us consider that trial lawyers do the same thing every day: lie about or exaggerate health effects of drugs for profit (just Google the name of any prescription drug to get a lawyer’s ad)–and without the intermediating effects of doctors to assess the claims and correctly inform patients, so it is clearly worse. But the lawyers do so with impunity, with no consequences for the adverse health effects on patients. (E.g., POL June 2007; POL Feb. 12.) There’s no private cause of action; and the trial bar and its professional organizations lionize such tactics, rather than punish them. All we can do is criticize plaintiffs’ lawyers for putting profits before people.

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  • “The accusatory legal document begins with several remarks defaming the skills, education, ability, integrity, and honesty of the physician being charged.” [Donald May, State Policy Blog] But hey, don’t take it personally, lawyers say [Mark Crane, Medical Economics] Good luck with that [Chiaramonte/Examiner, KevinMD, more]
  • Law throwing open Florida doctors’ peer review to lawyers was bad enough, but now state high court has applied it retroactively to records created before law was enacted [KevinMD guest post; background at PoL here, here, and here]
  • Even the New York Times hails as “sensible” laws encouraging medical apologies by making them inadmissible as evidence of wrongdoing [editorial]; but see counterexample to the usual reportage [Berlin/Am. Journal of Roentgenology via Buckeye Surgeon]
  • A med-mal defense attorney says plaintiffs would win more often in proposed “health courts” than they do in the cases he handles [Medical Economics, more, and similarly]
  • More evidence, this time from study of orthopedists, that docs rated as cold or callous attract far more than their proportionate share of suits [Orthopedics Today]
  • EMTALA, the law forcing emergency rooms to take all comers, “has created the very conditions it sought to avoid” [Edwin Leap, M.D.O.D.] Watch for “free-standing” ERs that dodge mandate by refusing federal dollars [Scalpel or Sword?, Health Care BS] Semi-defense of law [Over My Med Body]
  • Besieged state of dispersed emergency rooms and specialists is one reason for use of those risky helicopters that fly patients to the big city [Williams/Health Business Blog, M.D.O.D.]
  • Docs should stand up to family members demanding futile or inappropriate end-of-life care [Musings of a Dinosaur] Relatedly, daughter on dying father: “if you give him any more morphine, I will sue you.” [Fat Doctor]

(Most links via the highly recommended one-stop shop for medical blogging, KevinMD, e.g. this post and this one on EMTALA.)

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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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“– and not simply like liability risks.” Still smarting from the trauma of an obstetrics malpractice trial, a young doctor gets a surprising and heartening patient referral. (Steven Erickson, M.D., “The true final verdict of my malpractice trial”, Medical Economics, May 16) (so far as I know, not the same S.E. who’s guestblogged for us).

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Jurors’ trauma

by Walter Olson on May 31, 2008

First you get hauled in by compulsory process, then you start having to look at the emergency room photos: “North Carolina is considering allowing jurors access to counseling services to cope with post-traumatic stress that can occur after exposure to graphic images and disturbing testimony during a trial.” (Molly McDonough, “Jurors ‘Haunted’ By Time in Courtroom,” ABA Journal, May 16).

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Althouse on AutoAdmit

by Walter Olson on March 8, 2008

Advice to ponder (Mar. 6):

George Harrison once sang: “You serve me and I’ll serve you/Swing your partners, all get screwed/Bring your lawyer and I’ll bring mine/Get together, and we could have a bad time.”

If you sue me, I’m going to do my best to figure out how I can sue you. You want to think about that dynamic before you sue somebody. …

The decision to file a lawsuit is a momentous one. Think hard and think many steps ahead before you bring the courts into your life. Don’t sue angry.

More on the new suit filed by Anthony Ciolli, who had been named as a defendant in the earlier suit: Above the Law. Earlier on AutoAdmit/Xoxohth: Jun. 15 and Oct. 29, 2007.

December 2 roundup

by Ted Frank on December 2, 2007

  • Remember that ludicrous case where the Florida driver fell asleep, crashed his Ford Explorer, his passenger was killed, and a jury blamed Ford to the tune of $61 million? (See also Sep. 10.) A Florida court got around to reversing it, though only to grant a new trial under a variety of erroneous evidentiary rulings that prejudiced Ford, rather than because the suit was too silly to ever conceivably win in a just society. The remand goes back to the same judge that let the suit go forward and committed multiple reversible errors in favor of the plaintiff. [Ford Motor v. Hall-Edwards (Fla. App. Nov. 7, 2007); Krauss @ Point of Law; Daily Business Review; Bloomberg/Boston Globe]
  • Not really a man-bites-dog story, but Geoffrey Fieger (Aug. 25 and rather often otherwise) speaks. [ABA Journal]
  • Uh-oh: Former litigator hired to invest $100m in court cases for UK hedge fund. [Times Online]
  • The real NatWest Three deal. [Kirkendall; July 2006 in Overlawyered]
  • Homeowners fined $347,000 for trimming trees without a permit—after the Glendale Fire Department sent them a notice telling them to trim their trees for being a fire hazard. (h/t Slim) [Consumerist]
  • Disclaimers at children’s birthday parties (h/t BC) [Publishers Weekly]
  • British Christmas parades handcuffed by litigation fears. (h/t F.R.) [Telegraph]
  • Underlawyered in Saudi Arabia: A “19-year-old Saudi gang-rape victim was recently sentenced to 200 lashes and six months in jail for being in a car with an unrelated male when the attack occurred. Last week, her lawyer was disbarred for objecting too vociferously.” [Weekly Standard]
  • Don’t forget to vote for us at the ABA Journal Blawg 100.

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Dan Rather vs. CBS, cont’d

by Walter Olson on September 23, 2007

Beldar doesn’t hold back (Sept. 22) from telling us what he thinks:

Rather’s case — as incredibly, stinkingly, appallingly, cosmically bogus as it is — nevertheless has some considerable settlement value: Not because CBS is likely to lose to Rather if the truth is confirmed in court, but because individual decision-makers within CBS may have overwhelming vested interests in ensuring that the facts are not thoroughly probed in court.

Earlier: Sept. 19. More buzz: Howard Kurtz/WaPo, Eugene Volokh, New York Post “Page Six”, Bertovici/Portfolio.com.

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