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Roy Pearson

Judge Pearson update

by Ted Frank on August 2, 2007

(AM post bumped for PM update.)

A judicial panel is still deciding whether the Great American Pants-Suit plaintiff will keep his job as an administrative judge. A delayed decision is expected early next week.

Update to the update: Marc Fisher is reporting that the decision will be to start the bureaucratic process of firing Pearson. Amazingly, the chief ALJ recommended reappointing Pearson&mdash:until Pearson showed his typical good judgment by blasting the chief ALJ in an internal email as “evil,” causing his target to change his mind. Pearson will be entitled to a hearing (and who knows how many rounds of appeals) before he is officially fired; since April, he has been in a fully-paid no-work position as an “attorney-advisor.”

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The Associated Press and WSJ Law Blog cover Tuesday’s event, which was co-sponsored by ATRA and the Chamber. Raised so far: more than $64,000. Earlier coverage of the Roy Pearson pants case here (cross-posted from Point of Law).

July 17 roundup

by Walter Olson on July 17, 2007

  • Judge Bartnoff declines to reconsider decision against Roy Pearson in dry cleaner pants case [AP/WUSA]
  • Turnabout fair play? Louisville hospital sues trial lawyers, saying they injured its reputation and tried to extort settlement [Courier-Journal]
  • Employer sued for “post-traumatic stress disorder” after pranksters post co-worker’s profile on gay section of HotOrNot.com [McCullagh, CNet]
  • Former Belleville, Ill. cop sues over prosecutor’s letter suggesting his testimony not to be relied on [M.C. Record]
  • British race relations agency demands removal from shelves of Tintin comic book [Telegraph]; 22-year-old in Scotland sentenced for “racially aggravated breach of the peace” after website commentaries that went “beyond the realms of bad taste” [also Telegraph]
  • Farewell to that little patch of floating liberty, the South Carolina river shack [Zincavage]
  • Hey docs: if a plaintiff’s law firm calls your office to talk about a former patient, don’t call back [Medical Economics via KevinMD]
  • Yale Club replies to Judge Bork’s lawsuit [Turkewitz]
  • Arizona businesses aghast at hiring-sanctions law that suspends their license to operate should supervisor be found to have hired an illegal [Arizona Republic]
  • Grants from Bob Barker foundation (Jul. 5, 2001) help fuel animal rights boom in law schools [NLJ]
  • University of Utah settles lawsuit brought by devout Mormon student actress who refused to recite dramatic lines that were blasphemous or obscene [three years ago on Overlawyered]

…has requested reconsideration of the decision against him, and has filed a delusional brief in support. Rest assured his damages claims are more reasonable than before: he is now seeking only $35 million in damages.

The Chamber of Commerce fundraiser for the Chungs’ defense fund to pay $83,000 in attorneys’ fees defending against this suit is July 24.

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WSJ law blog has more details on Judge Roy Pearson’s plan to file for a reconsideration of the verdict against his pants suit, and also has a copy of the Chungs’ motion for attorneys fees, of which they’ve now racked up $83,000 (Lattman, Jul. 6).

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Anthony Sebok’s Findlaw column on the Pearson pants suit cites Overlawyered and repeats two points regular readers of Overlawyered and Point of Law have seen before:

  • Meritless cases often settle for nuisance value, thus making them profitable to bring;
  • Rule 11, as currently constituted, “has proven to be a very toothless weapon against abusive plaintiffs” and “does not effectively protect defendants from frivolous, or even, in some cases, fraudulent suits.”

Yet Sebok concludes that there is no epidemic of fraudulent litigation. I suppose it depends on one’s definition of “epidemic” and “fraudulent”; as we’ve noted before, Bill Lerach successfully swiped several billion dollars in nuisance settlements bringing meritless Enron litigation, helped by an erroneous district-court class certification. (Such erroneous class certifications helped make Madison County a judicial hellhole.) Sebok acknowledges that “lawyer-driven” cases where plaintiffs act as their own attorneys might merit loser-pays rules to deter meritless lawsuits that would be cheaper to settle than fight, but what makes most class-action litigation any less “lawyer-driven” such that they should be subject to different rules? (Cross-posted from Point of Law.)

By the way, Pearson has announced that he will appeal the trial court’s decision against him.

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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.

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As we’ve covered, Roy Pearson lost his $67 million lawsuit against his dry cleaners. Predictably, Bizarro-Overlawyered is trumpeting the outcome as evidence that the system works, that the “system has effective, built-in checks against such things.” I doubt many Overlawyered readers buy into that spin, but just in case, here are a few reminders about this case that, to the extent it had any merit at all, should have been a small claims suit:

  1. The Chungs offered Pearson $12,000 to drop this suit. If he had not been so greedy, they’d have been out that much money, plus a year’s worth of legal costs. The fact that our legal system enables people to extort tens of thousands of undeserved dollars from others is not evidence that there are “effective, built-in checks” on frivolous litigation.

  2. Putting aside any money issues, this lawsuit was filed on June 7, 2005; for more than two years, this case has been hanging over the Chungs’ heads. That’s two years of legal and financial uncertainty. Two years where they couldn’t make any significant business decisions because they had the possibility of an eight figure liability hanging over their heads. The fact that someone can drag out a case almost too small to have been on Judge Judy for two years is not evidence that there are “effective, built-in checks” on frivolous litigation.

  3. The Chungs “won” the case, but Pearson used the legal system to impose what was likely $100,000 in legal costs on them. Of course, there is a motion for sanctions pending against Pearson, but there are no guarantees here. Courts are very reluctant to impose sanctions, and even when they do (as the court probably will here) they very rarely impose sanctions sufficient to make the defendants whole. Note that sanctions are not automatic; the Chungs had to pay their attorney even more money to prepare a motion for sanctions. The fact that the Chungs have to endure two years of frivolous litigation and then cross their fingers and hope the judge awards them their legal fees is not evidence that there are “effective, built-in checks” on frivolous litigation.

  4. Oh, one other problem: the Examiner reported, even before the decision, that Pearson’s chances of keeping his job were slim. I think most reasonable people agree that Pearson hasn’t quite demonstrated that he’s fit to be a judge. But if he loses his job, the chances of the Chungs ever collecting any part of those sanctions drop from slim to none. (Their chances of recouping their losses are low to begin with — is it likely Pearson has $100,000 sitting around?)

  5. And let’s not forget one other party to this case, also abused by Roy Pearson: the taxpayers of the District of Columbia, who have to pay for the legal system. And they have no chance to get reimbursed.

  6. Finally, remember that the case is not necessarily over. It would be insane for Pearson to appeal, but that hasn’t proved to be a limiting factor in his actions in the past. The worst that happens is that he gets slapped with more sanctions, which he’ll never pay.

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Some Pearson reactions

by Walter Olson on June 26, 2007

WSJ Law Blog has the (long) opinion and (short) judgment in the case. Professor Bainbridge notes the pertinence of the legal principle of “puffery”, under which Pearson was no more justified in demanding the literal enforcement of the Chungs’ “Satisfaction Guaranteed” sign than would other customers be justified in suing United Air Lines after a grumpy flight for not providing “friendly skies”, Exxon for not putting a genuine “tiger in your tank”, Fox News for being less than “fair and balanced”, and so forth. Amygdala observes, of the $12,000 settlement offer that Pearson spurned from the Chungs:

Which is to say, if you’re a lawyer, or just knowledgeable about legal phrasing and documents, and willing to spend a certain amount of time generating and mailing documents, you can wind up being offered $12,000 if you’re sufficiently obnoxious and persistent, no matter how feeble, frivolous, and meretricious your claim is.

That’s a well-known, old, story, to be sure, but still worthy of note now and again.

And the WSJ Law Blog has an earlier interview with the Chungs’ lawyer, Christopher Manning, including this pertinent excerpt:

How’d all the publicity start?

A local neighborhood newspaper first picked up the story. Then WJLA – the local ABC affiliate — picked up the story, with me holding the pants. After that, Marc Fisher’s [Washington Post] column ran in late April which really set it off. [The story has since been featured on Today, Nightline, Good Morning America, MSNBC, Fox News, CNN and a host of other networks.]

Gosh. You mean the pants suit didn’t become a big worldwide story, as some of our friends in the trial bar have hinted, just because those nefarious legal reformers were looking for a far-out case to publicize? Next you’ll be telling us that Stella Liebeck’s McDonald’s hot-coffee award became a huge story because it was something the press found newsworthy and the public wanted to talk about, rather than because reformers plotted deep into the night to hype it.

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Welcome BBC listeners

by Walter Olson on June 25, 2007

I was a guest this hour on the BBC Radio 4 evening program “PM” with Eddie Mair, discussing the Roy Pearson lost-pants case. While most of our items on this site inevitably come from the USA, note that we have a section devoted to items from the UK as well.

A judge has ruled in favor of the defendant Chung family in the mishandled-dry-cleaning case, and awarded them (relatively minor) court costs. Pearson is expected to appeal; the Chungs’ lawyer says the family expects to ask eventually that he also be made to pay their attorney fees, but D.C. law sets the bar for such a request relatively high, so it’s by no means something they can count on. Coverage: Washington Post and its Marc Fisher and OFF/beat blogs, more. Earlier: here and here.

More: And here’s word of a fundraiser for the Chungs’ legal defense, next month in D.C., sponsored by the Chamber and ATRA.

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I’d like to make a correction. In my earlier post, I suggested that Milberg Weiss Justice Fellow Kia Franklin thought that Judge Roy Pearson’s $67 million lawsuit over a pair of pants was frivolous. I appear to have been mistaken in attributing such a common-sense view to her. Franklin has a lengthy post protesting that, while she thinks Pearson’s lawsuit is “ridiculous” and “crazy” (she has also called it “obscene”), she does not think it is “frivolous.” We regret the error.

But it is a useful illustration: when those who oppose civil justice reform say they don’t think frivolous litigation is a problem, it is because they define “frivolous litigation” so narrowly that even Roy Pearson’s lawsuit is not frivolous in their eyes. Well, that’s one way to make problems go away, by using doublespeak or narrow technical legal definitions to pretend they don’t exist instead of suggesting that there is a problem with the narrow technical legal definition.

[click to continue…]

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Our editor, Walter Olson, in today’s Wall Street Journal:

A few observations:
• Phrases like “Do you realize I’m a lawyer?” uttered in the course of routine disputes with storekeepers, neighbors, school principals, etc., probably account for more of the legal profession’s aggregate unpopularity than any number of scandals in the actual representation of clients.

• David and Goliath talk notwithstanding, legal action is often a powerful dis-equalizer of the playing field, as those who know how to work the system fleece the outsiders, the novices, the distracted and the trustful.

• Pretty much every other advanced country would have afforded the Chungs better protection against a lawsuit like this. Under proper “loser-pays” rules, the Chungs would be correctly construed as having won even if Mr. Pearson proves damages of, say, $1,000, since they would have prevailed on the actual issues in dispute. D.C. does have a weak “offer of judgment” rule that might let the Chungs recover some miscellaneous court costs — but not their major expense, lawyers’ fees — if Mr. Pearson loses or wins but a token sum. So even if they win, they’re bound to lose.

• The other source of Mr. Pearson’s power — his ability to hold the threat of huge penalties over the Chungs’ heads — arises from consumer laws that encourage complainants to multiply the stated penalty for a single infraction by the whole universe of a business’s clientele, or by all the days in the calendar, with no need to prove actual injury.

This sort of mechanical damage-multiplication has been a key engine in shakedown scandals in California (where roving complainants have mass-mailed demand letters to small businesses over technical infractions); in “junk-fax” litigation demanding billions from hapless merchants in Texas, Illinois and elsewhere; and in important sectors of litigation aimed at bigger businesses, including claims against credit-card providers and purveyors of “light” cigarettes. Whole dockets’-worth of opportunistic litigation would dry up if we revised these laws so as to require a showing of actual injury. Doing so would require overcoming epic resistance from the litigation lobby.

It’s nice to see that even the organized plaintiffs bar piously deplores Mr. Pearson’s abuse of the law. It would be even nicer if they agreed to stop opposing reforms that would give the Chungs of the world a fighting chance the next time around.

Earlier: June 17; June 14; Apr. 26; et cetera.

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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.

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The second day of the Roy Pearson pants trial happened yesterday; the Washington Post had another blog post from the scene of the trial. Highlight (or perhaps lowlight?):

It took more than 10 minutes and numerous attempts by both Manning and Judge Judith Bartnoff to get Pearson to answer a question about whether anyone has the right to walk into any cleaners and claim $1,150 simply by saying that their suit had been lost. Finally, Pearson said that the law requires that “The merchant would have an obligation to honor their demand.”

“So your answer is Yes?” Manning asked.

“Yes,” Pearson said.

The courtroom, in which it’s hard to discern any support for Pearson except from his mother and her friend, broke up in laughter. Derisive laughter.

Manning pushed ahead: Does Pearson believe that people should interpret signs “in a reasonable way?”

“Depends on the circumstances,” Pearson said.

Asked to answer yes or no, Pearson said, “No.”

According to the Post’s blogger, the trial is over, and now we just have to wait for the judge’s verdict, which should arrive next week. It’s risky to rely upon media coverage of a trial, particularly from non-lawyer journalists, but from the sound of things, the judge wasn’t significantly more impressed by Pearson than the rest of the civilized world was. (She did throw out one of his claims right away — his claim that “Same Day Service” was fraudulent because not all cleaning was done in one day even when the customer didn’t ask for it.)

Keep in mind that the defendants apparently made a formal offer of judgment in the case, in the neighborhood of $12,000 or so. So if Pearson wins, but wins less than that amount, he may be on the hook for all of the defendants’ legal fees over the last year and a half. Since those fees would amount to far more than the case was worth, it would be poetic justice.

Of course, nothing prevents Pearson from appealing! (Knock on wood.)

Update: Several readers have pointed out to me that the District of Columbia’s Offer of Judgment rule is less generous than the one I’m most used to; while the plaintiffs can recover their costs, these costs do not include attorney’s fees. Therefore, the Cleaners may be able to partly recover their expenses, but only partly.

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Roy Pearson’s $55 million pants lawsuit has begun; the Washington Post’s Emil Steiner is liveblogging the trial. There is a series of about ten posts so far, starting with this 10:02 AM entry.

In case you were holding your breath waiting to find out: the case doesn’t sound as if it has gotten any less frivolous. (Apparently Pearson has found a few dry cleaning customers who were also dissastisfied with their service. Well, I’m sold. He also somehow managed to invoke Godwin’s Law.)

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June 11 roundup

by Ted Frank on June 11, 2007

Updating earlier stories:

  • The Judge Pearson consumer fraud suit starts today. It’s exceedingly silly, but ATLA’s attack on Judge Pearson is hypocritical: the only difference between this consumer fraud suit and the consumer fraud suits ATLA supports is that it’s an African-American pro se going against a shallow pocket instead of a well-funded bunch of millionaires going against a deep pocket. The Fisher blog @ WaPo notes a publicity-stunt settlement offer. [via TaxProf blog]
  • Wesley Snipes playing the race card in his tax evasion prosecution would have more resonance if his white co-defendant weren’t still in jail while he’s out on bail. [Tax Prof; earlier, Nov. 22]
  • “Party mom host set for Virginia jail term” for daring to ensure high school students didn’t drink and drive by providing a safe haven for underage drinking. Earlier: June 2005. [WaPo]
  • Sorry, schadenfreude fans: Fred Baron settles with Baron & Budd. [Texas Lawyer; earlier Sep. 4]
  • Blackmail-through-civil discovery lawyer Ted Roberts (Mar. 19 and links therein) seeks new trial. [Texas Lawyer]
  • Second Circuit doesn’t quite yet decide Ehrenfeld v. Bin Mahfouz libel tourism suit (Oct. 2003). [Bashman roundup of links]
  • NFL drops claims to trademarking “The Big Game” as a euphemism for the trademarked “Super Bowl” (Jan. 31) [Lattman]
  • More on the Supreme Court’s “fake mental retardation to get out of the death penalty” decision, Atkins v. Virginia (Feb. 2005; Sep. 2003). [LA Times]
  • What does Overlawyered favorite Rex deGeorge (Sep. 2004) have to do with The Apprentice? [Real Estalker]

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Roy Pearson, the DC administrative law judge who made abusive litigation famous by suing his dry cleaner for $67 million over a pair of pants, has apparently heard all the public criticism he has received and taken it to heart. No longer is he asking for that kind of money over an article of clothing, according to the Examiner:

A customer who believes he was mistreated by a dry cleaner has dropped the pants from his suit.

Roy L. Pearson, who filed a $67 million lawsuit against the dry cleaning business that lost his pants, has lowered his demand. Now, he’s only asking for $54 million.

[...]

He is now focusing his claims on signs in the shop that have since been removed. The suit alleges that the three defendants, Jin Nam Chung, Soo Chung and their son, Ki Chung, committed fraud and misled consumers with signs that claimed “Satisfaction Guaranteed” and “Same Day Service.”

Oh, good. Now the lawsuit is only $54 million worth of frivolous instead of $67 million.

For all of you eagerly awaiting the outcome of this case, it is scheduled for trial on June 11.

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