Overlawyered: Chronicling The High Cost Of Our Legal System

Archive for September, 2004

Lawsuits of the future

John Michael Dunton of Anaheim was not criminally charged after his five-month-old died of heatstroke September 9 after her father left her in his van for four hours instead of at her babysitter. Dunton held a press conference with his attorney: “I hope that the auto industry or the car seat manufacturers will have some kind of alarm or bell so [parents] won’t forget their kid in a car.” (Wendy Thermos, “After Child’s Hot-Car Death, Father Backs Alarm Systems for Parents”, LA Times, Sep. 25). One awaits with trepidation the first parent/attorney combination with the chutzpah to sue the auto industry for this oversight. Readers of Romenesko are appalled, though Michael Kaufman, tongue firmly in cheek, writes

We really need these warning systems all over the house. For example, I can’t tell you how many times I have started doing laundry without realizing that little Jimmy was still wearing the clothes that I was throwing in the washing machine. If I only had an early warning system on my washer/dryer. Or when I made the bed with Suzie still sleeping. I am actually thinking of suing Allstate for not warning me when I moved and left all the kids behind.

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Coors shareholder? Operators are standing by

“A New York-based class-action law firm is trolling the Internet for Coors shareholders concerned that they will be financially hurt by the company’s proposed marriage to Molson.” Manhattan attorneys Ronen Sarraf and Joseph Gentile posted a message on a Yahoo financial urging “upset Coors shareholders to send their grievance to an e-mail address. The message goes on to say: ‘An attorney will get in touch with you.'” The message boards “can be a good place to win business, [Sarraf] said. … ‘As for intensifying any dislike the public has against lawyers, there is very little one can do about that'”. (Tom McGhee, “Lawyers on Net seek investors worried by deal”, Denver Post, Jul. 27)(via Colorado Civil Justice League).

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9/11 fund may have been a mistake

Even Ken Feinberg, the man who ran it, acknowledges as much. Must-read column from Boston Globe columnist Jeff Jacoby (“Why the 9/11 fund was a mistake”, Sept. 27). One remarkable passage among many:

“You would get situations like this,” Feinberg said. ” `Mr. Feinberg, I’m the brother of the victim. Don’t let my sister get a nickel. The victim hated his sister, trust me.’ Then the sister comes in. `Is my brother spreading rumors. . .? My [deceased] brother and I loved each other.’

“Or: `Mr. Feinberg, I’m the biological parent of my son who was killed. Don’t you dare give the fiancee any money. That marriage was never going to take place.’ Then the fiancee comes in. `We were going to be married on October 11th.’ And you go back to the biological parent. `They were going to be married October 11th. You threw a shower for them. You said you were gaining a daughter, not losing a son.’ `Yeah, but on Sept. 10, my son told me it was off.’ “

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Attention publishers

[Bumped 9/27 for the benefit of readers who weren’t around when it ran last Thursday. Thanks to readers who’ve responded thus far.] Here’s a proposition that may be of interest to commercial publishers or, conceivably, to some nonprofit organizations:

Read On…

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And for something completely different

I’ve written a literary review of a historical novel (Emma Donoghue’s Life Mask) for Sunday’s New York Times Book Review; it has nothing at all to do with problems of the legal system. I’m at work on a second review for the same outlet and hope the relationship will be a long and happy one. (Walter Olson, “Women in Love”, Sept. 26).

Back on topic: yesterday’s publicity roundup omitted a few recent clips. To wit: I’m quoted in an article in Legal Affairs on the controversial new “litigation-finance” industry, which advances money to plaintiffs (often at very high interest rates) in exchange for a share of the booty (Daniel Brook, Legal Affairs, Sept./Oct.)(see Aug. 4, 2003). My Manhattan Institute colleague Robert Goldberg quotes me in a piece on the attacks on FDA general counsel Dan Troy over his initiative to have the agency intervene in state-court liability suits which threaten to contravene FDA policies (“The sacking of Troy”, Washington Times, Jul. 25)(see Jul. 14). And very kind things are said at PokerPulse Forums about me, about this site, and about my book The Rule of Lawyers in the course of a discussion of the lawsuits under California’s s. 17200 against Google, Yahoo, etc. for supposedly promoting online gambling (see Aug. 9).

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Update: blame it on Riyadh

Even though the 9/11 commission (debunking certain widely circulated stories to the contrary) concluded that the government of Saudi Arabia did not fund al-Qaeda, several institutional victims of the terrorist attacks, including Cantor Fitzgerald Securities and the Port Authority of New York and New Jersey, recently filed suit against a long list of foreign entities including the Saudi government and various financial institutions for their alleged role in the attacks (Larry Neumeister, “Port Authority to Join Suit Against Saudi Arabia Over 9/11 Attack”, AP/Law.com, Sept. 13). The U.S. government has been highly critical of the freelance use of private litigation to second-guess the state of U.S.-Saudi relations, which has in no way deterred colorful asbestos-tobacco zillionaire Ron Motley from setting up his own mini-CIA-cum-State-Department-for-profit toward that end (Jennifer Senior, “Intruders in the House of Saud, Part II: A Nation Unto Himself”, New York Times Magazine, Mar. 14)(see Jul. 11, 2003). And in the New York Observer, Nina Burleigh in February profiled attorney Brian Alexander of the prominent plaintiff’s air-crash firm of Kreindler & Kreindler, who had “already filed a suit — on behalf of the families of more than 1,000 9/11 families?against a list of foreign entities hundreds of pages long.” (“Air Disasters, Legal Fees And Justice for the Victims”, New York Observer, Feb. 23).

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Welcome “All Things Considered” listeners

National Public Radio’s widely aired news show ran a piece yesterday afternoon (Saturday) on lawsuit reform as a factor in the election; the reporter first interviewed me at a couple of minutes’ length, and then turned the floor over to two professors who took the opposite view. The second of the two profs carried on at length about supposed public misunderstanding of the McDonald’s coffee (Stella Liebeck) case in a way that made me wish Ted had gotten some air time. I’m likewise quoted in a Denver Post article analyzing Congress’s failure to pass any litigation reform this term (Anne C. Mulkern, “Lawsuit caps lose support at roll call”, Sept. 13). Karen Selick kindly referenced me this summer in a piece for Canada’s National Post (“Stacking the deck against big tobacco”, Jun. 2, not online). And New York’s esteemed Observer, the one on the orange paper, carried in its last issue a favorable-in-context reference to “the [unnamed] Overlawyered.com guy”, meaning in this case me rather than Ted. (Tom Scocca, “Blogging Off Daily Can Make You Blind”, New York Observer, Sept. 20).

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Bushmaster settles D.C. sniper case

Bushmaster Firearms Inc. of Windham, Maine, has agreed to pay $550,000 and Bull’s Eye Shooter Supply of Tacoma, Wash. has agreed to pay $2 million to settle families’ lawsuits over the 2002 D.C. sniper shootings (see Jul. 1, 2003). Dennis Henigan of the gun-control-through-litigation Brady Campaign was the lawyer representing the families. “Authorities believe that Malvo shoplifted the rifle from Bull’s Eye, where he and Muhammad had been seen checking out the Bushmaster that later disappeared.” The Bradyites’ theory was that the killings were the gun store’s fault because it lost too many guns, and the manufacturer’s fault because it did not cut off the gun store for losing too many guns. Henigan crowed that the settlement represented the first-ever payment by a manufacturer over charges of negligent distribution and the biggest-ever payment by a distributor. (Tom Jackman, “Gunmaker, Store Agree To Payout in Sniper Case”, Washington Post, Sept. 10). I’m quoted in a subscriber-only BestWire article discussing the implications of the settlement (“Bushmaster Settlement Raises New Liability Questions for Gun Makers”, BestWire, Sept. 13)($). Jeff Soyer also comments (Sept. 10).

Both companies’ contribution to the settlement will apparently come from liability insurance proceeds. Reports the Portland, Me. paper (David Hench, “Gun firm settles in sniper lawsuit”, Portland Press Herald, Sept. 10):

In explaining its decision to settle, Bushmaster said half of its policy limits had already been spent on defending the legal case, and the insurance company believed defending the case would exhaust the money available for coverage.

“The balance of the insurance policy not spent on legal fees, approximately $550,000, will go to the victims’ families for their grief,” said the company’s chairman, Richard E. Dyke.

“Bushmaster strongly believes and vigorously supports the rights of citizens to own and use firearms, and the settlement of this case in no way compromises that stand,” the company said in its release. “The Brady Group’s . . . attempt to eliminate gun rights of citizens has failed legislatively and will continue to fail with these frivolous lawsuits against gun manufacturers.”

But with the decision costing the company’s insurer $1 million, insurers could pressure Bushmaster and other gun manufacturers to make changes.

The legal assault on the firearms industry is richly funded by George Soros, among others; if you’d like to make a contribution to combat such suits there are several legal defense funds working on behalf of companies that get sued, including the National Shooting Sports Foundation‘s Hunting and Shooting Sports Heritage Fund, which allows you to earmark your contribution specifically for legal defense.

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After the trial, a red carpet for jurors

They do something nice for you, you do something nice for them:

[Santa Ana, Calif. attorney] Daniel J. Callahan took respect for a jury to a whole new level. His client manufactured blood analyzers used to diagnose illnesses, and it claimed it was defrauded by a firm that supplied its circuit boards. The jury returned a verdict of $934 million. After it was over, he invited jurors to a party at his home. And sent limousines to pick them up.

“Oh my God,” some of his friends said. “You did that?”

“Yeah,” he told them. “It’s legal.”

— David Hechler, “Winning: Successful Trial Strategies from 10 of the Nation’s Top Litigators”, National Law Journal, Jun. 21 (PDF — reprinted at Akin Gump site). And from the same publication:

When his client’s recent rape trial ended in a hung jury, defense lawyer Joseph G. Cavallo decided to hire some of the jurors to get advice, to the tune of $50 an hour. While hiring a juror is not a crime or prohibited by professional conduct rules in most states, ethicists disagree about the propriety of the ever more common practice.”

— Leonard Post, “Hiring Former Jurors as Trial Consultants Catches On”, National Law Journal, Aug. 27. And see Sept. 13 and Sept. 17-19, 1999 (after jury deadlocks in tax fraud trial of eccentric NYC businessman Abe Hirschfeld, he hands each juror a check for $2,500; not seen as illegal; other cases cited).

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Next: a Federal Tobacco Agency?

So what happens if the Bush Justice Department does manage to convince a federal judge (see Sept. 21, etc.) that the U.S. tobacco industry has constituted a “racketeering enterprise” for these many years and ought to pay the government $280 billion? Forbes traces some of the likely fiscal consequences: bankruptcy for even very large tobacco manufacturers; a de facto federal ownership stake in the industry through its role as chief creditor; and higher prices for smokers, who presumably count as an innocent party.

Oddly, the Forbes account has nothing to say about the consequences of a federal victory for the group that currently milks the most money out of the tobacco business, namely the state governments and plaintiff’s lawyers who yearly pocket vast sums from the 1998 multistate settlement (along with, in the former case, vast revenues from taxes distinct from the settlement). A good chunk of this expected future flow of settlement money has already been “securitized”, thus securing a short-term cash windfall for the states and lawyers, by selling it to bond investors; presumably the owners of these bonds are also at risk. Now, as asserted property interests go, the interest of these various parties in the future stream of ill-gotten income from the settlement heist has scant claim to be regarded as sacrosanct; still, it will hardly improve this nation’s reputation for security of property for this industry to be pillaged a second time through flimsy legal theories wielded by high authority. (Daniel Fisher, “Smoking dopes”, Forbes, Sept. 22).

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