Overlawyered: Chronicling The High Cost Of Our Legal System

Archive for 2005

Congress pre-empts vicarious car-lease liability

In a surprising stroke, Congress has included in its new transportation bill a provision that would abolish New York’s “vicarious liability” law, which places auto manufacturers and independent leasing firms on the hook for unlimited vicarious liability when cars they lease are later involved in accidents, regardless of whether the lessors have been negligent or behaved wrongfully (see my N.Y. Post op-ed of Jun. 9, 2003 as well as many posts on this site including Feb. 2, Sept. 5, etc.) The law, stoutly defended by New York’s trial lawyers and certain of their allied “consumer groups”, has driven most of the largest automakers out of the leasing business in New York and led to a steep hike in lease charges for those that remain. The bill is headed to the desk of President Bush, who is expected to sign it. (Tom Incantalupo, “Auto leasing may return to NY”, Newsday, Aug. 2; Joe Mahoney, “New law may cut car lease cost”, New York Daily News, Aug. 3; Ian Bishop, “Boost for NY Car Leasers”, New York Post, Aug. 3; Michael Cooper, “Congress Passes Bill Nullifying a State Law, and Making It Easier to Lease Cars in New York”, New York Times, Aug. 4)(many links via Henry Stern’s NYCivic.org).

The provision is found as sec. 1409 at p. 219 of the 1075-page bill, and is reprinted below in the post’s extended entry (definitions omitted). Among the bill’s notable features: it will take effect immediately to block newly filed vicarious suits, including those over accidents before the law’s effective date; it apparently applies to short-term car rentals of the Hertz and Avis kind, which have also been much discouraged in New York by the vicarious liability law; and (from a casual reading, at least) it also appears to pre-empt the laws of other states which impose some degree of vicarious liability after a crash on lessors (up to a capped figure of damages, that is; only New York imposes unlimited liability).

“All it will do is enrich leasing companies and automobile companies,” charged Shoshana Bookson of the New York State Trial Lawyers Association — a prediction whose accuracy should be testable soon enough. (Alan Wechsler, “Congress paves way for cheaper vehicle leases”, Albany Times-Union, Aug. 3). And according to the Staten Island Advance, Charles Carrier, a spokesman for Democratic Assembly Speaker Sheldon Silver, “said the law change would be unfortunate because it ‘means that companies can rent to anyone — even someone drunk — and not incur a liability.'” (Robert Gavin, “Bill would scrap N.Y. law allowing crash victims to sue leasing firms”, Aug. 3). In point of fact, sec. (a)(2) of the bill specifically preserves liability in cases of “negligence or criminal wrongdoing” by the owner or its affiliate.

P.S. Well, it didn’t take long to falsify Ms. Bookson’s prediction. An Aug. 4 editorial in the New York Daily News (“Congress repeals the Shelly Tax”) says: “Expecting the President’s signature, a number of car companies that fled the New York market years ago are now planning their return. And several others announced immediate $600 price reductions, proof positive that [assembly speaker and trial lawyer Sheldon] Silver was the sole reason New Yorkers have unfairly paid extra for leasing a car. Call it the Shelly Tax, and thank heaven, or Washington, that it is finally gone.”

Read On…

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Update: Sony pays $1.5 million to settle ghost-blurber suit

Another triumph of our class-action system: Sony Pictures has agreed to pay out $1.5 million to settle a class action on behalf of filmgoers allegedly persuaded to attend the films “Vertical Limit,” “A Knight’s Tale,” “The Animal,” “Hollow Man” and “The Patriot” by Sony’s use of a nonexistent reviewer, “David Manning”, to say nice things about the films in blurbs. “Manning” was listed in the blurbs as working for the Ridgefield Press, a genuine newspaper in Connecticut which however has never employed any such reviewer (Jun. 12, 2001, Mar. 13, 2004).

Class lawyer Norman Blumenthal said moviegoers would be able to collect $5 rebates by affirming that they attended the original runs of the movies; remaining moneys will go to charity. The AP’s coverage does not discuss how if at all the attendance claims are to be verified, nor the question of how much the lawyers are going to get in fees. When the California courts agreed to let the suit go forward as a class action, a dissenting judge called it a “farce” and “the most frivolous case with which I have ever had to deal”, saying: “We should be occupying ourselves with resolving legitimate disputes instead of laughable cases designed not to gain anything for the plaintiffs, but rather to generate fees for the only true beneficiaries of this disgrace, the attorneys.” (Alex Veiga, “Sony to Pay $1.5M Over Fake Movie Critic”, AP/Tuscaloosa (Ala.) News, Aug. 3).

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Detroy Marshall v. Burger King

From the Deep Pocket Files, sometimes I don’t have to add a thing:

Pamela Fritz accidentally backed her car into a lamppost while attempting to exit her parking space. Shifting forward and accelerating quickly to escape the lamppost menace, she lost control of her car and it went airborne, flying through the window and striking Marshall. It’s a whopper of a tale, but it’s all true. And Marshall’s estate sued the restaurant for wrongful death.

See, as the complaint alleges, defendants

“Improperly designed the Burger King restaurant building, by designing the building to be bricked up only a few feet from the ground, when the Defendant[s] knew or should have known, that permitting the building to be bricked up only a few feet from the ground may allow a vehicle from the parking lot to drive into the building, and crash through the glass on top of the brick.”

I’ll now quote from the Illinois appellate court decision:

Burger King and Davekiz filed a joint motion to dismiss, claiming they had no duty under the law to protect their patrons from the threat of runaway cars crashing into the restaurant. The trial court granted the motion and dismissed the allegations against Burger King and Davekiz with prejudice. The trial court reasoned:

“[T]he likelihood of this scenario is so minor that to guard against it in the manner suggested would require fortifying every building within striking distance of any crazed or incredibly inept driver, and the result would be to require foregoing any hope of aesthetically pleasing or business-enticing buildings. Obviously these two factors are less important that [sic] the safety of invitees, but the Court is required to do a balancing test and in doing so, I find that the duty stated by the plaintiffs is too high in this instance.”

Yet, amazingly, the appellate court reversed. Burger King has appealed to the Illinois Supreme Court. The always-looking-out-for-our-interests Illinois Trial Lawyers Association has filed a brief asking for affirmance. (Brian Mackey, “Car Smashing Store ‘Foreseeable’: Advocates”, Chicago Daily Law Bulletin, Aug. 2 ($) (via ICJL); Anthony Marshall, “Parking lots can create unexpected dangers if not inspected”, Hotel & Motel Management, Jun. 20). (The Anthony Marshall columns, which assume matter-of-factly that defendants will and should get sued for everything, have recommended that hotels ban water slides, chewing gum sales, bathtubs, and birthday candles. They’re valuable reading to explain why small businessmen hate lawyers.)

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Don’ts

Some don’ts for lawyers, all based on instances of judicially imposed sanctions reported recently on Law.com: don’t file a “wholly frivolous appeal” after the judge has warned you “Y’all better not come back in court anymore on this.” (George Robert Belche and Franklin H. Thornton, fined $1,000 in Georgia, as were their clients); don’t engage in “continuous and brazen” disrespect toward the court including the filing of a fraud claim “utterly barren of any scintilla of legal principles” as part of a “laundry list of unethical actions” (Philip Berg of Lafayette Hill, Pa., fined more than $10,000 and ordered to complete six hours of ethics training); don’t tell a client you’ve won $1.1 million for him in his medical malpractice case when you haven’t actually filed it (Philip Morell, formerly of Tenafly, N.J., stripped of his law license)(Scott Simonson, “Lawyers, Client Hit With $2,000 Fine for Filing Frivolous Case”, Fulton County Daily Report, Jul. 28; Shannon P. Duffy, “Lawyer Slapped With $10K in Sanctions for ‘Laundry List of Unethical Actions'”, The Legal Intelligencer, Jul. 25; Michael Booth, “Lawyer Disbarred After Telling Client Fish Story About Unfiled Case”, New Jersey Law Journal, Jul. 27).

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Jailed…for not breaking the law

Conflicting legal obligations in Illinois:

An Alton woman embroiled in a divorce case spent more than four hours in jail for contempt of court after she refused a Madison County’s judge’s order to return a handgun to her ex-husband, a convicted felon.

Elizabeth “Beth” Ritchie, 30, said that complying with Associate Judge Ellar Duff’s order, delivered at a hearing on Thursday, would have required Ritchie to commit a crime herself.

It is a felony in Illinois for a felon to possess a firearm, and for anyone to transfer a gun to a felon.

Duff said in an interview Friday that she did not learn until after the hearing that Ritchie’s ex-husband was a felon, and that she then ordered Beth Ritchie released from the Madison County Jail.

Ritchie said she tried to explain the situation to Duff in court but was ignored.

“I was being ordered by the law to break the law,” Ritchie said. “And when I wouldn’t, I got thrown in jail.”

(Paul Hampel, “Justice misfires over gun”, St. Louis Post-Dispatch, Jul. 22)(& welcome Crime & Federalism, Wave Maker readers).

More: reader Mickey Ferguson asks whether Ritchie could have avoided the predicament by volunteering to the gun over to the court itself, as in a case of escrow, with the court then free to turn it over or not to the felon. Good question, but I for one don’t know the answer.

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“Fart science”

The San Joaquin Valley Air Pollution Control District, which governs the dirtiest air in the country, is planning expensive regulation of cow flatulence—even though the scientist on whose data they rely, Frank Mitloehner of UC Davis, says that closing every single dairy in the valley would have no effect on smog. (Miguel Bustillo, “In San Joaquin Valley, Cows Pass Cars as Polluters”, LA Times, Aug. 2; Kathleen Hennessey, AP, Jul. 26; Mark Grossi, “Some balk at blaming dairy cows for Valley air pollution”, Fresno Bee, Jul. 15).

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Class actions: the “reverse auction”

Something about class actions that gives pause to even their most enthusiastic cheerleaders is the frequency with which they end in “reverse auctions”. “In big cases, defendants facing multiple suits can pit plaintiff firms against each other in hopes of getting the cheapest — and most comprehensive — settlement.”

Ethical gray areas in class action law have allowed reverse auctions to become a trend, said Joseph McMonigle, an ethics expert and partner at Long & Levit in San Francisco.

He said that competing filings can allow defendants to pick the plaintiff with the weakest case. With weaker opposition, he said, defense lawyers have more leverage to reach a cheap settlement.

There is the danger that a lawyer in that position might be tempted to cut a worse deal for his clients just to make sure he gets paid. Since there are few clear rules on the duty a plaintiff lawyer has to a prospective class that hasn’t been certified, there’s some ethical wiggle room. “It certainly isn’t something that makes the legal profession shine,” McMonigle said.

(Justin Scheck, “Reverse Auctions Lack Class”, The Recorder, Jul. 20).

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Reader request: one-way fee shifting

Here’s a request for readers of this site. Some well-placed folks are planning to take up the question of the unfairness of “one-way” fee shifting (plaintiffs collect if they prevail, but defendants don’t, and the definition of what it means to prevail is often itself unfairly stacked). This unfairness might be addressable by turning one-way fee statutes into two-way; by reverting to a so-called “American” (neither side pays) rule; by working to fix lopsided definitions of what it means to prevail; or by some combination of these approaches. (More: May 31).

So here’s the reader request: these folks are in a hurry to line up well documentable case histories of unfairness arising from current federal one-way fee-shifting statutes. Federal only, like this and this, please (not state statutes like this and this and this one). They need the examples within the next couple of days (yes, they should have planned ahead, but I just heard from them now). And, of course, the case histories need to be highly checkable and to exemplify unfairness even in the face of skeptical scrutiny. The best examples will probably already be the subject of existing court opinions or news coverage.

If you’ve got examples, send them along to editor [at] [this-domain-name]. [cross-posted at PointOfLaw.com]

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