According to Judge Posner, writing for a Seventh Circuit panel, that law can be triggered by an employee’s use of a secure file deletion program to erase data stored on his company-issued laptop. Declan McCullagh is uneasy (“Police blotter: Ex-employee faces suit over file deletion”, CNet, Mar. 10).
Archive for 2006
After the lawsuit settlement, a spending spree
When big-ticket lawsuits are settled, a trust fund is often established for the future maintenance of the person whose injury occasioned the suit. How secure are these trust funds from being raided and squandered by faithless guardians? In New Jersey, apparently not very secure:
Calling it an “extremely sad case,” a judge on Friday sentenced a Fair Haven woman to seven years in prison for misappropriating much of her disabled daughter’s $2.8 million trust to buy drugs and a Porsche, among other things….[Barbara] Marschall in October admitted misappropriating funds from the $2.8 million special-needs trust established through a settlement of a medical malpractice lawsuit against Monmouth Medical Center, Long Branch. She did so between 1996 and 2004. The funds were intended to be used for services and other care for her daughter, Liza, now 20, to supplement care provided by Medicaid.
According to an assistant Monmouth County prosecutor, Marschall, an admitted heroin and cocaine addict, by 2002 had “spent about $614,000 she had received as an award from the medical malpractice settlement in 1995, then turned to the trust fund for Liza, who was born with neurological problems and cerebral palsy. By December 2004, only about $100,000 of the trust fund remained.”
Since it’s common for large funds of money to be set aside for purposes of covering future medical and personal needs for disabled plaintiffs, at least two questions suggest themselves. First, how frequently are such moneys dissipated (whether through criminal depredation, as here, or simply through less spectacular failings of stewardship) before they were supposed to run out? Second, given that they owe their existence in most cases to legal action, shouldn’t such trust funds be better protected from guardians’ criminality or incompetence? Wasn’t anyone required to ask questions — or call in an auditor, or withhold their co-signature — as this mother drained the trust fund at a rate of more than $100,000 a month over more than two years? (Karen Sudol, “7 years for raiding fund of infirm girl”, Asbury Park Press, Feb. 11; Christine Varno, “F.H. woman sentenced for embezzling”, Red Bank Hub, Feb. 16)(via Rovito).
Antitrust enforcers get wiretap/bug powers
Quietly slipped into the reauthorization of the Patriot Act: first-time-ever authority for the Justice Department to engage in wiretapping and bugging of private premises for purposes of going after antitrust violators. The Patriot Act reauthorization was advertised as an emergency measure needed to combat international terrorism; very little was said about any supposed emergency need to enact miscellaneous prosecutorial wish lists at the expense of civil liberties. (Pamela A. MacLean, “Bugging the boardroom”, National Law Journal, Mar. 1; Skip Oliva, Voluntary Trade Council, Mar. 10 and Mar. 11; Reason “Hit and Run”, Mar. 10; Open Market (new Competitive Enterprise Institute blog), Mar. 10).
Lawyer discipline systems
“Not getting any better,” in the opinion of HALT, the consumer-protection group that looks out for the interests of legal clients. The group has issued a report card rating each of the 50 state lawyer grievance systems, updating a similar effort four years ago. Worst state: Utah. Worst big state: California, ranked #46. Best state: Connecticut. Best big state: Pennsylvania (yes, really). (David Giacalone, Mar. 8).
Latest newsletter
Our free periodic newsletter went out to subscribers last night, summarizing highlights of recent postings in terse yet wry style. To read the latest installment — or to join or leave the list, change your address, etc. — visit this page (requires Google registration).
American Association of Physicians and Surgeons
The Tucson-based group, founded in 1943, bills itself promisingly as “the only national organization consistently supporting the principles of the free market in medical practice”. It’s published material favorable to liability reform in its Journal of American Physicians and Surgeons (formerly Medical Sentinel). Before citing to AAPS publications as one might cite to JAMA or The Lancet, however, it would be wise to read this and learn more about the group’s indulgence for anti-vaccine, anti-fluoridation and anti-gay crankery, as well as what one of its contributors regards as the superiority of “the creation religion of Jehovah” over the “religion of evolutionary humanism”. On the vaccine issue, at least, “the Journal of American Physicians and Surgeons [has been] transformed into one of the primary media allies of litigators and plaintiffs seeking to review medical care after the fact, and find legal fault with physicians, vaccine developers and public health authorities who exercised accepted standards of care prevalent at the time they made their decisions.” (Kathleen Seidel, Mar. 12).
Milwaukee stadium fees: through the roof
The Miller Park stadium district sued Mitsubishi Heavy Industries over alleged defects in construction of the structure’s roof, and Mitsubishi filed a counterclaim. The case was settled a year ago for a $45 million payment between the main parties; now-unsealed court documents indicate that the parties rang up at least $37 million in legal fees. An attorney employed by insurer Travelers Property Casualty Co. of America, which is contesting some of the bills, says millions were spent on consultants and engineers with no detailed descriptions of the work performed. As for the lawyers’ own bills, “Some of the billing entries that have been disclosed are so outrageous they leave no doubt that the bills were never reviewed carefully, even by the firms submitting them,” wrote Katherine Stadler, [another] Travelers attorney. “A charge specifically labeled ‘do not charge client,’ time billed to bring the lawyers lunch, a $5,000 charge for one hour of expert work, and a bill for purchases at a Japanese souvenir shop are only a few examples.”
Several attorneys involved in the case, however, describe the fees and expenses as neither excessive nor disproportionate. “John Hinderaker, a Minneapolis attorney who helped defend the stadium district, said the ‘district bought a completely successful defense of an $87 million claim.” Unless there is another Minneapolis attorney of the same name, that would be the same attorney John Hinderaker who publishes the much visited PowerLine blog. (Don Walker, “Legal fees in Miller Park case go through the roof “, Milwaukee Journal Sentinel, Mar. 4) (via Marquette lawprof Rick Esenberg, who describes the billing in the case as “a tsunami of fees” (Mar. 5) which may however reflect the unfolding logic of expense in big lawsuits rather than anyone’s having been “dishonest or cavalier about the clients’ money”).
Help wanted (Calif. shakedown practice)?
Three years ago California’s notorious Trevor Law Group was found to be mass-mailing demand letters to small businesses alleging violations of the state’s ultra-liberal s. 17200 unfair business practices act, then settling the complaints for cash. A major furor ensued, and the state bar and Attorney General Bill Lockyer made gestures toward reforming the law to prevent law firms from running “shakedown” practices. But did it work? Mike Cernovich notices that a law firm has placed an employment ad on Craigslist seeking “additional counsel” to handle an “expanding workload”. What kind of workload? Well, it’s “primarily in the practice of wage and hour law inclusive of class actions … almost all [of our] cases are settled and are rarely tried.”
That business about settling rather than trying “almost all cases” got Cernovich’s suspicions up, and then he “saw something that made my jaw drop:”
In assessing the nature of the work and return on time spent it is helpful to keep in mind that the burden of proof is always on the employer to establish that he has paid the correct wages. The law requires that the employer keep accurate and timely maintained records that show hours worked and amounts paid. Failure to maintain such records is almost always at the heart of the case ….
Furthermore the employer will be liable for our legal fees if he is unable to defense the case. These two elements [the inability to prove us wrong and threat of attorneys fees] provide our clients with extraordinary leverage to resolve the matter.
Cernovich reads this as amounting to: “we sue employers knowing that it’s unlikely they’ll be able to produce records that will prove us wrong. … In other words, let’s just sue someone, hope he can’t produce any employment records to contradict us, threaten him with attorneys fees, and then settle the case post haste.” Or is he being too suspicious? (Mar. 8). (Updated/corrected shortly after posting to fix a mistake on my part about who placed the Craigslist ad; also retitled next morning.)
More on Trevor Law Group here and here. More on wage and hour law: Mar. 10, Jan. 9 and links from there.
Update: Trump decamps to Camden
Caesar’s forum-shopping dept.: Donald Trump has filed his $5 billion defamation suit against author and New York Times reporter Timothy O’Brien (see Jan. 25, Feb. 12) not in the courts of some boringly obvious place like, say, Manhattan, but in Camden, New Jersey, which happens to be “where his golf buddy, George Norcross II, the state’s behind-the-scenes political kingmaker, holds court. In 2001, Norcross, an exec at Commerce Bank, was caught on tape boasting of having engineered a judgeship for a political foe ‘just to get rid of him.’ Norcross’s claim to control the New Jersey courts was only bluster, his longtime lawyer, William Tambussi, said at the time. Tambussi has also been retained by Trump in his suit.” (Geoffrey Gray, “Intelligencer: Trump’s Jersey Trump Card”, New York, Mar. 13).
Arise, ye prisoners of high-paid brokerage jobs
The overtime-classification wars have reached Wall Street, with the result that $400,000-a-year stockbrokers are claiming with a straight face that they’re really hourly employees, contends Littler Mendelson’s Allan G. King:
In a spate of class action lawsuits against Merrill Lynch, Morgan Stanley, Prudential and other brokerages, filed principally in New York, securities brokers — who earned billions in commissions annually — now claim they were just hourly “wage earners,” who were misclassified by their employers to thwart the Fair Labor Standards Act and the California Labor Code.
Could we please, please get Congress to revisit the antediluvian FLSA and start preparing to repeal parts of it that make no sense today, or never made sense in the first place? (cross-posted from Point of Law).