Overlawyered: Chronicling The High Cost Of Our Legal System

Archive for August, 2007

Stoneridge order

The Supreme Court issued the following order today:

The motion of Former SEC Commissioners for leave to file a brief as amici curiae out of time is granted. The motion of John Conyers, Jr. and Barney Frank for leave to file a brief as amici curiae out of time is granted. The Chief Justice and Justice Breyer took no part in the consideration or decision of these motions.

Respondents had objected to the out-of-time filing by the Former SEC Commissioners. Separately, Tony Mauro speculates in the Legal Times whether Roberts or Breyer will “unrecuse” themselves. (Mauro quotes me and Professor Bainbridge (who gets all the good lines); the “anti-investor opinion” language is Mauro’s, however, and not mine: as I wrote in the Wall Street Journal and expressed to Mauro, the lower-court decision was decidedly pro-investor, if anti-trial lawyer.) As the order suggests, however, if Roberts and Breyer are going to divest themselves of Cisco stock so they can participate in the case, they have not done so yet. Earlier: Aug. 15; POL May 20.

Full disclosure: As an unnamed class member, I am a plaintiff in Stoneridge, and would be entitled to some small amount of class recovery. Also, I hate hate hate respondent Scientific-Atlanta with a deep burning passion, not least because Scientific-Atlanta attorneys subjected me to a harassing subpoena. Nevertheless, a victory for petitioners would be disastrous.

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Podcast: The Role of State Attorneys General

The Federalist Society has posted a podcast of their recent panel:

Recently there has been growing discussion concerning the appropriate role of state Attorneys General. Some argue that state AGs have overstepped their boundary by prosecuting cases and negotiating settlements that have had extraterritorial effects, and sometimes even national effects. Others argue that state AGs are simply filling a vacuum left by the failure of others (for example, federal agencies) to attend to these issues. In light of this debate, the Federalist Society hosted a panel in Washington, D.C. featuring several state Attorneys General who discussed the proper role of state AGs.

Panelists included:

* Hon. Bob McDonnell, Attorney General of Virginia
* Hon. Donald Stenberg, former Attorney General of Nebraska; Erickson & Sederstrom
* Hon. John Suthers, Attorney General of Colorado
* Hon. J. B. Van Hollen, Attorney General of Wisconsin
* Ms. Peggy Little, Little & Little; Director, Federalist Society Pro Bono Center, Moderator

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A $50 Star-On Machine for Sneetches who wish to be Star-Bellied

Two groups claiming to be American Indian tribes are offering membership for $50. The AP report (via Hit & Run) suggests that the memberships are being sold for purposes of evading immigration laws, but no one explores the affirmative action possibilities, though Dr. Seuss anticipated such a scheme in 1961. Alas, the two groups are not federally recognized Indian tribes, so the deal is just a scam.

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Judge Murphy libel suit update

Via Rossmiller, more on Judge Murphy’s libel suit:

Though [Judge] Murphy won his case against the Herald, he has not emerged unscathed. The Commission on Judicial Conduct filed charges last month with the Supreme Judicial Court alleging that Murphy sent letters to the Herald that constitute “willful misconduct which brings the judicial office into disrepute.”

Murphy sent the letters to Purcell after the verdict, requesting a private meeting to discuss getting more money from the tabloid, according to the commission.

“You will bring to that meeting a cashiers check, payable to me, in the sum of $3,260,000,” wrote Murphy in a handwritten letter on Superior Court stationery. “No check no meeting. You will give me that check and I shall put it in my pocket.”

In another letter, Murphy wrote, “It would be a mistake, Pat, to show this letter to anyone other than the gentleman whose authorized signature will be affixed to the check in question. In fact, a BIG mistake.” A date has not yet been set for Murphy’s hearing on the misconduct charges.

Earlier this month, Governor Deval Patrick rejected an appeal by Murphy to retire early with a lucrative disability pension based on his contention that he has post-traumatic stress disorder as a result of the defamation case.

Murphy, not satisfied with his $3.41 million collection from the Boston Herald, has sued the Herald’s insurance carrier for $6.8 million for alleged bad faith. (Shelley Murphy, “Judge seeks $6.8m from Herald’s insurer”, Boston Globe, Aug. 18). Earlier: Jul. 15, May 11, Dec. 23, 2005, etc.

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Survey of Texas judges

Bill Childs notes a Baylor Law Review study polling Texas judges on whether they think there are problems requiring tort reform based on what they see in their own courtroom.

I can’t imagine why anyone thinks such a study will produce useful results. The study has typical issues, such as the typical anti-reform eliding of what “frivolous” means, ignoring that the state-law definition of “frivolous” differs from the common-sense meaning of the word used by many politicians. Another question asks whether judges have recently presided over cases where compensatory damages awarded were too high, but excludes cases where compensatory damages were required to be reduced by statutory limits, and the authors draw opinions from this intentionally biased question.

But there’s a larger problem with the very nature of the study. Judges who correctly run their courtroom and follow the law are generally not going to have runaway juries, so they are likely to say (and even say correctly) that their juries generally don’t produce outlandish results. The problem requiring reform are judges who are in the pocket of the plaintiffs’ bar, and create judicial hellholes, and let Mikal Watts and Mark Lanier run wild. If such judges thought there was a problem requiring tort reform, they wouldn’t let plaintiffs’ attorneys get away with what they get away with. Most reasonable judges would find it problematic if a plaintiff loaned money to a juror and had phone conversations with them during trial when a jury came back with an implausible multi-million dollar verdict for an overweight 71-year-old man’s second heart attack when he wasn’t even taking Vioxx, but the Starr County judge in Garza v. Merck signed off on the judgment: of course he doesn’t think anything’s wrong with that if he’s polled by professors, but that doesn’t make him correct.

Polling judges in judicial hellholes to find out whether there is a need for legal reform is like polling O.J. Simpson to find out if there’s a problem with domestic violence.

Nevertheless, expect to see the poll widely used by the litigation lobby and their academic water-carriers in upcoming months and years.

Post updated 10:30 PM to clarify nature of questioning.

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Alcohol isn’t tobacco, unfortunately for trial lawyers

Class action lawyers — led by David Boies III, son of famed litigator David Boies — continue to try to attack the alcohol industry the same way they did the tobacco industry, but with far less success. Back in June 2006 we reported that Boies the Younger had been racking up an impressive track record… of losing. His lawsuits are based on the marketing practices of the alcohol companies; the claim is that the advertising was aimed at (who else?) children. But the suits don’t allege any actual harms suffered by, well, anybody. Instead, they claim that the marketing caused the plaintiffs’ underage children to buy alcohol. Even with creative lawyering, the only damages that they could allege were that the kids spent their parents’ money on the alcohol.

The lower courts have laughed these suits out of court, and last month, in response to Boies’ appeals, the Sixth Circuit did the same (PDF), finding that the plaintiffs didn’t even have standing to bring the suits. And when they did so, they gave a little civics reminder of how our legal system is supposed to work:

In any event, if outlawing the actual sale and purchase is insufficient to remedy the alleged injuries (which is the premise underlying the plaintiffs’ theories), then outlawing mere advertising must be insufficient as well. Consequently, the plaintiffs cannot demonstrate redressability. If these plaintiffs are convinced that alcohol advertising (i.e., First Amendment commercial speech) should be outlawed, then the means must be by legislation or constitutional amendment, not by judicial fiat.

In a rational world, this would be the end of these trial lawyer efforts. But since there’s no loser pays, our legal system doesn’t work that way. Trial lawyers can keep filing these over and over again in state after state, tweaking their arguments slightly from time to time, hoping to win the lottery; all they need to do is prevail once to earn back their entire investment in this litigation scheme. Whereas the alcohol companies have to win every one of these suits to avoid a backbreaking financial penalty.

Read On…

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West Virginia Supreme Court benchslap

Above the Law calls opinions where judges criticize one another “benchslaps,” and there’s a doozy of one in West Virginia, made all the sweeter by the appropriateness of the facts for Overlawyered.

Robert Cleavenger and Marissa Strahin were lovers, but at some point the relationship ended. Strahin, pregnant with Cleavenger’s child, moved in with Earl Sullivan in Braxton County, West Virginia. This perturbed Cleavenger, who decided to resolve the matter with a high-powered rifle. Thinking discretion the better of valor, Sullivan fled his property in a car, taking Strahin and her brother, Daniel Strahin, with him. Cleavenger pursued, and fired at the fleeing car, hitting Daniel in the arm.

Now the lawyers enter the picture. In 1999, Daniel Strahin and his parents sued Cleavenger and his parents, and also sued Sullivan on the grounds that it was foreseeable that Cleavenger would come after people on Sullivan’s property. The Strahins demanded that Sullivan’s insurers settle for insurance limits; they refused. The Strahins then conspired with Sullivan for the latter to assign a “bad-faith” claim to the plaintiffs in exchange for a covenant not to execute on any judgment against him. A sham of a trial took place, and a jury awarded over a million dollars to the Strahins, holding Cleavenger 70% responsible and Sullivan 30% responsible. The Strahins then went after Sullivan’s insurers.

West Virginia is enough of a judicial hellhole that it affirmed Sullivan’s liability (for which the insurers paid the $100,000 limit), even though there was no longer a case or controversy against him, but even West Virginia courts would not countenance the attempt to team up against the insurer for the bad-faith claim. After all, Sullivan’s assets were never at risk because he already settled with the Strahins, so there was no harm from the insurer’s refusal to settle, even if it were in bad faith.

Amazingly, Justice Larry Starcher dissented from this common-sense result. But none of the cases he cited supported his dissent. This prompted a concurrence, and the aforementioned benchslap:

“The complexity of the issue is quite evident in view of the fact that absolutely none of the fifteen string-cited cases in Mr. Strahin’s brief is on point with the facts of his case. I should note that the dissenting opinion of Justice Starcher repeats Mr. Strahin’s error, by citing to cases that are not on point with the fact pattern presented to and addressed by the majority opinion.”

In the words of the West Virginia Record, “State Supreme Court Chief Justice Robin Jean Davis lectured Justice Larry Starcher so firmly over a dissent that he probably can count it as credit for continuing education.” (Steve Korris, “Davis lectures Starcher in insurance opinion”, Aug. 16; Strahin v. Sullivan (Feb. 21 majority opinion); Starcher dissent (Jun. 29); Davis concurrence (Jul. 19)).

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Price of sending email: $160/email

Think carefully before hitting that send button. The cost of having independent attorneys review 2500 documents (mostly internal emails) that Merck had claimed subject to the attorney-client privilege was $400,000. That $160/email expense is, of course, just the cost of the independent review, and does not include the cost of attorneys litigating whether the documents should be produced to the other side. Judge Eldon Fallon ruled some documents were privileged, and others must be produced; both sides claim victory in reporting by Ashby Jones at the WSJ Law Blog.

The explosion in document creation has caused a litigation explosion in document discovery. This has had multiple effects: first, it encourages the settlement of meritless claims, because of the expense of defending such claims when document discovery can take place. This in turn encourages the bringing of meritless claims, as their extortion value goes up if plaintiffs can force defendants to spend millions of dollars defending themselves.

Separately, the explosion in document discovery has caused a leap in the demand for attorneys, and, in my opinion, is a large part of the recent increase in law-firm associate salaries. And applications to top law schools would drop precipitously if incoming law students had any idea what percentage of high-paid associates’ time is taken up on document discovery disputes over questions of attorney-client privilege.

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