Overlawyered: Chronicling The High Cost Of Our Legal System

Archive for 2007

“Drunk on power: campaign reformers can’t help it”

Sens. Chuck Schumer (D-N.Y.), Tom Harkin (D-Ia.), Arlen Specter (R-Pa.) and Thad Cochran (R-Miss.) have teamed up to co-sponsor a proposed constitutional amendment that “would overturn U.S. Supreme Court decisions that limit Congress’ power to regulate the funding of political campaigns. … the amendment would repeal the 1st Amendment as it relates to campaign finance. This would be the first time in our history that we altered the Constitution to curtail liberties protected by the Bill of Rights. It would also have the effect, not accidental, of protecting incumbent members of Congress from being unseated at the polls.” (Steve Chapman, Chicago Tribune/syndicated, Oct. 28).

P.S. Then there’s the possibility that the talk-radio-stifling Fairness Doctrine will be reintroduced in 2009 or after (John Fund, OpinionJournal.com, Oct. 29). And while “Crooked Timber” may be a pleasantly evocative name for a weblog, would arch-liberal Isaiah Berlin really have been so keen to use the state’s coercive power against unwanted speech? (Sullivan, Bainbridge)(& welcome Salon Blog Report readers).

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A law written by attorneys, for attorneys

I previously posted on Washington’s Insurance Fair Conduct Act, known as Referendum 67. If passed by the voters, it would allow first party claimants to recover triple damages and attorney fees for those claims “unreasonably” delayed or denied.

Existing law already allows a wronged insured to bring three separate causes of action against his/her insurer for such claims: breach of contract, bad faith and violations under Washington’s Consumer Protection Act (CPA). Such existing remedies often yield bizarre results as we saw in the Woo v. Fireman’s Fund case.

The Supreme Court’s knuckleheaded 5-4 ruling upheld a judgment to pay Woo $250K he paid to settle an underlying suit, plus $750K in emotional distress and attorney fees. Obviously, there are already plenty of incentives for an insurer to avoid these judgments by acting fairly, and under this legislation Woo could have received three times more as punitive damages in addition to the “emotional distress” damages which have a punitive measure built into them. And in case you are wondering, Fireman’s Fund coverage position was perfectly reasonable.

The television ads for the Approve 67 camp are demagogic and misleading, if not outright lies. The worst has to be the ad featuring Tiffany Forslund whose father, firefighter David Potter, died allegedly because an insurer delayed payment for necessary health treatment. Forslund says:

My father would have given his life in the line of duty, turns out the insurance company took it instead.

What tripe. Not only would R-67 not apply to her father’s claim (it is intended to benefit auto, home and property policies–not health insurance) it’s not true according to the mayor of the city for which Potter worked, who said it would be covered as a workers’ compensation claim or through the city’s health plan. But the attorneys promoting this legislation could not resist such a sympathetic story of a firefighter allegedly killed by an insurance company, even if it’s entirely off-point and probably untrue. Demagoguery at its finest. And, if the claim is true Potter’s family already has remedies under existing law for emotional distress, which, for a lost loved one are rightfully substantial and the threat of such judgments deter wrongful insurer conduct. Why shall we now triple those damages?

Attorney fees are typically one-third of the gross recovery. So if the gross recovery is tripled it equals a bigger fee. But let’s say the insured prevails but the gross recovery is small? No problem. Just submit your fee request to the court on an hourly basis if it provides a greater recovery for the attorney. And, here’s another little tidbit: the attorney fee provision is mandatory but the triple damages are at the court’s discretion. Who’s looking out for who here, really? And, that the triple/punitive damages are for the deliberately vague “unreasonable” and not for criminal, willful or wanton conduct as you would expect (and would be deserved) to award punitive damages makes for a juicy tidbit indeed.

And, there’s no crisis in the first place. Check out this link from the Insurance Commissioner of Washington State showing the number of complaints against individual insurers. In 2006, Private Passenger Auto Insurance Complaints averaged one complaint for every $1.5M in premium and Homeowners Insurance Complaints averaged one complaint for every $2.5M in premium. Hardly a crisis, and nothing worthy of threatening triple damages in every instance.

This legislation will enrich those attorneys bringing these suits, bring a windfall to a small number of insureds at the greater expense of all who pay insurance, directly or indirectly.

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UK: False accuser wins settlement

Scotland: “A woman who falsely accused her father of rape after undergoing a discredited form of therapy has received an out-of-court settlement.” Katrina Fairlie underwent “recovered memory” therapy in Perth and proceeded to level unfounded allegations of sexual abuse at her father, an elected official. “She later said those claims were completely untrue and a police investigation found there was no evidence of abuse,” but in the mean time the allegations “had ruined her and her family’s lives”. The father sued the National Health Service-run psychiatric hospital but a court dismissed his case on the grounds “after ruling that the trust did not owe a duty of care to Mr Fairlie as a relative of a patient”. Ms. Fairlie was more successful in her claim, netting a reported £20,000, though the NHS admitted no liability. (“Settlement for bogus abuse woman”, BBC, Oct. 20).

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Deep pockets file: Kristin Rossum murder case

You may recall the case of De Villers v. County of San Diego (Mar. 2006; Jul. 2006). Kristin Rossum was found guilty of poisoning husband Gregory de Villers and trying to make his death look like a suicide; his family sued both Rossum and her employer, the county of San Diego, and a jury found that Rossum was only 75% responsible, but that still put taxpayers on the hook for $1.5 million. An appellate court has stepped in to belatedly throw out the case against the County. (via On Point)

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Harris v. Mt. Sinai Medical Center: Geoffrey Fieger loses

We’ve been on top of this outrage of a medical malpractice case since it was in trial—Aug. 2004, Oct. 2004, Nov. 2004, May 2006, Apr. 12—but Roger Parloff has such a comprehensive post about the Ohio Supreme Court’s 5-1 (corrected:) 6-1 decision to strike down an intermediate court’s reinstatement of a bogus $30 million verdict that we defer to him. Even the dissenter would have found Fieger’s shenanigans problematic, but would have merely reduced the award to $10 million. Still, on remand for a new trial, Justice Paul Pfeifer recommended that “it would be wise for the trial judge to deny any motion for admission pro hac vice filed on behalf of Mr. Fieger.”

NB that among the tactics condemned by the Ohio Supreme Court are the tactics that trial lawyer John Edwards used when he successfully tried a medical malpractice case—pretending to channel the baby in the womb to the jury.

Among the victorious attorneys: one of our favorite bloggers, Mark Herrmann.

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More Tidbits

Jackpot justice of another kind

A man on the nickel slot machines wins over $1M despite the maximum payout of $2,500. The casino blames computer error. The story shows a picture of the stoic gambler in front of the cordoned-off slot machine.

Etiquette expert pranked in ‘Borat’ sues

Yes, another ‘Borat’ suit, here. As the story points out, why wait so long? Come on, folks, jump on the bandwagon!

Wrong doctor sued, pays out of pocket due to Med-Mal policy deductible

Sue the wrong doctor and drag out the litigation process, all to the detriment of the defendant. The story notes that courts rarely find suits are frivolous because “there’s almost always some grounds for a suit to be filed.” (Update: Jan. 6).

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Bogus claims in Chevron-Ecuador suit

I’ve got a post at Point of Law detailing a judge’s ruling chastising, and imposing sanctions on, three lawyers (including one who’s fairly famous) who sued the oil company on behalf of supposed cancer victims in Ecuador; it turned out some of the victims 1) didn’t have cancer and 2) weren’t aware a suit was being filed in the U.S. in their name. (Oct. 25; and see Roger Parloff’s excellent post on the episode at Fortune “Legal Pad”).

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Federici v. U-Haul

Here is an interesting but tragic case currently in trial in King County, Washington. Maria Federici, a then 24-year-old woman was gravely injured when an entertainment center flew from a U-Haul trailer attached to a vehicle operated by another motorist. It smashed through the windshield of Federici’s following vehicle, striking her in the face crushing every bone in it. She suffered blindness and permanent disfigurement. Media accounts are here, here and here.

I’m not posting to criticize Federici’s suit per se. It has noteworthy flaws to be sure–for instance there is evidence suggesting her blood alcohol content (BAC) was above the legal limit while she was driving, but the BAC was obtained under circumstances suggesting the results were unreliable (the injury trauma and resultant blood loss may have affected the BAC.) And her boss testified that she had only one glass of wine prior to the accident. Notably, the court disallowed the BAC evidence at trial.

So, Federici sues the motorist who failed to tie down the entertainment center, U-Haul and the rental company for alleged design flaws in the trailer and alleged negligent rental practices. Okay, so the motorist can own up for his negligence and U-Haul and the agency can own up for theirs, right? Not so fast. Washington State allows for a fault-free plaintiff to recover all damages from any defendant even 1% at fault.

With or without evidence of intoxication I wonder if Federici could have avoided anything flying toward her while traveling at freeway speeds. So, let’s assume the jury assigns her zero fault. That leaves 100% of potential fault for the defendants. Now, if you read the media accounts it seems to me that the motorist carries the majority of any fault for failing to secure his load, causing the accident. But, who has the deepest pockets? Let me help you: it’s not the motorist.

The plaintiff attorney in this instance will pull out the stops–do anything–to implicate U-Haul, and to a lesser extent the rental agency for any little amount of liability they can so that his client can collect the entire judgment from them (I suspect U-Haul has sufficient assets; the rental agency, if the Mom-and-Pop type, maybe not.) I don’t blame the plaintiff’s attorney, really–he has to advocate his client’s interests. But, it shows how twisted and wrongheaded the joint & several statute is in Washington. Nothing against Federici here, she’s suffered enough. But I struggle with holding some people accountable for damages caused by others. Does this make any sense to you?

Let’s look at the Mission Statement for the American Association for Justice (formerly the Association of Trial Lawyers of America):

The Mission of the American Association for Justice is to promote a fair and effective justice system – and to support the work of attorneys in their efforts to ensure that any person who is injured by the misconduct or negligence of others can obtain justice in America’s courtrooms, even when taking on the most powerful interests.

I’m all for that! Especially that part that says “fair”. Is it fair to hold a 1% wrongdoer accountable for 100% of the damages? If so, why? Because I don’t agree and I’d like to know if I’m wrong. And, I just know the AAJ would scream bloody murder if anyone tried to amend that statute.

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Legal Tidbits for Thought

Don’t make his art the butt of your jokes

Spotted by Lowering the Bar and story here and if you dare, here’s the link. AP story excerpt:

A high school art teacher fired after officials learned he moonlighted by creating paintings using his bare buttocks and other body parts sued his former employers on Thursday.

Workers’ Compensation Appeal Board finds politician aide’s media criticism of him did not constitute “abnormal working conditions” and upheld a decision denying him benefits

The Court’s decision is here. The decision was purely on the merits of the compensability of the workers’ compensation claim, so there is no mention if he sued for libel.

Soldier dies after entering operating hotel air conditioning unit; family wants $10M

The story is not entirely clear on if the unit in which he was found was marked with a warning sign or not, although it suggests that it was. The suit claims the hotel was negligent (what a shock) for failing to post appropriate signs and lock doors. You’d think the whirring blades would give a clue it’s not the brightest place to be. Oh, his blood alcohol level may have been a factor (see the story.)

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