Archive for May, 2008

Breaking and exclusive: FACTA held unconstitutional

We’ve previously written about the problems of the Fair and Accurate Credit Transactions Act (FACTA), which imposes astronomical statutory damages on vendors whose credit card receipts fail to comply with ambiguous technical requirements. Today’s Daily Business Review recounts the tale of a small-business owner whose restaurant was hit with one of these suits, and how Congress has unanimously passed legislation, over some trial-lawyer objections, to shut down previous suits, though the bill far from solves the litigation problem from popping up again, and trial lawyers vow to continue pressing the suits. “U.S. Sen. Charles Schumer, D-New York, who sponsored the Senate bill, said, ‘Congress never intended for the law to be used to drive companies out of business with expensive legal cases that don’t involve any harm to consumers.'”

Meanwhile, Judge William M. Acker, Jr., of the Northern District of Alabama, had a series of summary judgment motions in four FACTA cases before him. He rejected the idea that class certification was inherently improper when the resulting statutory damages would bankrupt the defendant (an issue I discussed in my Liability Outlook on the subject), but held that the $100-$1000 statutory damages, without a showing of harm, were necessarily punitive in nature, and thus constitutionally impermissible under State Farm v. Campbell: Read On…

Breaking: Merck wins two more Vioxx cases on appeal

AP reports a Texas court has thrown out the infamous Ernst $26 million judgment; a New Jersey court has tossed $9 million of the judgment in McDarby. More details on Point of Law as available.

Ernst was the first Vioxx suit to go to trial. A jury awarded $253 million. Mark Lanier waited months before asking for a final judgment; at the time, I suggested that this was because he knew the case would be reversed on appeal, and did not want the bad publicity. Indeed, the appellate decision perhaps comes too late for Merck: the number of lawsuits increased from 6000 to 60000 in the months following publicity over the jury verdict, costing Merck billions of dollars in the later extortionate settlement.

With these two decisions, only three plaintiffs’ verdicts in favor of Merck remain.

Update: I still haven’t seen the McDarby decision, but an updated AP story indicates that it upheld the compensatory damages of $4.5 million, overturned the $9 million punitive damages verdict, and overturned the consumer-fraud judgment (which also saves Merck millions of dollars in plaintiffs’ attorneys’ fees).

Doesn’t Even Leave The Airport

“A New York lawyer is suing Delta Air Lines for $1 million, saying his family vacation turned into a nightmare after they were stranded in an airport for days and treated disdainfully by airline employees. Richard Roth, who filed the lawsuit on behalf of himself and his mother, said he planned the Christmas 2007 trip to Buenos Aires to celebrate his mother’s 80th birthday.” (Reuters/MSNBC, AP/Atlanta Journal Constitution). Best quote, arguably, from Roth: “I tried so hard not to sue them.” (New York Post). Scott Greenfield is not entirely admiring (or maybe he is, it’s hard to tell).

P.S. Okay, you win, then: Greenfield was being entirely admiring of the action, million-dollar-demand and all.

Thomas Bentey v. St. Thomas University Law School update

We wrote about this lawsuit when it was first filed in 2006, and were curious what was up with it. Bentey flunked St. Thomas U Law School; he then retained an attorney, Michael Lombardi, to sue numerous defendants alleging that it was consumer fraud for St. Thomas to admit him in the first place and seeking an injunction over Bentey’s contracts grade, suggesting a second person who should’ve flunked law school. The case was transferred from New Jersey to the Southern District of Florida in December 2006, and the multiple defendants filed a joint motion to dismiss in March 2007. The parties then apparently agreed that Bentey would voluntarily dismiss his case in April 2007; the terms of the settlement were not publicly discussed, but I’d be surprised if they weren’t simply a walk-away.

A Thomas Bentey who lives in New Jersey has a public Facebook page, though we make no representation that it’s the same Thomas Bentey.

Turkewitz April Fools joke still paying dividends

Blogger Eric Turkewitz fooled a lot of people with his April Fools Day blog-post about Supreme Court justices differing amongst themselves whether to recuse themselves from the pending cert petition in the fantasy-baseball case CBC Distribution v. Major League Baseball Advanced Media because of their own participation in a fantasy baseball league–a timely satire of the tsuris caused by individual Supreme Court members’ insistence in holding shares in individual stocks instead of mutual or index funds, which has caused recusals and 4-4 rulings.

But someone at American Lawyer didn’t get the memo when Turkewitz jumped up and said “Gotcha!” The hoax is repeated as fact (without attribution) in an unsigned squib on page 25 of the May 2008 issue of the $385-annual-subscription glossy. The moral is: don’t believe everything you read. Even if it’s in the extensively fact-checked mainstream media. The issue has been out for four weeks, and this post appears to be the first time someone has noticed the error publicly.

(As for the copyright issue in the fantasy baseball case, where baseball players claim intellectual property rights in their statistics, that really is before the Court in its certiorari conference Thursday the 29th; Overlawyered covered the Eighth Circuit opinion by Judge Morris Arnold October 23 and at the lower court level in 2005 and 2006.)

May 28 roundup

  • More on that New Mexico claim of “electro-sensitive” Wi-Fi allergy: quoted complainant is a longtime activist who’s written an anti-microwave book [VNUNet, USA Today “On Deadline” via ABA Journal]
  • Your wisecracks belong to us: “Giant Wall of Legal Disclaimers” at Monsters Inc. Laugh Floor at Disneyland [Lileks; h/t Carter Wood]
  • New at Point of Law: AAJ commissions a poll on arbitration and gets the results it wants; carbon nanotubes, tomorrow’s asbestos? California will require lawyers operating without professional liability insurance to inform clients of that fact (earlier here and here); and much more.
  • Actuaries being sued for underestimating funding woes of public pension plans [NY Times via ABA Journal]
  • City of Santa Monica and other defendants will pay $21 million to wrap up lawsuits from elderly driver’s 2003 rampage through downtown farmers’ market [L.A. Times; earlier]
  • Sequel to Giants Stadium/Aramark dramshop case, which won a gigantic award later set aside, is fee claim by fired lawyer for plaintiff [NJLJ; Rosemarie Arnold site]
  • Privacy law with an asterisk: federal law curbing access to drivers license databases has exemption that lets lawyers purchase personal data to help in litigation [Daily Business Review]
  • Terror of FEMA: formaldehyde in Katrina trailers looks to emerge as mass toxic injury claim, and maybe we’ll find out fifteen years hence whether there was anything to it [AP/NOCB]
  • Suit by “ABC” firm alleges that Yellow Book let other advertisers improperly sneak in with earlier alphabetical entries [Madison County Record]
  • Gun law compliance, something for the little people? A tale from Chicago’s Board of Aldermen [Sun-Times, Ald. Richard Mell]
  • Think twice about commissioning a mural for your building since federal law may restrain you from reclaiming the wall at a later date [four years ago on Overlawyered]

More tweaks to the site

As we’ve begun filling in tags to the thousands of posts, the “tag cloud” became less and less interesting and more and more distracting on the front page.  We’ve moved it to a back page and replaced it with three hand-made lists of tags:

  • Categories, with tags roughly corresponding to the categories from the old website;
  • Favorite topics, featuring tags corresponding to popular reader favorites from years past and today; and
  • Good copy, attorneys and law firms you want to read about.

Are we leaving anything out in those tag lists you’d like to see there?

Don’t hesitate to drop me an e-mail with a link if you see something that was improperly auto-tagged or is missing a tag that would be useful.

Stripper: getting tipsy was part of my job

Whatever happened to the old ginger-ale “champagne” ruse? “A woman contends that her job as a stripper caused her to have a one-car wreck on her way home from work last year, according to a lawsuit filed in Jefferson County Circuit Court. Patsy Hamaker’s suit says part of her job as a dancer at The Furnace club in Birmingham involved encouraging customers to buy her alcoholic drinks.” (Eric Velasco, “Stripper’s suit in Jefferson County court says her job led to wreck, injuries”, Birmingham News, May 27).

Another thought on Waddah Mustapha v. Culligan of Canada, the fly-in-bottled-water case

The Canadian Supreme Court overturned the lower court C$341,000 decision in Mustapha v. Culligan of Canada, but it’s worth noting that the result would have been different in the United States. To recap, Waddah “Martin” Mustapha saw (but did not consume) a fly in a bottled water. As Yoni Goldstein memorably recounts:

[Mustapha] proceeded to vomit all over his house, and later experienced problems drinking anything with water in it, showering (because that also involves water) and going to work and having sex (where, presumably, water was involved in some major, incapacitating way).

Culligan did not contest that it was negligent; it did not even contest that the sight of the fly caused Mustapha’s injuries. It simply argued that Mustapha’s idiosyncratic reaction was not its concern, and that it should only be liable for the reaction of the reasonable person who had seen a fly in a bottle of water. In the US, that argument does not fly: basic 1L Torts teaches the “eggshell plaintiff” rule–you take the plaintiff as you find him or her. Canada differs. “The law expects reasonable fortitude and robustness of its citizens and will not impose liability for the exceptional frailty of certain individuals.” Canada is thus less prone to the sort of absurd claims that Mustapha raised than the United States is, as, if the courts follow the law, there is less incentive to exaggerate the scope of injury. In a US case, the defendant would have to engage in expensive pre-trial discovery to demonstrate that Mustapha’s psychological disorders were not caused by the incident, and would still have to go to a jury if Mustapha could produce an expert for hire who would testify differently. According to the Canadian Supreme Court, the appropriate approach is to simply use common sense and toss the case. But, as the lower court decision shows, there are certainly some in the judiciary who wish to move the Canadian model closer to the disastrous American one.