Overlawyered: Chronicling The High Cost Of Our Legal System

Archive for 2008

“FaithGuard” insurance product leads to bias suit

In order to enhance diversity, it was necessary to suppress it, cont’d: The GuideOne Mutual insurance company offers, in 19 states at last report, what it calls a “FaithGuard” policy rider with features it believes are valued by some churchgoers. In particular, to quote its critics, the rider

waives insurance deductibles if there is a loss to personal property while it is in the “care, custody and control” of the insured’s church; pays church tithes or donations if the insured suffers a loss of income from a disability; and doubles medical limits for an injury received while sponsoring an activity conducted on behalf of the church.

All three provisions might make a family feel more confident about pledging material support or volunteer time to its church, by limiting the potential financial downside in case of accidents or misadventure. But now GuideOne is on the receiving end of a lawsuit filed by the National Fair Housing Alliance, on the grounds that the rider discriminates against non-churchgoers — which is to say, by providing benefits they would have no interest in purchasing. In particular, complains NFHA,

The benefits of FaithGuard are not available to persons who suffer a covered loss or disability while engaged in similar activities but who are not religious, who do not belong to a church, or who do not attend church or participate in religious activities.

Of course people in these latter categories would never be inclined to purchase FaithGuard in the first place, any more than people who never step on airplanes would go out of their way to buy flight insurance. Instead, if they worry about the financial risk of accidents, they would select one of the innumerable insurance products readily available with no particular religious component. But to achieve religious nondiscrimination in the eyes of NFHA, it’s apparently crucial not just that we non-churchgoers have access to every sort of risk coverage we might take a notion to buy, but that FaithGuard’s customers not have access to one they might like. Will the result of this lawsuit if successful be more diversity? Or, again, less? (earlier). More: Rick Armon, “Akron suit claims insurance for churchgoers discriminates”, Akron Beacon Journal, Nov. 27; Religion Clause (Howard M. Friedman), Nov. 28.

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Enron lawyers want $695 million; Texas objects

Class action lawyers who went after the various deep pockets in the Enron Corp. collapse — the team was led by now-disgraced William Lerach — want what may be a world record fee for an action of the sort. Highlight: Columbia lawprof John Coffee, whom lawyers often bring in to testify for fee requests, says courts’ eventual rejection of the lawyers’ claims against banks and investment companies — after some had paid fortunes to avoid the risk of trial — is actually a reason to pay the lawyers more, ’cause it shows that they were being creative and taking risks:

The Columbia professor, who was hired to submit a declaration supporting the award of legal fees, said it was a testament to Lerach’s skills that he convinced large corporations to pay billions in a case that turned out to be fatally flawed. “We now know it was an extraordinarily high-risk case because, ultimately, you lost it,” he said.

Texas Attorney General Greg Abbott is among those objecting to the fees as excessive. (Josh Gerstein, “Judge To Mull $695 Million Legal Fee”, New York Sun, Feb. 29; “Texas Objects To Enron Fees”, Mar. 13).

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“Judge awards Heather Mills £24.3 million in divorce ruling”

Indicating perhaps that divorcing Paul McCartney is an only slightly less remunerative affair than being Bear Stearns, even if she didn’t get the claimed £125 million. (David Byers, Times Online, Mar. 17). Reader Jim T. sends along this video of Mills’s press statement and describes as “hilarious” the “references of how it is ‘very, very sad’ that her daughter was only awarded enough travel expenses to travel ‘B class’ even though Heather Mills was just awarded $50 million dollars.” (& welcome Above the Law readers).

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Spitzer endnotes

  • Well, at least he cleaned up Wall Street; so runs one common valedictory to Spitzer, but Prof. Bainbridge begs to differ (Mar. 13)(and see links at my Point of Law roundup last week).

  • “Should Spitzer really go to jail because of the way he took his own cash out of the bank?” asks Larry Ribstein (Mar. 11). And indeed bank “Know Your Customer” regulations, of which I’ve been critical for a good long time, might now come in for much needed scrutiny (Jack Balkin, Balkinization, Mar. 13; see also). One public figure who likewise faced the prospect of a “money laundering” indictment when personal weaknesses led him into surreptitious payments was ideological antipode Rush Limbaugh, Megan McArdle reminds us (Nov. 24, 2003).

  • Last week’s New York Times article laying out Spitzer’s big crusade against the sex trade, and his successful push for a law lengthening sentences for “johns”, was powerful enough on its own terms. But isn’t it curious that the Times exclusively and at length quoted the feminist and legal-services groups who worked as Spitzer’s allies in that crusade, while not quoting a single source critical of the harsher penalties? Stephen Chapman has one corrective view [syndicated/Chicago Tribune, Mar. 13].

  • Toronto law blogger Garry Wise says that unless Spitzer was diverting public moneys his fall constitutes “just another political lynching by the Monica brigade”, a sentiment I find sufficiently wrong-headed that I’m provoked to jump in with a comment [Wise Law Blog]. P.S. Wise says he was referring not to the governor’s downfall, but to his potential overcharging.

  • How’d the press find out that “Client #9” was the governor of New York? All signs point to a prosecution leak — the sort of underhanded tactic that should be left to the likes of, well, the departing governor himself [Frum, National Post]. Plus: Don’t assume that all the ill-advised leaks came from the prosecution side [Beldar]

  • Should “Kristen” sue AP and other press outlets for swiping her MySpace pics, she might prove formidable in court: “It’s not often you get a case where there’s someone in the room with a higher hourly rate than the lawyers.” [Steyn @ NRO “Corner”].

  • One reader said he had to check Overlawyered to see whether a certain story was true or a parody, so please rest assured: it’s only a parody (Jason Roth, “Spitzer Sues Prostitute Over Sex Addiction”, Save the Humans, Mar. 11).

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Detroit mayoral scandal

Lawyers are coming under fire for numerous alleged derelictions in the Motor City’s abuse-of-executive-power scandal, which involves claims of “false testimony, concealment of information from the city council and possible destruction of evidence. … ‘There’s so much wrongdoing, it’s hard to know where to start,’ says professor John Brennan of Thomas M. Cooley Law School. ‘The city attorneys are not acting like lawyers, they’re acting like (Mayor Kwame) Kilpatrick’s legal bodyguards. They’ve forgotten who their clients are.'” (Martha Neil, “Lawyers in ‘Ethical Minefield’ in $8.4M Detroit Settlement Scandal”, ABA Journal, Mar. 6; Joe Swickard, “Attorneys’ conduct questioned in the Kilpatrick text-message scandal”, Detroit Free Press, Mar. 6).

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Buell-Wilson v. Ford redux

In February of last year, I wrote at length about an appalling jury verdict (June 2004) and disingenuous appellate decision in an SUV rollover case:

It went generally unnoticed last November when the California Supreme Court refused to review an intermediate court’s decision in Buell-Wilson v. Ford Motor Co. But then again, it went generally unnoticed when a jury awarded an arbitrary $368 million in damages in that case, when the trial judge reduced that verdict to an arbitrary $150 million judgment, and when an intermediate appellate court reduced that figure to an arbitrary $82.6 million (which, with interest, works out to over $100 million).

The US Supreme Court remanded to consider in light of Philip Morris v. Williams. For whatever reason, the California Court of Appeals decision to be even more disingenuous and say “We don’t care about Williams” reaffirming the $82.6 million got much more attention. Bruce Nye has the best analysis of the “thumb in your eye” decision; Lisa Perrochet also analyzes the verdict. John Rohan is critical. Press coverage: Recorder/Law.com; San Diego Union-Tribune; Reuters; AP/SJ Mercury News. Ford will appeal.

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Roundup, March 15

  • Speaking of prostitutes and politicians, Deborah Jeane Palfrey has come to recognize that Montgomery Blair Sibley (Oct. 29; May 4; etc.) may not be the best lawyer for her. [WTOP via BLT]
  • Update: Nearly two years later, trial court gets around to upholding $2 million verdict in lawn-mower death we covered Jun. 16 and Aug. 18, 2006. [Roanoke Times (quoting me); opinion at On Point]
  • In other lawn mower news, check out Jim Beck’s perceptive comment on a Third Circuit lawn-mower liability decision.
  • Update: Willie Gary wins his child-support dispute. [Gary v. Gowins (Ga.); Atl. Journal-Const.; via ABA Journal; earlier: Nov. 2]
  • Tobacco-lawyer Mike Ciresi drops out of Minnesota senate race. [WCCO]
  • Belfast court quashes libel ruling against restaurant critic. [AFP/Breitbart]
  • Trial-lawyer-blogger happy: jury returned $1.25 million med-mal verdict for death of totally disabled person suffering from end-stage renal disease, pulmonary hypertension, oxygen dependent lung disease, and obesity, after rejecting businessperson from jury “for cause” because he was head of local Chamber of Commerce. [Day]
  • Car-keying anti-military attorney Jay Grodner faced the law in January; here’s the transcript. [Blackfive]
  • Anonymous blog post not reliable evidence of factual allegations. [In re Pfizer, Inc. Sec. Litig., 2008 WL 540120 (S.D.N.Y. Feb. 28, 2008) via Roberts, who also reports on fee reduction in same post]
  • Clinton’s nutty mortgage plan. [B&MI (quoting me)]
  • A supposed DC cabbie’s take on DC v. Heller. [DC Cabbie blog]

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“Jury clears doctors of negligence in Ritter’s death”

“A Glendale jury on Friday cleared an emergency room doctor of negligence and liability in John Ritter’s death, holding he did everything he could to save the comic actor. … Jurors, who voted 9 to 3 against liability for Lee and Lotysch, said they were torn between sympathy for Ritter’s wife and children and their conviction that the doctors were blameless.” (John Spano, Los Angeles Times, Mar. 15). Earlier here and here (noting that Ritter family had already obtained $14 million in settlements from other defendants).

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Scruggs in guilty plea

The WSJ and Mississippi’s WLOX have the news up on Dickie Scruggs’ plea of guilty to conspiracy in the attempted bribe of Judge Henry Lackey. Earlier today, the Journal had an illuminating page-one feature on Dickie Scruggs’s history of fee disputes with other lawyers. YallPolitics‘ server seems to be down at the moment from traffic, but is back up now; in an email alert, YP’s Alan Lange said the surprise plea came three days before the deadline for Scruggs to plead before his approaching trial. Our past coverage is here, or check our Scandals page.

Update 12:18 EST: AP coverage is here (via Rossmiller). Sid Backstrom also pleaded and, per Folo rapid updates, is cooperating with prosecutors. No deal for Zach Scruggs yet. Also per Folo, Scruggs pleaded to conspiracy in the Lackey bribe attempt but did not resolve possible charges in the DeLaughter case, per the government side.

12:44: Now Folo’s server has crashed. Temporary replacement site up here.

1:16: Per Patsy Brumfield at the NEMDJ:

…The government recommended a sentence of five years in prison for Scruggs and 2 1/2 years for Backstrom. They also will pay a maximum fine of $250,000 each and a court fee. …

Before Biggers accepted their pleas, Scruggs and Backstrom admitted in open court that they had done what the government said they had done in Count One – they had conspired to bribe Circuit Judge Henry Lackey of Calhoun City for a favorable order in a Katrina-related legal fees case….

Dickie Scruggs, arguably the most famous plaintiffs’ attorney in the U.S., looked pale and thin but carried himself with a bit more control than his younger colleague at The Scruggs Law Firm, headquartered on the storied Square in Oxford.

The 61-year-old Ole Miss Law School grad and legal giant-killer, as well as Backstrom, likely will voluntarily surrender their law licenses, as has co-defendant Timothy Balducci of New Albany, who pleaded guilty in December although he was wired and cooperating with the government at least a month earlier.

“Do you fully understand what is happening here today,” Biggers asked him.

“Yes, I do,” Scruggs responded.

Questioned about whether he had discussed his decision to plead guilty with his attorney, Scruggs responded, “With my attorney, my wife and my family.”

1:25 p.m.: Rossmiller has an update from a correspondent at the scene. And Folo is up at a temporary site until its server gets back online. Excerpts from Folo’s on-the-scene report:

…* Richard Scruggs is pleading to conspiracy to bribe a state court judge, count 1 of the indictment, with other counts to be dismissed. This was an open plea, that is, no recommended sentence.

* The government expects that he will get the full five year sentence on that count. …

* There was no mention of cooperation by Scruggs. …

* There was an interesting and unusual disagreement with the government’s statement of facts in the plea colloquy. The government stated in its facts for both Backstrom and Scruggs that a conspiracy began in March to corruptly influence the state court judge, and Scruggs spoke to say that he had agreed to earwig the judge but not corruptly influence him in March, and that he later agreed to join a conspiracy to corruptly influence the judge. Sid Backstrom took a similar stance….

[See also WSJ law blog and later NMC post, as well as WikiScruggs on “earwigging” as a Mississippi tradition.]

1:56: Welcome Glenn Reynolds/Instapundit and David Rossmiller/Insurance Coverage Blog readers.

3:18: The Jackson Clarion-Ledger reports: “As part of the plea deal, federal prosecutors agreed to defer prosecution of Scruggs’ son, Zach Scruggs, who agreed to give up his license to practice law.” [N.B.: NMC @ Folo has a very different take, and other sites are also questioning the C-L’s reporting on this point.] Folo at its temporary bivouac has PDFs of the Scruggs and Backstrom pleas and underlying facts, as does David Rossmiller. ABA Journal coverage includes the text of a forthcoming article by Terry Carter on the affair, written pre-plea. Other reactions: Above the Law (“has Scruggs employed bribery as a tactic in other matters — e.g., the tobacco cases that made him famous …?”), Beck and Herrmann (“What a week. First Spitzer, and now Scruggs. What goes around, comes around.”), TalkLeft, Michelle Malkin, NAM Shop Floor (“So what are the odds that this was Dickie Scruggs’ first and only crime during his decades-long career as a trial lawyer?”).

6:27: Roger Parloff wonders whether Scruggs will cooperate, and whether the statute of limitations might have run already on tobacco skullduggery. NMC @ Folo wonders what prosecutors will make of a slew of fresh documents from the Scruggs Law Firm, or whether perhaps such documents have already had an effect. Not so surprising a plea, says Jane Genova at Law and More, but rather “widely expected“.

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Legal hazards of waking students

15-year-old Vinicios Robacher says he was snoozing away in class when teacher Melisssa Nadeau chose to rouse him abruptly by slamming her hand down on his desk. That rude awakening resulted in pain and “very severe injuries to his left eardrum”, according to the pre-lawsuit complaint filed by his lawyer, Alan Barry, with officials in Danbury, Ct. (“Danbury student suing after being awakened by teacher”, AP/WTNH, Mar. 13).

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