Overlawyered: Chronicling The High Cost Of Our Legal System

Archive for May, 2009

Trial lawyer earmarks: ending deductions for punitive damage payments

One can certainly see why ending tax deductions for punitive damages is a superficially appealing idea.

But the main effect will be to increase settlement pressure in cases where there are unjust punitive damages awards. Because settlements can be characterized as “compensatory” and tax-deductible while court-ordered judgments cannot, trial lawyers will be able to use the tax differential to discourage defendants from seeking appellate review. So one cannot expect very much tax revenue from this: “punitive damages” will drop precipitously, but money going to trial lawyers will go up. Moreover, appellate courts will have fewer opportunities to correct bad decisions by trial courts, creating more uncertainty in litigation, which raises litigation expenses because it will be harder to predict outcomes.

Note that taxpayers are not subsidizing punitive damages award deductions by businesses: the income “lost” because a defendant deducted the punitive damages award will be income realized by the plaintiff and his or her attorney. If the deduction is forbidden, the government will be, in effect, double-taxing the same money.

The Obama administration makes much of its claim of being pragmatic, rather than ideological, but this looks like an indirect giveaway to the trial bar rather than a source of government revenue. More: Walter at Point of Law; and my shining mug quoted at the Southeast Texas Record.

Filed under: , , , , ,

Small business, big business and regulation

Coyote has some thoughts on the tendency of market regulation to entrench bigger, more experienced companies at the expense of small:

I hate to admit it, but regulation in my own business (which I neither sought nor supported) has killed off many of my smaller competitors and vastly improved our company’s competitive position. It is no accident that the list of the largest companies in heavily-regulated Europe nearly never change, decade after decade, whereas the American list has always seen substantial turnover.

Or, put differently, CPSIA in its effects as a regulatory enactment is not so atypical as we might like to think.

Filed under: ,

Conference tomorrow: “Libel Lawfare”

From the Federalist Society, which is among the sponsors of the D.C. event tomorrow, along with the Thomas Jefferson Center for the Protection of Free Expression and other groups:

Lawfare is the use of the law and legal institutions to achieve military, political or strategic objectives. In recent years, lawfare has come to include libel litigation aimed at suppressing public dialogue about radical Islam and terrorism. Parties with financial means have been filing lawsuits, in American courts and abroad, against people who speak out against or write critically about radical Islam. Defendants include authors, researchers, journalists, politicians, and human rights advocacy groups.

“Libel Tourism,” is a form of forum shopping, where plaintiffs bring actions against American citizens in foreign jurisdictions that lack the free speech protections afforded by the U.S. Constitution. As a result New York State has passed the Libel Terrorism Protection Act, and the U.S. government is considering the Free Speech Protection Act, both of which operate to nullify said foreign libel judgments.

Our conference will address these fundamental issues: What does freedom of speech truly mean? Is U.S. legislation prohibiting the enforcement of foreign libel judgments necessary? What should be the role of the European Union and the United Nations in addressing these issues?

Some further reading: Brooke Goldstein/Family Security Matters, Aaron Eitan Meyer/New Majority.

Filed under: , , ,

May 18 roundup

  • Historic preservation and habitat preservation laws can backfire in similar ways [Dubner, Freakonomics]
  • Serious points about wacky warnings [Bob Dorigo Jones, Detroit News]
  • Texas solons consider lengthening statute of limitations to save Yearning for Zion prosecutions [The Common Room]
  • A call for law bloggers to unite against content-swiping site [Scott Greenfield]
  • Drawbacks of CFC-free pulmonary inhalers leave asthma sufferers gasping [McArdle, Atlantic]
  • Try, try again: yet another academic proposal for charging gunmakers with costs of crime [Eggen/Culhane, SSRN, via Robinette/TortsProf] More/correction: not a new paper, just new to SSRN; see comments.
  • California businesses paid $17 million last year in bounty-hunting suits under Prop 65 [Cal Biz Lit]
  • Trial lawyer lobby AAJ puts out all-points bulletin to members: send us your horror stories so we can parade ’em in the media! [ShopFloor]

Filed under: , , , , , , ,

Great moments in jury deliberations

According to affidavits in a Texas case, one juror slept during deliberations, another “all but read” a newspaper account about the incident aloud to others, some used “personal feelings” to decide, and one juror “asked to be told how to vote so she could get out of deliberations.” An appeals court sustained the defendant’s conviction anyway; Colin Miller at Evidence Law Blog explains the legal logic, if that is the right word for it.

Filed under: