| ARCHIVE -- NOV. 1999
(II) |
November 30 --
Class-action fee control: it's not just a good idea, it's the law.
A panel of the Ninth Circuit U.S. Court of Appeals has ruled that judges
have a positive duty to scrutinize and, where appropriate, reduce attorneys'
fees in class actions, independently
of whether anyone with appropriate standing raises an objection.
The case arose after a Los Angeles federal district judge approved nearly
$3 million in legal fees to the plaintiff's firm of Weiss & Yourman
in a shareholder class action against Occidental Petroleum, which had cut
its dividend in alleged breach of an earlier promise not to do that.
The case was settled by Occidental's agreement to maintain more lucrative
dividend payouts in the future and pay legal fees to the plaintiff's firm;
no cash recovery was had by shareholders.
Noted class-action objector Lawrence
Schonbrun then appeared on behalf of a class member to challenge the
fee payout as excessive; his arguments proved sufficiently persuasive that
the judge eventually cut Weiss & Yourman's fee by more than half, to
$1.15 million. The law firm appealed, arguing that because its fee
was the result of a separate side-deal with Occidental, rather than being
deducted from a payout to the class, an individual class member (such as
Schonbrun's client) had no standing to object. This line of argument
has been routinely offered in defense of "separately negotiated fee" class-action
settlements, and it has a remarkable implication, namely that once the
two sides' lawyers have cut their deal behind closed doors, no one in the
client class has any right to raise an objection to the fees obtained for
representing them. Fees for representing a class, yet with no worry
that anyone in the class will be able to bring a challenge to those fees
-- why, it's like magic!
A little too magical for the Ninth Circuit: a "client
whose attorney accepts payment, without his consent, from the defendants
he is suing, may have a remedy," wrote Judge Andrew Kleinfeld last month
on behalf of a unanimous panel that also included Judge Alex Kozinski and
Oregon district judge Owen Panner, sitting by designation. "The absence
of individual clients controlling the litigation for their own benefit
creates opportunities for collusive arrangements in which defendants can
pay the attorneys for the plaintiff classes enough money to induce them
to settle the class action for too little benefit to the class".
That's where "the supervisory power of the district court" should come
in, as "a mechanism for assuring loyal performance of the attorneys' fiduciary
duty to the class." (Paul Elias, "$2 Million Fee Reduction Stands in Securities
Case", The Recorder/Cal Law, Oct. 20 -- full
story).
November 30 --
Leave that mildew alone. It's illegal to
market "mildew-proof" paint for bathrooms and damp basements unless you
go through the (extremely expensive) process of registering the paint as
a pesticide, claims the federal Environmental
Protection Agency, which is seeking $82,500 in penalties from William
Zinsser & Co., Inc., a Somerset, N.J.-based paint manufacturer.
(EPA Region 2 press release, Nov.
10).
November 30 --
Update: sued columnist still disrespecting local attorneys.
As reported earlier in this space, Swansea, Ill. lawyers Judy Cates and
Steven Katz have filed a lawsuit demanding $1 million from St. Louis Post-Dispatch
columnist Bill McClellan after a column in which he criticized their handling
of a class-action suit against Publisher's
Clearing House and jocularly compared them to the James Gang of bank robbers
(see Nov. 4 commentary).
You'd think McClellan would have learned his lesson by now, especially
with the case still pending, but no, he's had the temerity to write another
column criticizing the same lawyers, this time pointing out that numerous
state attorneys general have intervened to fault their proposed settlement
of the magazine-subscription suit. ("Regardless of suit result, my
lawyers will have work", Nov. 21 -- full
column)
November 29 --
New subpage: Our overlawyered schools.
Compiling news clips and commentaries on the legal headaches that beset
teachers, students, principals, faculty and university administrators.
Highlights include our ever-popular Annals of Zero Tolerance, special ed
and the ADA, Title IX (From Outer Space), the role of litigiousness in
undermining supervised recreation, the paralytic contribution of tenure
laws, and other trends that tend toward the merger of schoolhouse, courthouse
and madhouse.
November 29 --
"Some lawyers try to make nice". "Soon after
EgyptAir Flight 990 plunged into the Atlantic Ocean, the personal-injury
lawyers at R. Jack Clapp and Associates marshaled their resources and mobilized
their forces. Faster than you can say class-action lawsuit, the Washington,
D.C., firm, which specializes in aviation
disasters, launched EgyptAir990.com
-- a Web site that at first blush appears primarily concerned with helping
the bereaved deal with loss, but on closer examination is all about financial
gain." New York Times writer David Wallis devotes a "Week
in Review" roundup to the legal profession's efforts to repair its "sorry"
image, lately impaired "by tacky late-night commercials for ambulance chasers;
the legal lobby's opposition to tort reform; and the one-two punch of the
O.J. Simpson trial and the Monica Lewinsky scandal."
The Ohio Bar, meanwhile, has sponsored a TV spot in which
two children explain at school what their parent does for a living: one
says his father "protects people", like a police officer, and another says
her mom "helps sick and hurt people", like a doctor. It turns out
that they're . . . lawyers. So what is it that the opposing
side's lawyers do for a living? (David Wallis, "Some Lawyers Try
To Make Nice", New York Times, Nov. 28 -- full
story)(free, but registration required).
November 29 --
"Wretched excesses of liability lawsuits".
Op-ed by the Philadelphia Inquirer's David Boldt looks at "the ever-expanding
litigation explosion" by way of some recent automotive
cases, including the class action against DaimlerChrysler that recently
resulted in a countersuit by the company (see November
12 commentary). On this summer's Chevy Malibu verdict in
Los Angeles, in which a jury voted $4.8 billion against General Motors,
later reduced by a judge to $1.1 billion, Boldt offers a point of comparison
we hadn't previously seen: "The impact [of the Chevy's 70 mph rear-ending
by a drunk driver] was the equivalent of dropping the car from the top
of a 16-story building."
Many accept the idea that the litigation boom offers compensating
benefits -- for example, "that our lives are made safer by the system because
it makes companies more careful. Interestingly, there is no known
evidence for this." Boldt cites the Brookings Institution's study "The
Liability Maze" of eight years ago. "The editors -- Peter Huber
of the Manhattan Institute and Robert Litan of Brookings -- wrote that
none of the authors had found a demonstrable improvement in safety for
Americans compared with nations that have less stringent liability-law
systems. Nor did the authors find that the increase in liability suits
had accelerated a decline in U.S. accident rates. I can find no subsequent
study that has contradicted these conclusions." (David Boldt, "We
all end up paying for a litigious society", reprinted in Baltimore Sun,
Nov. 24).
November 26-28 --
Oh, well, better luck next time. Illinois courts reviewing
capital sentences "have repeatedly expressed dismay at the representation
received by Death Row inmates at trial," and this Chicago Tribune
investigation brings to light a sad array of ways lawyers can drop the
ball at a time when clients need their help most: missing deadlines, failing
to develop exculpatory evidence, alienating judges, neglecting to disclose
conflicts of interest, and much more. "Since Illinois reinstated
capital punishment in 1977 . . . 33 defendants sentenced to death were
represented at trial by an attorney who had been, or was later, disbarred
or suspended -- disciplinary sanctions reserved for conduct so incompetent,
unethical or even criminal that the state believes an attorney's license
should be taken away." If lawyers can perform this sloppily even
when a client's life is at stake, what must they be getting away with in
lesser cases? (Ken Armstrong and Steve Mills, "Inept Defenses Cloud
Verdicts", Chicago Tribune, Nov.
15).
November 26-28 --
Beware of market crashes. "Online brokerages are 'probably'
financially responsible for computer outages that leave their customers
unable to trade," Securities and Exchange Commission Arthur Levitt said
this week. Executives at online trading firms, reports the New York
Post's
Jesse Angelo, "are terrified of lawsuits from customers claiming they lost
money due to computer glitches. E*Trade has already been slapped
with such a suit by an Ohio woman who attributes $40,000 in losses to computer
problems at the online trading site. The suit seeks class-action status".
(Jesse Angelo, "Levitt: Web Brokers May Be on the Hook for Computer Crash",
New York Post, Nov.
23).
November 26-28 --
Update: cannon shot OK. Administrators at Nevis High School
in Minnesota have relented and agreed to permit a yearbook photo of Army
enlistee Samantha Jones perched on a cannon draped with a U.S. flag, despite
a policy of "zero tolerance" of depictions of weapons (see Oct.
30-31 commentary). "More than 100 students walked out of class
Nov. 3 to protest the ban on the photo, leading to 50 suspensions," AP
reports. ("Fight over yearbook photo ends", AP/Washington Post,
Nov. 25 (link now dead)).
November 26-28 --
Weekend reading: evergreens. Pixels to take to the mall
or to peruse while resting off the big meal:
* Out-of-state defendants sued for more than $75,000 in a state
court should be able to choose removal of the suit to a U.S. district court
with its greater objectivity between local and nonlocal litigants, argues
Phelps Dunbar partner Michael Wallace in one of the more promising proposals
for liability reform we've heard in a while (Michael Wallace, "A
Modest Proposal for Tort Reform", from vol. 1, issue 3 of Federalist
Society Litigation Working Group newsletter; at Federalist
Society website).
* How to tell you've been the victim of a staged car accident:
tips from a local CBS-TV affiliate's story on "Los Angeles' most unlucky
driver" (you're driving alone in a newer car, someone in one vehicle distracts
your attention, a second older car with several passengers gets in front
of you and suddenly slams brakes, none of the alleged victims carry photo
IDs) and from investigator Jack Murray's book on the subject (the incident
occurred midblock, not in rush hour and with no eyewitnesses, struck vehicle
"has had tire pressure in the rear tires lowered (causes more taillight
damage and stops more quickly)". ("Special
Assignment: Staged Accidents", Channel2000.com, March 28, 1998;
Jack Murray, "Red flags:
a 14 point checklist", not dated, National
Association of Investigative Specialists website).
* "Procedures And Rules Regarding Suits Against Public Entities"
-- well, okay, it's a dry title for an undeniably dry outline of the steps
involved in extracting money from City Hall, but you've got to admit it
bears an interesting byline: Johnnie L. Cochran, Jr., whose success in
litigating personal-injury cases both preceded and followed his better-known
role in assisting O.J. Simpson to walk free of murder charges (website
of California law firm Kiesel, Boucher and Larson LLP -- full
paper, undated).
November 24-25 --
Don't redeem that coupon!
Under the heading, "Free money for doing nothing", financial commentator
Andrew Tobias writes, "If you've ever owned a Toshiba laptop -- I've owned
two -- apparently you're in line for $200-$400 because Toshiba has to pay
us $2 billion because . . . well, because . . . I'm actually not going
to claim my prize, because it doesn't feel right. But, as noted over
on overlawyered.com, it makes an interesting
story." (AndrewTobias.com, Nov.
24). Our coverage of the Toshiba
laptop settlement ran Nov. 3, Nov.
5, Nov. 17 and Nov. 23.
November 24-25 --
From our mail sack: memoir of a morsel. We've generally
refrained from publishing on this site the many letters people send us
describing their horrible personal experiences in court. Just this
once, we're going to break that rule and run this one from Paul Boyce of
Tustin, Calif.:
"I am a small businessman, owner of a 3-employee business helping companies
with their carpool programs (one of those employees is my wife). We were
sued by an employee for wrongful termination
5 years ago, at a time when we had six employees. She had been working
for me for only 6 months when I let her go. We went into binding arbitration,
supposedly a low cost alternative to a jury trial. I lost. With penalties
and interest, the judgment came to over $240,000. In 1998, I filed
for Chapter 7 liquidation bankruptcy -- there was no way I could pay that
much! In fact, business revenues were down to 1/5 of what they were
when she sued me. Last year I earned $60,000. My lawyer's fees came
to $55,000.
"In the bankruptcy, the only asset we had was our small-business retirement
plan savings, amounting to about $350,000. What was astonishing was that
the judge said that because my wife and I are in our mid 40s, we didn't
need the $350,000 -- we could easily make it up! He based this on tables
showing how long we could be expected to live versus how much we could
be expected to make at hypothetical government jobs. So he ordered our
retirement plan be handed over to the contingency fee lawyers to be split
up. We've asked around and the best we can tell, the employee who sued
us 5 years ago will get maybe $35,000 for her efforts. We counted a total
of 4 contingency fee lawyers on her side.
"The result of all this is that I've decided to close the office and
lay off my only employee. It's just a lot easier and less risky to run
the business out of our home.
"The legal system, with its strong preference for feeding the lawyers
at the expense of morsels like me, shows me how far astray from the constitution
our great country has strayed. It's a parody of what the founding fathers
had in mind when they clearly expressed their historic vision. Today, it's
all about the lawyers and how clever they are at shifting even more wealth
their way."
Paul and Sandy Boyce can be reached at Commuter
Services Group, Tustin, CA.
November 24-25 --
CNN "Moneyline". Watch for our editor as a likely guest on this
evening's (Wed., Nov. 24) CNN
Moneyline, discussing the continuing lawsuit boom.
November 23 --
Class actions vs. high tech. "It had to
happen: America's most successful industry, high
technology, is under sustained assault from America's second-most successful
industry, litigation." The editor of this website has an op-ed in
this morning's New York Times, tackling the Microsoft and Toshiba
class
actions. (Walter Olson, "A Microsoft Suit with a Sure Winner",
New York Times, Nov.
23).
November 23 --
Soros as bully. Add another prominent name to the list
of philanthropists (see September 2 commentary)
bankrolling the lawsuits that are fast driving family-owned gunmakers
into bankruptcy: wealthy financier George Soros, who according to a Wall
Street Journal report last month has donated $300,000 to keep the Hamilton
v. Accu-Tek litigation going and also provided financing for the
NAACP's suit against gunmakers. (Paul M. Barrett, "Evolution of a
Cause: Why the Gun Debate Has Finally Taken Off", Wall Street Journal,
Oct. 21)
November 23 --
Update: too obnoxious to practice law. The
Nebraska Supreme Court has now heard the case of Paul Converse, who wants
to become a lawyer though the state bar commission says he's behaved in
an "abusive, disruptive, hostile, intemperate, intimidating, irresponsible,
threatening or turbulent" manner in the past (see Oct.
13 commentary). Last week the court agreed that Converse
"seeks to resolve disputes not in a peaceful manner, but by personally
attacking those who oppose him in any way and then resorting to arenas
outside the field of law to publicly humiliate and intimidate those opponents."
Notwithstanding these high qualifications to practice in certain fields
of American law, it turned down his application. They sure do things
differently out in Cornhusker land (Leslie Reed, "Court: Law Grad Unfit
for Nebraska Bar", Omaha World-Herald, Nov. 20, link now dead)
November 23 --
Get off my jury. "To win a decent verdict, Mr. Rogers
[Chicago attorney Larry R. Rogers, Sr., who won $10.4 million for a client
after a serious traffic accident] had to select the right jury...He never
wants people from the banking industry, accountants and people in investment
professions
on his juries: 'These people tend to think about the power of money, that
if you give someone $100,000 and they invest it, it will earn something.
They won't give you full compensation for the injury.' He was also
sensitive to keeping off jurors who are anti-lawsuit: 'I ask them is there
anything they've heard in the media, in newspapers, about tort reform.'
...'They liked [his client], and juries tend to award damages to people
they like." ("Proving worth isn't age-related" (profile of Larry
R. Rogers Sr.), National Law Journal,
Oct. 4.)
November 22 --
From the planet Litigation. Courtroom jousting
continues between a group that calls itself Citizens
Against UFO Secrecy and the U.S. Department of Defense over CAUS's
charges that DoD has covered up incidents of possible intrusion by extraterrestrial
spacecraft.
CAUS has sued the government a half-dozen times over its alleged unresponsiveness
to Freedom of Information Act (FOIA) requests regarding UFO sightings;
on September 1 it added a complaint that the government has fallen short
of its responsibilities under Article IV, Section 4 of the Constitution
to defend the nation's territory against foreign invasion. CAUS executive
director Peter Gersten filed the action in his home state of Arizona, which
"is definitely a targeted area for the clandestine intruders," and is contemplating
follow-on suits in New York and California. "I can prove in a court
of law, and beyond a reasonable doubt, that we are in contact with another
form of intelligence," he says. CAUS's site reprints affidavits,
motions and other documents
from the case, including illustrations of UFO sightings in Corpus
Christi, Tex., Pahrump, Nev. (link now dead), and Seattle.
(Robert Scott Martin, "CAUS Sues U.S. Over Secrecy", Space.com,
Sept.
1, link now dead; CAUS Sept. 1 press
release.)
In a separate action, UFO researcher Larry Bryant of Alexandria,
Va., who's served as CAUS's Washington, D.C. coordinator, has prepared
a petition charging Virginia authorities with shirking their constitutional
obligation to safeguard citizens from invasion by foreign powers.
Bryant says Virginia governor
James Gilmore III "knows that it's against the law to abduct, torture,
falsely imprison, wantonly impregnate and unconsensually surgically alter
(via implants) a person. He also knows that he has the power to repel these
invasive activities of apparently alien-originated UFO encounters."
Described by Space.com as a retired writer and editor of military
publications, Bryant "takes pride in having 'filed more UFO-related lawsuits
in federal court than has anyone else in the entire universe.'" (Robert
Scott Martin, "UFO Invasion Outcry Spreads to Virginia", Space.com,
Sept.
10, link now dead.)
CAUS's Gersten has also described as "gratuitously demeaning",
probably "defamatory" and "actionable" an ad for Winston cigarettes this
summer which made fun of alien-abduction believers, but declined to pursue
legal action against the cigarettes' maker, R.J. Reynolds. ("Cigarette
Ad Sparks UFO Controversy", Space.com, Sept. 28; "UFO Lawyer Unlikely
To Sue Tobacco Company over Ad", Oct. 1, links now dead).
November 22 --Vice
President gets an earful. "One employee summed up the
anguish over the case, saying, 'when I read what the government says about
Microsoft, I don't recognize the company I work for.' Another bitterly
complained that the many subpoenas of Microsoft e-mail had invaded employees'
privacy more than any government wiretap, 'so that sharp lawyers can cut
and snip bits of e-mail to construct whatever story they want' in court.
'We bugged ourselves'." John R. Wilke, "Gore, Addressing Microsoft
Staff, Defends Nation's Antitrust Laws", Wall Street Journal, Nov.
16).
The New York Times is reporting that class-action
lawyers on the West Coast will sue Microsoft as early as today on behalf
of a class of California end-users of Windows 95 and 98. The suit,
which will ask treble damages for alleged overcharges, will be filed on
behalf of a statewide rather than nationwide class because the U.S. Supreme
Court's 1977 Illinois Brick decision disallows federal antitrust
actions on behalf of indirect purchasers of goods (most Windows users buy
it preloaded on their machines, rather than direct from Microsoft).
However, 18 states including California and New York have enacted statewide
laws allowing such suits. (Steve Lohr, "Microsoft Faces a Class Action
on 'Monopoly'", New York Times, Nov.
22 -- free, but registration required).
November 22 --
Great moments in zoning law. Officials in Millstone, N.J.
have issued a summons to Lorraine Zdeb, a professional pet-sitter who took
in nearly 100 animals from neighbors, clients and strangers to save them
from the flooding of Tropical Storm Floyd, charging her with operating
a temporary animal shelter in a residential neighborhood. ("Somerset
County woman charged for taking in animals during storm", AP/CNN, Nov.
20, link now dead).
November 22 --
Repetitive motion injury Hall of Fame. Delicacy prevents
us from describing exactly how this Fort Lauderdale, Fla. woman acquired
carpal tunnel syndrome in the course of providing paid telephone companionship
for lonely gentlemen, but it did not prevent her from applying for workers'
compensation benefits for which she obtained a "minimal settlement" this
month. (Reuters/ABC News, Nov. 19, link now dead).
November 20-21 --
Annals of zero tolerance: the fateful thumb. MeShelle Locke's
problems at North Thurston High School
near Tacoma, Washington began Nov. 5 when she pointed her finger and thumb
at a classmate in the shape of a gun
and said "bang". Asked if that was a threat, she saucily quoted a
line from the 1992 movie "The Buttercream Gang": "No, it's a promise."
Before long, she was hauled up on charges of having threatened violence,
drawing a four-day suspension and a disciplinary record that may affect
her chances of getting into a competitive college.
A budding writer whose work appeared in the high-selling anthology Chicken
Soup for the Kid's Soul, and who says she'd never been in trouble with
the school before, MeShelle might seem an unlikely source of menace, but
school officials told her father that his daughter "fit the profile" of
a potentially dangerous student: "For example, she often eats lunch alone
or in a small group." (Karen Hucks, "Gunlike gesture results in suspension",
Tacoma News-Tribune, Nov. 13; "School is no place for 'bang-bang'
jokes", Nov. 16, links now dead)
November 20-21 --
From the evergreen file: L.A. probate horror. Wealthy art collector
Fred Weisman was lucky he didn't live to see the proceedings in a Santa
Monica courthouse after his death "as his will and his estate are picked
apart like a slab of pork thrown to buzzards." (Jill Stewart, "Shredded
Fred", New Times L.A., Nov. 19, 1998, link now dead).
November 20-21 --
No, honey, nothing special happened today. In early 1997
Denise Rossi startled her husband by announcing that she wanted a divorce.
In the ensuing legal proceedings she forgot to mention -- it just slipped
her mind! -- that eleven days before filing she'd happened to win the California
lottery for $1.3 million. Two years later, her husband learned the
truth when a misdirected Dear-Lottery-Winner letter arrived offering to
turn his ex-wife's winnings into ready cash. And this Monday a judge
ruled that she'd have to hand it all over to her ex-husband, as a penalty
for committing a fraud on him and on the court. She has since filed
for bankruptcy proteciton. (Ann O'Neill, L.A. Times, reprinted
in San Jose Mercury News, link now dead).
November 20-21 --
Judge to lawyers in Miami gun suit: you're trying to ban 'em, right?
"If you were to get exactly what you wanted, they'd be taken off the market
entirely," Circuit Court Judge Amy Dean told lawyers representing Dade
County in its recoupment lawsuit against major gunmakers,
by way of clarifying their position. (Jane Sutton, "Miami Gun Suit
Could Take Firearms Off Market", Reuters (link now dead), Nov. 16).
Last month attorney John Coale, a spokesman for the municipal suits, "dismissed
claims that the lawsuits could ever shut down the entire handgun industry.
'It can't be done, and it's not a motive, because as long as lawful citizens
want to buy handguns, and as long as the market's there, there's going
to be someone filling it,' Coale said." (Hans H. Chen, "Colt's Handgun
Plan Heats Up Debate", APBNews.com, Oct.
11) (see Oct. 12 commentary).
Dade County-Miami Mayor Alex Penelas, quoted in the new Reuters report,
seemed to view the anti-democratic nature of the county's lawsuit almost
as a point in its favor: he "said he was using the courts in an attempt
to crack down on the gun industry because the Florida legislature refused
to do so. 'Every year that I've gone to the legislature we have basically
been told to take our case elsewhere,' he said." Much the same sentiment
was expressed last month by Elisa Barnes, the chief lawyer behind the Hamilton
v. Accu-Tek lawsuit in Brooklyn, N.Y. against gunmakers: "'You don't
need a legislative majority to file a lawsuit,' says Ms. Barnes."" ("Evolution
of a Cause: Why the Gun Debate Has Finally Taken Off", Wall Street Journal,
Oct. 21 (requires online subscription))
November 20-21 --
National Anxiety Center "Favorite Web Sites of the Week".
"I recommend a visit to www.overlawyered.com where you
can get tons of data regarding how trial lawyers are destroying this nation
out of nothing more than greed, greed, and greed. This excellent site will
help you understand what’s happening to Microsoft, to the tobacco industry,
the gun manufacturers, and much more." -- "Warning Signs", the weekly
commentary of Alan Caruba's National
Anxiety Center, for Nov.
19. Unabashedly conservative, Mr. Caruba's popular site specializes
in refuting environmental scares in outspoken style.
November 20-21 --
100,000 pages served on Overlawyered.com. We'd have hit
this milestone earlier but our counter went on the fritz for a few days...thanks
for your support!
November 18-19 --
Worse than Y2K? "If the EPA succeeds in
forcing a shutdown of the 17 coal-fired power generating plants it claims
are illegally polluting," editorializes the Indianapolis Star regarding
the Clinton Administration's recently filed lawsuit, "chances are very
good the Midwest will experience major brownouts and rolling power outages
on the next hot summer day." Moreover, the "lawsuits were filed without
warning [Nov. 3] by the Justice Department on behalf of the EPA. It was,
quite simply, an unprecedented sneak attack on the electrical power industry"
-- yet one to which private environmental groups may have been tipped off
in advance, given how ready they were to fire off a flurry of supportive
press releases. EPA administrator Carol Browner and Janet Reno's
Justice Department now contend that utilities disguised expansions and
upgrades of the grandfathered plants as routine maintenance, but a Chicago
Tribune
editorial says the modernizations were carried out with "the knowledge
of federal environmental inspectors"
whose superiors are now seeking to change the game's rules after many innings
have been played. If a looming Y2K glitch threatened to shut down
a large share of the electric capacity of the Midwest and South, there'd
be widespread alarm; when aggressive lawyering threatens to do so, few
seem to care. ("EPA sneak attack", editorial, Indianapolis Star,
Nov.
5, link now dead; "A costly U-turn by the federal EPA", editorial, Chicago
Tribune,
Nov.
13).
November 18-19 --
Golf ball class action. Golf Digest
is "disgusted" over a class-action suit
that lawyers filed against the Acushnet Company because, after running
out of a promotional glove sent free to customers of Pinnacle golf balls,
it sent the remaining customers a free sleeve of golf balls instead.
Fraud! Deception! Shock-horror! "In the end, the plaintiffs'
attorneys were awarded as much as $100,000 in fees for their heroic efforts,
[Allen] Riebman and [Lawrence] Bober (as the two named plaintiffs) themselves
received payments of $2,500 apiece, and everyone else received what the
lawsuit claimed was unacceptable in the first place: another free sleeve
of Pinnacles. That's justice at work." ("The Bunker", Golf Digest,
October 1 -- link now dead)
November 18-19 --
Skittish Colt. According to Colt
Manufacturing, the historic American gunmaker
battered by the trial lawyers' onslaught, Newsweek got some things
wrong in its report last month, which was summarized in this space Oct.
12 (see also Nov. 9 commentary).
Colt denies that its dropping of various handgun lines constitutes an exit
from the consumer market, and says "it will continue its most popular models,
such as the single-action revolver called the Cowboy and the O Model .45-caliber
automatics." It gave a number for layoffs of 120-200 rather than
300, and suggested that the lines would have been dropped at some point
even without the litigation pressure. (Robin Stansbury, "Arms Reduction
at Colt's", Hartford Courant, Oct. 13,
reprinted
at Colt site). A
statement by the company did not, however, dispute a quote attributed
to an executive in the original reports: "It's extremely painful when you
have to withdraw from a business for irrational reasons."
According to Paul M. Barrett in the Oct. 21 Wall Street
Journal, Colt's legal bills for defending the suits "are expected
to reach a total of about $3 million in 1999 alone. Insurance will
cover two-thirds of that, says [New Colt Holdings chairman Donald] Zilkha,
but the remaining $1 million is a significant hit for a still-struggling
company that expects to have net income of only about $2 million this year."
("Evolution of a Cause: Why the Gun Debate Has Finally Taken Off", Wall
Street Journal, Oct. 21). Update: for a closer look at
Colt, see Matt Bai, "Unmaking a Gunmaker", Newsweek, April
17, 2000.
November 18-19 --
Law-firm bill padding? Say it isn't so!
Law professor Lisa Lerman of Catholic University in D.C. thinks lots and
lots of overbilling goes on, even at big-name firms. "There's a complete
disconnect between the occurrence of misconduct and the rate of discipline,"
she says. (Michael D. Goldhaber, "Overbilling Is a Big-Firm Problem
Too", National Law Journal, Oct.
4). One of Lerman's case histories, if accurate, indicates systematic
malfeasance in the methods by which an unnamed Eastern law firm generated
time sheets to submit to its insurance-company clients. (Michael
D. Goldhaber, "Welcome to Moral Wasteland LLC", National Law Journal,
Oct.
11).
November 18-19 --
A lovable liability risk. Zoe, a golden
retriever who for the past two years has accompanied Principal Jill Spanheimer
at her office at West Broad Elementary School, and has made friends with
practically all the kids over that time, has been banished by an administrative
order of the Columbus, Ohio public schools. The school system's letter
to Ms. Spanheimer "cited 'possible allergic reactions,' 'liability issues'
and 'an uncomfortableness of some students and staff' as reasons Zoe was
expelled." See if your heart doesn't melt at the picture (Julie R. Bailey,
"Principal's dog expelled from elementary school", Columbus
Dispatch,
Nov.
11). On Tuesday the board agreed to review the policy (Bill Bush,
"Policy on animals in schools becomes pet project for board", Columbus
Dispatch,
Nov.
17).
November 18-19 --
Aetna chairman disrespects Scruggs. No love
lost, clearly, between Richard Huber, chairman of Aetna, and Mississippi
tobacco-fee tycoon Richard Scruggs, prominent in the much-hyped legal assault
on managed care. Scroll down
about halfway through this interview to find the bracketed "Editor's Note"
where the interviewer asks the chairman of the nation's largest health
insurer whether it was "by intention or mistake" that he'd consistently
misreferred to Mr. Scruggs' surname as "Slugs". Knock it off, kids
(MCO Executives Online, Oct. 27 -- full
interview).
November 18-19 --
Welcome WTIC News Talk visitors
("Ray and Robin's picks").
We've even got a few Hartford-related items for you: see the Colt and Aetna
bits above, and this report summarizing
an article from the Courant about how lawsuits are making it hard
for towns around Connecticut to run playgrounds.
November 17 --
"How I Hit The Class Action Jackpot".
"As the lucky co-owner of a Toshiba
laptop computer, I should be tickled pink: I apparently qualify for
a cash rebate of $309.90....And the beauty of it is that my Toshiba works
just fine!....[S]o remote is the possibility that our laptop will ever
seriously malfunction that I may not get around to downloading the free
software 'patch' that Toshiba has provided as part of the settlement."
Don't miss this scathing Stuart Taylor column on the mounting scandal of
the $147.5-million (legal fees) laptop settlement. (National Journal,
Nov. 15 -- link now dead).
November 17 --
Who needs communication? The Equal
Employment Opportunity Commission steps up its campaign of complaint-filing
over employer rules requiring employees to use English on the job.
Synchro-Start Products Inc. of suburban Chicago has agreed to pay $55,000
to settle one such agency complaint; native speakers of Polish and Spanish
make up much of its 200-strong workforce, and the company said it adopted
such a policy after the use of languages not understood by co-workers had
led to miscommunication and morale problems. The EEOC, however, pursues
what the National Law Journal terms a "presumed-guilty" approach
toward employer rules of this sort, permitting narrowly drafted exceptions
only when managers can muster "compelling business necessity", as on health
or safety grounds. Earlier this year, a California nursing home agreed
to pay $52,500 in another such case. In some early cases, employers
adopted English-only policies after fielding complaints from customers
who felt they were being bantered about in their presence or that non-English-speaking
customers were getting preferential service -- a problem which, like that
of co-worker morale, may not necessarily rise in Washington's view to the
level of "business necessity". ("EEOC Settles 'English Only' Workplace
Suit For $55,000", DowJones.com newswire, Nov.
12; Darryl Van Duch, "English-Only Rules Land In Court", National
Law Journal, Oct.
26.)
November 17 --
Microsoft roundup. A critic of the giant
company explains, not without glee, why the findings of fact mean so much
as a template for private lawsuits: "Before last Friday, telling a jury
that Microsoft is an evil, predatory
organization that drove you out of business was a long, protracted procedure
of walking a jury, step by step, through a crash course of how a technology
company works; the importance of core technologies and leveraging them
into a larger space, the nature of operating systems and related licensing
and agreements, how Microsoft was able to exploit its position in the marketplace;
and why this means that the plaintiff's company was hoodwinked and not
simply outmaneuvered. Today, you just have to call the jury's attention
to the document which your, their, and Bill Gates' tax dollars helped to
prepare." (Andy Ihnatko, "The Wicked Witch Is Seeking Positive Spin", MacCentral
Online,
Nov.
9).
Also: why bungling by IBM (especially) and Apple helped
clear the way for Redmond's dominance (Jerry Pournelle, "Jerry's
take on the Microsoft decision: Wrong!", Byte, Nov.
8). And a Gallup Poll shows the public viewing Bill Gates favorably
by more than three to one, siding with Microsoft on the trial by a 12-point
margin, and opposing breakup of the company by a solid majority -- as if
any of that will matter to the folks in Washington (Ted Bridis, "Despite
court loss, Microsoft moving ahead in public opinion", AP/SFGate Tech,
Nov.
10).
November 16 --
What a mess! New Overlawyered.com subpage on environmental
law. Our latest topical page assembles commentaries
and links on the slowest and most expensive method yet invented to clean
up fouled industrial sites, pay due respect to irreplaceable natural wonders,
and bring science to bear on distinguishing serious from trivial toxic
risks -- namely, turning everything over to lawyers at $325 an hour.
Also included are commentaries on animal rights, including our ever-popular
drunken-parrot,
crushed-insect,
rattlesnake-habitat
and eagle-feather reports -- though
at some point the menagerie of legally protected critters will probably
get its own page.
November 16 --
Baleful blurbs. Under well-established First Amendment
precedent, it's still nearly impossible to prevail in lawsuits against
book publishers alleging that their wares are false and misleading -- that,
e.g., the diet book didn't really make the pounds melt away, the relationship
book resulted in heartbreak rather than nuptials, the religion book led
the reader into spiritual error, and the celebrity autobiography bore only
a passing relationship to strict historical truth. Were it otherwise,
whole categories of book might never appear on bookstore shelves in the
first place for fear of liability, including not a few works of public
policy interest, such as, for example, the writings of certain early enviro-alarmists
who predicted famine and exhaustion of world nonrenewable resources by
1985.
However, a recent decision in a California court may represent a breakthrough
for plaintiff's lawyers who've long hoped to expand publisher liability
for printed untruths. The "Beardstown Ladies" were a mid-1990s publishing
phenomenon in the well-worn genre of commonsense investment advice: a group
of grandmothers in a small Midwestern town whose investment club was widely
reported to have achieved stellar annual returns. Eventually a reporter
for Chicago magazine investigated and found the Ladies had inadvertently
inflated their returns, which turned out to be not especially stellar.
Disney, their publisher, sent correction slips to booksellers, and the
Beardstown craze was soon but a memory. The San Francisco law firm
of Bayer, August & Belote, however, went to court on behalf of a customer
to say that Disney had behaved falsely and deceptively by not yanking the
book or at least its cover, which repeated the discredited claims.
Last month, reversing a lower court's ruling, the state's First District
Court of Appeal ruled that although First Amendment law concededly protected
the contents of the book, its cover blurbs were entitled to no such protection
-- even though the blurbs were in fact quoted verbatim from the book's
text. "Because the state has a legitimate interest in regulating
false commercial speech, we conclude that the statements, as alleged, are
not entitled to First Amendment protection," wrote Justice Herbert "Wes"
Walker. The Association of American Publishers had filed an amicus
brief warning that such a ruling would "impose an affirmative obligation
on publishers to investigate independently and guarantee the accuracy of
the contents of the books if those contents are repeated on book covers
and promotional materials." (Rinat Fried, "Panel: You Can Judge Book by
Cover", The Recorder/Cal Law, Oct.
29). (DISCUSS)
November 16 --
'Bama bucks. Per financial disclosure reports, six plaintiff's
law firms "donated about $4 million last year to six candidates through
the state Democratic Party and political action committees", according
to the pro-tort reform Alabama Citizens for a Sound Economy.
Tops was the firm of Jere Beasley of Montgomery, which gave "more than
$1 million -- $633,000 to the Democratic Party and $389,000 to two political
action committees, Pro-Pac and Trial-Pac". Other distributors of
largesse included Cunningham, Bounds, Yance, Crowder & Brown of Mobile
($955,000), Hare, Wynn, Newell & Newton of Birmingham ($636,000); Pittman,
Hooks, Dutton & Hollis of Birmingham ($526,000); Morris, Haynes, Ingram
& Hornsby of Alexander City ($476,000); and King, Warren & Ivey
of Jasper ($250,000). The money went to four judicial candidates, of whom
two won, and to losing candidates for attorney general and lieutenant goveror.
(Stan Bailey, "Group: 6 law firms gave $4 million to Demos' run", Birmingham
News,
Nov.
10) (earlier coverage of Alabama tort politics: Aug.
26, Sept. 1).
