Overlawyered: Chronicling The High Cost Of Our Legal System

New Jersey high court: palimony without cohabitation OK

Courts up to now have maintained a bright-line rule of not entertaining palimony claims unless a couple has cohabited, such a rule significantly improving people’s degree of certainty about which former romantic partners might suddenly emerge with a financial claim. But of course when you have bright-line rules of this sort, not as many people get to sue, so the New Jersey high court has now made itself the first state high court to overthrow the rule, inviting claims where the totality of the facts and circumstances “would cause one of the partners to believe a relationship existed, that it was similar to a marriage,” to quote Chatham, N.J. lawyer Alan Zegas (Tom Hester, “Palimony ruling sets precedent in Jersey”, Star-Ledger; NJLJ; AP/Cherry Hill Courier-Post*). Earlier here.

* Okay, there you go, AP, I didn’t quote even the five words from your story. But you also notice I gave the Star-Ledger first billing.

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Kentucky fen-phen: we’d have been justified taking 85 percent

Perfectly jaw-dropping testimony at the ongoing Covington, Ky. trial:

Attorney William Gallion testified yesterday that he and his co-defendants would have been “legally justified” in taking as much as $170 million from Kentucky’s $200 million fen-phen settlement — because, he said, their clients’ cases were worth only $30 million.

“We were like an insurance company where the hurricane didn’t strike, so we got to keep the premium,” the suspended Lexington lawyer testified in his diet-drug fraud trial in U.S. District Court.

The lawyers, it seemed, had structured the settlement so as to reserve the gigantic helping of gravy in question for the supposed disposition of certain contingencies which then conveniently failed to materialize. Judge William Bertelsman immediately told the jury that Gallion’s interpretation of the law was wrong. (Andrew Wolfson, “Judge, lawyer clash at fen-phen trial”, Louisville Courier Journal, Jun. 14).

And on Monday, famed Cincinnati attorney Stan Chesley — who has been given immunity — testified, assailing the conduct of the three defendants and conveying his complete shock that they would structure the settlement so unfavorably to clients. (Jason Riley, “Chesley rakes diet-drug trio”, Courier-Journal, Jun. 17; Jim Hannah, “Chesley: Fen-phen role slim”, Cincinnati Enquirer, Jun. 17). For a different viewpoint, see Peter Bronson, “Where’s Chesley?”, Cincinnati Enquirer, Jun. 12. More: Herald-Leader.

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Loose-fitting clothes and food machinery

Industrial safety specialists have long warned of the hazards of letting employees wear baggy garments around assembly-line machinery, hence the snug uniform, including pants, prescribed for both sexes by Mission Foods at its tortilla-making plant in New Brighton, Minn. Fatuma Hassan, an employee of Somali descent, claims it’s religious discrimination not to let her wear traditional garb. Thanks in part to activist groups eager to provide backup, Minnesota has become a flashpoint for Muslim employees’ demands for religious accommodation on the job: the cab drivers who refused to transport arriving airline passengers carrying duty-free alcohol and the Target cashiers who declined to scan pork apparently never made it to court, but complainants in the state filed 45 other cases with the EEOC last year. A class action is in progress against circuit-board maker Celestica on behalf of 22 employees, many of whom “were fired or suspended for taking unauthorized breaks at sunset. The changing Islamic prayer schedule was a key reason.” (“Cultural traditions can lead to conflict on the job”, AP/Rochester (Minn.) Post-Bulletin, Jun. 17)(via Michelle Malkin).

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Cyrus Sanai: Kozinski investigation “is part of a litigation strategy”; second Sanai v. Saltz sanctions order

Cyrus Sanai tells Patterico that his triggering an investigation of Judge Alex Kozinski’s web site is all “part of a litigation strategy” but does not reveal what the other two steps of his three-step strategy is, or more insight into his strategic genius.

Read On…

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WAMU Kojo Nnamdi show

I’m scheduled to be one of the guests on the popular Washington, D.C. public radio show today, during the 12 to 1 p.m. segment. We’ll be discussing BlackBerry legal issues, in particular, the degree to which employers are at risk of big retroactive wage-hour suits if they issue the communications devices to workers and then require (or even permit) them to use the devices for work purposes outside their normal hours. Our BlackBerry posts from this website can be found here. A while back I dismissed as unlikely, in the Times (U.K.), the notion of suits over BlackBerry “addiction” (truncated version here).

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Suing the chaperone

18-year-old Lauren Crossan, captain of the Randolph (New Jersey) High School cheerleading squad on a trip to the Hula Bowl, plunged naked to her death from a ninth-floor hotel balcony in Maui in 2004. Police arrested two California men who were staying in the hotel room, but then decided that the death was an alcohol-related accident–Crossan had a BAC of 0.17. (The men told police that they fell asleep while Crossan was still in the room after one had sex with her, and didn’t know what happened to her. Police say there was no evidence of sexual contact or of a struggle.) (AP, “Police: Cheerleader’s death an accident”, Jan. 15, 2004; Gary T. Kubota, “Tests show cheerleader was not on illegal drugs”, Honolulu Star-Bulletin, Jan. 27, 2004; memorial site with obnoxious music).

Read On…

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Lawyers manipulate dates — in backdating suit

Class-action lawyers pursuing an options-backdating suit against digital-media chip maker Zoran over options backdating “arbitrarily picked a stock price in the past that made the deal look more valuable than it was,” thus showing themselves willing to “engage in a little backdating themselves,” reports Daniel Fisher in Forbes. Lawyers at Seattle’s Keller Rohrback

portrayed themselves as having achieved $1.6 million in value and wanted $1.2 million in fees for their work. Using the stock price on the day the settlement was filed with the court, however, U.S. District Judge William Alsup said, the settlement would be worth perhaps $200,000 and possibly nothing at all. …

The lawyers painted the value of the package as $1.6 million, based on a Dec. 3, 2007, stock price of $21.99 a share. When Alsup asked how they arrived at that date, lawyers first indicated that was when they had signed a memorandum of understanding, but when Alsup ordered a copy of the memorandum, it turned out to have been signed Dec. 21 and wasn’t filed with the court until Feb. 26. By then Zoran’s stock was down 50%, and the options concessions were worth far less.

Faced with a tongue-lashing from Judge Alsup over the “collusive settlement” — and the prospect of few or no fees — the lawyers went back and returned with what appears a considerably enriched settlement offer from Zoran. (“Fee Fixers”, Jun. 9; Zusha Elinson, “Federal Judge Rejects Easy Options Deals”, The Recorder, Apr. 25). Update Jun. 18, from Recorder: judge approves revamped settlement.

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What newspapers need, and why antitrust law may block it

Jonathan Rauch:

Unfortunately, however, it is probably illegal for newspapers to form a subscription consortium [enabling consumers to pay for web content through a one-stop subscription to hundreds of newspaper sites]. Antitrust law was written generations ago, when newspapers were local monopolies or duopolies. Today, of course, they compete with the whole Internet. The problem now is that they have too little market power, not too much.

Even so, antitrust law regards collective pricing as collusion. “There is a well-established tunnel vision in applying antitrust laws,” says Lee Simowitz, a media lawyer with Baker Hostetler in Washington. “Broader values don’t enter the equation.” Allowing newspapers to combine forces, he says, is “really up to Congress.” …

Sooner or later, newspapers will need to get their acts together — literally — and charge collectively for content, and it will be in the public’s interest to let them do so.

(“How to Save Newspapers–and Why”, National Journal, Jun. 14; will rotate off site).

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