SOX Whistleblower claims

Michael Delikat in the Wall Street Journal:

Sarbox’s whistleblower provisions were intended “to prevent recurrences of the Enron debacle and similar threats to the nation’s financial markets” by protecting those who report fraudulent activity that could damage innocent investors. That was the intent, at least. The reality is something else.

About 1,000 whistleblowing claims have been filed under Sarbox. Only 17 were determined after federal investigation to have merit and only six of this group have kept their wins after full evidentiary hearings before administrative law judges.

Nevertheless, the plaintiffs bar and others have ready answers for this extremely poor batting average. Critics assert that the 90-day statute of limitation for filing whistleblower claims is too short, the burden of proof placed on complaining employees is too high, that judges are reading the law too narrowly, or even that, as one law professor testified, the whistleblower provisions have “has failed to protect the vast majority of employees who file a Sarbanes-Oxley claim” because they rarely win.

None of these criticisms measure up. Sarbox whistleblowers rarely win because most claimants are using, or some might say, misusing, the law as a club in garden-variety workplace disputes.

Larry Ribstein comments.

Update: as does Professor Bainbridge: “Clearly, the whistle blower provisions significantly raised costs and created opportunities for employees to game the system.”

Pet store not at fault for letting customers bring in pets

“A 5-year-old girl bitten by a Rottweiler puppy in a Petco store cannot sue the pet supplies chain because it has a policy of allowing its customers to bring their pets into its stores, an acting New York Supreme Court justice has ruled, noting the policy reflects ‘an industry-wide standard’ designed for the benefit of pet store customers. The summary judgment ruling also exonerated the owner of the Rottweiler, finding he had no reason to suspect that the 8-month-old puppy had a ‘vicious propensity.'” Plaintiffs say they’re going to appeal, though. (Daniel Wise, “Bid Challenging Pet Supplies Retailer’s Pet-Friendly Policy Fails”, New York Law Journal, Aug. 8). Earlier: Dec. 14, 2003.

New at Point of Law

Among things you’ve missed if you haven’t been keeping up with our sister site: law firm tells silicosis clients that “unfortunately” they’ve checked out healthy and don’t have the disease after all; American Express pays $3 million, and class action objectors go away; Harvard’s Larry Tribe apologizes to the widow of the late Prof. Bernard Siegan; French consumerist vows not to replicate U.S. folly on class actions; Madison County, Ill. courts due for upgrade to heckhole status?; Hillary bashes Obama for supporting class action reform; Deborah La Fetra concludes her week of guestblogging on premises liability, negligent security and other matters; and much, much more.

Holier-than-thou Edwards called to account

Ruth Marcus in today’s WaPo:

I don’t think it would much matter if Democrats were to live in The World According to Edwards, who has never taken lobbyist money. Nice symbolism, perhaps, but how does it make candidates any purer to disdain checks from lobbyists while avidly vacuuming up contributions from the various industries they represent?

Edwards is no less tainted by the trial-lawyer money he scoops up by the bucketful than he would be by lobbyist contributions.

Sounds familiar.

Business Week on arbitration clauses

The Ninth Circuit, bound by California Supreme Court precedent, struck down a class-action waiver in an arbitration clause in a Cingular cell-phone contract. As I note to Business Week, forcing consumers to keep legal rights that they may not want ex ante raises prices: better to permit consumers and businesses the choice of how best to arrange their business affairs through freedom of contract. This is largely unpopular with the 17 commenters to the article.

“The Party of the First Part: The Curious World of Legalese”

In the mail, not read yet but looks amusing: The Party of the First Part: The Curious World of Legalese by Adam Freedman, “Legal Lingo” columnist for the New York Law Journal Magazine. Freedman observes that “For better or worse, the instruction manual for today’s world is written by lawyers” and aims to reach an audience of “everyone befuddled, enraged or intrigued by legalese — even lawyers.” Freedman’s website features a “Golden Gobbledygook” contest and “Legalese Hall of Shame”; you can order the book through Amazon here.

August 22 roundup

  • Criminal charges dropped against Oregon 13-year-olds over fanny-swatting in school corridors [CBSNews.com, Malkin, KGW.com and AP; earlier]

  • Elasticity of “medical error” concept: Medicare will stop paying hospitals for treatment of “reasonably preventable” injuries that happen in hospitals, such as patient falls — we all know those are preventable given enough duct tape [NCPA, Right Side of the Rainbow; and before assuming that bed sores invariably result from negligent care, read this](more: Turkewitz)

  • Yale University Press beats back libel suit in California court by Muslim charity over allegations in book scrutinizing terrorist group Hamas [Zincavage]

  • Law firms, including Philadelphia’s senatorially connected Kline & Specter, already advertising for clients following Mattel toy recall [Childs]

  • First class action against RIAA over its scattershot anticopying suit campaign [P2PNet]

  • Four Oklahoma inmates claim copyright to their own names, demand millions from warden for using those names without permission, then things really start getting wild [UK Telegraph and TechDirt via Coleman]

  • UCLA’s Lynn LoPucki, scourge of corporate bankruptcy bar, has another study out documenting soaring fees [WSJ Law Blog]

  • Man who knifed school headmaster to death is expected to win right to remain in Britain on grounds deporting him would violate his human rights [Telegraph]

  • Among targets of zero tolerance bans: jingle of ice cream trucks in NYC, screaming on Sacramento rollercoasters [ABCNews.com]

  • Does California antidiscrimination law require doctors to provide artificial insemination to lesbian client against religious scruples? [The Recorder]

  • Alabama tobacco farmers got $500,000 from national tobacco settlement, though fewer than 300 acres of tobacco are grown in Alabama [five years ago on Overlawyered]

Jackpot Justice or Insurance Fair Conduct?

The Washington Legislature recently passed and governor signed the “Insurance Fair Conduct Act” allowing first party claimants to recover treble (triple) damages and attorney fees for claims unreasonably denied. The Seattle Post Intelligencer’s story here lays out the pending battle between insurers and the trial bar. You see, the legislation is up for public vote in November and each side is scurrying to curry favor with the electorate.

Now, as an insurance consumer myself I expect high marks from my insurance company in the event of a loss. And, I have from time to time witnessed the recalcitrance of other insurers when tendering defense and indemnity to them (particularly in additional insured scenarios.) Few would disagree that insurers should promptly and cheerfully pay those claims they owe, period.

Read On…