Overlawyered: Chronicling The High Cost Of Our Legal System

Survey of Texas judges

Bill Childs notes a Baylor Law Review study polling Texas judges on whether they think there are problems requiring tort reform based on what they see in their own courtroom.

I can’t imagine why anyone thinks such a study will produce useful results. The study has typical issues, such as the typical anti-reform eliding of what “frivolous” means, ignoring that the state-law definition of “frivolous” differs from the common-sense meaning of the word used by many politicians. Another question asks whether judges have recently presided over cases where compensatory damages awarded were too high, but excludes cases where compensatory damages were required to be reduced by statutory limits, and the authors draw opinions from this intentionally biased question.

But there’s a larger problem with the very nature of the study. Judges who correctly run their courtroom and follow the law are generally not going to have runaway juries, so they are likely to say (and even say correctly) that their juries generally don’t produce outlandish results. The problem requiring reform are judges who are in the pocket of the plaintiffs’ bar, and create judicial hellholes, and let Mikal Watts and Mark Lanier run wild. If such judges thought there was a problem requiring tort reform, they wouldn’t let plaintiffs’ attorneys get away with what they get away with. Most reasonable judges would find it problematic if a plaintiff loaned money to a juror and had phone conversations with them during trial when a jury came back with an implausible multi-million dollar verdict for an overweight 71-year-old man’s second heart attack when he wasn’t even taking Vioxx, but the Starr County judge in Garza v. Merck signed off on the judgment: of course he doesn’t think anything’s wrong with that if he’s polled by professors, but that doesn’t make him correct.

Polling judges in judicial hellholes to find out whether there is a need for legal reform is like polling O.J. Simpson to find out if there’s a problem with domestic violence.

Nevertheless, expect to see the poll widely used by the litigation lobby and their academic water-carriers in upcoming months and years.

Post updated 10:30 PM to clarify nature of questioning.

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Alcohol isn’t tobacco, unfortunately for trial lawyers

Class action lawyers — led by David Boies III, son of famed litigator David Boies — continue to try to attack the alcohol industry the same way they did the tobacco industry, but with far less success. Back in June 2006 we reported that Boies the Younger had been racking up an impressive track record… of losing. His lawsuits are based on the marketing practices of the alcohol companies; the claim is that the advertising was aimed at (who else?) children. But the suits don’t allege any actual harms suffered by, well, anybody. Instead, they claim that the marketing caused the plaintiffs’ underage children to buy alcohol. Even with creative lawyering, the only damages that they could allege were that the kids spent their parents’ money on the alcohol.

The lower courts have laughed these suits out of court, and last month, in response to Boies’ appeals, the Sixth Circuit did the same (PDF), finding that the plaintiffs didn’t even have standing to bring the suits. And when they did so, they gave a little civics reminder of how our legal system is supposed to work:

In any event, if outlawing the actual sale and purchase is insufficient to remedy the alleged injuries (which is the premise underlying the plaintiffs’ theories), then outlawing mere advertising must be insufficient as well. Consequently, the plaintiffs cannot demonstrate redressability. If these plaintiffs are convinced that alcohol advertising (i.e., First Amendment commercial speech) should be outlawed, then the means must be by legislation or constitutional amendment, not by judicial fiat.

In a rational world, this would be the end of these trial lawyer efforts. But since there’s no loser pays, our legal system doesn’t work that way. Trial lawyers can keep filing these over and over again in state after state, tweaking their arguments slightly from time to time, hoping to win the lottery; all they need to do is prevail once to earn back their entire investment in this litigation scheme. Whereas the alcohol companies have to win every one of these suits to avoid a backbreaking financial penalty.

Read On…

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West Virginia Supreme Court benchslap

Above the Law calls opinions where judges criticize one another “benchslaps,” and there’s a doozy of one in West Virginia, made all the sweeter by the appropriateness of the facts for Overlawyered.

Robert Cleavenger and Marissa Strahin were lovers, but at some point the relationship ended. Strahin, pregnant with Cleavenger’s child, moved in with Earl Sullivan in Braxton County, West Virginia. This perturbed Cleavenger, who decided to resolve the matter with a high-powered rifle. Thinking discretion the better of valor, Sullivan fled his property in a car, taking Strahin and her brother, Daniel Strahin, with him. Cleavenger pursued, and fired at the fleeing car, hitting Daniel in the arm.

Now the lawyers enter the picture. In 1999, Daniel Strahin and his parents sued Cleavenger and his parents, and also sued Sullivan on the grounds that it was foreseeable that Cleavenger would come after people on Sullivan’s property. The Strahins demanded that Sullivan’s insurers settle for insurance limits; they refused. The Strahins then conspired with Sullivan for the latter to assign a “bad-faith” claim to the plaintiffs in exchange for a covenant not to execute on any judgment against him. A sham of a trial took place, and a jury awarded over a million dollars to the Strahins, holding Cleavenger 70% responsible and Sullivan 30% responsible. The Strahins then went after Sullivan’s insurers.

West Virginia is enough of a judicial hellhole that it affirmed Sullivan’s liability (for which the insurers paid the $100,000 limit), even though there was no longer a case or controversy against him, but even West Virginia courts would not countenance the attempt to team up against the insurer for the bad-faith claim. After all, Sullivan’s assets were never at risk because he already settled with the Strahins, so there was no harm from the insurer’s refusal to settle, even if it were in bad faith.

Amazingly, Justice Larry Starcher dissented from this common-sense result. But none of the cases he cited supported his dissent. This prompted a concurrence, and the aforementioned benchslap:

“The complexity of the issue is quite evident in view of the fact that absolutely none of the fifteen string-cited cases in Mr. Strahin’s brief is on point with the facts of his case. I should note that the dissenting opinion of Justice Starcher repeats Mr. Strahin’s error, by citing to cases that are not on point with the fact pattern presented to and addressed by the majority opinion.”

In the words of the West Virginia Record, “State Supreme Court Chief Justice Robin Jean Davis lectured Justice Larry Starcher so firmly over a dissent that he probably can count it as credit for continuing education.” (Steve Korris, “Davis lectures Starcher in insurance opinion”, Aug. 16; Strahin v. Sullivan (Feb. 21 majority opinion); Starcher dissent (Jun. 29); Davis concurrence (Jul. 19)).

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Price of sending email: $160/email

Think carefully before hitting that send button. The cost of having independent attorneys review 2500 documents (mostly internal emails) that Merck had claimed subject to the attorney-client privilege was $400,000. That $160/email expense is, of course, just the cost of the independent review, and does not include the cost of attorneys litigating whether the documents should be produced to the other side. Judge Eldon Fallon ruled some documents were privileged, and others must be produced; both sides claim victory in reporting by Ashby Jones at the WSJ Law Blog.

The explosion in document creation has caused a litigation explosion in document discovery. This has had multiple effects: first, it encourages the settlement of meritless claims, because of the expense of defending such claims when document discovery can take place. This in turn encourages the bringing of meritless claims, as their extortion value goes up if plaintiffs can force defendants to spend millions of dollars defending themselves.

Separately, the explosion in document discovery has caused a leap in the demand for attorneys, and, in my opinion, is a large part of the recent increase in law-firm associate salaries. And applications to top law schools would drop precipitously if incoming law students had any idea what percentage of high-paid associates’ time is taken up on document discovery disputes over questions of attorney-client privilege.

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Wright on Frank on Chemerinsky on Roberts

Josh Wright expands on my line “we all know darn well that many ‘pro-business’ legal rules favor consumers and employees as a group ex ante,” and is even harsher with Chemerinsky than I was:

[W]hat gets me about this section is the heading: “Supreme Court favors businesses over consumers.” Is that really what these cases are about? I have read political accounts of the Supreme Court opinions in newspapers and periodicals or blogs that read this way (”The Roberts Court wants to stick it to the consumer — I can prove it: the Defendant won in all 4 cases this term”). But I’ve not heard law professors take this route too often, and never an antitrust commentator. In fact, a reasonable reading of the Court’s antitrust output this year suggests that the issues are much more nuanced than this oversimplified soundbite that pits business against consumers.

Is Leegin a pro-business and anti-consumer decision? I’m not sure I even know what that means in this context. … Justice Kennedy’s opinion on behalf of the majority does allow manufacturers to engage in behavior that was previously constrained. Perhaps that is a sufficient condition for a pro-business label? On the other hand, the very reason the Court overturned the per se rule was the result of evidence that minimum resale price maintenance made consumers better off! Now, one might think that the Court got it wrong and that RPM actually harms consumers. … But to argue that the Court got there by favoring business over consumers is not accurate, and obvious from reading the opinion.

Earlier on Leegin: Skip Oliva, Jul. 26.

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Whatever happened to that $217 million verdict?

You may recall the questionable $217 million verdict issued against Florida doctors for allegedly misdiagnosing a stroke after a CT-scan was negative. (Also: Oct. 7.) The attorney, Steve Yerrid, got a lot of publicity from promising to donate the $100 million punitive damages award to charity.

In March, we reported that the case settled, and promised a follow-up from the public-reporting system.

Read On…

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Bipartisan group of SEC chairs, law professors, speak out against “scheme liability”

The trial bar’s efforts to broadly expand the securities laws through judicial fiat is challenged in an amicus brief filed in Stoneridge v. Scientific-Atlanta (earlier: Jul. 31, etc.), including former SEC chairs Roderick Hills, Harvey Pitt and Harold Williams; and law professors Richard Epstein, Joseph Grundfest, Stephen Bainbridge, and Larry Ribstein.

Update: Not only has the Department of Justice come out in favor of affirmance (despite extensive lobbying by the plaintiffs’ bar), but both major stock exchanges—who interests unquestionably parallel the interests of investors as a group—filed amicus briefs seeking affirmance. But watch the press portray this as “businesses versus investors” instead of “businesses and investors versus trial lawyers and government officials seeking donations from trial lawyers.”

Update: Oral argument is October 9. AEI will hold a panel discussing the case October 5.

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Imus in the Courtroom, Update

In April, Don Imus infamously called the Rutgers Unversity women’s basketball team “nappy-headed hos.” After a week of controversy, criticism, and grovelling apologies, he was fired from his job by CBS radio. Imus threatened a lawsuit, and yesterday he settled with CBS. That should have been the end of the story. But of course, if it were, then how would the poor trial lawyers feed their families? Now that Imus’s settlement is final, he has money to burn. So, just a few hours after the settlement was announced, the first Rutgers player rushed to the courthouse to file suit against Imus and the other deep pockets:

“Imus lost four months of employment and gained $20 million and a new platform. But what about these young women? How does Imus’ big payday affect their self-esteem?” said Vaughn’s lawyer Richard Ancowitz.

The suit, which also named CBS, MSNBC and Imus sidekick Bernard McGuirk, did not ask for a dollar amount. There was no immediate comment from the defendants.

“The kind of sexist and bigoted attack these young women and Kia in particular suffered demands more than lip service,” Ancowitz said. “She wants the court to recognize that Imus slandered her.”

I haven’t seen a copy of the complaint yet, but it’s hard to imagine that it is anything other than utterly frivolous. Imus’s comments might have been nasty and uncalled for, but calling someone a “nappy headed ho” is not defamatory unless it is interpreted as an actual accusation that the person is a prostitute. No reasonable person could interpret it that way. That’s without even getting to the issue of lack of actual damages.

Update: AP provides the money quote from the complaint, and unless there’s a lot more they failed to mention, it’s exactly as frivolous as I expected:

The Vaughn suit claims that the comments were made in the context of a news or sports report and therefore Imus had certain standards to abide by but ignored them. The suit reprints the script from the “Imus in the Morning” show on which the comments were made.

“The … false, defamatory, sexually denigrating and slanderous statements and comments against the women athletes of said basketball team were heard, believed and understood by millions of listeners … as factual pronouncements concerning the character, chastity and reputation of the plaintiff,” the lawsuit says.

I’d tell you what I think of a lawyer that actually tries to make such a claim with a straight face, but I’m afraid he’d sue me for challenging his character, chastity, and reputation.

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