Overlawyered: Chronicling The High Cost Of Our Legal System

Quitting while you’re behind

Ohio attorney John Ferron, and his client/serial plaintiff, Nathaniel Burdge, thought they had discovered a good moneymaking scheme. They found an obscure Ohio consumer protection statute, one which required retailers to stop printing credit card numbers or expiration dates on sales receipts, and they began suing retailers left and right, claiming the law entitled them to $200 in damages (plus, of course, attorneys fees) for every violation of the law. (The law had only been enacted in 2004, so many retailers were not in compliance.)

Fortunately — though not for Ferron or Burdge — Ohio judges had some common sense, and most quickly held that the words of the statute which explicitly stated that to sue, one had to be “a person injured by a violation” actually meant what they said. Since Burdge wasn’t actually injured, they dismissed his lawsuits. That didn’t deter Ferron/Burdge; they kept filing the suits and kept appealing the dismissals. Finally, one appeals court had enough (PDF), and denounced them in ringing language:

Burdge could not demonstrate that an actual injury was not a required element of his claims because R.C. 1345.18 explicitly sets out an injury requirement. Additionally, Burdge and his attorney had been repeatedly advised of this injury requirement by trial courts in opinions decided on their merits prior to March 2, 2006, when the notice of appeal was filed in this case.21 The facts as pleaded in the complaint in this and the other cases indicate that Burdge purposely made purchases at stores that were printing his expiration date on his receipt in order to recoup statutory damages totaling at least $12,800. Burdge’s actions are totally inconsistent with any allegation of actual injury; rather, his actions demonstrate that he attempted to reap a profit from this activity.

We are offended by the contrived nature of this frivolous action, which has wasted much time, paper, and other resources to the prejudice of legitimate disputes between parties, especially those involving the consumer-protection laws of Ohio.

They sanctioned Ferron/Burdge $3,000 for filing a frivolous appeal. (But not, it should be noted, for the frivolous lawsuit itself.)

Read On…

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More powerful than a locomotive. Less powerful than a lawyer?

Speaking of Good Samaritans: On January 2, New Yorker Wesley Autrey jumped off a subway platform in front of an oncoming train to rescue a man who had fallen onto the tracks. After a wave of good publicity, he signed a contract with an attorney, Diane Kleiman, to help him exploit his newfound celebrity.

Now… he’s suing that attorney, claiming that the contract he signed was unfair and asking that the court declare it void:

Autrey, a 50-year-old Bronx construction worker, says in court papers that the contract is “a one-sided agreement” he was induced to sign by “fraud” and that it gives the lion’s share of everything he earns to Kleiman and her business partner, Marco Antonio Esposito, operator of an entertainment production company.

[…]

Autrey’s lawsuit, filed Friday, says the contract gives Kleiman and Esposito exclusive rights to exploit his name and reputation and gives them ownership of intellectual property rights to his story.

The contract also gives Kleiman and Esposito the right to receive all gross receipts from commercial exploitation of Autrey’s name and to keep half those receipts, whether or not they helped generate the money, court papers say.

Whether the contract is fair or not, I can’t say; Autrey claiming he signed it without reading it certainly doesn’t win him any sympathy points with me.

Read On…

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Update: Brockovich Beverly Hills case

A further stinging rebuff in court for the glamourpuss tort-chaser: “A judge on Friday dropped the Beverly Hills Unified School District from a lawsuit that claims an oil well on a high school campus caused cancer in former students. Superior Court Judge Wendell Mortimer Jr. said he was not persuaded that the well operating for decades at Beverly Hills High was a danger. He also found no evidence that the school district was aware of any danger.” (“Beverly Hills schools dropped from lawsuit over campus oil well”, AP/San Diego Union-Tribune, Mar. 23). For more on the Beverly Hills case, see Mar. 16, 2004, Nov. 3, 2005, and Dec. 1, 2006. For Brockovich’s rebuffs in Medicare-billing cases, see Mar. 15, etc.

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“It’s ‘my policy to follow the ethical rules'”

Last week, Ted posted a court decision about a lawyer/client team who have turned the Americans with Disabilities Act — in theory, a law designed to protect actual consumers — into a full-time career, patronizing businesses for the specific purpose of being able to sue them. Not all such lawyer/client teams bother to even take the step of patronizing the businesses, however; some just skip the damages and go right to the extortion, hoping the defendants will pay rather than spend the money to defend themselves.

Many times, their business model works, but occasionally, it backfires, as it did last week on serial ADA litigant Theodore Pinnock. (Technically, Pinnock is the attorney, not the plaintiff. But why split hairs? The plaintiffs, Delores Jackson and the imaginary organization she “represents,” the Association of Women with Disabilities Advocating Access, are just fronts for Pinnock.) On Friday, a federal judge in San Diego sanctioned Pinnock, ordering him to take an ethics class and pay $15,000 in attorneys fees to Marcos Mout, a defendant he had sued last October. Mout owned a convenience store, and was sued because the store was allegedly inaccessible to the disabled. Well, not quite:

Jackson, who uses a walker, said she had “researched” the store and had photographic evidence of numerous violations. In the complaint, she said she had intended to patronize the store but would have been thwarted by problems with signage, the entrance door, interior paths, counter height, parking and the restroom, among many things.

The businessman’s attorney countered that the convenience store wasn’t even open to the public at the time Jackson was allegedly denied access, having been seriously damaged in December 2004 by a flood.

Mitch Wallis, attorney for convenience store owner Marcos Mouet, also told the court that the small store, which remains shuttered, didn’t even have a public restroom. Jackson’s lawsuit also alleged that interior pathways weren’t wide enough, but Mouet’s attorney noted that the shelves had been pushed against the wall to fix the flood damage.

Yes, but aside from those issues…

Incidentally, the Bizarro-Overlawyered crowd will tell you that frivolous suits are easily, quickly, and cheaply disposed of by the courts; this case illustrates yet again how badly they misunderstand the nature of the legal system. Because the suit against Mout’s convenience store made superficially legitimate allegations, it cost Mout at least $15,000 to defend the suit. (He actually claimed legal costs of $38,000 in making his motion for sanctions, but the court found that $15,000 was a more reasonable figure.) And that was for a suit that lasted “only” five months.

Previous coverage of Pinnock: Apr. 2006

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Pacific Research Institute: Cost of American jackpot justice: $865 billion

I’ve long complained that the Tillinghast/Towers Perrin estimate of the cost of the tort system is a fundamental underestimate because of its lack of measurement of second-order effects.

I haven’t had a chance to analyze the PRI report in detail, but their figure of $865 billion/year (6.6% of the GNP), which includes the effect of the tort system on safety, employment, innovation, rent-seeking, and rent-avoidance, is around the right order of magnitude, though it’s a little much to expect three-digit accuracy from the estimates the study makes. (Cross-posted at Point of Law.)

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California Good Samaritan out of luck

Alexandra Van Horn was a passenger in a car that ran into a light pole at 45 mph. Lisa Torti, a passenger in a car following behind, stopped at the crash scene and tried to render assistance by lifting Van Horn out of the car. Van Horn emerged from the accident a paraplegic, although court testimony differed on whether the accident itself or Torti’s attempt to pull her out of the vehicle was responsible for this. Now a California appeals court has ruled that the state’s Good Samaritan liability shield does not protect Ms. Torti from Ms. Van Horn’s negligence suit because it “only protects people from liability if they are administering emergency medical care. The perceived danger of remaining in the wrecked car was not ‘medical,’ the court ruled.” (“Court: Law may not protect Good Samaritan from suit”, AP/CourtTV, Mar. 23).

Update Dec. 19, 2008: Calif. high court rules for plaintiff.

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