Overlawyered: Chronicling The High Cost Of Our Legal System

“Shorts’ nemesis dumped a client’s shares”

“Texas plaintiffs’ lawyer James ‘Wes’ Christian, the legal mind behind the rash of claims alleging naked short-selling in penny stocks…was a consistent seller of several companies that he is representing in high-profile and bitter legal fights,” according to records obtained by the New York Post. For example, “in May 2001, several months after Nanopierce retained Christian to launch one of the initial lawsuits against naked short-sellers – and after the publicity surrounding the legal battle goosed the stock price – he began unloading blocks of stock.” Christian is partnering with regular Overlawyered mentionee John O’Quinn on the naked-short-selling lawsuits, which have not fared well in court thus far. (Roddy Boyd, New York Post, Aug. 18).

Reporter Christopher Faille interviewed me for an August 23 article in the subscriber-only HedgeWorld. The article quotes me as saying that Mr. Christian

“seems to be preserving a possible line of argument that inducing a stock-price rise isn’t really part of his business plan, he just happens to own these stocks because the companies pay him in shares, he would have been happy to take cash payment instead, et cetera.”

That was precisely what Mr. Christian said in the interview Tuesday—that he took the stock instead of cash simply because Nanopierce didn’t have the cash necessary for him to do the original pre-litigation due diligence.

Older ethical rules — now often fallen into disuse — used to discourage or prohibit lawyers from taking stakes in enterprises they represented in litigation. As the HedgeWorld article quotes me as saying, “If what attorney Christian is doing is consistent with the ethical rules of the Texas bar, maybe it’s time to revisit those rules.”

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Election focus: Trial lawyers target Heather Wilson (R-NM)

The Democratic candidate, Patricia Madrid, is state attorney general and a former trial attorney; ATLA has provided her campaign $10,000 (among the $430,000 in trial lawyer contributions) and made an extensive ad buy. (Wilson press release, Aug. 31) Madrid’s office has been using taxpayer money to blanket the state with mailed pamphlets trumpeting recent settlements by the AG’s office, prominently featuring the same photo she uses on her campaign site. (Steve Terrell, “Roundhouse Roundup”, The New Mexican, Aug. 31).

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Another Grand Theft Auto lawsuit

The lawyers just love to sue Rockstar Games (e.g., Aug. 17; Mar. 5; Jul. 27, 2005; Feb. 19, 2005; Dec. 29, 2003); this particularly ludicrous suit alleged that “Grand Theft Auto:San Andreas,” the first part of which takes place in an ersatz parody of Los Angeles, infringed the trademark of a local strip club, “The Play Pen” because the game’s version, “The Pig Pen,” (one of hundreds of locations in the game) had a similar name and also had a parking lot and a round awning. Judge Margaret M. Morrow rebuffed the claim. But it took 100 entries on the docket, numerous depositions of game designers, expert-witness surveys, and a 55-page judicial opinion before this common-sense issue could be resolved in court. Moreover, the PlayPen attorneys say they’ll appeal, subjecting the matter to the random-legal-opinion generation of the Ninth Circuit. (AP, Aug. 8; Trademark Blog; E.S.S. Entertainment 2000 v. Rock Star Videos, CV 05-02966 MMM (C.D. Cal. July 28, 2006)).

In the weird coincidence department, one of the junior defense attorneys in the suit is not only someone who has worked on behalf of the RIAA in their oft-criticized “spamigation” suits against individuals who allegedly illegally download songs, but a co-creator of the lonelygirl15 Internet phenomenon.

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More on Nelson Rocks Preserve disclaimer

The amusing and well-written rock-climbing disclaimer we linked to yesterday had already been the subject of some attention around the web. Attorney David Canton used it as the model for a disclaimer about doing business on the Internet that was in turn picked up on Slashdot (May 6).

Unfortunately, the Nelson Rocks Preserve itself, which includes some of the most challenging terrain in the Eastern United States, has mostly closed itself to rock climbing by the public following a number of injuries and rescue emergencies. A few days ago (Sept. 9) Tom at AllClimbing.com passed along a rumor that the preserve might reopen next year. (Update Nov. 2010: Legal Blog Watch).

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Caesarean sections: ooooops…

A whole field of malpractice litigation has been based on contentions that babies could have been spared injury if doctors used Caesarean sections more often, and doctors, in part responding to the incentives sent by the legal system, now order the procedure at high rates even when it is not clearly indicated. But what if C-sections themselves turn out to be much more dangerous to babies than we had realized? (Nigel Hawkes, “Babies ‘are more likely to die’ after an elective Caesarean”, The Times (U.K.), Sept. 7)(via the returned MedPundit).

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Lawsuit claim: legal right to more publicity

Some time ago, celebrity boutique and paparazzi-magnet Kitson had a legal dispute with Us Weekly magazine over payment for a book party the store threw for an Us editor. It was settled for a small chunk of change and a standard non-disparagement clause over the lawsuit. Us Weekly had the last laugh, however; it stopped covering the store in its magazine, to the point of cropping out the Kitson logo when publishing photos of celebrities shopping there. Or it thought it had the last laugh, because Kitson is now suing Us Weekly claiming a legal right to the publicity the magazine is withholding and alleging $10,000/week in damages from the loss of publicity. The Jossip blog has the complaint and somewhat more detail than the mainstream press account. (Andrew Blankstein, “Celebrity Boutique Sues Us Weekly, Saying Lack of Coverage Is Hurting Business”, LA Times, Sep. 12) (via Romenesko).

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The war over “W”

The wildly popular oval “W” stickers sported nationwide by supporters of President Bush’s 2004 re-election bid are at the center of a federal copyright case in Texarkana. This week, a judge set a Nov. 7 trial date.

Jerry Gossett of Wichita Falls claims the stickers are based on his idea, which he copyrighted in 2001. He accuses the Republican National Committee and campaign material maker Spalding Group of stealing his concept after he pitched it to them.”

A plaintiff’s expert has estimated damages at $100 million, defense attorneys said….

Texarkana, where Bill Clinton appointee David Folsom presides as the federal judge, has a reputation as a plaintiff-friendly venue, but Altman [Gossett attorney William Altman of Wichita Falls] said he simply sought a speedy docket.

(Mark Babineck, “Designer of a Bush logo seeks a ‘W’ in courtroom”, Houston Chronicle, Sept. 9).

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