Overlawyered: Chronicling The High Cost Of Our Legal System

Wal-Mart Litigation Project

Where you might see a store that offers lower prices than its competition, this site sees a goldmine:

Imagine that you are a Wal-Mart customer. You first park your car and walk through the parking lot, onto the sidewalk, and through the front doors. Looking at the listing of cases you can see there have been lawsuits involving each of these activities; for example, customers have been injured by automatic doors. Now continue shopping. As you proceed down the aisle way all manner of injuries can occur, notably slipping and falling on wet substances (including products) on the floor. Next, consider the fact that thousands of customers are injured each year by falling merchandise. As you, the imaginary shopper, continue you may encounter falling shelves, chairs or benches that collapse, falling signs, and injuries caused by Wal-Mart employees pushing carts or pallets. Continue to pretend you are a shopper and you can visualize situations where Wal-Mart security personnel falsely accuse you of theft. Finally, you may have an unhappy experience with the items you purchased, including mis-filled prescriptions from a Wal-Mart pharmacy, or defective goods such as toys or electrical appliances.

The attorney, Lewis Laska, will sell you for $135 a packet of materials dealing with lawsuits against Wal-Mart for “Parking Lots- Uneven Surface and Protrusions.” And do you think it’s just reformers who refer to the “litigation lottery”? Laska is the proud author of “How Trial Lawyers Win Jackpot Verdicts in Medical Malpractice Cases,” which unfortunately does not exist beyond the title page is not currently on the web, though Google has a cache that merits its own post.

Addendum: Alas, when researching this post, I looked up Laska in our archives, rather than the web-page title, and missed Walter’s post of Jul. 7, 2000, which noted the “Pallets or Dollies Left in Aisle Ways (12 items, $100)” “Shopping Carts – Overloaded (4 items, $45)”, and “Restrooms – Water on Floor (3 items, $40)” items on the price list. Kevin Brancato writes us to say his blog about (but not affiliated with) Wal-Mart covered this Mar. 23.

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“The Fen-Phen Follies”

Comprehensive and damning coverage in the March American Lawyer by reporter Alison Frankel, who terms the annals of the diet-drug litigation a “veritable catalogue of ignominy”:

Law firms allegedly attempting to fleece a lawyer-built victims trust fund. Doctors working for contingency fees, filing questionable supporting reports. Corporate executives, facing the prospect of ruin, hurling money at claimants. The fen-phen class action approved in 2000 was supposed to be a new paradigm of how to resolve a mass tort equitably. Instead the iron law of unintended consequences has ruled. Misconduct has not been punished, but rewarded. Some uninjured people have been paid to go away while thousands of claimants alleging real injuries still wait for compensation.

Lawyer advertising and generous settlement standards drew claimants “like ants to a picnic”, and some law firms figured out how to game the system by arranging echocardiograms that would diagnose supposed heart troubles in entirely uninjured patients: “in one horrifying case, a patient whose condition was overstated for the sake of obtaining payment through the trust ended up having unnecessary heart valve replacement surgery.” Frankel quotes Michael Fishbein, a plaintiff’s attorney who helped negotiate the initial settlement:

“…We all believed it would be done in an honest way, that doctors would not endanger the health of their patients by making phony diagnoses.”

Says Fishbein: “I guess we were naive.”

Also see Jim Copland, Point of Law, Mar. 1. We’ve covered the fen-phen saga extensively, and nearly nine years ago I was sounding the alarm about the medical dangers that arise from litigation-driven diagnoses.

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Lawsuit cash advances

The mushrooming “legal finance” industry offers to advance injury claimants cash on the barrel, to be repaid only if their suits are successful. Some firms have charged effective interest rates exceeding 100 percent a year, but the business generally operates beyond the reach of moneylending laws and has mostly escaped the sort of hostile attention that has been directed at say, the payday loan industry and its alleged “predatory lending“. That may be changing, however. New York Attorney General Eliot Spitzer (who says he gets only unflattering attention in this space?) has reached settlements calling for clearer disclosure of fees from at least ten litigation-cash-advance firms, including one based in New Jersey which billed a client $19,000 for a cash advance of $3,000 two and a half years earlier, later accepting a smaller sum. (Joseph P. Fried, “Waiting To Settle a Lawsuit? Beware of Cash Advances”, New York Times, Apr. 4). For a glimpse of how the business sometimes works, see Barbara Ross, “Costly trip for Zongo family”, New York Daily News, Feb. 14.

More: Financial Rounds (Apr. 5) points out that we shouldn’t assume the legal finance company is actually pocketing an extraordinarily high overall return on its cash advances since in cases where client/plaintiffs obtain neither a verdict nor a settlement it will lose the money. Fair enough; but once again suggestive of the near-parallel with subprime lenders, many of which also must write off a nontrivial share of debt holdings as uncollectable. Do legal finance companies (which of course can screen for case “collateral” based on quality) in fact suffer a rate of nonpayment that much exceeds that of so-called predatory lenders? It would be interesting to find out.

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Gerry Spence’s Trial Lawyers College

The Wyoming injury lawyer is known for his extended rants on the theme of the People versus the Interests, which makes it piquant to see his name turn up so prominently among exploiters of a federal tax provision intended to benefit the needy, in this case — through his Trial Lawyers College — allowing him to maintain his control over a spectacular 220-acre ranch while dodging the taxman. ABC News has the details (Jake Tapper and Avery Miller, “Wealthy Cash In on Charity Tax Loophole”, Mar. 24). Trial lawyer/blogger Mike Cernovich, a satisfied customer of Spence’s seminar operation, praised it here, while his co-blogger Norm Pattis more recently noted the tax-avoidance story.

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N.J. appeals court: parents can’t waive kids’ rights

A New Jersey appellate panel, split 2-1, has ruled that parents can’t sign a legally binding waiver of their kids’ right to sue a skateboard park for injuries. And kids can’t sign such a waiver either. If the result is that one or another recreational activity just isn’t offered to kids at all, well, tough noogies. Appeal is likely, but for now the message is: your family’s right to sue is far too important to let you decide whether to give it away. And quit that muttering about “choice”, bud; we’re making the choices around here. (Henry Gottlieb, “Parents Can’t Waive Child’s Right to Sue for Skateboard Park Injuries”, New Jersey Law Journal, Mar. 24). For more on kids’ recreation, follow these links as well as the many newer links on our personal responsibility page.

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Lotteries about lotteries

Because of a misprinted number in a New York Daily News circulation-boosting game called Scratch n’ Match, hundreds of people thought they’d won the top $100,000 prize. The rules printed on the back of each ticket specify that there is to be no liability “in the event of printing, production or other error”, but Queens attorney Steven Gildin says the News can’t “cower behind fine print”: “Thousands of people thought they had their shot at the American dream”. And now, to give them that shot, he and other lawyers are preparing lawsuits. “A lot of people keep their hopes alive on these lotteries,” said one of Gildin’s law partners referring, it would seem from context, to the scratch-off tickets rather than the courtroom filings. (Clyde Haberman, “American Dreaming? Take a Number”, New York Times, Apr. 1).

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The sailor’s doxy

Suits against cruise lines by passengers who get sick on board are bringing the courts quite a bit of business at the moment, but the lawsuit against Holland America Line by 81-year-old Bernice Oltman and her son, Jack Oltman, goes further. “The Oltmans said they suffered from a gastrointestinal illness, and also saw crew members eating directly from buffet platters. ‘During the scheduled stop in Ecuador, Jack Oltman noticed some crew members openly associating with prostitutes,’ the lawsuit said.” (There was an overflowed toilet, too.) “The Oltmans said they expected to be compensated by Holland America for pain and suffering, emotional distress, loss of earnings, legal fees and medical expenses, including a colonoscopy and hemorrhoid surgery, the lawsuit said.” (“Cruise Line Sued for ‘Unsanitary’ Cruise”, Reuters, Apr. 1). “Scandalous” pleadings, as described in legal authorities such as Federal Rule of Civil Procedure 12, include those which serve to heap disrepute on the opponent without advancing any colorable claim; presumably the Oltmans’ attorney is prepared to demonstrate a convincing link between the alleged tarts and the alleged torts.

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