Overlawyered: Chronicling The High Cost Of Our Legal System

Thanks

I have much to be thankful for this year. I’ve had some remarkably good luck, some remarkably bad luck that is likely to seem fortuitous in hindsight, and walk away healthier and better adjusted because of it. I went four-for-four in summary judgment motions worth millions to my clients, tripled what I can bench press, and am that much closer to being able to credibly comment about obesity litigation without creating an obvious punchline. I have a roof over my head, food on my table, and I’m living in the future I dreamed about as a little boy.* I have friends and family, new and old, from coast to coast, whom I care about and who care about me, and who magnaminously forgive me my slights small and large. I have a wonderful co-blogger who’s generously given me this opportunity to speak to thousands of thoughtful readers on issues I care about. I’m thankful for the sacrifice of the men and women who have volunteered to take up arms to defend this nation. And I’m thankful that I live in the United States of America, which is not only the greatest country in the world, but a country that gives me the freedom to talk about ways to make it better.

I hope my readers also have what to be thankful for. Have a good, and lawsuit-free, holiday.

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Mississippi high court overturns hellhole insurance verdicts

Why are some Mississippi courts considered judicial hellholes? Witness the trial of the breach-of-contract dispute between local insurance businessman Carroll Hood and his HICO versus St. Paul Insurance. HICO remained profitable after they agreed to reduced commissions and raised rates for selling St. Paul insurance (and there’s no indication why they thought St. Paul didn’t have the right to raise rates), but then turned around and sued St. Paul for “tortious breach of contract.” Though the contract required disputes to be litigated in Texas, the court permitted the case to go to trial, permitted the plaintiffs to add a new theory of liability in the middle of trial without warning, permitted $1.2 million damages to be awarded for “mental distress” over a contract dispute between sophisticated businessmen, and then allowed a jury to award $75 million in punitive damages–thirty times the already-inflated compensatory damages. (The jury actually wrote $75,000,000,000 on their verdict form, but the judge decided that this was a confusion over how many zeroes were in a million.) St. Paul also complained that the judge encouraged the jury’s bias against out-of-state companies. The Mississippi Supreme Court threw out the verdict on the easiest of grounds: the Mississippi court never had jurisdiction over the case because of the explicit forum selection clause in the contract being sued on. (AP, “Miss. Supreme Court Overturns $80 Million Breach of Contract Verdict”, Insurance Journal, Nov. 22; Jimmie Gates, “Justices toss out $77.5M jury award”, Clarion-Ledger, Nov. 25; Titan Indemnity Co. v. Hood opinion).

Another sign of hope: on September 9, in Gallagher Bassett Services, Inc. v. Jeffcoat, the Mississippi Supreme Court threw out a $3.5 million verdict against an insurance adjuster that negligently failed to pay an uninsured motorist claim (with a policy limit of $10,000) for all of ten months. If this trend continues, Mississippians might find that insurance companies can more affordably offer insurance.

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CAIR using litigation to silence critics?

The Council for American-Islamic Relations (CAIR) (Sep. 17) has continued their campaign of suing or threatening to sue for libel in an effort to silence critics who have alleged it to be soft on terrorism because of what Senator Schumer calls the organization’s “intimate links to Hamas.” David Frum comments on the notice he received. (“The Question of CAIR”, National Post, Nov. 23).

California, believe it or not, is in the forefront of tort reform by permitting defendants to recover attorneys’ fees when defamation suits are intended to chill protected free speech. Another twenty-two states have adopted similar laws, with bills pending in eight legislatures. See The California Anti-SLAPP Project, Nov. 11, and Mar. 12.

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Jim Butler wins $105M verdict in Chrysler seat litigation

Another example of how personal injury attorneys and the “Center for Auto Safety” actually care very little about auto safety: In 2001, Louis Stockell, driving his pickup at 70 mph, twice the speed limit, rear-ended a Chrysler minivan. Physics being what they are, the front passenger seat in the van collapsed backwards and the passenger’s head struck and fatally injured 8-month old Joshua Flax. The rest of the family walked away from the horrific accident. Plaintiffs’ attorney Jim Butler argued that Chrysler, which already designed its seats above federal standards, should be punished for not making the seats stronger — never mind that a stronger and stiffer seat would result in more injuries from other kinds of crashes because it wouldn’t absorb any energy from the crash. (Rear-end collisions are responsible for only 3% of auto fatalities.) Apparently car companies are expected to anticipate which type of crash a particular vehicle will encounter, and design accordingly. The $105M verdict includes $98M in punitives, a number that will almost certainly be reduced, but the entire verdict is inappropriate. “It is unfairly punishing DaimlerChrysler for a reasonable engineering decision that resulted in a product that met all federal standards,” DaimlerChrysler spokesman Jason Vines said. (Rob Johnson, “Jury awards $105.5 M in baby’s death”, The Tennesseean, Nov. 24; Matt Gouras, AP, Nov. 24; “DaimlerChrysler Is Told to Pay $98 Mln in Van Crash”, Bloomberg, Nov. 23; Sheila Burke, “Chrysler being sued over baby’s van death”, The Tennesseean, Nov. 4). More coverage: Dec. 21.

Read On…

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Basketbrawl lawsuits begin

Fark would mark this entry with an “Obvious”: Fans at the now-infamous Detroit-Indiana basketball game Friday night have started filing lawsuits. According to the Detroit Free Press, video shows season ticket holder William Paulson dousing Indiana Pacer Ron Artest with a drink after Artest charged the stands and pummeled an innocent bystander, but he’s suing three players, the Pacers, and the arena over a concussion he allegedly suffered in the brawl. John Ackerman also claims to have suffered a concussion; he’s told different reporters that he was hit by a chair and hit by Jermaine O’Neal. The lawyer is your friend and mine, Geoffrey Fieger (Aug. 31 and links therein). (Ben Schmitt and Frank Witsil, “Victims? Suspect? Prosecutor identifies fan who started brawl”, Detroit Free Press, Nov. 23; Mike Martindale, “Find chair-tosser, get cash”, Detroit News, Nov. 24; Daniel Howes, “Lawsuits over Palace fight show a culture of litigation”, Detroit News, Nov. 24; Bisi Onile-Ere, “Lawsuits come in Palace brawl”, ABC-12, Nov. 23).

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Imperfect Lawsuits: Perfect 10 v. Google (and Visa and …)

“Perfect 10” is an unsuccessful California pornography business that has branched out into the litigation business with the same results. The company is justifiably upset that disreputable pornographers are stealing their copyrighted photos for their web sites. (We know you’re shocked to hear that some pornographers are disreputable, but we call ’em like we see ’em here at Overlawyered.) But unsatisfied with the results of suing fly-by-night operators, they tried to sue the billing services these sites used. These suits were mostly shut down; a federal court held that billing services that aren’t responsible for web site content are not, well, responsible for web site content. (A billing service that did regulate content did not fare so well. Perfect 10 Inc. v. Cybernet Ventures Inc., 213 F. Supp. 2d 1146.)

Then Perfect 10 took on credit card companies Visa and MasterCard. The credit card companies noted that they processed millions of transactions a day, and could not do so economically if they had to be responsible for enforcing property rights of third parties, and compared it to a company “send[ing] a notice to the electric company supplying power to people infringing its rights and say ‘shut them off.'” The Northern District of California threw those cases out.

With this track record, you’d think the media would be more skeptical now that the company has sued Google for providing a search engine with which someone can find web sites that infringe Perfect 10’s copyright, instead of giving company president Norman Zada an unrebutted platform, but the idea of a lawsuit over pictures of naked women is apparently too titillating to resist. Because, of course, a search engine shouldn’t just index the web, but should have intelligent spiders that test the propriety of the web sites indexed. Perfect 10 seems to be trying to get around this problem with their lawsuit by alleging that Google prioritizes search engine results for participants in its Ad Sense program and is lying to the public when it says its search engine results are objective. One wonders why Google doesn’t more prominently feature this benefit of sending them money, as well as about the Rule 11 basis for this allegation. Meanwhile, I guess we should be happy that Bo Derek never sued Perfect 10. (Wendy Davis, “Adult Publisher Sues Google For Copyright Infringement”, MediaDailyNews, Nov. 23; AP, Nov. 23; Lisa Baertlein, Reuters, Nov. 22; Chris Gaither, “Porn Firm Sues Google Over Photos”, LA Times, Nov. 20; Brenda Sandburg, “Strange Bedfellows”, The Recorder, June 7; Gretchen Gallen, “Perfect 10 Sues Visa/MasterCard”, XBiz, Jan. 29). Other Google lawsuits: Nov. 9, Aug. 9, Mar. 28.

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$3.5M to unsuccessful suicide

Such suits are sufficiently common (e.g., Oct. 8, May 20, Jan. 31, 2003) that we can almost retire the category. Lawyers for Christopher Foster, a male prostitute who, while imprisoned, attempted to hang himself but only managed to self-inflict severe brain damage, argue that the mix-up in paperwork that resulted in his being put in a conventional cell instead of on suicide watch was a constitutional violation. While it’s perhaps too much to ask that suicides only blame themselves, most federal courts recognize that the standard for a constitutional violation is “deliberate indifference” rather than negligence. This case somehow got to trial and the City of Philadelphia is on the hook for $3.5 million (7% of the $50M Foster asked for) after a settlement. Foster won’t be conscious of the marginal difference in life-long nursing care (which one suspects is being shifted from one government expense account to another), but his lawyers, from the firm Kline & Specter (Jan. 24, 2003), will sure appreciate their seven-digit cut from taxpayers. (Joseph A. Slobodzian, “City abruptly settles suicide-prevention suit for $3.5 million”, Philadelphia Inquirer, Nov. 23; Jim Smith, “City to pay $3.5M in jail hanging case”, Philadelphia Daily News, Nov. 23).

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The flying shrimp of death

For decades, Benihana has advertised itself as the place where hibachi chefs put on a show while preparing Japanese food. In December 2000, furrier Jerry Colaitis went for a birthday celebration at a Munsey Park, NY, Benihana. Colaitis reflexively ducked when the chef tossed a piece of shrimp at him — and, the family says, injured his neck. (Benihana says that Colaitis may have been trying to catch the shrimp in his mouth.) Colaitis had an operation six months later on the neck; but complications from that operation required a second operation two weeks later; according to the family, Colaitis, in his mid-40s, had a blood-borne infection and died from complications from that second surgery.

This is, of course, Benihana’s fault, says plaintiffs’ lawyer Andre Ferenzo, who has sued them for $10 million. A Nassau County judge, Roy Mahon, has held that the question of causation is for a jury to decide, which means the case will go to trial. (Andrew Harris, “Benihana Chef’s Playful Food Toss Blamed for Diner’s Death”, New York Law Journal, Nov. 23).

Update: Fark comments: “You have to admit, of all the ways a Benihana chef could have killed the man–his expert wizardry with knives, his ability to dice raw meat midair, his precise spatularic stylings–he cleverly used a common shrimp. Those ninjas that disguise themselves as Benihana chefs are as cunning as they are evil…”

Another update: By coincidence, the day after this post, the New York Daily News did a story with the same headline. (Helen Peterson, “The flying shrimp of death suit”, Nov. 24; Charles Delafuente, “A Shrimp, A Duck, A Death”, ABA Journal EReport, Dec. 10).

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Hooters sues its competition

Trial began last week in a lawsuit filed by Hooters of America against a rival “breastaurant” operator named WingHouse, which also relies on curvy waitresses to sell sports-bar food and drink to a clientele of young men. Hooters charges infringement of “trade dress” (undress?) and other sins, while WingHouse contends that the older chain is using the legal system to suppress competition. (Henry Pierson Curtis, “Hooters suit aims to clip upstart competitor’s wings”, South Florida Sun-Sentinel, Nov. 18; Kris Hundley, “Hooters defends wings-and-winks turf”, St. Petersburg Times, Nov. 18; “Hooters competitor in court, accused of stealing ideas”, AP/Daytona Beach News-Journal, Nov. 19)(via Reason “Hit and Run”). For more Hooters litigation, see Mar. 27, 2001; Mar. 24-26, 2000.

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