Overlawyered: Chronicling The High Cost Of Our Legal System

Posts Tagged ‘bankruptcy’

Restraining David Letterman

Colleen Nestler, a resident of Santa Fe, N.M., alleges that late night TV host David Letterman has communicated with her in coded words in his broadcasts, has tormented her and driven her into bankruptcy, and has promised to marry her. So far, nothing terribly unusual as regards the problems celebrities face from fixated fans; Letterman himself long endured the attentions of a female stalker suffering from mental illness, Margaret Mary Ray, who repeatedly was arrested for entering Letterman’s property. This time, however, the law has taken a different attitude: according to the Santa Fe New Mexican, Judge Daniel Sanchez of the district court in Santa Fe late last week granted Ms. Nestler a temporary restraining order against Letterman, which the entertainer’s lawyers are now attempting to get lifted. Ms. Nestler’s application for the order

requested that Letterman, who tapes his show in New York, stay at least 3 yards from her and that he not “think of me, and release me from his mental harassment and hammering,” according to the application.

Nestler’s application was accompanied by a typed, six-page, double-spaced letter in which she said Letterman used code words, gestures and “eye expressions” to convey his desire to marry her and train her as his co-host. Her story also involves Regis Philbin, Kathie Lee Gifford and Kelsey Grammer, whom Nestler says either supported or attempted to thwart her “relationship” with Letterman, according to the letter….

When asked if he might have made a mistake, Sanchez said no. He also said he had read Nestler’s application.

(Jason Auslander, “Letterman lawyers: End Santa Fe claim”, Santa Fe New Mexican, Dec. 21) Discussion: Volokh, TalkLeft, and a hundred others. On judges’ over-readiness to grant restraining orders in cases of alleged domestic violence and its threat, see this set of links. Updates Dec. 23 (discussion); Jan. 2 (judge lifts order).

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Vatican as defendant

A couple of ambitious lawyers have managed to sue the Vatican itself in pursuit of the Catholic Church’s priest-abuse scandals, but it isn’t easy:

…even if a process server could get past the Swiss guards, handing the pope a copy of a lawsuit doesn’t count as service.

Because the Vatican is a foreign country, all documents must be translated into its official language.

In this case, that means Latin. And there’s still the major obstacle to get around of the Foreign Sovereign Immunities Act, which bars most suits against foreign governments. (Ashbel S. Green, “Suit reaches new heights: the Vatican”, The Oregonian, Dec. 11). See PoL Mar. 10. More on church scandals: this site Sept. 16, 2003, Jul. 11, 2004; Point of Law Aug. 10, Sept. 29, 2004; Aug. 28, Aug. 31, Sept. 1, 2005.

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Deep pocket files: Motor Coach Industries I-35 bus crash trial

A Temple church group chartered a bus from Central Texas Trails Inc. on Valentine’s Day 2003 to attend a Christian music concert in Dallas. It was raining when charter-bus driver Johnny Cummings approached an Interstate 35 traffic jam too fast, lost control of his tour bus, crossed a median, swerved into oncoming traffic, and collided with an SUV, killing five of his passengers. Cummings and the charter company declared bankruptcy, so 19 injured bus passengers and survivors sued Motor Coach Industries, the bus manufacturer, for its failure to include three-point seatbelts on its 1996-manufactured bus. The bus met federal safety standards, NHTSA has found that seatbelts on tour buses do not “enhance overall occupant protection,” and no tour buses sold in the US have seatbelts, but a McLennan County jury awarded $17.5 million anyway. Judge Jim Meyer allowed Houston attorney Thomas Brown to argue that a jury vote for the plaintiffs was a vote for the cause of safety. A second trial with a second set of plaintiffs from the bus accident remains to be scheduled. (Matt Joyce, “Jury awards bus crash victims $17.5 million”, Waco Tribune-Herald, Nov. 4).

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Jay Sekulow

Major investigative piece by Tony Mauro for Legal Times on “the leading Supreme Court advocate of the Christian right,” alleging that Sekulow has feathered his nest very nicely through the use of his American Center for Law and Justice, which in 2003 raised $14.5 million for its high-profile legal advocacy. Among the specifics: payments to Sekulow that are very high by non-profit standards, along with perks such as the use of a private jet, chauffeur-driven cars and several houses; jobs for his family members on the payroll; and circuitous routings of both donations and expenditures that have the effect of sanitizing ACLJ’s financial statements. “A review of publicly available tax and court documents, as well as interviews with several former employees, paints a stark portrait of Sekulow as a hard-charging man who emerged from bankruptcy and allegations of securities fraud in the late 1980s to build a complex network of personal, business, and nonprofit entities. At times, those financial dealings have alienated employees and been criticized in court.” They have also produced a backlash among many associates who believe that Sekulow’s handling of his organizations’ finances, which draw heavily on support by small donors, does not well exemplify Christian teachings. Vital reading (“The Secrets of Jay Sekulow”, Legal Times, Nov. 1). More: Mike Cernovich, Jeremy Richey, Legal Reader, Mike Airhart. And: Jonathan Rowe, Ed Brayton, Rob Huddleston, Radley Balko, Greg Prince; and welcome Andrew Sullivan readers.

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A Boies cookie jar

Famed attorney David Boies “champions himself as an advocate of honest corporate governance,” notes Tom Kirkendall (Aug. 31), so it’s more than a little piquant that Boies “just resigned as special counsel for Adelphia for violating the Bankruptcy Code and Rules by failing to disclose to the Adelphia Bankruptcy Court that members of his family indirectly own a substantial interest in a document management services company that did between $5 and $10 million of business with Adelphia. Apparently, other clients of Mr. Boies’ firm also have paid substantial sums to the document management company without knowing of the affiliation to Mr. Boies’ family members.” Larry Ribstein also comments (Aug. 30) and notes (Aug. 31) that the W$J story that broke the news “also notes that a former Boies associate, [William F.] Duker, who headed the firm [document management firm Amici] was sentenced to 33 months in prison in 1997 for ‘falsely inflating legal bills to the federal government.’ (Ironically, the same person helped Boies sue Mike Milken in 1990.) The current Amici CEO, ‘when asked if Mr. Duker had a consulting contract or office at the company this year’ said ‘I don’t know how to describe that relationship.’ Wonder if Boies’ clients knew about that when they approved use of Amici.” (Laurie P. Cohen and Robert Frank, “More Boies Clients Used Family Firm”, Aug. 31). Update: Larry Ribstein has more (Sept. 12).

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Deep Pocket Files: Taxpayers responsible for porch collapse?

You may recall the unfortunate collapse of a Chicago porch at a party that killed thirteen and injured 57. Of course there are lawsuits against the building owners and the contractor who built a porch that couldn’t support 70 people. But the plaintiffs’ attorneys recognize that that insurance and the defendants’ underlying assets will run out quickly. Thus, they have sought to join the city of Chicago as a defendant for allegedly failing to enforce building codes. (Because, as anyone who has lived in Chicago knows, what that town needs is more city workers.)

John Ehrlich, the city’s chief assistant corporation counsel, told Cook County Judge Jeffrey Lawrence that if he didn’t drop the city from the lawsuit, it could lead to suits against other cities for everything from bad restaurant food to house fires.
“That makes the city of Chicago an insurer for every single bad incident that occurs on private property. And it makes every city — every municipality in the state — an insurer for every bad incident” that happens, Ehrlich said. ”If you allow that to happen, you will have [the] bankruptcy of every single municipality and local government in the state. That is simply untenable.”

(Nathaniel Hernandez, “Porch suit threatens Illinois cities: lawyer”, Chicago Sun-Times, Aug. 24).

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“Court: Man Can’t Take Both Sides of Same Case”

Massachusetts’ highest court has rebuffed John Otis III of Scituate, who first won a largely uncollectable $6.5 million verdict from a drunk driver and then tried to get that victory overturned so as to extract money from others. Otis, a pedestrian, was hit by inebriated motorist Todd Cusick, whose insurance policy limits were only $50,000. Here’s what happened next, according to reporter Sue Reinert of the Quincy Patriot-Ledger:

In a complicated legal maneuver, Otis agreed to free Cusick from his liability. In return, Otis got authority to sue Cusick’s attorneys and his insurer, Arbella Mutual Insurance of Quincy, on Cusick’s behalf. Otis would collect any winnings from the suit.

In this second lawsuit, Otis contended that Cusick got a raw deal from his lawyers, who were hired by Arbella. Cusick would have won the lawsuit if his attorneys had done a good job, Otis argued.

To make his case, Otis’ attorney, Driscoll, had to present the exact opposite arguments that he had made in winning the $6.5 million judgement, yesterday’s ruling said. He even contended that some crucial facts were different, the decision written by Justice Martha Sosman said.

“In short, Otis’ position in the present suit is that he should not have recovered anything in the first suit,” Sosman wrote.

Otis’s downfall proved to be the doctrine of judicial estoppel, which per Wikipedia “precludes a party from taking a position in a case which is contrary to a position they have taken in earlier legal proceedings”, at least if the position proved successful in the first round. (Sue Reinert, Quincy Patriot-Ledger, Mar. 15)(via Common Good Society Watch). For a 2004 case in which Judge Edith Jones of the Fifth Circuit invoked judicial estoppel to stymie the attempt of a bankrupt debtor to pursue a personal injury case not disclosed during his Chapter 13 bankruptcy proceedings, see In re Superior Crewboats (PDF), summarized at the Louisiana blawg Naked Ownership (Jun. 21, 2004).

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Winn-Dixie, up North

According to UCLA lawprof Lynn LoPucki, about 60 percent of recent big corporate bankruptcies have been filed in courts away from the companies’ hometowns. Although not all motives for selecting a distant bankruptcy venue are improper, forum-shopping can assist incumbent managers in finding a court that will cede them broad control during a reorganization (including the payment of large “retention” bonuses), while lawyers and other professionals may seek to steer filings into courts that are indulgent about approving fee requests. Among the losers: many creditors, which in some cases may include the companies’ workers. An opponent dismisses the charges as “baseless and offensive”, but some judges agree that the indictment holds merit. The Southern supermarket chain Winn-Dixie filed in New York City, then after a furor agreed to move the proceedings to its home state of Florida. (Pamela A. MacLean, “Forum Shopping Alleged in Chapter 11 Cases”, National Law Journal, May 3). See, among other posts, Mar. 8, 2004. More: Larry Ribstein (Jun. 22) has some thoughts on the market for jurisdiction-shopping.

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The Times’s errors on malpractice, cont’d

I’ve just posted at Point of Law the second and I assume final installment of my long critique of Tuesday’s New York Times article on medical malpractice insurance. The Times coverage contended — in assertions picked up and repeated by many a credulous blogger — that the premium levels charged to doctors bear no relationship to payouts or to legal limits on damage recoveries. Part I of the critique, again, is here.

While you’re at it, you really should be reading Point of Law every day if you have any interest in the more serious side of litigation and its reform, or just want to follow Ted’s or my writing (we both post regularly there). Among the topics you would have learned about recently: the difference, among civil litigators, between “chicken catchers and chicken pluckers“; Colorado lawmakers may restore to homeowners the right not to be sued over “open and obvious dangers” on their property; FDA panel recommends letting Vioxx back on market; a new study of class actions by Yale’s George Priest; medical malpractice law in the U.K.; Sen. Biden praises “bottom-feeders”; silicosis diagnosis scandal; a new legal ethics blog; tons more stuff on the Class Action Fairness Act, including this, this and this; problems with that much-ballyhooed report on medical costs supposedly causing half of consumer bankruptcies; and the Wall Street Journal on loser-pays.

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