- Big news: California judge: contingency-fee lawyers hired by state present inherent conflict of interest. [POL roundup; Santa Clara v. ARCO]
- Must-read post about Westrup Klick’s fishing for clients in class actions. [Cal Biz Lit; Lattman; Bodner v. Oreck Direct]
- Why not let the market decide the optimum level of securities litigation? [Jim Copland @ NY Sun; AEI event; 10b5 blog; W$J]
- More on subprime mortgages. [Frank @ POL; Michael Lewis @ Bloomberg via Kirkendall]
- Watch what you say about lawyers dept.: Filmmaker complains about lawsuit in memoir, gets sued by former opposing attorney for libel [Ferlauto v. Hamsher @ Don Murphy]
- Update on clinic sperm mixup case [On Point]
- Tunc pro nunc: Justice Roberts is a funny guy [Kerr @ Volokh]
- So is this Arkansas attorney. [Snopes]
- Seven years ago on Overlawyered, Pets.com sues Conan O’Brien show over sock-puppet dogs; ATLA tries to threaten senator. Three years ago: $3M verdict (including punitive damages) for failing to fire truck driver who had speeding tickets; also three years ago, motorcyclist runs from police at 130 mph, crashes, dies, family sues. Two years ago, blogger takes big paycut and gets new job.
Posts Tagged ‘class actions’
“Prime Target”
I have an op-ed in today’s Wall Street Journal on misguided attempts by trial lawyers and Congress to regulate mortgage lending through expanded liability.
Update: Free version available at AEI. And additional back-and-forth at Point of Law and in the Marginal Revolution comments.
Judge: Clients have no right to learn how much their lawyer got
It might only upset them, or perhaps upset other lawyers:
The judge in a 2004 federal class action lawsuit over fuel gauge damage caused by tainted gasoline made at Shell-Motiva refinery in Norco has sealed records on how he divided $6.8 million in legal fees among 79 lawyers in the case.
U.S. District Judge Ivan Lemelle has ordered each lawyer, on pain of being sanctioned, not to reveal how much they were paid.
Lemelle’s late January decision to keep the information under wraps has drawn criticism from some of the lawyers and has attracted the attention of Loyola Law School ethics professor Dane Ciolino.
Ciolino says the situation violates the right of the lawyers and the public to have access to court records. Additionally, he said, it flies in the face of a Louisiana attorney ethics rule that says a client is entitled to know how his lawyer shares fees with other lawyers.
(Susan Finch, “Judge seals records on legal fees in suit”, New Orleans Times-Picayune, Apr. 6)(& welcome Robert Ambrogi readers).
Update: And now it’s reported that the judge has turned down a motion to unseal the fee records (Susan Finch, “Judge won’t unseal fee records”, New Orleans Times-Picayune, Apr. 10). Further updates: May 22 (WSJ editorial covers); Jun. 7 (judge unseals records).
Ontario lottery scandal
A major scandal has erupted in Ontario in recent weeks following reports that some lottery retailers have for years been cheating their customers out of winning tickets, instead cashing in the tickets themselves. Now the law firm of McPhadden, Samac, Merner & Barry has filed a would-be class action lawsuit on behalf of all persons who bought lottery tickets since 1975, charging that the lottery failed to exercise its responsibility to prevent cheating, and demanding C$1.1 billion including C$100 million in punitive damages.
Perhaps the most interesting question raised by the legal action is: assuming a remedy cannot be had against the rogue retailers, what is a suitable remedy against the allegedly negligent lottery authorities? According to CTV, the law firm has proposed to hold a “free lottery”, or, perhaps more precisely, a lottery that would compensate for past unfairness by enabling Ontarians to buy a ticket which would be eligible for a payoff above the usual. (Those who could prove they had played the lottery in the past would be entitled to one free ticket.) (“Class-action suit launched against lotto agency”, Mar. 28).
Details of the proposed “remedial” lottery are hazy in the CTV account, but a couple of practical difficulties immediately come to mind. Start with the assumption that a “remedial” pot would be fixed at a certain lump sum intended to punish the province for its past negligence — let’s say C$100 million — and that such a sum greatly exceeds a typical lottery pot. Since there is no upper limit to the number of tickets that purchasers could buy in pursuit of the extra-large pot, the province might in fact wind up making money on its penitential lottery, even taking into account the obligation to dispense a certain number of free single tickets to persons who could bring in the paperwork to show they were past lottery players. Alternatively, assume that the province undertakes to run a one-time penitential lottery with a higher payout than usual — say, 95 percent rather than the usual 40 or 60 percent or whatever. Again it’s possible that by stoking player interest in a much-publicized “good-odds” lottery, the authorities will come out ahead (perhaps having hooked many novices into buying their first lottery tickets).
The practical difficulties if the province is so rash as to promise a lottery with a payout of, say, 110 percent of the money put in, will be left as an exercise to the reader.
The Class Action Fairness Act Two Years Later
The latest AEI Liability Outlook, which has my take on two years of CAFA, is on-line.
“You got your lawsuit in my peanut butter.” “You got your peanut butter in my lawsuit.”
On February 14, 2007, the Food & Drug Administration issued a recall for certain brands of peanut butter manufactured by ConAgra. On March 1, 2007, the FDA announced it had identified the salmonella at the manufacturing plant. Enter the lawyers.
On Wednesday, a Louisville, Kentucky man who claimed he got sick after eating the peanut butter, filed suit against ConAgra. (The story featured a disclaimer I don’t believe I’ve seen elsewhere in news coverage of litigation: “Claims made in filing a lawsuit give only one side of the case.”) I certainly didn’t think that this was the first suit filed against ConAgra, but I naively thought it was one of the first. Ha! (In my defense, I wasn’t blogging at Overlawyered at the time, and I hadn’t eaten the peanut butter, so I didn’t have any particular personal or professional reason to notice the announcements of the lawsuits.)
The first suits — at least three of them — appear to have been filed on February 16, 2007, just two days after the FDA’s announcement. Each of those three involved individual plaintiffs; in case you were wondering, the first (of many) class action lawsuits seems to have waited until February 20, 2007. The huge four-day gap between the filing of the individual suits and the class-action suits is explained by the three-day Presidents Day holiday; Feb. 20 was actually the next business day.
Is there some sort of trial lawyer contest like the old Name That Tune game show? “I can file that suit in 72 hours.” “I can file that suit in 48 hours.” “Okay, file that suit!” There’s certainly no legal reason the suits need to be filed that fast; there was no approaching statute of limitations, for instance.
Pay-for-play, the Gotham way?
New York City Comptroller William Thompson, Jr. regularly hires outside law firms to represent city pension funds in shareholder lawsuits, as with a recent suit against Apple Computer. The New York Sun “[obtained] the names of the nine law firms in the ‘securities litigation pool’ that the city uses to file these shareholder suits” and found that lawyers associated with the firms had donated more than $100,000 to Mr. Thompson’s campaign coffers. (“Thompson’s Trial Lawyers” (editorial), New York Sun, Feb. 27). See Aug. 14-15, 1999 (ABA delegates defeat proposal to ban pay-for-play); Sept. 25-26, 2001. The Committee on Capital Markets Regulation aimed some criticism at the practice: see Point of Law, Dec. 1.
Experian class action settlement
Attorney Donald Caster writes from Cincinnati:
OK, I’ll admit it: I’m a “trial lawyer,” and I usually disagree with Overlawyered’s point of view. (In fact, usually when I read the blog, I’m thinking about what a great job a particular lawyer did to get the result that you’re now protesting.) But I get nearly as agitated as you folks do over the abusiveness of coupon settlements in class action cases, and I just got notice of such a settlement myself.
Below I’ve cut and pasted the exact text of the email message I received notifying me of the settlement. The class action has its own website at www.browningsettlement.com. As you can see, the defendant is Experian, and the plaintiffs claim that they made some sort of representations on a website that violated the “Credit Repair Organizations Act.”
Class counsel is set to take over $2.5 million in fees. The “benefit” to the class? A settlement in which class members get either (a) a free credit score, or (b) free credit monitoring for two months. And oh, by the way, if you take the latter option, you have to remember to cancel the monitoring, or you’ll automatically start getting billed $9.95/month for credit monitoring after sixty days. That reeks of a lack of arms-length negotiation between class counsel and the defendant (what a great deal for the defendant–they get new customers in exchange for settling a class action lawsuit!).
Class action settlement: credit ratings in insurance
Allstate used applicants’ credit ratings as one piece of information in rate-setting, a baldly rational policy if you accept that credit ratings do on average help predict future consumer behavior. Lawyers sued claiming that the credit ratings were really an improper proxy for race, and a federal judge has now approved a class action settlement in which Allstate will revamp its policies and pay six named plaintiffs $5,000 each, minority policyholders will be free to seek refunds of $50 to $150 if they get around to it and can prove they qualify, and plaintiff’s lawyers will get $11.7 million. (“Judge Approves Settlement in Allstate Class-Action Suit”, AP/WOAI, Feb. 17).
February 8 Roundup
- New Jersey Supreme Court won’t touch appellate court reversal of $105M dram-shop verdict against Aramark Corp. Not noted in our earlier coverage: Aramark was held liable as a deep pocket through illegitimate piercing of the corporate veil, adding yet another problem to an appalling series of problems with the trial. [New Jersey Law Journal; earlier on Overlawyered; Point of Law]
- Half-trillion-dollar class certified against Wal-Mart in lawless Ninth Circuit decision. [Point of Law]
- Court papers show direct link to Lerach in Milberg probe. Most entertaining: a letter by Lerach saying “Dr. Cooperman’s reputation and character are impeccable.” Cooperman has since pled guilty to taking kickbacks, and Milberg Weiss now says he has no credibility. [National Law Journal; WSJ Law Blog]
- Slip and fall worth $5.7M [Atlantic City Press]
- Cardiologists doing Brazilians: “Graduating med students aren’t blind; they see established physicians with busy practices dropping out. Looking ahead they see more headaches–more controls and regulations, more scrutiny, more liability, less money.” [TIME via Kevin MD]
- Florida law may allow men to get out of paying fraudulent paternity when DNA shows they’re not the father. [Miami Herald; see also Parker v. Parker; earlier on Overlawyered]
- Editorial: Alabama Supreme Court ruling on illegal multi-billion-dollar punitive damages award in Exxon contract dispute can prove state is no longer tort hell. [Press-Register]
- Update to earlier Overlawyered post: Danny Cuesta pleads guilty, sentenced to fifteen months; Melissa Cuesta, whose claim we covered, arrested for perjury, pleads not guilty. [EmpireStateNews.net via Teacher trash blog]
- Incomes and inequality: what the numbers don’t tell us. [Marginal Revolution]
- India and the drug patent wars. [AEI]
- I (along with John Beisner, Michael Hausfeld, and John Stoia) am speaking on a panel on the Class Action Fairness Act at the National Press Club February 14. [Federalist Society]