Overlawyered: Chronicling The High Cost Of Our Legal System

Posts Tagged ‘class actions’

More on the Grand Theft Auto lawsuit

A reader asks about yesterday’s post:

  • Shouldn’t the 85-year-old grandmother &/or the 14-year-old’s parents (where are the 14-year-old’s parents, please?) be hauled into court and charged with contributing to the delinquency of a minor? If this was a grandfather, he likely would be in court on charges ….
  • Has anyone asked the 14-year-old how, where, or from whom he got the extra scenes for the game??
  • Said grandmother is now lead plaintiff in class-action lawsuit against game’s maker and others, claiming . . . what?
  • How soon will this lawsuit be thrown out; how soon will it be declared “frivolous,” and how soon will the lawyers and the legal firm who filed this suit be either disbarred or sanctioned (or should they be punished at all)?
  1. There’s no reason to charge anyone with delinquency of a minor. One can question the grandmother’s or parents’ wisdom, but they’re allowed to expose their kids to R-rated material. The distributors of the modification to the game might have trouble if they aren’t screening for age, but no one seems to seek to go after the shallow pocket.
  2. The complaint makes no effort to claim that the kid ever had or accessed the extra scenes. I suspect the lawyers will claim that they don’t need to prove that to collect damages. They’re alleging the grandmother was deceived, that the defendants engaged in false advertising, that she wouldn’t have purchased a game if she had known about the hidden sex scenes, and that disgorgement of profits is appropriate—and not that the grandmother or the grandson was actually harmed in any way. I’ve made the nine-page complaint available on the Documents in the News page on the AEI Liability Project web site.
  3. One hopes the lawsuit will be thrown out eventually, but the Pelman decision (Jan. 27) means that the lawsuit almost certainly won’t be held frivolous or result in sanctions or in anyone being disbarred. But that says more about Pelman and the sorry state of the law than the value of this lawsuit. See Michael Greve’s discussion of the issue in “‘Harm-Less’ Lawsuits?”

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Class action fees slashed — or not

Last month Vice Chancellor Leo E. Strine Jr. of Delaware’s Chancery Court slashed by three-quarters a $4.95 million fee request by class action lawyers who intervened on behalf of shareholders in a dispute involving Cox Enterprises, the media company; he blasted some of the lawyers’ filings as “dashed off complaints” and “hastily drafted throwaways” and questioned whether they had done much to influence the final disposition of the transaction. In Atlanta, on the other hand, “Fulton Superior Court Judge Constance C. Russell awarded all of the requested $1.25 million in fees to Atlanta lawyers Corey D. Holzer and Michael I. Fistel Jr. of Holzer & Holzer; Steven J. Estep of Cohen, Cooper, Estep & Mudder; and other lawyers” in parallel class action litigation arising from the same dispute. “A key difference between the two cases was that a group of shareholders in the Delaware case filed official objections to the fee requests, while in Atlanta, the lawyer for those shareholders informally submitted information from the Delaware case to argue that the lawyers in the Fulton case provided little, if any, benefit to the shareholders they represented.” The objecting lawyer in both the Delaware and the Georgia proceedings was Elliott J. Weiss, a professor at the University of Arizona’s James E. Rogers College of Law. Apparently feeling that Weiss’s less-than-official submission could be brushed aside, Judge Russell issued an order approving the fees without elaboration. (Steven H. Pollak, “Ga. Lawyers in Cox Case Escape Fee-Slashing Endured by Delaware Counterparts”, Fulton County Daily Report, Jul. 18). More: Francis Pileggi (Jun. 24) has posted a copy of the Delaware decision (PDF) and Larry Ribstein has commented Jul. 20 (referring to “Chancellor Strine’s classic-to-be opinion”) and again Jul. 29 (“The vice chancellor paints a picture of truly parasitic lawyers inserting themselves into a corporate transaction and demanding to be paid big bucks to go away.”)

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And now the lawsuits…

As we predicted on July 16, the ridiculous lawsuits over the Grand Theft Auto video game “scandal” have begun. The lead plaintiff in the putative class action is an 85-year-old grandmother, Florence Cohen, who bought the game for her 14-year-old grandson, who may have his own claims for emotional distress when his ninth-grade classmates beat him up. I suspect the eventual lead-plaintiff deposition I imagined is likely to be more entertaining than the game itself.

“Laurence D. Paskowitz, the lawyer who filed the lawsuit on behalf of Cohen, said no parent would knowingly buy an adult-only video game for their children.” Because a “M-for-Mature” 17-or-over game featuring graphic violence, profanity, and “strong sexual content” is so much more appropriate. The sex scenes that are the subject of the lawsuit are only available by taking affirmative steps to download a modification from the Internet and install it: if her 14-year-old grandson has that much freedom with a computer to be able to experience the pixeled sex (an allegation that is missing from press accounts), what else is he downloading?

The Class Action Fairness Act is already paying dividends; the case was filed in federal court, which increases the likelihood that federal judges will correctly decide that class certification is inappropriate. (AP, “Grandmother sues maker of ‘Grand Theft Auto'”, Jul. 27; hat-tip to W.F. and A.B.). Update: Jul. 28.

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Teflon class action

Two Florida law firms are hoping to extract $5 billion from chemicals giant duPont by alleging that it did not inform consumers of dangers of its nonstick coating Teflon. Although there does not seem to be the smallest evidence that any user of kitchen utensils has ever been harmed by the chemicals used to make the coating, attorney Alan Kluger plans to rely on a misrepresentation theory: “I don’t have to prove that it causes cancer,” he said. Another problem with the suit, say the people at duPont, is that although the chemical perfluorooctanoic acid (PFOA) and its salts are used in manufacturing Teflon, they are not found in the finished product. Kluger, by contrast, asserts that Teflon “contains” PFOA. (John Heilprin, “DuPont sued over Teflon”, AP/USA Today, Jul. 19; Elizabeth M. Whelan (American Council on Science and Health, “The New Litigation Against Teflon Won’t Stick”, ACSH Health Facts and Fears, Jul. 19). More: and here’s Michael Fumento (“Teflon accusation doesn’t stick”, TownHall.com, Jul. 21).

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Grand Theft Auto “Hot Coffee Mod”

Bill Clinton made a name for himself as a moderate by criticizing violent rap in 1992, and Hillary is following in his footsteps with what ALOTT5MA’s “Phil Throckmorton” calls “an executive-quality display of deep moral concern” over an alleged modification possible in the popular “Grand Theft Auto: San Andreas” video game that makes the simulated sex in the game somewhat more explicit, and thus worthy of an “AO” Adults Only rating instead of a “M” Mature rating. (Under the voluntary system, AO is 18+, while M is 17+.)

Me, I’m just amused by the thought of class action attorneys trolling for a named plaintiff parent who will testify that, while she was okay for her little Johnny to buy a game involving drug dealing, gambling, carjacking, cop-shooting, prostitution, throat-slashing, baseball-bat beatings, drive-by shootings, street-racing, gang wars, profanity-laced rap music, homosexual lovers’ quarrels, blood and gore, and “Strong Sexual Content,” she is shocked, shocked to learn that the game also includes an animation at about the level of a Ken doll rubbing up against an unclothed Barbie doll with X-rated sound effects, and is thus a victim of both consumer fraud and intense emotional distress, entitled to actual and punitive damages totalling $74,999 per identically-situated class member in the state. The Grand Theft Auto series has already been the target of some pretty silly suits (Feb. 19 and links therein), and we can pretty much expect the trend to continue. (And I beg the eventual defense attorney to pass along a public version of the deposition of the stooge named plaintiff, which will have tremendous entertainment value.) One is hopeful that the Class Action Fairness Act will give Take-Two Interactive Software the backbone to resist the extortion attempt. But if not, expect to see $5 coupons for the next edition of Grand Theft Auto in the offing.

Update: Reason’s Daniel Koffler notes “[T]oday, kids might only be able to download explicit content into their video games, but given a few years and a couple of leaps in technology, they might even be able to find hardcore pornography on the Internet.”

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Utah tax refund class action

Echoes of California’s celebrated smog-fee affair:

A class-action lawsuit seeking refunds for 120,000 Utahns wrongly charged millions of dollars in sales taxes for floor coverings and installation has been criticized as a full-retirement plan for lawyers rather than a boon to consumers.

That is because the erroneously taxed consumers could have gotten a full refund — simply by calling the Utah State Tax Commission and making a claim.

“There was no need for a class-action lawsuit,” said Assistant Attorney General Clark Snelson, who represented the Utah State Tax Commission in litigation against challenging the tax collections. “Individuals had the ability to come to the Tax Commission to get their refund, which made the lawsuit unnecessary.”

Under the terms of the settlement, “half of the $5.7 million settlement goes to plaintiffs’ attorneys and investigators”. (Dawn House, “Was tax refund lawsuit needed?”, Salt Lake Tribune, Jun. 30).

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Nocera on Lerach

Via Kirkendall, Joseph Nocera profiles the legal career of William Lerach (Jun. 28, Jun. 27). (“The Lawyer Companies Love To Hate”, NY Times, Jul. 2). Larry Ribstein correctly quibbles:

[The 1995 Private Securities Litigation Reform Act] was not just, and maybe not even mostly, intended to make securities cases harder to “win,” as Nocera said, but harder to bring. This is an important distinction, since a main problem with class actions is the extent they are used to bludgeon (or, less charitably, blackmail) firms into settling cases that probably can’t be won, but that can cause plenty of trouble along the way. The plaintiff’s lawyer in effect “wins” the case by surviving a motion to dismiss, which is harder to do post PSLRA. Moreover, even apart from the motion, the case is likely to have more weight if big shareholders, rather than the lawyers and their stable of career suers, are behind it.

This distinction between eliminating nuisance cases and hobbling good cases is a big reason why Lerach and others are flat wrong about the effect of the PSLRA in inviting Enron.

Moreover, Nocera’s interview with Lerach makes clear why Lerach doesn’t like the Act — whatever his success post-PSLRA, he likes being able to bring weak cases. Lerach calls it his “business model.” He says it’s useful in training lawyers. One can’t tell from newspaper page how fully Lerach’s tongue was inserted in his cheek when he came up with that one.

See also Peter Burrows, “Payback Time for Lerach?”, Business Week, Jun. 30 (via Schaeffer).

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Trauma reality-TV show

The reality TV show “Trauma: Life in the ER” was filmed at 35 hospitals in 23 states over a five-year period. Now lawyers are pursuing would-be class actions against the New York Times’ television subsidiary, Discovery Communications, and various hospitals claiming that the privacy consent given by patients and family members was defective or obtained under false pretenses. Despite protests from defendants that the issue of validity of consent is intrinsically one that requires case-by-case determination, a New Jersey judge has certified a class action for lawsuits within that state. The judge estimated that the number of potential class members nationwide might reach into the hundreds of thousands. (Charles Toutant, “Hospital Patients Filmed for Reality TV Certified as Plaintiff Class”, New Jersey Law Journal, Jun. 20). Florida Masochist notes (Jun. 24) that a plaintiff’s lawyer suing in Orlando, per the Sentinel coverage, “said the lawsuit doesn’t question the right to broadcast the material, but the filming and production process”. (Pedro Ruz Gutierrez, “Patients sue over TV appearances”, Orlando Sentinel, Jun. 24). That sounds puzzling: if the persons suing aren’t objecting to the broadcast of the material, how seriously were they injured by the alleged affront to their privacy?

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Milberg Weiss client indicted

Following a three-year federal probe (see Jan. 28-29, 2002), a grand jury in Los Angeles has indicted retired Palm Springs entertainment lawyer Seymour Lazar, 78, on charges that he collected millions in kickbacks from attorneys in exchange for acting as a plaintiff in dozens of class-action lawsuits. Milberg Weiss, the law firm that represented Lazar, was not named in the indictment; it said it was “outraged” at the “baseless” implications that its lawyers had acted improperly. Mr. Lazar’s lawyer, Thomas H. Bienert, described his client as a “crusader for consumer advocacy”. (John M. Broder, “Ex-Lawyer Is Indicted on Kickbacks in Lawsuits”, New York Times, Jun. 25; Reuters/L.A. Times; Washington Post; Law.com/The Recorder; W$J).

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