Elsewhere in Madison County, there was another hearing in the James Blair Down (Sep. 11 and links therein) settlement. The Belleville News-Democrat covers the hearing seriously (albeit focusing on a collateral procedural question, rather than the hearing’s debate over the fairness of the settlement), while a columnist for the St. Louis Post-Dispatch decides to settle for ridicule. (Brian Brueggeman, Belleville News-Democrat, “N.Y. attorney denied access to local suit”, Dec. 16; Bill McClellan, St. Louis Post-Dispatch, “Madison County has a court system made for a TV sitcom”, Dec. 17). Previous columns poking fun at Madison County class action attorneys had resulted in McClellan being sued (Feb. 29, 2000).
Posts Tagged ‘class actions’
Land of junk-fax lawsuits
Illinois lawyers have established their state as the new hotbed of junk-fax litigation, according to Chicago Business. “In 2002 in Downstate St. Clair County, a Circuit Court judge ordered Seventeen Motors Inc. to pay $7 million for sending about 33,000 unsolicited faxes.” Cleveland-based Charter One Bank recently “agreed to pay $1.8 million for sending unsolicited faxes to about 70,000 phone numbers.” And “Cook County Circuit Court Judge Patrick McGann alone has since 2002 presided over more than 100 lawsuits, all seeking class action status, filed against senders of junk faxes.” Particularly active in the business: Daniel Edelman and his firm of Edelman Combs Latturner & Goodwin LLC. (Shruti Dat? Singh, “An IL industry: junk-fax law suits”, Chicago Business, Dec. 12). For more on junk-fax litigation, see Mar. 19, 2004, Jul. 19, 2003, etc.
Workers get $211K, lawyers bag $2.57 M?
Speaking of class actions against Wal-Mart: “Six lawyers who represented Oregon workers in their fight for overtime pay from Wal-Mart say that the world’s largest retailer should pay them $2.57 million for the time and money they spent trying the case. Wal-Mart opposes the request, saying that it would be an exorbitant payday for a case that had a relatively small judgment. In September, a U.S. District Court judge in Portland awarded 83 Wal-Mart workers back wages, penalties and interest totaling $211,000, an average of $2,542 each.” (“Lawyers want $2.57 million from Wal-Mart”, Salem Statesman-Journal, Dec. 9)
Class actions: Wal-Mart sued over obscenity in song
“Wal-Mart Stores Inc., which promotes itself as a seller of clean music, deceived customers by stocking compact discs by the rock group Evanescence that contain the f-word, a lawsuit claims.” (“Wal-Mart sued over Evanescence lyrics”, AP/USA Today, Dec. 11). On behalf of Melanie and Trevin Skeens, residents of Washington County, Md., attorney Jon D. Pels of the Bethesda, Maryland firm of Pels, Anderson & Lee LLC is demanding up to $74,500 for each copy sold of the CD in Maryland, and is vowing to expand the litigation into other states. (Julie E. Greene, “County couple sues Wal-Mart over lyrics”, Hagerstown, Md. Herald-Mail, Dec. 10). A Google search reveals that three years ago attorney Pels filed an intended class action against Atlantic Records, AOL Time Warner and Slip-N-Slide Records on behalf of a different Maryland parent, saying obscenities were not edited out of a supposedly “clean” version of Trick Daddy’s Thugs Are Us. (Eric Schumacher-Rasmussen, “Trick Daddy Accused By Maryland Mom Of Having Dirty ‘Clean’ LP”, VH1.com, Jun. 26, 2001). More: The Christian Science Monitor’s account is sympathetic to the claimants and their lawyer (Dec. 20).
Hevesi’s gift
New York Comptroller Alan Hevesi has again (see May 14) marched the state into a plaintiff’s role in securities litigation, this time against Merck, and once more he has selected as counsel a law firm that was a major contributor to his campaign. “The fees in these class-action cases are so outsized that winning the chance to represent the New York State pension fund in a case like this is like winning the lottery,” editorially observes the New York Sun. The paper “called Arthur Abbey, a partner at Abbey Gardy who wrote a $44,000 check to Mr. Hevesi’s campaign in March of 2002. Asked how his firm was chosen to represent Mr. Hevesi in the Merck case, Mr. Abbey told us, ‘I can’t tell you…It’s like how you come to get a gift. It was his decision.'” (“The Gift That Keeps on Giving” (editorial), New York Sun, Dec. 7). More: Apr. 14.
Cosmetics class action update
Bringing a blush to the wrong cheeks: “A plan to settle a class-action lawsuit over cosmetics pricing by giving away millions of dollars worth of lipstick, blush, and perfume is a step closer to approval after a retired judge appointed to review the deal recommended that all remaining objections to the pact be dismissed.” The class counsel will get up to $24 million for bringing the case, which the retired judge, Charles Renfrew, called “exceedingly weak”. (Josh Gerstein, “Settlement Nears In Cosmetics Price-Fixing Suit”, New York Sun, Dec. 1). For earlier posts on the case, see Jul. 21, 2003; Apr. 14 and May 19, 2004. Update Mar. 14, 2005: judge approves settlement.
Suing car dealers
Litigation against auto dealers has gotten better-organized and more entrepreneurial, according to a report in the trade publication FastTrack.
“We probably have 12 to 13 lawyers down here who make their living solely on suing auto dealers,” says Ted Smith, Executive Director of the Florida Auto Dealers Association. “The Florida litigation environment for dealers is an evolving nightmare. It is a norm to see an attorney bring a case for damages of $10,000 and a court award of $200,000 in attorneys’ fees. There is no way to stop the trial lawyer from churning fees even [in] small damages cases.”
California lawyers invoked the state’s famously broad consumer-protection laws to sue about 1,200 auto dealers for sins that included using the wrong font size in ads or using the acronym “A.P.R” instead of spelling out “Annual Percentage Rate”. Dealers were graciously afforded the chance to settle for $10,000 apiece. (Matt Pinnell, “Hunt for the Frivolous Lawsuit”, FastTrack (AIADA), Fall). And New Jersey lawyers have hit nearly every dealership in the state with class actions alleging excessive or poorly disclosed fees for vehicle registration and other services; settlements have been controversial, however, for providing juicy fees to the lawyers while affording consumers only coupons. (Charles Toutant, “Car-Dealer Class Actions: Coupons for Clients, Big Bucks for Lawyers”, New Jersey Law Journal, Nov. 3).
Madison County judge nixes tracking class payouts
After a class-action settlement in Madison County, Ill. between Ameritech and class action lawyers Korein Tillery over alleged unfairness in the giant phone company’s SimpliFive rate program, the Citizens Utility Board, a consumer advocacy group, petitioned the court to keep track of how much of the ostensible $12.4 million in refunds for customers actually got paid out. (Korein Tillery, for its part, is slated to get $1.9 million in fees). Last month, following opposition to the motion by both the Korein firm and Ameritech parent Southwestern Bell, “Madison County Circuit Judge Nicholas G. Byron rejected the Citizens Utility Board motion, ruling that the board had no standing in the case. Byron’s ruling means that the public will never know how much will be paid out.” “You would have to wonder why the plaintiff attorney would be so adamantly opposed to making this information public,” said Terryl Francis, a retired attorney representing the Citizens Utility Board. “After all, he’s supposed to be fighting for the class.” More:
Lester Brickman, a law professor at Cardozo Law School in New York and a critic of the Madison County Circuit Court, said Byron, Korein Tillery and SBC had a “mutual interest in suppressing the actual number of people who claim the benefits secured for them.”
Brickman said: “It’s not a surprising outcome, because the information the Citizens Utility Board was requesting would prove embarrassing to the court. It’s a sad comment on the state of class actions that a judge joins forces with both the plaintiff lawyer and the defendant to suppress this information.”
(Paul Hampel, “Judge’s ruling keeps payout in Ameritech case under wraps”, St. Louis Post-Dispatch, Oct. 17).
Agenda: gun suit pre-emption, class action reform
The U.S. Senate has been the graveyard of federal liability reform legislation for years now, but yesterday’s election may start upheaving the tombstones in an entertaining manner. The new Senate should be perceptibly more favorable to litigation reform than the old — by three or four votes, at least. Gone, for example, will be the Carolinas’ Ernest Hollings and John Edwards, two lions of the trial bar.
The most obvious impact will be on measures which already commanded a substantial majority of Senators, including many Democrats, but had nonetheless been blocked by parliamentary gamesmanship — specifically, the bill to pre-empt lawsuits against lawful gun sellers over the illegal later use of their products, and the bill to redirect most national class actions into federal courts. Also significant will be the defeat of Senate Minority Leader Tom Daschle, whose tendency to talk like a litigation reformer back home in South Dakota, while working closely with trial lawyer interests in Washington, has been the subject of scrutiny in this space (Apr. 12, Aug. 19, Dec. 18).
Daschle’s defeat may cause prudent Democratic colleagues to rethink the policy of filibustering all major liability measures rather than letting them come to a vote. Also significant is the greatly strengthened hand of organized gun owners in the next Senate, on which see Dave Kopel’s roundup. If the Republicans know what they’re doing, they’ll call up and pass gun-suit pre-emption at an early point, with some version of class action reform not far behind.
s. 17200 (and Proposition 64) roundup
More about the Magna Carta for California bounty-hunters known as the Unfair Competition Law or s. 17200, which Golden State voters have a chance to rein in tomorrow by approving the much-needed Proposition 64:
* Attorney Harpreet Brar, whose law firm of Brar & Gamulin was among those to arouse public outrage in the shakedown-lawsuit scandal of 2002-03, has been ordered to pay nearly $1.8 million for filing shoddy lawsuits against small businesses and seeking to settle them quickly for cash (see Aug. 20, 2002) (various news sources, via Legal Reader, Oct. 20);
* Justice David Sills’s spirited dissent in the “Six Screws” case in June (mentioned in my Friday WSJ piece) can be found, along with the majority opinion, here. An excerpt from Sills’s opinion to illustrate the flavor:
What is the difference between the $3 million attorney fees award here and the petty shakedowns which made the Trevor Law Group infamous in Southern California? Nothing but the size of the law firm and its target. As this court noted in People ex rel. Lockyer v. Brar (2004) 115 Cal.App.4th 1315, 1316-1317: “The abuse is a kind of legal shakedown scheme: Attorneys form a front ‘watchdog’ or ‘consumer’ organization. They scour public records on the internet for what are often ridiculously minor violations of some regulation or law by a small business, and sue that business in the name of the front organization.”
Thus, if the Trevor Law Group sues an auto body shop over not having its license up to date, that is an abuse of the unfair competition law. But if a more established law firm sues a big corporation over an equally trivial putative violation — it is rewarded with $3 million in fees. The net result is to bless the same kind of abuse in which the Trevor Law Group engaged — looking for a hypertechnical violation of some law by a California business and then going after that business under section 17200 as a profit-making venture — with appellate holy water.
* Rutan & Tucker attorney Layne H. Melzer has published a succinct guide to the headaches s. 17200 can inflict on an unwary California businessperson (“A Step Toward Disarming California’s ‘Business Practice Bandits'”, undated, at Rutan site (PDF))
* On the other hand, as we mentioned Jul. 7, there’s a whole blog about s. 17200, written by a class action lawyer who has filed many cases using the law. She has published on the blog a description and defense of the law and a post in opposition to Prop 64. (Fixed 11/1 to correct description of blog’s author and to add last-mentioned link.)
* Tim Sandefur (Oct. 28) examines allegations that Prop 64 would impair the enforcement of environmental laws.
* According to the latest Field Poll (Oct. 30, PDF), proponents of Prop 64 have been gaining momentum as the word gets out about the measure. In late September the proposition was behind by twelve points, 26 to 38 percent. Now the deficit has been shaved to five points, 37 percent No and 32 percent Yes, with a gigantic 31 percent of likely voters still undecided. And Gov. Schwarzenegger has started storming the state at rallies to promote his “road trip to reform” which includes a Yes vote on 64, further improving the measure’s chances if its supporters can be made to turn out at the polls.