“Hedge funds and institutional investors are financing the latest wave of IP lawsuits. … Says Daniel McCurdy, a patent consultant in Warren, N.J., ‘They are the arms merchants in the new patent wars.'” (Nathan Vardi, Forbes, May 7). For more on champerty, a former offense at common law which consisted of financing the prosecution of a lawsuit in exchange for a share of the proceeds, follow this link.
Posts Tagged ‘ethics’
Don’t
More things you really shouldn’t do if you’re a lawyer:
- While having an affair with a married client, draft a will for him in which he leaves you nearly $5 million from his estate (Orange County, N.Y. estate lawyer Michele Okin, already disbarred over unrelated client fraud; a judge threw out the will)(New York Law Journal)
- Hire a thug to rough up clients who owe you money (former Winnipeg immigration lawyer Ingrid Chen, sentenced to 18 months behind bars)(CBC)(more at Legal Juice)
- Serve as straw man for a 3,000-client bogus accident ring (now-disbarred Solomon Kaplan, convicted in New York of witness tampering and making false statements to an FBI agent, though the Second Circuit vacated his insurance fraud convictions on account of judicial error)(New York Law Journal)
“Rabid”, “animal” — in the good sense?
Curious passage in a Law.com profile of federal prosecutor Michael Wang:
“Mike is just different,” said an assistant U.S. Attorney who has known him for years. “If anything, he tends toward the rabid. I like him.”
An admiring defense lawyer concurred: “He’s an animal.”
(Justin Scheck, “Corporate Crime Prosecutor Plays Hard”, The Recorder, Apr. 13).
NJ comp fraud case: lawyers settle out, workers nailed
When the Melard bathroom-components factory closed in Passaic, New Jersey, 112 workers were laid off, and more than 80 filed workers’ comp claims alleging that they’d been injured on the job but just hadn’t gotten around to reporting it previously. Mass comp filings of this sort are by no means rare following plant closings, at least in some parts of the country. However, the employer, Bath Unlimited — a subsidiary of Masco that does business as Melard — sniffed fraud, and decided to fight back. It sued the workers and the law firm that represented them, Ginarte O’Dwyer and Winograd, alleging racketeering:
The company claimed in its 2004 federal lawsuit that the Ginarte law firm and attorney [Michael] Policastro encouraged workers angry at being fired to file claims, most of which were identical except for employees’ personal information. According to the suit, the law firm directed workers to provide false information to doctors, and “virtually all” of the employees examined by physicians for Bath had no disabilities or none attributable to the company, the complaint charged.
The 84 worker-defendants did not make an appearance to contest the charges, and last month a federal judge signed a default judgment against them which leaves them personally on the hook for at least $2.26 million. (Greg Saitz, “$2.26M fraud judgment against workers shakes labor landscape”, Newark Star-Ledger, Mar. 21; “Workers penalty to be reviewed”, Mar. 30; John Petrick, “Workers must pay ‘compensation’ after losing claims suit”, Bergen Record, Mar. 25; Workers Comp Insider, Mar. 21 and Mar. 30).
Not surprisingly, the ruling has sent shock waves through the workers’ compensation and labor bar. Some of these lawyers argue as if granting employers any right at all to pursue fraud sanctions will impermissibly chill legitimate claims; presumably they imagine that the right to sue should forever be left a one-way affair. Others not unreasonably take exception to the severity of federal racketeering law’s treble-damage remedy (although the default “progressive” position, or so it seems, is otherwise to defend that same treble-damage remedy). Finally, and most cogently, they have pointed to the intrinsic harshness of the default judgment as a procedural device, which in this case has laid heavy burdens on unsophisticated immigrant workers, some of whom might plausibly have advanced the merits of their individual comp claims even if the bulk of the other 80-plus cases should be shown to be bogus.
But what of the law firm of Ginarte O’Dwyer and Winograd, which was at the center of the fraud scheme, if a fraud scheme there was? Well, this is the piquant part: after denying the allegations in court papers and trying unsuccessfully to get the federal case dismissed, the law firm settled separately with Bath/Masco/Melard on undisclosed terms. That protected its own interests, but left its former clients … well, “twisting in the wind” may not be too strong a way of putting it. The large law firm of Lowenstein Sandler has now stepped forward, acting on what it says is a pro bono basis, to attempt to get the default judgment against the workers overturned. (Greg Saitz, “Defending factory workers”, Newark Star-Ledger, Apr. 11).
Disbarred, but not gone
Despite the disbarment of its 78-year-old namesake over a long and colorful catalogue of misdeeds, the Kenneth Heller Law Office on lower Broadway in Manhattan has not closed its doors, according to the New York Law Journal. And where exactly are the elusive 47 boxes of litigation files that Heller is refusing to hand over to a widow-client until he gets paid? (Mark Fass, “Sheriff’s Raid Can’t Pry Client Files From Disbarred Lawyer’s Grip”, New York Law Journal, Mar. 28). More: Apr. 24.
John O’Quinn update
Judge Denise Page Hood has issued an order to show cause why the O’Quinn law firm (many entries; also POL Jul. 15, 2005, POL Jul. 10, and POL Aug. 3) should not be held in contempt for improperly withholding breast implant settlement money from their clients. There is no press coverage of this brewing scandal.
There has, however, been plenty of press coverage of one of O’Quinn’s other clients, Anna Nicole Smith’s mother. In that circus, O’Quinn finds himself a defendant in a civil defamation suit brought by Smith’s, er, widower, attorney Howard K. Stern, for going on national television and accusing Stern of murdering Smith. [AP/ABC News] The fact of having this client gave cause TMZ.com to dig up some of the more obvious scandals in O’Quinn’s past, though they still missed the more recent ones covered by Point of Law.
Elsewhere in O’Quinn news: the firm settled its $1 billion fen-phen verdict (Apr. 28, 2004) for an unknown amount on the eve of appeal as part of a global settlement of O’Quinn’s caseload of fen-phen cases. (Brenda Sapino Jeffreys, “$1 Billion Fen-Phen Case Settles Before Appellate Oral Arguments”, Texas Lawyer, Apr. 16). The verdict was tainted because the plaintiffs blamed fen-phen for Cynthia Cappel-Coffey’s PPH, but Ms. Cappel-Coffey had been taking four other diet drugs since fen-phen had been pulled from the market that had the known risk of causing PPH. Yet that evidence was excluded from the jury, though the Texas Lawyer coverage barely touches upon this outrage. The state court in judicial hellhole Beaumont also improperly applied Texas caps on punitive damages.
Complete text of the breast implant order after the jump, if you don’t want to read the order in PDF format.
Abusive scare letters: JL Kirk & Associates
JL Kirk & Associates has its attorneys, King & Ballow, send a scare letter to a blogger over an account of their sales tactics, and feels the wrath of the blogosphere. [Bill Hobbs; Rob Huddleston (both via Bainbridge); many more links in those posts]
Update: I see Dave Nieporent’s boss is now in the fray on behalf of the Media Bloggers’ Association.
Walks like a contingency, quacks like a contingency
An article in the West Virginia Record discusses a survey of physicians complaining about questionable expert witnesses in medical malpractice cases. For some reason, physicians seem to think that experts will say whatever they’re paid to say. But the president of the West Virginia Trial Lawyers Association denounces the survey, including the doctors’ complaints about experts being paid on contingency:
“And you can’t have contingency experts. I abhor that, anyway. There are State Bar rules are [sic] against that.”
In fact, pretty much everyone agrees that it’s unethical to pay expert witnesses on a contingency fee basis. Most states seem to have explicit ethical rules against it; New Jersey certainly does.
But how effective do you think those rules are? They didn’t stop Nagel Rice and Mazie, a New Jersey plaintiff’s law firm, from trying to weasel out of paying its expert witness recently for his work on a med-mal case, leading the expert to sue the firm for his fees. Why did Nagel try to get out of paying? Because, as Nagel admitted in his testimony in that case, they had lost the med-mal lawsuit:
And I said, “And in addition to that, we lost the case. It’s cost my firm over $100,000 in out-of-pockets.” I said, “So, I want you to consider two things: one, it was your first time on the stand; two, I think your 17 hours is really heavy-handed; and, number three, we took a blood bath in this case. And what I do with experts over the course — I’ve been doing this almost 30 years is that where you take a huge loss, experts will virtually always work with you.”
In case that wasn’t clear, he clarified, according to the New Jersey Law Journal (subscription required):
Nagel says his firm does not seek discounts from experts on losing verdicts. Rather, expert witnesses who have an ongoing relationship with his firm tend, of their own volition, to increase their bills in the event of a victory and to cut them after a defeat.
Yup. Spontaneously. “Of their own volition.” If there’s a difference between charging more if you win/less if you lose, and a forbidden contingency, let me know.
Incidentally, perhaps Nagel ought not to have invested $100,000 in the med-mal case in the first place, without doing a little due diligence. One reason that they might have lost was because the plaintiff’s claim that she suffered severe back pain and was permanently disabled by her doctor was successfully undermined by the defendants. As explained by the Appellate Division (PDF):
Video surveillance tapes showed Meegan walking, driving, bending over to talk to children, and lifting her daughter’s bicycle into the back of a car, all without any difficulty whatsoever.
Oops. Pesky facts.
“I don’t think that’s his fault; I think it’s the system.”
North Carolina lawyers were up in arms after a seven-month Raleigh News & Observer investigation reported that an attorney who was a Wake County Court-appointed guardian to manage the financial affairs of a series of incompetent parties had been awarded $3.4 million in legal fees since 1991 by courts from his fiduciaries’ accounts. Not over the possibility that cozy political connections and a flawed guardianship system permitted Robert Monroe to regularly charge the legal maximum commission and be “handsomely compensated for not having to do very much,” but apparently over the fact that the newspaper reported the story at all. [News & Observer; News & Observer ombudsman, both via Obbie]
Update: Minor, co-defendants guilty on all charges
“Attorney Paul Minor, former Circuit Judge John Whitfield and Chancery Judge Wes Teel were found guilty Friday of all charges in a judicial bribery conspiracy.” (Anita Lee, “Guilty, guilty, guilty”, Biloxi Sun-Herald, Mar. 31; Jimmie E. Gates, “Minor, 2 others found guilty”, Jackson Clarion-Ledger, Mar. 31). We’ve been covering this corruption story, which arose from the financial coziness with judges of one of Mississippi’s most prominent trial lawyers, since it broke: see Mar. 16, etc., as well as Mar. 22.
More: Anita Lee, “Hard Time”, Biloxi Sun-Herald, Apr. 1.