Overlawyered: Chronicling The High Cost Of Our Legal System

Posts Tagged ‘ethics’

More fen-phen fun

We’ve recently discussed the Kentucky fen-phen scandal, in which the plaintiffs’ lawyers are accused of stealing tens of millions of dollars from their clients; there’s another brewing scandal involving fen-phen lawyers in New York.

Napoli Kaiser Bern (now known as Napoli Bern) represented more than 5,000 plaintiffs who had opted out of the larger class action suit against manufacturer AHP; a whistleblower, or disgruntled ex-employee (take your pick) alleged that Napoli Bern manipulated the amounts of the settlement to be paid to each plaintiff — giving more to its own direct clients — so that Napoli could maximize its own profits at the expense of other law firms.

More important is the allegation that Napoli Bern lied to its clients (and to its own expert witness on ethics) in making them think that the amounts allocated to each plaintiff had been determined by AHP and reviewed by a special master appointed by the court; in fact, it appears that Napoli Bern may have decided unilaterally how much to offer each plaintiff. Yesterday, a New York state judge ruled that the allegations had sufficient merit to reopen the settlement and send the allegations against Napoli Bern to trial.

The stakes are high here; the total amount of this settlement — confidential, but reportedly at least a billion dollars — is not at issue, but the distribution of that money among the lawyers and plaintiffs is. As the judge noted, in theory the penalty could be as severe as requiring Napoli Bern to forfeit all fees earned in the case. (Isn’t mass tort litigation fun? Billions of dollars of Other People’s Money floating around, waiting for lawyers to figure out how to distribute it.)

(Previously covered on Overlawyered: Feb. 2005, Dec. 2001)

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“It’s ‘my policy to follow the ethical rules'”

Last week, Ted posted a court decision about a lawyer/client team who have turned the Americans with Disabilities Act — in theory, a law designed to protect actual consumers — into a full-time career, patronizing businesses for the specific purpose of being able to sue them. Not all such lawyer/client teams bother to even take the step of patronizing the businesses, however; some just skip the damages and go right to the extortion, hoping the defendants will pay rather than spend the money to defend themselves.

Many times, their business model works, but occasionally, it backfires, as it did last week on serial ADA litigant Theodore Pinnock. (Technically, Pinnock is the attorney, not the plaintiff. But why split hairs? The plaintiffs, Delores Jackson and the imaginary organization she “represents,” the Association of Women with Disabilities Advocating Access, are just fronts for Pinnock.) On Friday, a federal judge in San Diego sanctioned Pinnock, ordering him to take an ethics class and pay $15,000 in attorneys fees to Marcos Mout, a defendant he had sued last October. Mout owned a convenience store, and was sued because the store was allegedly inaccessible to the disabled. Well, not quite:

Jackson, who uses a walker, said she had “researched” the store and had photographic evidence of numerous violations. In the complaint, she said she had intended to patronize the store but would have been thwarted by problems with signage, the entrance door, interior paths, counter height, parking and the restroom, among many things.

The businessman’s attorney countered that the convenience store wasn’t even open to the public at the time Jackson was allegedly denied access, having been seriously damaged in December 2004 by a flood.

Mitch Wallis, attorney for convenience store owner Marcos Mouet, also told the court that the small store, which remains shuttered, didn’t even have a public restroom. Jackson’s lawsuit also alleged that interior pathways weren’t wide enough, but Mouet’s attorney noted that the shelves had been pushed against the wall to fix the flood damage.

Yes, but aside from those issues…

Incidentally, the Bizarro-Overlawyered crowd will tell you that frivolous suits are easily, quickly, and cheaply disposed of by the courts; this case illustrates yet again how badly they misunderstand the nature of the legal system. Because the suit against Mout’s convenience store made superficially legitimate allegations, it cost Mout at least $15,000 to defend the suit. (He actually claimed legal costs of $38,000 in making his motion for sanctions, but the court found that $15,000 was a more reasonable figure.) And that was for a suit that lasted “only” five months.

Previous coverage of Pinnock: Apr. 2006

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Government rules raising litigation costs

Todd Zywicki posts at the Volokh Conspiracy on the issue of professional licensing as a form of economic protectionism; the comment section quickly turns to the issue of attorney licensing. Eliminating lawyer licensing might be one way to lower the costs of litigation; another way would be to allow “unbundling” of lawyer services — to allow lawyers to provide some services to litigants but not full service representation. (For instance, allowing lawyers to provide research and prepare papers on behalf of litigants, but not to go into court.)

The current legal system is hostile to such an approach, however. On Wednesday, a Federal magistrate judge ruled that a New Jersey lawyer violated ethics rules when he “ghostwrote” pleadings on behalf of a pro-se litigant:

First and foremost, she said, courts generally construe pro se litigants’ pleadings liberally and are more flexible in applying procedural rules. “Simply stated, courts often act as referees charged with ensuring a fair fight,” she said. “This becomes an obvious problem when the Court is giving extra latitude to a purported pro se litigant who is receiving secret professional help.”

[…]

As for the societal benefits of unbundled services, Bongiovanni remarked, “This is not to say that this court does not believe that unbundled legal services, in some form, may be beneficial to the equal administration of justice. But, when viewed under the current RPC, ghostwriting is antithetical to the public interest.”

Bongiovanni ordered that Shapiro enter an appearance by March 30 if he wants to represent Delso, or else cease communicating with her about the case.

The problem, according to the judge, was that the lawyer’s assistance to the litigant wasn’t disclosed to the court. You may wonder why they didn’t just disclose it; the reason likely was because disclosing it could unravel the whole non-full service scheme, and force the attorney to represent the litigant in court.

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Annals of incivility

It may not quite reach Jamail-esque depths — almost nothing can survive that far down other than those curious tube worms that live on volcanic sulfide fumes — but the lawyerly unpleasantness in the case of Redwood v. Dobson (PDF) was plenty bad enough, as recounted in Judge Easterbrook’s entertaining opinion. Discussion: Evan Schaeffer’s Illinois Trial Practice, Prof. Bainbridge, Legal Ethics Forum.

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“Litigation is coercive”

Many commentators over the years have compared litigation to extortion. In Texas, it turns out that there’s at least some line between the two. Last week, San Antonio attorney Ted Roberts was convicted on three of five counts of theft for his role in a blackmail scheme. The scheme — previously discussed on Overlawyered in Jun. 2004 , Sep. 2005, and Feb. 2007 — involved having his wife, Mary, pick up married men on the internet, have sex with them, and then threaten to sue them (and reveal their sexual activities) for ruining his marriage unless they paid him big sums of money.

If you think that’s low, consider that Roberts falsely told his victims that the money they paid would go to a charity; he instead spent almost all of the money on a new $635,000 home. It was that fact that apparently convinced the jury, which didn’t have much sympathy for the adulterous men, to vote to convict.

It might sound unconscionable to normal people, but Roberts had found someone to defend him:

Support for the accused Ted H. Roberts and for his creative response to his wife Mary’s adultery came from an accomplished fellow attorney with more than 44 years’ experience, including a term as president of the State Bar of Texas.

Testifying for the defense, Broadus A. Spivey voiced no qualms about the way Roberts extracted $155,000 from four of his wife’s lovers by threatening to file litigation that would embarrass them and alert their wives and employers to their infidelities.

“Litigation is coercive,” Spivey explained to jurors. “That’s part of the nature of the beast.”

The seasoned lawyer offered a voice of experience, and the defense took care to note for jurors his multiple board certifications, awards and various distinctions.

Spivey might not quite be an impartial witness, though; he represents the Roberts duo in their civil lawsuit against the newspaper that first reported their scheme.

Still to come: the trial of Roberts’ wife on the same charges.

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Grand jury looking at Ky. fen-phen scandal

A grand jury is expected to hear testimony this week about the role of three Lexington lawyers in the now-infamous Kentucky fen-phen settlement (Feb. 14, etc.). “Frank Bentley IV, a lawyer representing [Cincinnati’s Stanley] Chesley, said he is not a target of the criminal investigation.” (Andrew Wolfson, “Grand jury to look at diet-drug attorneys”, Louisville Courier-Journal, Mar. 15). Last month one of the lawyers caught up in the scandal, William Gallion, said “that he did nothing wrong and that a lawsuit filed against him and others in the case is simply the result of ‘a cottage industry of lawyers who attack class-action settlements.'” (Andrew Wolfson, “Attorney denies wrongdoing”, Courier-Journal, Feb. 11).

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Update: Neuborne fee fracas

A federal judge in Brooklyn has recommended that the NYU lawprof be given about $3 million, or $1 million less than what he asked, for representing Holocaust-assets claimants. Some clients say they understood Neuborne to have said he was working pro bono (Jones/WSJ law blog, Mar. 16; Tom Perrotta, “$3 Million Fee Suggested for Neuborne for Work on Holocaust Survivor Issues”, New York Law Journal, Mar. 16). Earlier: Oct. 6, etc.

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Update: Some people got it and make it pay…

…which may not necessarily mean that some people can’t even give it away:

A federal judge ruled Friday that a former escort service owner cannot sell phone records and other documents that could be used to publicly identify thousands of her clients…. [Deborah Jeane] Palfrey’s civil attorney, Montgomery Blair Sibley, said Friday he does not believe the judge’s order bars him from distributing copies of the phone records for free. In any event, Sibley said it’s a moot point because he has already given copies of the records to an undisclosed news organization.

(“Judge Blocks Former D.C. Madame From Selling Client List”, AP/FoxNews.com, Mar. 16; SF Chronicle; WTOP). Background: Mar. 13.

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Profitable angles in harlotry law, cont’d

Washington, D.C. has been on edge lately over the news that Deborah Jeane Palfrey, facing charges of running a pricey call girl operation in the capital, wants to sell her list of 10,000 clients and 46 pounds of phone records to the highest bidder to raise money for her legal defense. (Scott McCabe, “Accused D.C. madame’s client list remains in limbo”, Washington Examiner, Mar. 10; Fox News, Mar. 9; Anne Schroeder, Politico, Mar. 1; TPM Muckraker, Dec. 7, Mar. 1, Mar. 7, Mar. 9). Palfrey’s attorney and adviser, Montgomery Blair Sibley, says numerous overtures for purchase have already come in, that efforts are underway aimed at “mining the data to identify individuals,” and that his client will do her part in cooperating with the buyer of the data to identify clients. Attorney Sibley is quoted in the Examiner as teasing journalists about the newsworthy nature of the client names: “You won’t be disappointed.”

Something about the name of Palfrey’s attorney, Montgomery Blair Sibley, rang a bell from the past. Was it the historical resonance of his having been named after a member of Lincoln’s cabinet? Or his having once headed an organization called Forfeiture Endangers American Rights, which I’ve had occasion to cite favorably for its work against police and prosecutorial abuses? No, that wasn’t it. Oh, wait, here it is: an Overlawyered entry from March 7 of last year about how Arthur Vanmoor, a South Florida man accused of running one of the largest prostitution rings in the Southeast, had taken the step of suing his own former clients for getting him in trouble (seems they had signed credit card slips which read “Cardholder states that this transaction is not for illegal activity”). As I noted then, “One wonders whether the possibility of [publicity for the “johns” being sued] might be one factor influencing the prospective settlement value, if any, of the new round of suits.” Vanmoor’s attorney appeared on Tucker Carlson’s “The Situation” to discuss the strategem, with entertaining results. His name? Montgomery Sibley.

Maybe Mr. Sibley can adopt as a new promotional slogan for his law practice, “Turning your client lists into gold.”

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