Writers Ronnie Niederman and Judith Shangold sued Disney, claiming that in publishing “Summerland,” a novel by author Michael Chabon with a baseball theme, the entertainment giant’s Miramax Books subsidiary had ripped off one of their own 1995 idea submissions to Disney. Trouble is, the theatrical plot they claimed to have submitted in 1995 contained numerous references to the Palm Pilot personal organizer, a product not introduced until 1997. Citing “voluminous, independent and irrefutable evidence” that the plaintiffs did not create the treatment at the time they said they did, federal judge William H. Pauley concluded “that there was ‘clear and convincing’ evidence that the plaintiffs had committed a fraud on the court and ‘manipulated the judicial process.'” He dismissed their case and ordered them to pay Disney’s legal fees in an amount to be determined later. (Mark Hamblett, “Judge Blasts Bogus Proof, Rejects Claim Against Disney”, New York Law Journal, Jan. 18). Jonathan Edelstein comments at Head Heeb (Jan. 21).
Posts Tagged ‘loser pays’
Calif. court OKs countersuit in “shakedown” case
Just over a year ago, following numerous scandals about law firms’ filing of mass shakedown suits based on California’s s. 17200 unfair-competition law (UCL), the state’s voters curtailed somewhat the law’s extortive potential by requiring that actual harm to a complainant be shown. Last month, a California appeals court gave the nod to a second, potentially powerful way of restraining unwarranted s. 17200 suits, namely countersuits from outraged defendants. As Kimberly Kralowec notes (Dec. 20), “the Court of Appeal held that the litigation privilege did not bar a suit against lawyers accused of filing Trevor-like ‘shakedown’ suits under the former UCL. [The Trevor Law Group was the most notorious filer of shotgun UCL suits — ed.] In a now-familiar irony, the lawyers were themselves sued for violating the UCL, as well as for intentional interference with prospective economic advantage.” The case (Word document format) is American Products Co. v. Law Offices of Geller, Stewart & Foley, LLP.
Working overtime (or maybe not) for fees
The federal Fair Labor Standards Act, which governs overtime and other aspects of wage-and-hour workplace regulation, entitles prevailing plaintiffs’ lawyers to demand attorneys’ fees from defendants, but not vice versa; it’s a “one-way” fee-shift
Some attorneys who represent employers say plaintiffs attorneys are filing claims for small dollar amounts under the wage and hour provision of the federal law that require little litigation beyond filing a claim, then claiming fees sometimes in the tens of thousands of dollars. Another tactic, defense attorneys say, is dragging out the litigation to pad their fees.
“It’s a hijacking,” said Mark Cheskin, a defense-side labor and employment lawyer and partner at Hogan & Hartson in Miami. “There’s a whole cottage industry of plaintiff attorneys who are doing nothing but these cases.”
“It’s a volume practice,” said Paul Lopez, a partner at Tripp Scott in Fort Lauderdale. “They use the same forms [for every client] and are doing cut-and-paste jobs.”…
In a quickly settled case, the attorney fees generally seem like small potatoes to the employer, defense attorneys say, even though the fee may be 10 to 20 times the amount paid to the plaintiff.
However, claimants’ lawyers respond that business defendants often underrate the amount of time needed to prepare the cases. “‘They’re wrong, and there’s nothing out of control at all,’ said Donald Jaret, a Miami attorney with a substantial FLSA practice. ‘They always have complained, and they always will.'”
Lawyers say some judges have been policing fees more closely lately:
In 2003, U.S. District Judge Federico A. Moreno rejected Donald Jaret’s request for $16,000 in fees on a $315 claim that was settled weeks after the claim was filed.
In his order, Moreno wrote that the claim “shocks the conscience of the court. … This strategy of ‘shaking down’ defendants with nightmarishly expensive litigation in pursuit of attorney fees must not be rewarded.”
That case, entitled Goss v. Killian Oaks House of Learning, was cited last year by U.S. District Judge Kenneth Ryskamp in denying a lawyer’s fee request in a case against the Rag Shop of Hollywood, Fla. (Jessica M. Walker, “Are FLSA Suits Too-Lucrative Labors for Plaintiffs Attorneys?”, Miami Daily Business Review, Dec. 16). More on overtime and FLSA litigation: PoL, this site.
Don’t take that client!
Norm Pattis at Crime and Federalism (Nov. 21) describes a temptation felt by many trial lawyers during “the periodic lull in cases of merit”: taking on the cause of a vengeful, deluded or disturbed complainant:
You know the type. The injured, angry, pissed off, ornery cuss of a client who has been waiting, hoping, praying for a lifetime for someone to commit a tort, any tort will do, against them. Armed with this tort, this anger addicted fiend of a plaintiff will demand the scorching of any Earth within one thousand miles of their rubbed raw hangnail.
Will such a client find a lawyer willing to take his case? Very possibly he might:
Each year the bar belches forth a new class of lawyers; we add them faster than they die off. Lawyers need cases or controversies to survive. As the number of lawyers grows, plaintiffs’ lawyers reach ever deeper into the cesspool of human need to find clients. Is it any wonder that the courts are filled to overflowing with litigation that would better be treated with Prozac, Thorazine or some other radical therapy?
Lawyers should turn down such clients, Pattis says, and society should add its own discouragement:
I am a plaintiff’s lawyer. I am a successful plaintiff’s lawyer. But, perhaps this is too much to assert — I am an honest plaintiff’s lawyer. I favor as a matter of policy liberal rules requiring a plaintiff to pay sanctions for a claim brought without merit. A plaintiff who imposes unneeded expense on a defendant should reimburse the defendant.
And he follows that thought up with several other policy recommendations: “Liberalize the use of independent medical examinations for plaintiffs claiming emotional distress”, “Expand Rule 11 type sanctions on lawyers”, and “Make it easier for lawyers to withdraw when they discover that the client’s claims lack merit”. Even if you don’t usually follow the links in our posts, do it this time and read the whole thing. Update Jan. 8: Pattis responds to colleagues’ criticism.
“7th Circuit Giveth–Then Taketh Away”
Budget Rent A Car won sanctions for its adversary’s filing of a frivolous appeal, but lost its ability to recover its fees when it submitted what the court, in a Judge Posner opinion, called an “exorbitant” nine-thousand-dollar bill. (David L. Hudson Jr., ABA Journal eReport, Nov. 18). But were the fees really that exorbitant? Point of Law explores why they perhaps might not have been.
Also on Point of Law:
- the Vioxx MDL rules on expert evidence;
- attorneys get $22 million while their ostensible clients get nothing, or worse than nothing;
- a study on the impact of litigation on small business;
- plaintiffs aren’t kidding when they say they’re going to make welding the next asbestos;
- how the multistate tobacco deal penalizes the growing Sun Belt states; and
- a plaintiffs’ lawyer makes an interesting nationwide cardiological diagnosis.
Update: Michael J. Zwebner and John Faro
You may recall the entertainingly stupid lawsuit filed by Michael J. Zwebner and his penny-stock holding company Universal Communication Systems against CNN and Wolf Blitzer (Feb. 17). No surprise, Rule 11 sanctions were granted—the judge found that each of the three independent reasons for granting sanctions under Rule 11 applied to this case. Zwebner’s attorney, John H. Faro, demonstrates his uncertain grasp of the law by continuing to blizzard the court with papers, including filing a premature appeal purporting to divest the district court of jurisdiction and fundamentally misunderstanding the concept of “bad faith” litigation by arguing that the Rule 11 sanctions were inappropriate because the lawsuit was filed for “tactical” (!) purposes. One hopes that the court awards fees over the collateral litigation tactics so that the defendants are not worse off for having sought Rule 11 sanctions. One further hopes that the Florida Bar steps into protect other defendants and clients from Faro. A similar lawsuit brought by Zwebner and Faro against Lycos appears to have been dismissed this week; the same message board has fun discussing these and other Zwebner lawsuits. See also Mar. 12.
How copyright clearance problems stultify documentaries
Forty-five percent of the budget for the movie “Mad Hot Ballroom” covered the cost of “clearing” rights to songs. The filmmaker even had to negotiate with the subject of the film not to play certain music, because the presence of an uncleared song playing in the background on a boombox would prevent a scene from being used. A three-word-shout that corresponded to the lyrics of a song would have cost the filmmakers $5,000 alone; they had to cut the scene rather than risk litigation. Carrie McLaren interviews producer/writer Amy Sewell on the Stay Free Daily blog (Jun. 22), and a follow-up post notes how the fear of litigation prevented her from asserting her fair-use rights (Jun. 22), a problem that could be solved by loser-pays rules. (Hat tip to C.N.) More: Feb. 8-10, 2002.
Eenie Meenie Minie Update
Grace Fuller claims that she suffered two epileptic seizures because a flight attendant used the phrase “Eenie, meenie, minie, mo, pick a seat, we gotta go” to passengers boarding an open-seating flight late; Fuller and her travelling companion, both African-Americans, ascribed racist meaning to the phrase, and sued under a variety of federal and state claims. Some claims were thrown out, and a jury did what a judge should’ve done sooner, and bounced the rest. (Feb. 9, 2004; Jan. 22, 2004 and links therein).
The United States Court of Appeals for the Tenth Circuit affirmed the district court judgment for defendants. After a full trial, and briefing for an appeal, the cost to Southwest Airlines of “Eenie Meenie Minie Moe” was surely in the six digits. But, though the law in questions permit plaintiffs to recover attorneys’ fees if they are successful (surely the only reason an attorney agreed to bring this suit), defendant Southwest Airlines is going to have to swallow the cost of this ridiculous suit. The opinion creates no precedent, so if Sawyer wants to sue someone else for using a nursery rhyme, she can do so in the future. (Sawyer v. Southwest Airlines Co., No. 04-3109 (10th Cir. Aug. 10, 2005) (hat tip to P.N.)).
Reader request: one-way fee shifting
Here’s a request for readers of this site. Some well-placed folks are planning to take up the question of the unfairness of “one-way” fee shifting (plaintiffs collect if they prevail, but defendants don’t, and the definition of what it means to prevail is often itself unfairly stacked). This unfairness might be addressable by turning one-way fee statutes into two-way; by reverting to a so-called “American” (neither side pays) rule; by working to fix lopsided definitions of what it means to prevail; or by some combination of these approaches. (More: May 31).
So here’s the reader request: these folks are in a hurry to line up well documentable case histories of unfairness arising from current federal one-way fee-shifting statutes. Federal only, like this and this, please (not state statutes like this and this and this one). They need the examples within the next couple of days (yes, they should have planned ahead, but I just heard from them now). And, of course, the case histories need to be highly checkable and to exemplify unfairness even in the face of skeptical scrutiny. The best examples will probably already be the subject of existing court opinions or news coverage.
If you’ve got examples, send them along to editor [at] [this-domain-name]. [cross-posted at PointOfLaw.com]
Over at Point of Law
The mystery guestblogger over at Point of Law has now been revealed: it’s Prof. Martin Grace of the highly recommended site RiskProf. He’s an insurance and liability expert and will be contributing comments this week and next. We originally announced that there would be a second guestblogger at Point of Law this week as well, but that personage is being held at an undisclosed location and is expected to stop by next month instead.
Also at Point of Law, check out Ted’s posts on Kelo v. New London, the eminent domain case decided today by the Supreme Court, and on anesthesiologists and malpractice; Jonathan B. Wilson’s posts on recent California Supreme Court rulings on punitive damage limits, a $300 million fee for Bill Lerach, and scary scam suits by prison inmates; and my contributions on such topics as how some securities lawyers get clients and the politics of loser-pays.