Overlawyered: Chronicling The High Cost Of Our Legal System

Posts Tagged ‘Roy Pearson’

Judge Pearson update

(AM post bumped for PM update.)

A judicial panel is still deciding whether the Great American Pants-Suit plaintiff will keep his job as an administrative judge. A delayed decision is expected early next week.

Update to the update: Marc Fisher is reporting that the decision will be to start the bureaucratic process of firing Pearson. Amazingly, the chief ALJ recommended reappointing Pearson&mdash:until Pearson showed his typical good judgment by blasting the chief ALJ in an internal email as “evil,” causing his target to change his mind. Pearson will be entitled to a hearing (and who knows how many rounds of appeals) before he is officially fired; since April, he has been in a fully-paid no-work position as an “attorney-advisor.”

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July 17 roundup

  • Judge Bartnoff declines to reconsider decision against Roy Pearson in dry cleaner pants case [AP/WUSA]
  • Turnabout fair play? Louisville hospital sues trial lawyers, saying they injured its reputation and tried to extort settlement [Courier-Journal]
  • Employer sued for “post-traumatic stress disorder” after pranksters post co-worker’s profile on gay section of HotOrNot.com [McCullagh, CNet]
  • Former Belleville, Ill. cop sues over prosecutor’s letter suggesting his testimony not to be relied on [M.C. Record]
  • British race relations agency demands removal from shelves of Tintin comic book [Telegraph]; 22-year-old in Scotland sentenced for “racially aggravated breach of the peace” after website commentaries that went “beyond the realms of bad taste” [also Telegraph]
  • Farewell to that little patch of floating liberty, the South Carolina river shack [Zincavage]
  • Hey docs: if a plaintiff’s law firm calls your office to talk about a former patient, don’t call back [Medical Economics via KevinMD]
  • Yale Club replies to Judge Bork’s lawsuit [Turkewitz]
  • Arizona businesses aghast at hiring-sanctions law that suspends their license to operate should supervisor be found to have hired an illegal [Arizona Republic]
  • Grants from Bob Barker foundation (Jul. 5, 2001) help fuel animal rights boom in law schools [NLJ]
  • University of Utah settles lawsuit brought by devout Mormon student actress who refused to recite dramatic lines that were blasphemous or obscene [three years ago on Overlawyered]

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Sebok on the Pearson pants suit

Anthony Sebok’s Findlaw column on the Pearson pants suit cites Overlawyered and repeats two points regular readers of Overlawyered and Point of Law have seen before:

  • Meritless cases often settle for nuisance value, thus making them profitable to bring;
  • Rule 11, as currently constituted, “has proven to be a very toothless weapon against abusive plaintiffs” and “does not effectively protect defendants from frivolous, or even, in some cases, fraudulent suits.”

Yet Sebok concludes that there is no epidemic of fraudulent litigation. I suppose it depends on one’s definition of “epidemic” and “fraudulent”; as we’ve noted before, Bill Lerach successfully swiped several billion dollars in nuisance settlements bringing meritless Enron litigation, helped by an erroneous district-court class certification. (Such erroneous class certifications helped make Madison County a judicial hellhole.) Sebok acknowledges that “lawyer-driven” cases where plaintiffs act as their own attorneys might merit loser-pays rules to deter meritless lawsuits that would be cheaper to settle than fight, but what makes most class-action litigation any less “lawyer-driven” such that they should be subject to different rules? (Cross-posted from Point of Law.)

By the way, Pearson has announced that he will appeal the trial court’s decision against him.

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More twisted justifications for Pearson’s pants-suit

As I have repeatedly noted, the only reason the Chungs can be said to have been vindicated is that Judge Roy Pearson is more delusional and less sinister than the typical trial-lawyer extortionist. Had Judge Pearson accepted the $12,000 settlement the Chungs felt forced to offer between the expense of litigation and the small risk of Pearson mounting a case that successfully resulted in the giant fines imposed by DC consumer-fraud law, Pearson would have had a five-digit profit, and the Chungs would be out tens of thousands of dollars in litigation and settlement expense without any hope of recoupment. As Michael Greve demonstrates in “Harm-Less Lawsuits”, this is more than hypothetical: in consumer-fraud lawsuits alone, billions of dollars have been extracted from innocent defendants.

DMI’s Kia Franklin’s defense of her claim that the travesty of justice we have seen in Pearson shows that the system works? “Now, had Pearson collected the $12,000 settlement, we would have a whole new hypothetical and a whole new set of questions about the terms of the settlement (Would we have known the settlement amount? Would they have been able to publicize this? What were the lawyers’ strategies?) and the consequences thereof. So we can’t prematurely say that it would pay off for him.” Franklin goes on to deny that trial lawyer abuse even exists—a perhaps necessary position for her to take, given that the top of any list of abusers would include the indicted law firm Milberg Weiss, which funds her fellowship, in part from the successful extortion of billions of dollars using the same in terrorem tactics as Pearson.

As Peter Nordberg notes in the Overlawyered comments, “If [Pearson] is indeed representative, there should be thousands of cases just like it, and we may as well get to discussing those.” And indeed we should.

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The significance of Roy Pearson

As we’ve covered, Roy Pearson lost his $67 million lawsuit against his dry cleaners. Predictably, Bizarro-Overlawyered is trumpeting the outcome as evidence that the system works, that the “system has effective, built-in checks against such things.” I doubt many Overlawyered readers buy into that spin, but just in case, here are a few reminders about this case that, to the extent it had any merit at all, should have been a small claims suit:

  1. The Chungs offered Pearson $12,000 to drop this suit. If he had not been so greedy, they’d have been out that much money, plus a year’s worth of legal costs. The fact that our legal system enables people to extort tens of thousands of undeserved dollars from others is not evidence that there are “effective, built-in checks” on frivolous litigation.

  2. Putting aside any money issues, this lawsuit was filed on June 7, 2005; for more than two years, this case has been hanging over the Chungs’ heads. That’s two years of legal and financial uncertainty. Two years where they couldn’t make any significant business decisions because they had the possibility of an eight figure liability hanging over their heads. The fact that someone can drag out a case almost too small to have been on Judge Judy for two years is not evidence that there are “effective, built-in checks” on frivolous litigation.

  3. The Chungs “won” the case, but Pearson used the legal system to impose what was likely $100,000 in legal costs on them. Of course, there is a motion for sanctions pending against Pearson, but there are no guarantees here. Courts are very reluctant to impose sanctions, and even when they do (as the court probably will here) they very rarely impose sanctions sufficient to make the defendants whole. Note that sanctions are not automatic; the Chungs had to pay their attorney even more money to prepare a motion for sanctions. The fact that the Chungs have to endure two years of frivolous litigation and then cross their fingers and hope the judge awards them their legal fees is not evidence that there are “effective, built-in checks” on frivolous litigation.

  4. Oh, one other problem: the Examiner reported, even before the decision, that Pearson’s chances of keeping his job were slim. I think most reasonable people agree that Pearson hasn’t quite demonstrated that he’s fit to be a judge. But if he loses his job, the chances of the Chungs ever collecting any part of those sanctions drop from slim to none. (Their chances of recouping their losses are low to begin with — is it likely Pearson has $100,000 sitting around?)

  5. And let’s not forget one other party to this case, also abused by Roy Pearson: the taxpayers of the District of Columbia, who have to pay for the legal system. And they have no chance to get reimbursed.

  6. Finally, remember that the case is not necessarily over. It would be insane for Pearson to appeal, but that hasn’t proved to be a limiting factor in his actions in the past. The worst that happens is that he gets slapped with more sanctions, which he’ll never pay.

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Some Pearson reactions

WSJ Law Blog has the (long) opinion and (short) judgment in the case. Professor Bainbridge notes the pertinence of the legal principle of “puffery”, under which Pearson was no more justified in demanding the literal enforcement of the Chungs’ “Satisfaction Guaranteed” sign than would other customers be justified in suing United Air Lines after a grumpy flight for not providing “friendly skies”, Exxon for not putting a genuine “tiger in your tank”, Fox News for being less than “fair and balanced”, and so forth. Amygdala observes, of the $12,000 settlement offer that Pearson spurned from the Chungs:

Which is to say, if you’re a lawyer, or just knowledgeable about legal phrasing and documents, and willing to spend a certain amount of time generating and mailing documents, you can wind up being offered $12,000 if you’re sufficiently obnoxious and persistent, no matter how feeble, frivolous, and meretricious your claim is.

That’s a well-known, old, story, to be sure, but still worthy of note now and again.

And the WSJ Law Blog has an earlier interview with the Chungs’ lawyer, Christopher Manning, including this pertinent excerpt:

How’d all the publicity start?

A local neighborhood newspaper first picked up the story. Then WJLA – the local ABC affiliate — picked up the story, with me holding the pants. After that, Marc Fisher’s [Washington Post] column ran in late April which really set it off. [The story has since been featured on Today, Nightline, Good Morning America, MSNBC, Fox News, CNN and a host of other networks.]

Gosh. You mean the pants suit didn’t become a big worldwide story, as some of our friends in the trial bar have hinted, just because those nefarious legal reformers were looking for a far-out case to publicize? Next you’ll be telling us that Stella Liebeck’s McDonald’s hot-coffee award became a huge story because it was something the press found newsworthy and the public wanted to talk about, rather than because reformers plotted deep into the night to hype it.

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