Overlawyered: Chronicling The High Cost Of Our Legal System

Posts Tagged ‘statutes of limitations’

“Eenie Meenie” redux

Remember the “Eenie Meenie Minie Mo” case? (Feb. 2003, Jan. 2004, Aug. 2005.) Here’s a variation which is almost as ridiculous, if less entertaining, from the Virgin Islands. Bad customer service as a cause of action:

During a layover in Puerto Rico, the passenger approached American’s ticket counter to verify her connecting flight to the Virgin Islands.  The ticket agent supposedly refused to return the passenger’s ticket and told her “to shut up and take a seat” and that she might not be scheduled to travel on any flight that day.

The passenger sued American, alleging claims under Virgin Island territorial law for negligence, breach of an implied contractual duty to ensure that employees “conduct themselves in a professional manner” and discrimination.  The passenger’s claims seemed to focus solely on her alleged emotional distress from being treated rudely; the opinion does not indicate that the agent’s conduct caused the passenger to miss her flight or suffer any other more tangible injury. 

Fortunately (unlike in the Eenie Meenie case) the court did not let this case get to trial; he granted summary judgment in favor of the defendant Airlines. As a result, American Airlines probably “only” spent in the low five digits to “win” this case.

Incidentally, I’ve heard the pace of life is slower in the Caribbean, but this flight took place in July 1996. The suit was filed two years later — it looks like just before the statute of limitations expired — in July 1998. Inexplicably, American Airlines did not move for summary judgment until eight years later, in July 2006; it’s not clear what was going on in the interim.

(But judging from one of the plaintiff’s previous trips (PDF) through the legal system, it would not be beyond the realm of possibility that she might bear some responsibility for the long delay.)

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Credit where credit is due

In 2002, an 18-year old community college student named Joshua Endres signed up for a Wells Fargo credit card, allegedly based in part on the promise made by a sales representative that it could provide overdraft protection for his Wells Fargo checking account. He “does not recall” seeing any of the disclosures and disclaimers from the bank which explained to him that there’s no such thing as a free lunch — that he would be charged a fee if he overdrew his checking account.

A few months after signing up, he overdrew his account, and was charged this fee. He discovered this a few days later, when he received his credit card statement. He was so outraged by this unconscionable behavior by Wells Fargo that he immediately cancelled the card. No, not really; this isn’t April 1st. In fact, he immediately used the card for four more years, incurring at least fifty more overdraft charges. Then he filed a lawsuit demanding restitution, and compensatory and punitive damages, alleging that nobody told him that he would be charged a fee.

McCune admits Endres could have done a better job of tracking his charges. Endres once exceeded his limit 62 times in a year, causing him to pay $620 in finance charges so he could obtain $1,115 in cash.

“It took a couple of years before he sat up and noticed,” McCune said. “The information was available to him.”

That’s his own lawyer admitting that.

There are other problems with the lawsuit, related to the statute of limitations and federal preemption of California laws, but the larger issue here is that someone would fail to read his credit card agreement, incur fees for four years based on the terms of the agreement, and then try to sue on the grounds that nobody told him what the agreement said about those fees. (Oh, did I mention that Endres’s lawyer seeks to turn this into a class action lawsuit?)

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Update: appeals court tosses $18M Gannett verdict

Following urgings by prominent attorney and frequent Overlawyered mentionee Willie Gary, a jury in Pensacola, Fla. had awarded the sum to a road builder who said he was defamed by an investigative-journalism piece in the newspaper chain’s Pensacola News-Journal (Mar. 30-31, 2001; Dec. 23, 2003; Jan. 7, 2004). The Florida appeals court “ruled that Joe Anderson’s case should have been dismissed because he mischaracterized his lawsuit as a ‘false-light claim’ to get around a two-year statute of limitations that applies in libel cases. The court said that since its decision was based on the statute-of-limitations issue, it did not rule on several other arguments for reversal raised by the newspaper.” (Ginny Graybiel, “News Journal suit reversed”, Oct. 21).

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Why the Jessica Cutler case matters

For some reason, we haven’t yet covered the Washingtonienne libel suit, where Little Rock law professor Robert Steinbuch revealed he was “R.S.” by filing suit against the infamous blogger, causing Judge Paul Friedman to comment, “I don’t know why this guy thought it was smart to file a lawsuit and lay out all of his private intimate details in an appendix to the complaint.”

Now Wonkette reports that Cutler’s third set of attorneys in the litigation Robert Steinbuch has filed against her, and has not yet retained new attorneys. Why might you care? Because Steinbuch, who waited until May 16, 2005 to complain about a May 4, 2004 blog post, is planning on arguing that every new blog post restarts the statute of limitations for a plaintiff wishing to complain about a blog. (T.R. Goldman, “A Man Scorned”, Legal Times, May 22). If Cutler defends against this argument pro se, Judge Friedman could be induced into an erroneous ruling that makes life difficult for bloggers everywhere. And there’s no reason that Steinbuch’s logic wouldn’t equally apply to computer databases like LEXIS that “republish” mainstream media articles upon request. One hopes Friedman will see through the Steinbuch argument.

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Down repressed-memory lane, cont’d

The Missouri Supreme Court has ruled that if plaintiffs claim to have repressed their memory of the bad things that happened to them, they may succeed in suspending for years and even decades the statute of limitations on the resulting tort actions. The court reinstated a suit by a man who said he had been sexually abused at Chaminade College Preparatory School 30 years ago, but had repressed the memory of the episode for 25-odd years. (Robert Patrick, “Repressed memory abuse suits supported”, St. Louis Post-Dispatch, Jun. 13). Reader Patrick R., who sent the item along, says: “This is an invitation to fleece churches and insurance companies through fraudulent claims and an invitation for claimants to sleep on their legal rights.”

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Federal mail fraud and RICO statutes

Prompted by the (ongoing) corruption trial of former Illinois governor George Ryan and co-defendant Larry Warner, University of Chicago lawprof Albert Alschuler has written a series of posts at the Chicago Law Faculty Blog using the trial “to illustrate the unfairness of the mail fraud and RICO statutes”. He notes that “prosecutors call the federal mail fraud statute ‘our Stradivarius, our Colt 45, our Louisville Slugger, our Cuisinart’, with the closely related Racketeer Influenced and Corrupt Organizations Act (RICO) law second on the list of favorites.

In the Ryan case, the alleged misconduct to be brought out at trial “will cover a twelve-year period and range from failing to register as a lobbyist, to accepting secret consulting fees from a presidential campaign, to giving low-number license plates to campaign contributors.” Are all those things illegal? Well, they might be, ever since Congress added a vaguely worded new section to the mail fraud statute declaring that a scheme or artifice to defraud includes a scheme ‘to deprive another of the intangible right to honest services.’” The interpretations of this language have been so broad that even an elected official’s violation of his announced personal policy on a matter, not otherwise illegal, may be construed to deprive constituents of honest services.

In the Ryan case and others, prosecutors have used the intangible rights doctrine to stand federalism on its head. In effect, federal prosecutors prosecute state officials and private individuals for state crimes in the federal courts. Worse, they use the mail fraud statute to bootstrap minor state crimes and violations of non-criminal regulations into 20-year federal felonies. … Does every broken promise by a politician (“read my lips”) now constitute mail fraud?

The mail fraud statute, Alschuler argues in a third post, encourages “kitchen-sink” proceedings in which a vast assortment of dubious actions, not in fact closely related to each other, get treated as a single vast “scheme” for purposes of prosecution. Finally, a fourth post discusses RICO charges, which prosecutors can build up on a foundation of “predicate acts” that:

may extend over two or three decades. They may include crimes on which the statute of limitations has run, crimes that could not themselves be prosecuted in a federal court, crimes that could not be joined with one another in separate prosecutions, crimes of which the defendant already has been convicted and for which he has been punished, and even crimes of which he has been acquitted in a state court. The courts, if faithful to the statute, have no way to prevent this sprawl.

For our comments on the abuse of the RICO statute by the Clinton and Bush administrations in litigation against tobacco companies, see Sept. 23, 1999 and many other posts.

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Connecticut: a little favor for Koskoff, Koskoff and Bieder

The Bridgeport law firm of Koskoff, Koskoff and Bieder, which accounts for many of Connecticut’s high-profile settlements against doctors and other defendants, isn’t shy about throwing its political weight around in Hartford. Consider what happened after the firm got hit with a legal-malpractice suit from a former client, a widow who allegedly hadn’t been properly advised by attorney Rosalind Koskoff to file for workers’-comp benefits for her late husband, and was later ruled to have waited too long. As the widow’s malpractice suit against the law firm headed toward trial, two friends of the trial bar in the state senate, deputy majority leader Andrew McDonald and Sen. Edith Prague, tacked onto an unrelated bill an amendment which would have the state fork over the benefits the widow was suing for — not as a general rule, just in that one case — which would have the probable effect of knocking out the malpractice case by mootness. The bill became law, and the influential law firm can now presumably breathe a bit easier, glad it has cultivated so many friends in high political places. (Meir Rinde, “A Legislative Rat? The Koskoff Clause”, Hartford Advocate, Aug. 4).

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The Overlawyered iMix

On August 25, a San Mateo County court will hold a fairness hearing over a nationwide class action settlement over iPod batteries that will provide $50 coupons for class members and $2,768,000 in fees for the attorneys. Because the lawsuit was filed before the Class Action Fairness Act took effect, the state court does not have to comply with the new federal requirement that attorneys’ fees reflect the actual redeemed value of the coupons, rather than the face value, one of many sensible provisions of the Act that trial lawyers, the New York Times, and dozens of prominent Democrats (including leading 2008 presidential contenders Hillary Clinton, John Kerry, and John Edwards) opposed. In honor of this fairness hearing (as well as in honor of a pending lawsuit alleging that Apple is monopolizing the music market by selling music in a proprietary format), Overlawyered presents the Overlawyered iMix:

Read On…

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Wisc. high court opens paint-suit floodgates

After getting thrown out of court pretty much everywhere else, trial lawyers suing companies that long ago manufactured lead paints and pigments may have finally achieved their long-sought breakthrough. They are indebted for this benefaction to the Wisconsin Supreme Court, within days of the same court’s baldly activist decision (PoL Jul. 14) to strike down the state legislature’s limits on medical malpractice awards. By a 4-2 margin, the court agreed to apply the theory of market-share liability — widely rejected by courts except in the context of suits over the drug diethylstilbestrol (DES) — to hold liable any and all companies which made paints and pigments sold in Wisconsin, regardless of whether a plaintiff claiming injury can demonstrate whose product he or she was exposed to. The court did not apply any statute of limitations and impatiently brushed aside defendants’ objections that the conduct being sued over took place more than a century ago — the houses in which the teenage plaintiff had been exposed to lead paint were built in 1900 and 1905 — and was lawful according to the standards of that time. “It will be nearly impossible for paint companies to defend themselves or, frankly, for plaintiffs to lose” under the newly announced standard, predicts dissenting justice David Prosser. If he’s right, expect a gold rush by client-chasing lawyers in Wisconsin. (J.R. Ross, “Court Allows Teen to Sue Lead Paint Pigment Makers for Injuries”, AP/Law.com, Jul. 18). For more on paint litigation, see this set of links, Dec. 15, 2003, Jul. 2, 2005, etc.

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More on District of Columbia v. Beretta, U.S.A.

We get mail:

You mention in your “District of Columbia v. Beretta, U.S.A.” post that other commentators, such as Mr. Healy and Mr. Levy, have argued that individual states, not the federal government, should be initiating legislation preventing lawsuits against gun manufacturers. The idea is that businesses can “withdraw from doing business in a state that has an oppressive tort regime.” Your counter-argument, however, is that the latter idea “doesn’t help gun manufacturers who don’t do business in the District of Columbia to begin with.”

But, in fact, can’t businesses withdraw from states to the point where these businesses no longer have the “minimum contacts” necessary for the state courts to assert personal jurisdiction over the businesses? Then the businesses would be avoiding the oppressive tort laws of those states, but the states would not have personal jurisdiction for any lawsuits against these businesses.

Chris Schmitthenner

It is correct that gun manufacturers will, in litigation, attempt to get themselves out of the case by arguing lack of personal jurisdiction via such precedents as Asahi Metal Industry Co. Ltd. v. Superior Court of California. However, there are two separate issues that prevent Asahi from providing complete relief.

First, plaintiffs will argue that there are minimum contacts that suffice for personal jurisdiction. They’ll argue that the manufacturers placed ads in magazines that would be seen by residents of the state. They’ll argue purposeful availment under the same factual theories that underlie the “nuisance” claims in the Weinstein litigation. Cf. GTE New Media Services v. BellSouth Corp. (D.C. 2000) (plaintiff entitled to discovery whether defendant, while not physically present in District, intended for District residents to do business with it and caused injury within District); LaMarca v. Pak-Mor Mfg. Co. (N.Y. 2000) (distinguishing Asahi to find personal jurisdiction). In the case of the D.C. city council law, the manufacturers may even have problems to the extent they have lobbyists in the area. A particular judge may well decide that it’s a jury issue, and many manufacturers won’t want to take that risk.

Second, even if D.C. courts do not have personal jurisdiction over the manufacturer, little stops a D.C. plaintiff from suing a gun manufacturer in a state where there is personal jurisdiction. For example, in Peterson v. BASF, Minnesota state courts applied the New Jersey Consumer Fraud Act to a nationwide class; in Ysbrand v. DaimlerChrysler, Oklahoma state courts applied Michigan law. One can easily imagine a D.C. plaintiff and a well-funded attorney filing suit in Los Angeles County against a California manufacturer asking for application of D.C. law. I think, in such a circumstance, gun manufacturers have strong arguments under the principles behind Phillips Petroleum v. Shutts that, if D.C. has no personal jurisdiction over a defendant, choice-of-law principles cannot be used to apply D.C. law to the defendant in a manner consistent with due process. But the question, to my knowledge, has not yet been resolved definitively; the defendants in Peterson and Ysbrand certainly were within the personal jurisdiction of the forum whose law was applied. Cf. also the different case of Keeton v. Hustler Magazine, Inc., where a New York plaintiff was allowed to sue an Ohio/California defendant using New Hampshire courts and laws, solely for the purpose of taking advantage of a favorable statute of limitations.

In short, gun manufacturers have strong arguments for application of the Healy/Levy federalism theory should such a suit actually happen. But plaintiffs get to choose their forum, and a large part of forum-shopping is finding a forum where the courts are less likely to resolve issues of law in favor of the defendant. The advantage of an immunity law is that it removes that uncertainty.

I’ve opened comments on the narrow question of the interrelationship between personal jurisdiction and choice of law. Please keep discussion civil and limited to this issue.

Update:David Hardy provides another example.

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