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ARCHIVE -- SEPT. 2000 (I)

September 8-10 -- Netscape "Cool Sitings" of the day.  Overlawyered.com was one of the picks on Thursday's edition of Netscape's much-surfed "Cool Sitings" feature.   Their write-up: "Legal Shenanigans.  If the joke: 'What do you call 1000 lawyers at the bottom of the sea? A good start' rings true for you, check out this site" (Sept. 7).  And we're also today's (Friday's) web pick of the day at the Memphis Commercial Appeal's "C.A. Eye".

September 8-10 -- ...Than never to have been born at all.  By a 4-3 margin, the Ohio Supreme Court has declined to let a 7-year-old with spina bifida sue her parents' doctors on a claim of "wrongful life".  The little girl's argument -- at least, the argument put forth on her behalf in court -- is that had the doctors told her parents about the availability of a prenatal test that would have disclosed her abnormality, they would have had an abortion, and that she suffered injury because they failed to do so.  "Chief Justice Thomas J. Moyer, writing for the majority, said courts do not have the authority to decide if a person should or should not have been born."  Justices Paul Pfeifer, Andrew Douglas and Alice Robie Resnick dissented.  (Spencer Hunt, "Girl has no right to sue", Cincinnati Enquirer, Sept. 7; "Ohio Court Rules Against Parents", AP/FindLaw, Sept. 7; decision, Hester v. Dwivedi) (see also May 9).

September 8-10 -- "NZ kids get 'license' to play with toy guns".  "Children as young as four in New Zealand are being required to apply for 'licenses' for toy guns."  They must explain why they want one, and playing cops and robbers is not a good enough reason.  (Sydney Morning Herald, Sept. 6).  Also: an Australian radio talk show host, convicted of improperly soliciting information about the deliberations of a jury, was "given a 15-month suspended sentence ... because the judge believed he was too wealthy to fine and too famous to jail." (Stephen Gibbs, "Laws too famous to jail, says judge", Sydney Morning Herald, Sept. 6).

September 8-10 -- "A perverse use of antitrust law".  "The Justice Department could hardly have come up with a more harmful set of demands than those it now makes [on Microsoft]," writes Charles Munger, vice chairman of famed investor Warren Buffett's Berkshire Hathaway.  "If it wins, our country will end up hobbling its best-performing high-tech businesses. And this will be done in an attempt to get public benefits that no one can rationally predict."  (Charles Munger, Washington Post, Sept. 1).  More: "Did Microsoft Harm Consumers? Two Opposing Views", by David S. Evans, Franklin M. Fisher, Daniel L. Rubinfield, and Richard L. Schmalensee, AEI-Brookings Joint Center for Regulatory Studies (abstract, full text (PDF format), order form); David Boaz, "The theft of Microsoft", Cato Daily, July 27; Jonathan Rauch, "The Microsoft Case: Fair, Necessary, and Totally Random", National Journal, June 10.

September 8-10 -- "State errors unfairly cast some dads as deadbeats".  A federal law has mandated toughening of state child support collection systems.  Unfortunately, reports Marilyn Gardner of the Christian Science Monitor, the resulting overhauls have increased the rate of billing errors in some of the systems and led to parents mistakenly being labeled deadbeats (August 9).

September 8-10 -- $1.5 million estate bill included 900 hours spent on fees.  An Indiana appeals court has rebuked a law firm which billed heirs $1.5 million for handling an inheritance case, including 900 hours it says it spent calculating its fees.  The Indianapolis law firm of Henderson, Daily, Withrow & DeVoe had worked on the estate of former Conseco Inc. executive Lawrence W. Inlow, who died without a will at age 46 in a helicopter accident leaving an estate of $185 million.  "Requiring a client to pay an additional amount for being told what he owes in the first instance is neither good business nor good law," wrote Judge Sanford M. Brook for the appeals court.  ("Court Rejects Attorneys' Charge", AP/FindLaw, Sept. 7) (court opinion, Inlow children v. Estate of Inlow).

September 6-7 -- Prosecution fears slow crash probes.   Aviation accidents almost never used to result in the filing of criminal charges, but in recent years they've been the subject of several highly publicized prosecutions.  A House Transportation Committee hearing in late July looked into evidence that fear of incarceration or fines is now discouraging witnesses from cooperating with crash investigators.  "For decades, we had relied on individuals to tell us what happened in an accident -- and they usually, sometimes reluctantly, do so," said Daniel Campbell, managing director of the official National Transportation Safety Board.  But "what has been reluctance to cooperate may become refusal to cooperate."  Campbell said prosecution fears had also made it hard to investigate a recent nonaviation accident, a fatal pipeline explosion in Bellingham, Wash., last year.  As a result, "more than a year later, we still have not been able to talk to most of the key individuals who were operating the pipeline when it ruptured and may not be able to in the foreseeable future."  A federal grand jury subpoena also "resulted in a significant delay in the investigation," Campbell said.  "In our view, too much lawyering went on before we were able to test the physical evidence of that tragedy."

"The recent trend towards the criminalization of aircraft accidents is extremely alarming in that it has the potential to cripple industry's ability to learn from incidents and accidents, essentially guaranteeing that we will repeat them," said Capt. Paul McCarthy of the Air Line Pilots Association.  He cited the 1996 ValuJet crash in Florida, the USAir 1989 crash at LaGuardia, and the recent Alaska Air crash off the California coast as examples of cases where safety investigations had been slowed.  (House Transportation Committee, Aviation Subcommittee, hearing summary, Campbell, McCarthy statements; thread on Professional Pilots bulletin board)

September 6-7 -- Update: second chance for Wal-Mart.  The giant retailer has won a rematch in the case of former employee Ricky Bourdouvales, who sued alleging discrimination based on transsexualism (male-to-female).  Judge Douglas Hague issued a default judgment of $2.1 million when Wal-Mart failed to show up in his New Jersey court (see July 21), but has now agreed to grant a retrial.  ("Judge Tosses Trans Bias Award", PlanetOut, Aug. 28).

September 6-7 -- Australian roundup.   A now-retired New South Wales judge has come under criticism from the losing plaintiffs in a large case, who complain in their appeal that more than 200 pages of his 247-page opinion consist of material cut and pasted from the submissions made by the two sides.  The judge had called the case, over the Copper-7 contraceptive IUD, the longest and most complex product liability case in Australian history. ("Judge 'cut and paste' in making his decision on IUDs", AAP/The Age (Melbourne), Aug. 29).  Five partners of a Sydney law firm that handles a large volume of immigration work are suing Immigration Minister Philip Ruddock for defamation, "claiming he implied they were unethical and overcharged clients." ("Ruddock sued for defamation by lawyers", AAP/The Age (Melbourne), Aug. 29).  And a 1998 finding by a federal justice that a prominent Brisbane law firm engaged in abuse of legal process ignited a debate about the condition of the law in Australia; a national TV show explored widespread discontent over the gamelike aspects of adversary process, interviewing both leading insiders of bench and bar and two outspoken critics, former defense lawyer and prosecutor Brett Dawson and journalist Evan Whitton ("The justice system goes on trial", Ross Coulthart, reporter, Sunday/NineMSN, Transcript #252, undated).  One passage among many that caught our eye: 

REPORTER: Do you think there's a case to argue that some of the ethical rules that lawyers have actually almost encourage dishonesty among lawyers? 

JUSTICE [GEOFFREY] DAVIES: Yes I do. One of the examples is that a lawyer can ethically deny an allegation in the opponent's pleading knowing it to be true. 

REPORTER: You're kidding - so you can basically lie? 

JUSTICE DAVIES: Well, what lawyers would say is that you are putting the other side to proof. 

REPORTER: It's a lie though isn't it? 


September 6-7 -- Bill for pizza delivery: $1.25 million?  A Cocoa Beach, Fla. jury voted, but a federal judge almost immediately threw out, an award of one and a quarter million dollars to a black family that ordered home delivery from Pizza Hut and found a racial slur included as part of the computer-generated receipt.  Judge Patricia Fawsett ruled that responsibility lay with the unauthorized actions of a rogue employee and could not fairly be charged to the company.  ("Judge throws out $1.25M verdict against Pizza Hut", Orlando Sentinel, Sept. 1).

September 5 -- EEOC: offbeat beliefs may be protected against workplace bias.  "Belief in radically unconventional scientific notions, such as 'cold fusion' or cryptic messages from extraterrestrials, may merit the same workplace protections as freedom of religion, according to a ruling by the Equal Employment Opportunity Commission in a job-discrimination case."  The case arose from the April 1999 firing by the U.S. Patent and Trademark Office of patent examiner and astronomer Paul A. LaViolette, who claims the action was taken because he holds unconventional beliefs, including a belief in the highly controversial theory of energy generation through "cold fusion".  In the words of the Washington Post, LaViolette's website, www.etheric.com, "details his 'proof' of the existence of alien radio communication, his theory that the zodiac is a 'time capsule message' warning of emanations from the galactic center and his views on the Sphinx, the Tarot and Atlantis, along with his considerable accomplishments in mainstream science."  (Curt Suplee, "EEOC Backs 'Cold Fusion' Devotee", Washington Post, Aug. 23).

September 5 -- Tax software verdict: pick a number.  A Hinds County, Mississippi jury "awarded the state of Mississippi $474.5 million in its suit against a company that failed to deliver on a new tax processing system that was supposed to modernize the state's collection efforts."  The verdict against Fairfax, Va.-based American Management Systems Inc. included $299.5 million in actual damages and $175 million in punitive damages.  A few days later, the company settled the suit by agreeing to pay the state $185 million.  The company has contracts with seven other states to operate similar computerized tax systems; no other lawsuits are pending.  ("Company loses tax software suit", AP/USA Today, Aug. 24; "Settlement cuts tax software verdict", Aug. 29).

September 5 -- Juries and cost-benefit analysis.  W. Kip Viscusi, professor at Harvard Law, says businesses today get conflicting signals on the use of cost-benefit analysis in safety matters: a large academic literature encourages them to engage in such analysis as part of their responsibility to the public, but juries get furious when they think that sort of "cold-blooded calculation" has gone on.  Moreover, there's evidence to support the paradoxical finding that the higher a valuation of life and limb a company employs in such an analysis, the more stringently it will be punished by subsequent juries.  ("The Trouble With Lawsuits", TechCentralStation, May 29; Manhattan Institute, luncheon transcript).

September 4 -- Emulex fraud: gotta find a defendant.  "With the manhunt for the perpetrator of the Emulex fraud [false news report torpedoed company's stock] apparently over, investors burned by the company's $2 billion post-fraud swing are now hunting for someone, anyone, to sue for legal damages.  Two lawsuits have already been filed, one against Internet Wire, which originally distributed the bogus press release, and one against both Internet Wire and Bloomberg, the financial news service that sent out a story based on the press release."  (Craig Bicknell, "Emulex Victims: Who Can We Sue?", Wired News, Sept. 1).

September 4 -- Record-breaking securities class action fee: $262 million.  A federal judge in New Jersey last month approved a fee of $262 million for plaintiffs' lawyers in the securities fraud case stemming from the collapse in the stock price of Cendant Corporation (see June 20).  Judge William Walls upheld the record-breaking fee against objections from New York City, a member of the investor class, reasoning that the two lead law firms, New York's Bernstein Litowitz Berger & Grossman and Philadelphia's Barrack, Rodos & Bacine, had taken part in a fairly run auction to determine who would get to represent the investors.  (Daniel Wise, "Cendant Lawyers Get Record $262 Million in Securities Fraud Case", New York Law Journal, Aug. 22).

September 4-- "Just put the candy in the bag, lady."  "I've been watching the lawsuits over Columbine with interest bordering on disgust. It seems the argument is that someone (preferably a government agent not affiliated with the Postal Service, or failing that, any random person with deep pockets) should have foreseen the future and intervened," writes Paul Kelly, a former vice chair of the Boulder, Colo. Democratic Party.  "...If this new 'everybody's negligent all the time' social philosophy seems silly to you, it's probably because you're not a lawyer.  To a lawyer this is like Halloween to a 10-year-old. 'Just put the candy in the bag, lady. And hurry.  There are still five families on this block I haven't sued yet.'"  ("Doing nothing may be best option", Denver Post, Aug. 13).

September 1-3 -- Texas tobacco fees: Cornyn's battle.  In December 1998 an arbitration panel awarded a stupendous $3.3 billion in legal fees to five law firms selected by former Texas Attorney General Dan Morales to represent the state in the tobacco-Medicaid litigation, which had ended in a $17 billion settlement.  The Big Five firms, all high rollers in Lone Star State personal-injury litigation and all major Democratic Party donors, include Beaumont, Texas's Provost & Umphrey (Walter Umphrey), Houston's Williams & Bailey (John Eddie Williams), Harold Nix's law firm in Daingerfield; Beaumont's Reaud, Morgan & Quinn (Wayne Reaud); and John O'Quinn's firm in Houston.

Mr. Morales's Republican successor as Texas Attorney General, former Texas Supreme Court Justice John Cornyn, ran for office in part on a pledge to investigate the circumstances surrounding the fees, and his probe soon led to some eye-opening revelations (see May 22).  A Houston lawyer named Marc Murr, who'd earlier worked at the same law firm with Morales, had stepped forward after the settlement to claim a $520 million (later $260 million) share of the proceeds, a mystifying claim since participants could not remember Murr doing work on the case or being considered part of the state's team.  Murr pointed to a hitherto unsuspected contract with Morales entitling him to a piece of the action, but Cornyn hired forensic experts who concluded that the contract had been doctored and backdated.  Rather than be put under oath about the matter, Murr withdrew his claim to the fees; a U.S. attorney's office has the matter under investigation.

As for the circumstances by which the Big Five came by their fees, Cornyn's investigation has met with a stone wall of resistance and non-cooperation from Umphrey, Williams, Nix, Reaud and O'Quinn.  In particular, he would like to investigate what the Houston Chronicle describes as "longtime allegations that [Morales] solicited large sums of money from lawyers he considered hiring" for the suit.  Two years ago famed Houston attorney Joe Jamail, who wasn't among those picked to represent the state, "said Morales solicited $1 million from each of several lawyers he considered hiring", in addition to the $2 million that each of the five agreed to front to finance the case.  "The money, according to memos prepared by Jamail, purportedly was for a fund to help Morales defend himself against political or public relations attacks from cigarette companies during the litigation."  Last year in sworn testimony Dawn Nelson, ex-wife of Big Five lawyer John Eddie Williams, said "Williams had told her that Morales wanted $1 million from one or more of the lawyers that were hired for the tobacco case," the Chronicle reported.

In an interview last November cited in the same Chronicle reportage, Morales said that the purpose of the money might have been misunderstood and that he didn't intend it to be used for his personal or political benefit.  In May, the Five filed statements in court saying they had not paid any consideration for the chance to participate in the litigation.  But they've consistently refused to go under oath to answer Cornyn's questions, and skillful legal maneuvering on their behalf has kept at bay that alarming prospect -- first by their successful removal of his legal action away from state court and into the hands of the same federal judge in Texarkana whom they initially selected to hear the Medicaid-recoupment case (see "Best little forum-shopping in Texas", Aug. 27, 1999), and now with their obtaining of a ruling by that judge last month that Cornyn has no independent right to question the lawyers except under such terms as he, the judge, may see fit to approve in future (Cornyn plans an appeal of that ruling to the Fifth Circuit).  The Five have also sought a gag order to prevent the press or anyone else from getting a look at documents generated by the investigation, notwithstanding the usual publicly proclaimed stand of organized trial lawyers that "protective orders" of that sort are an affront to the public's right to know and serve only to shroud wrongdoing in secrecy.  And, like other lawyers who have represented the states in the tobacco recoupment litigation, they have argued that the fees are not an appropriate subject for review by representatives of the taxpayers because they are formally structured so as to be paid directly by the cigarette companies, rather than be routed through the state as part of its payment as is customary. 

The Big Five also claimed $40 million in reimbursement for out-of-pocket expenses (as distinct from legal fees) but at the end of May they returned $6.9 million of this money, saying the earlier sum had been overstated.  "Their misrepresentation of expenses just raises more questions and strongly reinforces the need to determine what happened in the tobacco case," Cornyn said.  "After 18 months of assuring the people of Texas that their expenses were justified in every way ... [they] are now returning millions of dollars with no satisfactory explanation as to why."  Michael Tigar, attorney for the Five, said the earlier sum had been a good-faith estimate and that deviations from such estimates are common. (DURABLE LINK)

SOURCES: Kelley Shannon, "Cornyn, rebuffed in federal court, vows to appeal", AP state and local wire, Aug. 16, not online, available on NEXIS; "Five attorneys say Morales not paid for contract in anti-tobacco lawsuit", AP state and local wire, May 12, not online, available on NEXIS; Brenda Sapino Jeffreys, "As Tobacco Lawyers Return Money, Questions Return", Texas Lawyer, June 9; "Tobacco trial lawyers admit misrepresentation", Cornyn press release, June 1; Susan Borreson, "Tobacco Plaintiffs' Lawyers Won't Enforce Contract With State", Texas Lawyer, December 2, 1999;  Robert Bryce, "Nicotine Fit", Texas Observer, November 26, 1999; Janet Elliott, "'Tobacco Five' Want Confidentiality Order", Texas Lawyer, Sept. 9, 1999.; Clay Robison, "Cornyn moves in on anti-tobacco lawyers", Houston Chronicle, April 27.  Murr case: Miriam Rozen, "Smoke-filled room", Dallas Observer, Sept. 17, 1998; "Pay up?", April 22, 1999; Patrick Williams, "Buzz", Dec. 17, 1998, May 20, 1999; Jim Brickman, "What Would I Ask Former Attorney General Dan Morales In the Grand Jury Investigation?", Citizens for Lawsuit Abuse Houston; John R. Butler, Jr., "Dan Morales and Marc Murr Have Some Explaining To Do To All Texans", CALA Houston.

September 1-3 -- "Olympic trials".  At least ten athletes, after falling short in efforts to make the U.S. Olympic team in their sports, have insisted on going to arbitration or in one case to federal court, according to columnist Kimberly Strassel of the Wall Street Journal's online Opinion Journal (Aug. 31; see also Mark R. Madler, "Judges Wrestle With Epic Case of Olympic Athlete" (wrestlers), American Lawyer Media, Aug. 31.

September 1-3 -- "Don't talk to the humans".  Some years back the federal government issued regulations on universities' use of human experimental subjects.  How strictly are these rules being enforced?  So strictly that a scholar can get in big trouble by not asking an official committee's permission before visiting a retirement home and chatting with one of the elderly residents about his life.  (Christopher Shea, Lingua Franca, Sept.) (via Arts & Letters Daily).

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