ARCHIVE -- JULY 2002
July 30-31 -- Tobacco
fees: one brave judge. Although most of the press from
the New York Times on down continues to ignore this developing story,
on July 10 Manhattan Supreme Court Justice Charles
E. Ramos "told lawyers for six law firms that were awarded $625 million
for their work in the historic 1998 tobacco
settlement in no uncertain terms that he will examine whether the fee
award is unethical. The April 2001 decision of the arbitration panel
that issued the award set off 'a flashing light that got my attention'
that the $625 million fee might violate the New York Code of Professional
Responsibility's proscription against illegal or excessive fees, Ramos
told the throng of lawyers that filled his courtroom," reports Daniel Wise
in the New York Law Journal. Virtually the entire array of
lawyers in the case was lined up against Judge Ramos: the trial lawyers
themselves of course were furious, the tobacco companies were disputing
his jurisdiction over the matter, and New York Attorney General Eliot Spitzer's
office was defending the mega-fees in a brief. Outside the courtroom,
meanwhile, establishment legal ethicist Stephen Gillers was scoffing that
"There doesn't seem to be any legal or ethical basis for this inquiry."
There doesn't? The state's Disciplinary Rule 2-106 bars lawyers from
collecting "an illegal or excessive fee," and it says nothing about excessive
fees being okay so long as the other parties in the case have been dragooned
into not objecting. (Daniel Wise, "New York Judge Begins Query Into
Tobacco Fees", New York Law Journal, Jul.
12)(see Jun. 21-23 and Oct.
25-27, 2002; May 11-13, 2001).
Correction Jul. 31: our first report mistakenly named the scene
of these proceedings as the Superior Court; it is in fact the Supreme Court
(which in New York is a trial court and not the highest appellate body).
On July 25 the judge held a further hearing which even fewer press outlets
seem to have covered -- the only account we've seen ran on the Bloomberg
wire ("N.Y. Judge Calls Tobacco Pact Legal Bills 'Offensive", Bloomberg
News Service, Jul. 25, fee-based
archive (search on date in litigation category, pulling up additional
screens if necessary)). Judge Ramos pointed out that the $625 million
fee amounted to $13,000 an hour, a figure he described as "offensive".
Although the trial lawyers who are set to collect those fees include many
powerful insiders in New York politics -- the sort of men who can make
or break the career of an elected judge -- the judge seemed admirably uncowed
by them. He compared the lawyers' overcompensation to "the problems
now emerging in large corporate America", which prompted Philip Damashek
of Schneider, Kleinick, Weitz, Damashek & Shoot, which was awarded
$98.4 million in fees, to demand an apology for "comparing me and my colleagues
to these Enron people'". And Ramos "ordered another attorney at the
firm, Harvey Weitz, removed from the courtroom when he loudly told partner
Brian Shoot not to let the judge interrupt him. 'You're sandbagging
us,' Weitz shouted at Ramos as he was escorted out. The judge threatened
to hold him in contempt." The judge "ordered the attorneys to file
a new application supporting their fee request by August 30, or submit
papers challenging his jurisdiction in the matter. The attorneys
declined to say after the hearing how they planned to respond." Addendum:
Daniel Wise of the New York Law Journal also covered the July 25
hearing and provides further details of an oral argument that was "unparalleled
-- for its vitriol, much of it aimed at the judge." ("New York Tobacco
Fee Hearing Has Lawyers Smoking", Jul.
More: in Texas, Attorney General John Cornyn's ethics investigation
is turning up the heat on the Big Five tobacco lawyers who for years now
have dodged being put under oath over the terms of their hiring by Cornyn's
predecessor Dan Morales (Brenda Sapino Jeffreys, "Investigation of Texas
Tobacco Litigators Still Smokin'", Texas Lawyer, Jul.
22)(see Jul. 15 and links from there).
July 30-31 -- Lying's
not nice, especially when representing the bar. "Oregon's
highest court has suspended for two years an insurance defense lawyer who
lied, while being deposed, to conceal a strategy that allowed his client
to control both sides of a claim. ... The lawyer, John P. Davenport of
Portland, Ore., represented the Professional Liability Fund, an insurer
established by the State Bar to provide mandatory malpractice insurance."
The Fund used a shell corporation to buy up unpaid malpractice judgments
at a discount from claimants, which it could then dismiss; the strategy
is not in itself illegal, but the court found that Davenport had not provided
forthcoming answers to a bankruptcy examiner about the shell's dealings
with a bankrupt couple who had sued their lawyer for malpractice.
(Annie Hsia, "Two-year Ban for Oregon Lawyer Who Lied", National Law
In other sanctions news, a federal
judge has ordered French drug company Aventis "to pay $32.6 million in
attorney fees for vexatious conduct in patent litigation against Bristol-Myers
Squibb Co. Southern District of New York Judge Robert P. Patterson
said last week that [the company] 'defiled the temple of justice' by obstructing
depositions and discovery, instructing a witness not to answer questions
at a deposition and advancing baseless claims." The finding of vexatious
conduct is on appeal (Tom Perrotta, "Drug Company Must Pay Fees of $32
Million", New York Law Journal, Jul.
29). (DURABLE LINK)
July 29 -- "Bush
Urges Malpractice Damage Limits". "President Bush urged
Congress today to impose substantial nationwide restrictions on medical
malpractice cases, arguing that million-dollar verdicts are driving
up health care costs and forcing doctors out of business." Sen. John Edwards
(D-T.Law.) promptly charged
that under the White House proposal, when a child is blinded or paralyzed
for life, "He [Bush] proposes what they get for that is $250,000."
(Mike Allen and Amy Goldstein, Washington Post, Jul.
26). In fact, as Edwards cannot but be aware, damages to cover
the costs of care, lost income and other monetizable damages, which commonly
would run into the millions in the case of a paralyzed child, would remain
fully collectable as before; the mooted limit would apply only to the portion
of awards which covered "non-economic" elements such as pain and suffering.
remarks; White House "Policy
in Focus"; HHS
report on effects of medical liability, PDF format). The Senate
Republican Policy Committee has published a paper collecting some of the
malpractice-suit-crisis "horror stories" from recent months, with links
to accounts in the press (Jul.
25). See also Steve Friess, "Liability costs drive doctors from
practice", Christian Science Monitor, Jul.
17; "Soaring Liability Costs Blamed for Non-Profit Nursing Home Closures",
Dallas Morning News, Jul.
25 (reg); Corpus Christi (Tex.) Caller special
Sasha Volokh and correspondents discuss the federalism angles (Jul.
27). (DURABLE LINK)
July 29 -- Law
lectures needn't be dull. We were familiar with some of
the writings of Harvard law prof David Rosenberg, but we had no idea his
lecture style was so ... colorful, as evidenced by this best-of collection
(Harvard Law Record, 1999)
(via Eve Tushnet, Jul.
25, who got it from Stuart Buck, Jul.
22 and Jul.
25; and thanks to Dan Lewis for the web-archive link).
July 29 -- New
medium, new opportunities. John Steele Gordon, the history-of-business
columnist for American Heritage and author of such acclaimed books
Thread Across the Ocean and The
Business of America, devotes his new column to comparing the rise of
online publishing with the technological developments, such as the rotary
press, that ushered in the era of the metropolitan newspaper in the years
before the American Civil War. "When the young can enter a business
and experiment with new technology at little risk, revolution is on the
way." Small internet news-gathering and news-assemblage sites can
now "have a great impact. ... [One of them] has been giving tort lawyers
and activist judges fits by assembling in one much-visited site called
the most egregious lawsuits and decisions from around the country and beyond.
It makes for reading that is often hilarious, infuriating, and sad at the
same time." ("The Man Who Invented the Newspaper", Aug./Sept.).
(More on weblog impact: John Leo, "Flogged by Bloggers", U.S. News,
5). While on the subject of nice publicity, we won't even try
to summarize all the additional exposure this site and its editor have
gotten in the past few days from the lawyers-sue-fast-food controversy,
but we will note that our editor's O'Reilly Factor appearance of
last Tuesday, on educational lawsuits, is now online at FoxNews.com ("Watch
out Teachers!", Jul. 24). (DURABLE
July 26-28 -- Fat
suits, cont'd. George Washington University law
prof John Banzhaf, who got himself so much publicity in the tobacco round,
says he's advising the plaintiff who just announced that he's suing fast-food
chains, so we know the suit must be serious (right?) (Geraldine Sealey,
"Fat suits filed", ABC News, Jul.
25; BBC, "Fat Americans sue fast food firms", Jul.
25, and "Talking
Points"). As for our editor, he's in considerable demand
on the subject, having appeared over the past day on (among others) Fox
News Network, CBS radio, and the BBC. This just in: debating
our editor on Laura Ingraham's radio show Friday evening, Banzhaf announced
that he is working up a possible suit against milk marketers which will
charge that the "Milk Moustache" campaign should give rise to liability
because it doesn't warn consumers that skim milk is sometimes better for
you than whole milk. Is he serious? He sure sounded like it
(discussion on Democratic
Underground). (DURABLE LINK)
July 26-28 -- Third
Circuit: prisoners may be entitled to watch R-rated films.
"Inmates in federal prisons who challenged a ban on allowing them to watch
movies rated R or NC-17 have won a new shot at making their case now that
a federal appeals court has ruled that a Western District of Pennsylvania
judge was too quick to rule in favor of the government. In Wolf v.
Ashcroft, the 3rd U.S. Circuit Court of Appeals found that U.S. District
Judge Sean J. McLaughlin of the Western District of Pennsylvania 'did not
conduct a proper, thorough analysis' of whether the ban is 'reasonably
related to legitimate penological interests.'" The trial judge's ruling
against the prisoners, furthermore, "improperly relied on 'common sense'".
(Shannon P. Duffy, "Prisoners' Suit Over R-Rated Movies Worth Another Look,
Says 3rd Circuit", The Legal Intelligencer, Jul.
25). (DURABLE LINK)
July 26-28 -- Skittish
at Kinko's. The clerk at the copy shop raises objections
to a request to photocopy a newspaper column: "Do you have permission to
duplicate this copyrighted material?" But it's my column, the customer
protests -- I wrote it! "Look -- my picture is on the top." "He told
me that didn't matter, that corporate Kinko's was overburdened with copyright
lawsuits, and consequently he wasn't about to run my copy job.
Sheesh." ("Inane Laws and Egotistical Copy Men", Cornell Daily Sun,
4). (DURABLE LINK)
July 26-28 -- Update:
cost of clipboard-throwing only $8 million. A San Diego
judge has reduced the damage award from $30 million to $8 million in a
case against the Ralphs supermarket chain over the conduct of a manager
who over the course of a decade is alleged to have verbally harassed
female employees and thrown such objects as a telephone and clipboard at
them. Superior Court judge Michael Anello called the damages
"grossly excessive" and the result of the jury's "passion and prejudice,"
and said "the evidence was insufficient to support the conclusion that
defendant [corporation] approved of or ratified [the manager's] conduct."
The decision is "a slap in the face of women's rights," countered the plaintiffs'
co-counsel (see Apr. 19-21) (Alexei Oreskovic,
"Judge Slashes Sex Harassment Damages Against Ralphs Grocery", The Recorder,
17). (DURABLE LINK)
July 25 -- "Ailing
Man Sues Fast-Food Firms". You knew it was coming: "A
New York City lawyer has filed suit against the four big fast-food
corporations, saying their fatty foods are responsible for his client's
obesity and related health problems. Samuel Hirsch filed his lawsuit Wednesday
at a New York state court in the Bronx, alleging that McDonald’s, Burger
King, Wendy’s and KFC Corporation are irresponsible and deceptive in the
posting of their nutritional information, that they need to offer healthier
options on their menus, and that they create a de facto addiction in their
consumers, particularly the poor and children." Quotes our editor, who
takes the dim view of the suit that you would expect (Michael Y. Park,
24). (DURABLE LINK)
July 25 -- "Surgeon
halts operation over foreign nurses' poor English". Britain:
"A surgeon at a leading hospital has said he had to stop halfway through
an operation because foreign nurses could not follow his instructions.
As a result, he said he has been threatened with disciplinary action for
racism. David Nunn, a consultant orthopaedic surgeon at Guy's and
St Thomas's Hospitals, in London, told The Telegraph that he was unable
to complete the operation last week without certain instruments.
When he asked the nurses, all of whom were foreign, to find them, 'I was
met with a selection of bemused reactions,' he said. 'They were produced
only when the scrub nurse de-scrubbed and went to find them herself.'
Mr Dunn, 48, said his superiors had accused him of racism and threatened
him with being disciplined." Dunn said the influx of nurses from
outside Britain are "without doubt well-trained and dedicated professionals,
but if medical staff cannot communicate effectively then patients' care
may be put at risk." Careful what you say, doc... (Richard Eden,
22). (DURABLE LINK)
July 25 -- "Licensing
Deadline Sneaks Up In District". "Consultants, landlords,
music teachers, nannies, massage therapists and other home-based workers
in the District face fines of as much as $500 if they do not obtain a new
type of city license by Aug. 31, but most are unaware of it. Self-employed
individuals and District firms, including nonprofit groups, that collect
more than $2,000 in annual revenue will have to obtain a master business
license to legally sell their services." More "than 60,000 businesses and
individuals in the District face fines of as much as $500 if they don't
obtain a new type of city license by Aug. 31" -- and have things really
reached the point where it's going to require a license from the government
to practice independent journalism from your apartment? (Avram Goldstein,
Washington Post, Jul.
21; "How D.C. Creates Chaos" (editorial), Jul.
23; Eugene Volokh, Jul.
23). (DURABLE LINK)
July 24 -- Smog
fee case: "unreal world of greed". A California appeals
court has thrown out an arbitration panel's $88.5 million award of attorneys'
fees, amounting to an estimated $8,800/hour, to five law firms which had
prosecuted a case against the state of California arguing the unconstitutionality
of its former assessment of "smog impact fees" on cars registered from
out of state. "The justices called the panel's $88.5 million fee
award 'an unconstitutional gift of public funds' that was not authorized
by the Legislature. In a scathing concurring opinion, Justice Richard
Sims said the award from the arbitration panel was 'completely in outer
space.' 'The fact that attorneys even requested a fee award of that
magnitude from the taxpayers,' Sims wrote, 'is a testament to the unreal
world of greed in which some attorneys practice law in this day and age.'"
The five law firms included Milberg
Weiss Bershad Hynes & Lerach, long a major political donor in California,
as well as "New York's Weiss & Yourman; San Diego's Sullivan, Hill,
Rez & Engel; La Jolla, Calif.'s Blumenthal & Markham, and Berkeley,
Calif., solo practitioner Richard Pearl." (see Dec.
5, 2000, Jun. 22, 2001)(Robert
Salladay, "Court rips $8,800 an hour in attorneys' fees", San Francisco
23; Mike McKee, "California Appeals Court Rips $88M Fee Award in Smog
Case", The Recorder, Jul.
23). (DURABLE LINK)
July 24 -- Update:
"Harassment by kids gets ex-teacher 50G" Following up
on a story from last month: the city of New York has agreed to pay $50,000
to settle a lawsuit by a former Queens teacher who says his students had
harassed him by way of derogatory comments about his immigrant status (from
Sri Lanka), accent and ethnicity. "Legal experts said the suit was
the first of its kind in which a teacher successfully brought a civil rights
action alleging that students had created a 'hostile work environment.'"
The other noteworthy feature of the dispute (see Jun.
26) is the defense the city put forth, namely that it was powerless
to discipline the students, who had special
education (disabled) status, for insulting the teacher "because students
with that classification have already been identified as having behavioral
problems, and the verbal misconduct might be considered a manifestation
of their disability," as a city lawyer put it (John Marzulli, "Harassment
by kids gets teacher 50K", New York Daily News, Jul.
22). (DURABLE LINK)
July 23 -- Welcome
Factor viewers. Our editor was a guest on the top-rated
TV talk show this evening, interviewed one-on-one by host Bill O'Reilly
on the subject of parents threatening to sue teachers over their kids'
bad grades. We mentioned the recent
Arizona case and an earlier Ohio case
that we understand has been dismissed by the court; and here's our theme
page on overlawyered schools. (DURABLE
July 22-23 -- Politicos'
"stagey" outrage at balance-sheet sins. "John Walker
Lindh got 20 years this week for joining a terrorist network at war with
his country. Lucky for him he didn't try something really bad, like
capitalizing an expense item. ... President Bush, who spent 56 years on
this earth without revealing the slightest passion for corporate reform,
now says life will be intolerable if he doesn't have a bill to sign within
a couple of weeks. And he has sent signals that he doesn't give much of
a hoot what is in it." (Michael Kinsley, "Stock Option Cure-All", Washington
Jul. 19). "Even now, the mob waving pitchforks and torches finds
the details of accounting, compensation and corporate governance too tedious
to take seriously. But 'reforms' that ignore the role of incentives and
competition will turn out to be monsters themselves." (Virginia Postrel,
"Business 'Reforms' Should Not Ignore Incentives and Competition", New
York Times, Jul.
18 (reg)). (DURABLE LINK)
July 22-23 -- Nightmare
under the palms. You retire to a Florida condo, and imagine
that the hassles of life are over -- that is, until you discover that a
couple of your neighbors have turned asserting their legal rights into
an art form. (Joe Kollin, "Sunrise condo residents get socked with
bill because neighbors won't pay", South Florida Sun-Sentinel, Jul.
19). (DURABLE LINK)
July 22-23 -- Disabled
testing: hence, loathèd asterisk. In a settlement
with a disabled-rights litigation group, the College Board has agreed to
stop flagging the test scores of students who got extra time or other
accommodations in taking its college admissions test. The effect
will be to allow applicants to conceal from colleges whether they "took
the test under normal conditions, or used a computer, worked in a separate
quiet room, and had four and a half hours for the three-hour test. ...
High school guidance counselors said the elimination of flagging could
set off a wave of new applications for accommodations, including some from
students without real disabilities. ... most of those who are accommodated
have attention deficit problems or learning disabilities like dyslexia,
a reading disorder." "It's very clear who's been getting extended-time:
the highest-income communities have the highest rates of accommodations,"
said Bruce Poch, the dean of admissions at Pomona College in Claremont,
Calif. "I think what's going to have to happen now is that
everyone will, in effect, get more time." (Tamar Lewin, "Abuse Is
Feared as SAT Test Changes Disability Policy", New York Times, Jul.
15 (reg)). Among commenters: Kimberly Swygert at No. 2 Pencil
and 17) and Joanne Jacobs
(Jul. 15 and Jul. 17). We covered the controversy back in February
1999, May 10, 2000 and Feb.
9-11, 2001. (DURABLE
July 22-23 -- Last-minute
friends in Texas politics. "In 1998 [John] Sharp narrowly
lost the lieutenant governor's race to Republican Mr. Perry, who later
became governor when George W. Bush became president." Sharp drew
about 15 percent of his financial backing from trial lawyers in that race,
which actually probably isn't all that high a percentage for a Lone Star
Democrat. What was interesting was the timing: "A review by The News
of finance reports in that matchup indicates that nearly half Mr. Sharp's
trial lawyer support came in the final eight days of the campaign and was
not reported until after the race. For example, a few days before
the election, Mr. Sharp collected $250,000 from Houston trial lawyer John
Eddie Williams and $150,000 apiece from lawyers Walter Umphrey of Beaumont
and Harold Nix of Daingerfield. And he got $15,000 from Michael Gallagher
of Houston." Reports of trial lawyer backing can damage a candidate
in Texas campaigns, but when the lawyers donate at the last minute the
voters may be none the wiser as they troop to the polls (Wayne Slater,
"Trial lawyers' cash at issue", Dallas Morning News, Jul. 13).