Our editor has an op-ed in today’s Journal on the latest developments in California’s “shakedown lawsuit” scandal, in which law firms were discovered to be mass-mailing demand letters holding up small businesses for thousands of dollars apiece under the state’s uniquely liberal “unfair competition law”, otherwise known as Business and Professions Code 17200. In brief, the Democratic leadership of the state legislature in Sacramento is using the scandal as an excuse to push through legislation that, along with a bit of window-dressing reform directed at the more obvious shakedown artists, would actually increase lawyers’ leverage to obtain settlements from defendants under section 17200. (Walter Olson, “The Shakedown State”, Wall Street Journal, Jul. 22). We covered the scandal earlier on Jan. 15-16 and Mar. 3; for more on California’s bounty-hunting Prop 65, follow these links and in particular our post for Nov. 4-5, 2002. More: The Civil Justice Association of California maintains a lot of information on the status of section 17200 legislation, especially here, here and here.
Archive for July, 2003
We didn’t mean vicarious that way
Deputy U.S. Attorney General Larry D. Thompson professes to believe, at one and the same time, that it is “bedrock” law that incorporated businesses be held to vicarious criminal liability for the acts of their employees and agents, and that the law both does and should set a single standard for individual and business criminality, rather than dealing more severely with business. (“‘Zero Tolerance’ For Corporate Fraud”, Wall Street Journal, Jul. 21). Which raises the question: will Mr. Thompson volunteer to serve jail time personally should one of his household employees commit vehicular manslaughter while on the way to buy him groceries? “Robert Musil” wonders, and so do we (Jun. 21).
A Lipstick-Up
Various cosmetic companies settled a class action suit today. They were accused of price-fixing and collusion, the rank enemies of a competitive market. The companies, by and large, settled — it’s probably cheaper to do that than to litigate, given the chance (however slight) of a jury giving the class a bonanza of a deal. So, what do all the wrong customers get? One (1) item. Enough lipstick to last a few weeks. What do the lawyers get? The AP didn’t mention it, but I’m sure it’s a lot more than a tub of mascara and some blush. Would anything make a class action lawyer blush? (“Settlement could give away $175 million in cosmetics,” AP, Jul. 22). Update Apr. 14, 2004: settlement challenged; May 19: more details; Dec. 3, 2004 and Mar. 14, 2005: judge approves settlement.
Beaumont and its reputation
Lawyers and judges in Beaumont, Texas are far from pleased to hear their city called a “judicial hellhole” and “the Barbary Coast for class-action litigation.” “Defense lawyer James R. (“Jay”) Old Jr. says the county has unfairly gotten a reputation as a place where ‘the plaintiffs and defense bar work together to combine for the greatest amount of billables for the defense lawyers and the greatest recoveries for the plaintiff'”. Why, sir, the very idea is preposterous! Besides, there’s a silver lining in the city’s reputation as a forum-shopping destination for lawyers around the state and country: “In fairness, it represents to us an industry. It puts a lot of people to work here,” says Jim Rich, who heads the Beaumont Chamber of Commerce. However, things might be changing: recent elections have shifted the three-member appeals court that oversees Beaumont to a 2-1 Republican edge, from 3-0 Democratic. (Terry Maxon, “Beaumont known for torts”, Dallas Morning News, Jul. 20).
It’s raining money for Mo. governor
Against a backdrop of growing political difficulties for Missouri Governor Robert Holden, “how did Holden’s campaign pile up an impressive $623,245 in contributions? Who are the governor’s backers and why are they opening their wallets? … Reports filed last week show that the biggest identifiable chunks of money the last three months came from two groups: trial lawyers and labor unions.” Holden just vetoed a bill that would have limited damages in lawsuits. Besides giving more than $80,000 to his campaign in the last quarter, lawyers also gave $240,000 to the Missouri Democratic Party. (Virginia Young, “Lawyers, unions give big to Holden war chest”, St. Louis Post-Dispatch, Jul. 21.)
“Public balks at obesity lawsuits”
Per a Gallup Poll conducted July 7-9, “nearly 9 in 10 Americans (89%) oppose holding the fast-food industry legally responsible for the diet-related health problems of people who eat that kind of food on a regular basis. Just 9% are in favor. Those who describe themselves as overweight are no more likely than others to blame the fast-food industry for obesity-related health problems, or to favor lawsuits against the industry.” (Lydia Saad, Gallup News Service, Jul. 21). Some opinion pieces: Kathleen Parker, “A ludicrous premise for a lawsuit: Obesity is the food’s fault”, Chicago Tribune, Jul. 16(“It’s hell living in a rich country with too much to eat, isn’t it? … The idea that restaurants are trying to make food taste better by combining sugar or fat to their protein, also known as ‘cooking,’ hardly qualifies as criminal conduct.”; Robert Tracinski, “Reductio ad Totalitarianism”, Ayn Rand Institute, Jun. 26 (quotes our editor)(“The problem with the ‘reductio ad absurdum’ argument, one of my philosophy teachers once warned me, is that your opponent may simply embrace the logical end result of his ideas — no matter how absurd it is. And that’s exactly what is happening now.”); Patti Waldmeir, “In America it takes lawsuits to change lives”, Financial Times, Jul. 21 (“the point is publicity, not liability. … My children have never seen a McDonald’s advert: they know instinctively that fat is good”). Yet more: James Justin Wilson, “Battling the Fat Suits”, National Review Online, Jul. 21; John Stossel, “Give Me a Break!: Food Fight”, ABC News, Jul. 18.
Scotland: “Alcoholics sue booze companies”
“Alcoholics are attempting to make legal history by suing the drinks industry for failing to warn them of the dangers of addiction. Twelve addicts, aged between 18 and 60, claim their lives have been destroyed by the demon drink and that they were not warned of the risks.” Lawyers from the Glasgow firm of Ross Harper “believe they can use the arguments employed in successful prosecutions against huge American tobacco companies in 2000 to win their case” and are applying for officially funded legal aid to help finance a test case. (Glasgow Daily Record, Jul. 21). Liquor companies have been curiously absent from the list of targets of mass litigation campaigns in the U.S.A. in recent years; but see Mar. 22, 2000.
Fun with EULAs
We’ve all seen them, checked off the “I Agree” box, clicked “Continue” or “Next” or whatever the button says. But end user license agreements (EULAs) aren’t read too often. Which is why this is funny.
Update: Tony Martin case
U.K.: “Tony Martin, the farmer who killed a criminal who broke into his house, has been denied a preparatory home visit before his release on parole next week because he is considered to be a “danger to burglars”.” (Daniel Foggo, “Tony Martin refused leave ‘because of risk to burglars'”, Sunday Telegraph (UK), Jul. 20). Last month, in a decision that caused a public furor in Britain, a judge ruled that career criminal Brendan Fearon was entitled under the Human Rights Act “to sue Martin for a reported ?15,000 damages for wounds he received during a break-in at the farmer’s home in Emneth Hungate, Norfolk, in August 1999. … Unemployed Fearon, who is currently serving an 18-month sentence for heroin dealing, claimed his injuries [Martin shot him in the leg] had affected his ability to enjoy sex and martial arts and that he had suffered post traumatic stress.” (“Ex-Minister Calls for Review over Fearon Case”, Nottingham Evening Post, Jun. 25; Chris Bishop, “Date set for burglar’s bid to sue Martin”, Eastern Daily Press, Jul. 2)(more “maybe crime does pay” cases).
Update: Hager’s bad behavior
Disgraced law professor Mark M. Hager, after being suspended by the District of Columbia bar for a year, at last has resigned his tenured job at American University’s law school, the Washington Post reported in April (James V. Grimaldi, “Hearsay: The Lawyer’s Column”, Washington Post, Apr. 21 (not online); Mary P. Gallagher, “How Not To Settle a Multiparty Suit”, New Jersey Law Journal, May 5 (not online); Julianne Basinger, Jamilah Evelyn, and Katherine S. Mangan, “Suspended Law Professor Loses Tenured Job”, Chronicle of Higher Education”, May 9 (not online). In December the District of Columbia Court of Appeals found Hager “to have engaged in ‘conflicts of interest, dishonesty’ and ‘improper conduct’ when he represented two southern Virginia mothers who wanted to sue the makers of the lice-killing shampoo Nix. The court upheld the D.C. Bar’s one-year suspension of Hager and further ordered him to disgorge the $225,000 fee he shared with co-counsel.” (James V. Grimaldi, “Misconduct in Lice Case Puts AU Professor’s Job in Jeopardy”, Washington Post, Mar. 10). For our earlier coverage of the Hager affair, see Feb. 23, 2000 and May 3, 2001.