Archive for September, 2004

Calif. anti-Microsoft lawyers to get $112M, not $270M

Townsend and Townsend and Crew and its cohorts are getting only a vast pile of money, not a super-extra-vast pile, for purporting to represent a huge class of California consumers in what Judge Paul Alvarado acknowledged was the not-particularly-risky Golden State car in the Microsoft litigation train. (Brenda Sandburg, “Judge Slashes Fees in Microsoft Class Action”, The Recorder, Sept. 14). For our earlier coverage, see Mar. 31 and May 12 (California cases) and Jan. 11, Jul. 9 and Jul. 25 (fees in MS antitrust suits generally).

IRS ordered to pay damages for taxpayer’s emotional distress

Now here’s a case you might think would really open the floodgates: Prof. Paul Caron of the University of Cincinnati reports at TaxProf (Sept. 17) that a court has ordered the Internal Revenue Service to pay a taxpayer $10,000 for the emotional distress occasioned by its overzealous collection techniques. The case arose in bankruptcy proceedings, however, and its relevance as precedent for solvent taxpayers is not clear. The $10,000 will be paid at the expense of other taxpayers who presumably will surrender their money in a way that involves no emotional distress for them.

Bounteous bankruptcies, cont’d: PG&E

A judge’s OK for fees in the insolvency of the giant California utility “puts the final tally for more than three years’ worth of work at about $450 million to $475 million, according to an accounting by the Office of the U.S. Trustee. Of the total, about $100 million goes to law firms representing the utility in different capacities. ” Milbank Tweed originally agreed to charge $595 per hour but now wants that figure revised upward. (Jeff Chorney, “Calif. Bankruptcy Judge OKs About $450 Million in PG&E Fees”, The Recorder, Sept. 16). See Jul. 23, Dec. 6, Nov. 26.

Copyright litigation for trolls

“‘The trolls have made amazing comebacks. They just keep coming back from the dead,’ said IP attorney Parker Bagley, a partner at New York’s Milbank, Tweed, Hadley & McCloy who in the past has helped the Hummel figurine company protect its copyright status.” (Tresa Baldas, “Trolling for Copyrights”, National Law Journal, Sept. 21).

ADA suits close another beloved eatery

Once again it’s happening in central California: “After more than 40 years in business, Roy’s Drive-In in Salinas is closing — in part because the owner can’t afford a lawsuit that accuses him of violating the Americans with Disabilities Act.” Jarek Molski of Woodland Hills in southern California, who uses a wheelchair, “is suing Patterson because he claims the restaurant is in violation of the Americans with Disabilities Act. Molski has sued over 200 small businesses for not meeting ADA requirements. …Built in the 1950s, Roy’s Drive-In does not have ramps to access the windows and restrooms, but employees say the business is accessible to all of their customers — including the disabled,” through car-hop service. The restaurant is scheduled to close today. (“Roy’s Drive-In Closing After 40 Years”, TheKSBWChannel.com, Sept. 20; Claudia Melendez, “Roy’s Drive-In to close”, Salinas Californian, Sept. 18). Last year (see Sept. 2, 2003) On Lock Sam, a beloved 105-year-old Chinese restaurant in Stockton, closed after being hit with an access suit.

Complainant Molski has been known to call himself “Sheriff”, and his activities (assisted by lawyer Thomas Frankovich) have caused an uproar lately in central California. His suits repeatedly recycle identical allegations concerning the lack of accessibility of establishments he says he has visited, and demand money over such putative misdeeds such as placing paper towel holders at an incorrect height. Hundreds of residents “filled the Morro Bay council chambers” after Molski hit a dozen local restaurants with suits. (Andrew Masuda, “Residents speak out over ADA lawsuits”, KSBY, Sept. 14). “Customers are calling Molski’s tactics a get-rich-quick scheme,” reported KSBY. Molski is “asking for $4,000 a day until the remodeling is completed,” says Ruth Florence, who owns Ahedo’s Mexican Restaurant in Grover Beach. “That’s ridiculous.” (Carina Corral, “China Bowl owner speaks out”, Sept. 15). More coverage on the same station: Sept. 8, Sept. 9, Sept. 10, Sept. 14.

Nor is Roy’s Drive-In the only casualty: “Owners of The Hungry Fisherman restaurant on Beach Street in Morro Bay say that Molski’s lawsuit caused the establishment to close after 28 years.” (Lindsay Christians, “Disability suits worry Morro Bay”, San Luis Obispo Tribune, Sept. 14). More coverage in the same paper: Sept. 11, Sept. 15, Sept. 15 again, Sept. 16, Sept. 18. San Diego-based lawyer Amy Vandeveld has also represented Molski (Matt Krasnowski, “Flood of ADA lawsuits irks small businesses”, Copley/San Diego Union-Tribune, Sept. 12). For Morse Mehrban’s recent activities in Fresno, see Jul. 9. For much more about disabled-rights filing mills, see Mar. 9 and links from there, and my City Journal article, “The ADA Shakedown Racket“. Update Dec. 12: judge declares Molski vexatious litigant.

Federal tobacco trial to begin

The Justice Department — this under the supposedly free-market, tort-reforming administration of George W. Bush — has delivered itself of the following remarkable pronouncement: “”the United States would be justified in seeking disgorgement of the proceeds from all [cigarette] sales to people of all ages from 1954 into the future.” As it is, it’s demanding a mere $280 billion in its baldly retroactive suit, this after Judge Gladys Kessler’s dismissal of the department’s Medicaid-recoupment claims. (Jacob Sullum, “Smoking in the Dark”, syndicated/Reason, Sept. 17; see Ron Scherer, “In the largest suit yet, US sues the tobacco industry”, Christian Science Monitor, Sept. 20). For more on the suit’s threat to First Amendment values, see Sept. 23, Oct. 13 and Oct. 25, 1999; for its status as an attempted end run around democracy, see Jan. 15-16, 2000; for other reactions at the time of its filing, see Sept. 29 and Oct. 26, 1999; plus our other posts, and most recently Jul. 16, 2004. More: Legal Times, Sept. 21.

Environmental impact laws: new bludgeon for unionists

Nice little power plant you’re planning there, wouldn’t want anything to happen to it: Municipal officials in California are charging that a powerful labor group, California Unions for Reliable Energy, is exploiting environmental protection laws to extract money for its members. The city council of Roseville wanted to press ahead with a $150 million power plant but was told by city managers that unless it signed a “project labor agreement” pledging to employ union workers CURE “would try to delay licensing for the gas-fired plant by raising environmental objections. Snubbing CURE could cost $15 million in extra red tape and other costs and put the project 18 months behind schedule.”

CURE says it is only utilizing its legal rights (which it possesses in common with every other potential objector) to ensure that plants comply with environmental guidelines. But “critics say CURE abandons its green crusades once power-plant developers agree to use union labor,” a charge the group denies. Even a Sierra Club official is critical of the group, while Riverside council member Steve Adams referred to its actions as “borderline extortion or racketeering.” And: “The California Energy Commission, which licenses new plants, has launched an inquiry following a complaint by Assembly Republicans.” (Dale Kasler, “Pressure by labor group alleged”, Sacramento Bee, Sept. 19).