Overlawyered: Chronicling The High Cost Of Our Legal System

Archive for April, 2007

Judge: Clients have no right to learn how much their lawyer got

It might only upset them, or perhaps upset other lawyers:

The judge in a 2004 federal class action lawsuit over fuel gauge damage caused by tainted gasoline made at Shell-Motiva refinery in Norco has sealed records on how he divided $6.8 million in legal fees among 79 lawyers in the case.

U.S. District Judge Ivan Lemelle has ordered each lawyer, on pain of being sanctioned, not to reveal how much they were paid.

Lemelle’s late January decision to keep the information under wraps has drawn criticism from some of the lawyers and has attracted the attention of Loyola Law School ethics professor Dane Ciolino.

Ciolino says the situation violates the right of the lawyers and the public to have access to court records. Additionally, he said, it flies in the face of a Louisiana attorney ethics rule that says a client is entitled to know how his lawyer shares fees with other lawyers.

(Susan Finch, “Judge seals records on legal fees in suit”, New Orleans Times-Picayune, Apr. 6)(& welcome Robert Ambrogi readers).

Update: And now it’s reported that the judge has turned down a motion to unseal the fee records (Susan Finch, “Judge won’t unseal fee records”, New Orleans Times-Picayune, Apr. 10). Further updates: May 22 (WSJ editorial covers); Jun. 7 (judge unseals records).

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April 8 roundup

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KCET on Prop 65 abuse

At the “Life and Times” department of the Southern California public broadcasting station, reporter Val Zavala examines a problem often discussed in this space (May 26,, Apr. 5, Apr. 29, and Dec. 26, 2006, among many others):

This story is about a long-standing soda-pop store in Highland Park, Calif., that was hit with a legal notice telling them that they are selling hazardous products. The owner says that they don’t make the product, but that they have informed the public according to the Proposition 65 law. But the law allows them to be sued anyway. Their only choice? Settle or go to court. As Val Zavala reports, some attorneys are making millions abusing Proposition 65.

The ten-minute video has expired, but the station’s blog entry about the show has links and discussion (Feb. 28).

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Walks like a contingency, quacks like a contingency

An article in the West Virginia Record discusses a survey of physicians complaining about questionable expert witnesses in medical malpractice cases. For some reason, physicians seem to think that experts will say whatever they’re paid to say. But the president of the West Virginia Trial Lawyers Association denounces the survey, including the doctors’ complaints about experts being paid on contingency:

“And you can’t have contingency experts. I abhor that, anyway. There are State Bar rules are [sic] against that.”

In fact, pretty much everyone agrees that it’s unethical to pay expert witnesses on a contingency fee basis. Most states seem to have explicit ethical rules against it; New Jersey certainly does.

But how effective do you think those rules are? They didn’t stop Nagel Rice and Mazie, a New Jersey plaintiff’s law firm, from trying to weasel out of paying its expert witness recently for his work on a med-mal case, leading the expert to sue the firm for his fees. Why did Nagel try to get out of paying? Because, as Nagel admitted in his testimony in that case, they had lost the med-mal lawsuit:

And I said, “And in addition to that, we lost the case. It’s cost my firm over $100,000 in out-of-pockets.” I said, “So, I want you to consider two things: one, it was your first time on the stand; two, I think your 17 hours is really heavy-handed; and, number three, we took a blood bath in this case. And what I do with experts over the course — I’ve been doing this almost 30 years is that where you take a huge loss, experts will virtually always work with you.”

In case that wasn’t clear, he clarified, according to the New Jersey Law Journal (subscription required):

Nagel says his firm does not seek discounts from experts on losing verdicts. Rather, expert witnesses who have an ongoing relationship with his firm tend, of their own volition, to increase their bills in the event of a victory and to cut them after a defeat.

Yup. Spontaneously. “Of their own volition.” If there’s a difference between charging more if you win/less if you lose, and a forbidden contingency, let me know.

Incidentally, perhaps Nagel ought not to have invested $100,000 in the med-mal case in the first place, without doing a little due diligence. One reason that they might have lost was because the plaintiff’s claim that she suffered severe back pain and was permanently disabled by her doctor was successfully undermined by the defendants. As explained by the Appellate Division (PDF):

Video surveillance tapes showed Meegan walking, driving, bending over to talk to children, and lifting her daughter’s bicycle into the back of a car, all without any difficulty whatsoever.

Oops. Pesky facts.

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More on infant mortality stats

Linda Gorman of the Independence Institute writes in an email:

I was finally catching up on my reading on Overlawyered.com and came across your Feb. 4 post on the possibility that Amber Taylor had a point when she noted that the IRS might give U.S. parents an incentive to count have a dead baby classified as a live birth.

This assumes that parents can affect the classification on the death certificate. U.S. parents do not typically fill out death certificates. She needs to provide evidence that parents affect classifications in meaningful numbers in the United States before anyone should take this speculation seriously.

The evidence that birthweight registration varies from country to country rests on statistical comparisons of the number of very low birthweight infants recorded. An early paper, which is very short, is here (PDF). These studies have been followed by a number of papers on birth registration in various European countries. At this point, the evidence suggests that what are counted as live births in the U.S. are often considered fetal deaths in other countries. They are thus not included in infant mortality statistics, and OECD has (finally) included a note to this effect in its international comparisons of infant mortality. It wouldn’t be a public policy issue if those who wanted to reduce the amount of privately provided medical care in the United States hadn’t used it as an indicator of the poor performance of the U.S. health care system. If you’d like more references, I’d be happy to provide them.

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Supreme Court to review disabled-ed case

As we’ve been noting for a long time (Mar. 24, 2006, etc.), it’s increasingly common for parents of kids with disability diagnoses, after deciding that the public schools are not doing a good job of educating their kids, to enroll the kids in private school programs and stick public school taxpayers with the resulting high bill, citing federal disabled-ed law. (Parents of non-disabled offspring, needless to say, do not enjoy legal options of this sort if they believe the public schools are failing their kids.) Now the Supreme Court has accepted for review a case in which, according to the New York Times’s account, a former chief executive of Viacom did not even give a public school program a try before enrolling his son in a private school and demanding that New York City pick up much of the resulting bill. The New York Times’s account is distinctly unsympathetic toward the parent, and quotes Julie Wright Halbert, legislative counsel for the Council of the Great City Schools, as saying: “Many wealthy, well-educated people are gaming the system in New York City and around the country.” (Joseph Berger, “Fighting Over When Public Should Pay Private Tuition for Disabled”, Mar. 21; Amity Shlaes, “After Viacom, Freston Makes Case for Special Ed”, Bloomberg, Mar. 16; Mary Ellen Egan, “A Costly Education”, Forbes, Apr. 9 (sub)).

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Ontario lottery scandal

A major scandal has erupted in Ontario in recent weeks following reports that some lottery retailers have for years been cheating their customers out of winning tickets, instead cashing in the tickets themselves. Now the law firm of McPhadden, Samac, Merner & Barry has filed a would-be class action lawsuit on behalf of all persons who bought lottery tickets since 1975, charging that the lottery failed to exercise its responsibility to prevent cheating, and demanding C$1.1 billion including C$100 million in punitive damages.

Perhaps the most interesting question raised by the legal action is: assuming a remedy cannot be had against the rogue retailers, what is a suitable remedy against the allegedly negligent lottery authorities? According to CTV, the law firm has proposed to hold a “free lottery”, or, perhaps more precisely, a lottery that would compensate for past unfairness by enabling Ontarians to buy a ticket which would be eligible for a payoff above the usual. (Those who could prove they had played the lottery in the past would be entitled to one free ticket.) (“Class-action suit launched against lotto agency”, Mar. 28).

Details of the proposed “remedial” lottery are hazy in the CTV account, but a couple of practical difficulties immediately come to mind. Start with the assumption that a “remedial” pot would be fixed at a certain lump sum intended to punish the province for its past negligence — let’s say C$100 million — and that such a sum greatly exceeds a typical lottery pot. Since there is no upper limit to the number of tickets that purchasers could buy in pursuit of the extra-large pot, the province might in fact wind up making money on its penitential lottery, even taking into account the obligation to dispense a certain number of free single tickets to persons who could bring in the paperwork to show they were past lottery players. Alternatively, assume that the province undertakes to run a one-time penitential lottery with a higher payout than usual — say, 95 percent rather than the usual 40 or 60 percent or whatever. Again it’s possible that by stoking player interest in a much-publicized “good-odds” lottery, the authorities will come out ahead (perhaps having hooked many novices into buying their first lottery tickets).

The practical difficulties if the province is so rash as to promise a lottery with a payout of, say, 110 percent of the money put in, will be left as an exercise to the reader.

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“Twelve Angry Men”

At American Thinker, Michael Margolies notes the fiftieth anniversary of “one of Hollywood’s most revered, indeed sacrosanct films”, but finds the work on calmer viewing to be emotionally manipulative, stacked from first frame to last, and even “dishonest”. (“12 Angry Men Turns 50”, Mar. 31).

Kentucky fen-phen court: “Chesley was paid more than he should have been”

So wrote Boone Circuit Court Senior Judge William Wehr in a motion denying both Stan Chesley’s motion to dismiss a suit against him in the Kentucky fen-phen fee scandal. But, with plaintiffs’ summary judgment motion also denied, a jury will ultimately decide how much that “more” should be, and whether a fiduciary duty was broken. The same order denied a request by Melbourne Mills to reconsider the finding that a fiduciary duty was broken. Chesley’s attorneys state that he will pay back $7 million of his $20 million fee. (Jim Hannah, “Chesley made too much”, Cincinnati Enquirer, Apr. 5). Earlier: OL Mar. 26 and links therein. (Cross-posted at Point of Law.)

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