A New Yorker is back in the news with his attempts to shut down the sex-based discounts at drinking spots. (Gothamist, Dec. 17). See Jul. 29, etc., etc.
Archive for 2007
“Mississippi’s Tort King”
I’ve got a piece in Saturday’s Wall Street Journal on the indictment of perhaps the nation’s most successful tort lawyer and four colleagues on charges of attempted judicial bribery. The tag line the Journal’s editors give the piece: “Dickie Scruggs’s mistake may have been to stiff another lawyer.” (Walter Olson, Wall Street Journal, Dec. 15)(sub-only). For new readers who’d like much more detail about the indictments and their aftermath, check out my regular updates at this site and also those of David Rossmiller at Insurance Coverage Blog. I’ve been covering Mr. Scruggs’s doings in tobacco, asbestos, product liability, reparations, HMO, and hospital litigation pretty steadily since this site got its start in 1999 (newer/older posts). (Bumped Monday a.m. for those who didn’t see it over the weekend).
Scruggs indictment XI
Two noteworthy stories in the Mississippi press: Anita Lee of the Biloxi Sun-Herald takes a look at “Dickie Scruggs’ $50 million man: What did P.L. Blake do to earn all that money?” (Dec. 16; some earlier Blake discussion).
Blake will earn $50 million, court records show, for clipping newspaper articles and alerting Scruggs to maneuvering in political “cloakrooms,” as Scruggs put it, from Mississippi to Washington. …
Accounts of how Blake earned the money are vague and contradictory.
Even more surprising, Blake and Scruggs were unable to say whether they sealed their business agreement with a handshake or in writing.
A few points brought out in the article: “Scruggs said Tom Anderson, who then worked in Lott’s office, referred Blake to Scruggs.” Attorney General Mike Moore, nominally Scruggs’s public client after hiring him to advance the state’s interests in the tobacco litigation, was aware that Blake was being paid, though he professes surprise at how much. And Scruggs routed the $10 million in initial tobacco payments to Blake through attorney Joey Langston as intermediary. (more discussion)
The assignment of steady continuing payments to Blake over the life of the tobacco settlement distinctly resembles a gesture toward diverting a share of the tobacco proceeds (a contingency share, as it were) to reward and incentivize Blake, or perhaps Blake-and-others-too, to work for the success of the deal. [corrected 12:24 on proofreading after posting; I mistakenly used a wrong surname in place of “Blake” here and below.]
If reporters or others at some point succeed in reaching and questioning Blake, who is said to have moved to Alabama, presumably one of the questions worth asking him will be: is he really the final recipient and ultimate beneficiary of all that impressive cash flow — declaring it on his income tax, having all the funds available for his personal use, and so forth — or does he pass/has he passed some of the money along to anyone else? If he keeps it all, it’s no wonder the questions will keep re-echoing about whether his services could really have been worth that much. If it turns out he is passing/has passed some of it along to another actor or actors, why would things have been arranged that way? One possibility — though not the only one, of course — is that such further beneficiary or beneficiaries might not wish to be known publicly as holding a share in the payouts of the great tobacco project. (Update: a Monday article by Anita Lee in the Sun-Herald (“Blake’s information ‘right-on'”, Dec. 17) quotes Moore saying that Blake seemed to have accurate intelligence in what was going on in tobacco-industry and Republican circles.)
The other noteworthy story is by Jerry Mitchell in the Jackson Clarion-Ledger (“Feds probe Hinds case under scrutiny”, Dec. 16). It confirms that one of the “bodies buried” that Balducci told federal agents about relates to the Luckey/Wilson asbestos fee matter, which was eventually split into two legal proceedings, both hard-fought, with Luckey faring better than Wilson in the legal battle against Scruggs. In addition, the search warrant for the Langston law firm sought documents relating to the Wilson case “as well as documents regarding payments to Jackson lawyer Ed Peters, who played no known role in the case. In 2001, Peters retired as Hinds County district attorney.”
An active comment thread at Lotus/folo includes additional information about Peters, among other topics, and also passes along details about some of non-wannabe Timothy Balducci’s past involvements in high-stakes litigation, from his own promotional material. A sampling:
In 2006, Tim was Lead Counsel in Mississippi’s successful prosecution of securities fraud claims against Citigroup in Federal District Court in New York. His success in representing the state in so many complex litigations was a major factor which contributed to his selection by the Commonwealth of Kentucky to prosecute an action on its behalf to recover over $1 Billion dollars in government funds from a major chemical manufacturer. Also, the United States District Court in Charleston, South Carolina, selected Tim to serve on the National Leadership Committee for the ReNu contact lens solution litigation against Bausch & Lomb.
Notes a commenter: “it’s amazing how much lawyering these tiny law firms seem to get done. It’s just as amazing that he gets it done with *no reported decisions.* Pretty strange.”
Alan Lange at Y’All Politics is back with a synopsis of Scruggs’s current troubles, and as always don’t miss the David Rossmiller updates (Dec. 15 and Dec. 16).
The sub-prime bailout
Speaking ill of lenders began when homo sapiens acquired language, hence it is unsurprising that many people who until recently were criticizing lenders for not making money available to marginally qualified borrowers are now caustic about lenders who complied.
Earlier: me in the WSJ.
Consumer and employee win rates in arbitration
For example, a study published in the Dispute Resolution Journal compared 125 employment discrimination lawsuits filed in the Southern District of New York, with 186 arbitration claims involving employment disputes in the securities industry. The data showed that employee claimants prevailed 46% of the time in arbitration compared to 34% in federal court. The median monetary award amount was slightly higher in arbitration, and the median time from filing to judgment was 16.5 months in arbitration compared to 25 months in litigation.
Also, a 1998 comparison of arbitration and litigation published in the Columbia Human Rights Law Review noted that employees prevailed over employers in 63% of employment arbitration cases filed with the American Arbitration Association between 1993 and 1995. To compare, only 14.9% of employees who brought cases to federal district court in 1994 prevailed in their litigation. The average duration of an arbitrated claim was 8.6 months, compared to 2.5 years in litigation.
Source, citing Michael Delikat & Morris M. Kleiner, An Empirical Study of Dispute Resolution Mechanisms: Where Do Plaintiffs Better Vindicate Their Rights?, 58 DISPUTE RESOLUTION JOURNAL 56, 57-58 (2004); and Lewis L. Maltby, Private Justice: Employment Arbitration and Civil Rights, 30 COLUM. HUM. RTS. L. REV. 29, 45-48 (1998).
California data shows that when consumers bring arbitration claims against businesses, the consumers prevail in 65.5% of cases that reach a decision. To compare, buyer plaintiffs litigating contract claims in the 75 largest American counties prevailed 61.5% of the time overall, and 60.9% of the time in cases decided by bench trials. When businesses bring arbitration claims against California consumers, the businesses prevail in 77.7% of cases that reach a decision. To compare, seller plaintiffs litigating contract cases in the largest 75 counties prevail 76.8% of the time overall and 78.9% of the time in cases decided by bench trial.
These results show that the win rates for consumers and businesses bringing claims in arbitration are within just a few percentage points – and, sometimes, just fractions of a percentage point – of the win rates of individuals and businesses bringing contract claims in court.
Source. See also the Ernst and Young study showing consumers doing better in arbitration than in court. More data available at the National Arbitration Forum page.
Update, Dec. 17: The National Arbitration blog has more links, and the blog appears to be chock-full of resources. For other Overlawyered posts on arbitration, see our new arbitration section.
Great moments in client-chasing
Injury law firms in St. Louis and Seattle run promotional blogs for which they’ve been generating content as follows: a post summarizes (presumably from police or news reports) a recent local road fatality or injury naming the victim and other persons involved, towns, roads and other identifying information. Then it adds a bit of discussion of the accident, and advises that the law firm can assist the victims in filing claims. Often the killed, maimed or comatose person’s name appears prominently in the post title, which aids in search engine visibility to reach families searching for their own names or the names of witnesses or other parties involved in the accident. The law firms have had no previous involvement whatsoever in most of the incidents, nor have they been invited onto the scene by any of the persons they name or their survivors.
Isn’t legal marketing wonderful? In years to come when you go online in quest of remembrances of your loved ones, paging through their school reunion pages, club involvements and professional achievements, you can look forward to confronting the equivalents of giant if outdated lawyer billboards along the way. Kevin O’Keefe at Real Lawyers Have Blogs blasts the practice as “a cheap stunt” and “the stuff that gives plaintiff’s lawyers a bad name” (Dec. 11), “unseemly” and “wrong” (Dec. 14), “shameless” and “sleazy” (Dec. 15). Eric Turkewitz adds his voice in condemnation (Dec. 13). Peter Lattman’s link at the WSJ law blog (Dec. 14) draws out numerous posters who appear to approve of the idea, though.
Clarification: Flatley $11 million “settlement”
Earlier this week, we quoted an Australian newspaper that Michael Flatley had won an “$11 million settlement” in his lawsuit against Tyna Marie Robertson, a woman who had falsely accused him of rape and tried to extort him through the threat of litigation, and speculated that Robertson’s other romantic shenanigans with the wealthy may permit her to pay it. Alas, other press coverage reveals that this was not a settlement, but a default judgment, which suggests the inability to pay for a lawyer to defend herself as well as to pay Flatley. On Point’s report of the default judgment notes that Robertson’s child support litigation claims she has $6 to her name. Flatley did come to an undisclosed financial settlement with D. Dean Mauro, the attorney who handled Robertson’s claim, so there will be some justice done.
Arbitration and the free market
Let us imagine a writer for a left-wing magazine, we’ll call her Mephanie Stencimer, who wants to buy a car. But she has particular tastes: she doesn’t just want any old car. She wants a three-wheeled vehicle, perhaps because the feng shui is better, perhaps because she wants to spend less money on tires forced upon her by Big Rubber. She goes from car-dealer to car-dealer around town, but every single one of the dastardly businessmen insist that her only choice is a four-wheeled vehicle. She patiently explains the aesthetics of the triangular approach, but they shrug their shoulders and tell her it’s out of their hands and she has to have a four-wheeled car or nothing. Finally, she surrenders her preference for the three-wheeled vehicle, and takes a model with the extra wheel.
If you were to take seriously the arguments of Stephanie Mencimer at Mother Jones and the commenters there, and perhaps the occasional judge, this is an outrageous “contract of adhesion” that should be outlawed: Stencimer didn’t have a choice, didn’t have the bargaining power to make the auto-dealer sell her a three-wheeled car, and was forced to buy an extra wheel. But is this really a problematic failure of the market that requires government intervention?
Scruggs indictment X
A few odds and ends:
Two rumors previously passed along in this space have been denied by relevant parties. The attorney for indictee Sidney Backstrom specifically denies that his client is considering a plea deal with prosecutors, contradicting speculation from Scott Horton that we passed along the other day (more). We also cited Sid Salter of the Jackson Clarion-Ledger on reports that federal agents searched attorney Joey Langston’s home as well as law offices, but Salter talked with Langston’s mother who says that isn’t so (more).
Lotus/folo has some speculation on what it might mean, as to the way the investigation developed, that the dates in the indictment switch back and forth between “on or about” and precise dates. Also on the timeline of the investigation and prosecution, Alan Lange at Y’All Politics has further thoughts on the post-election surfacing of the prosecution’s case.
Finally, former AG Mike Moore, a longtime mentionee on this site and deeply connected with Scruggs through the tobacco episode among other involvements, had at first been considered a likely candidate for the Lott Senate seat, but has now changed his mind and prefers to spend time with his family (Y’All Politics).
P.S.: As for the question, “why would a lawyer so rich do such a thing?”, Great Red Spot is reminded of a cynical quote from Monty Burns of The Simpsons: “I would trade it all … for a little more.”
Scruggs not alone in violating protective order?
David Rossmiller details an employment discrimination suit with scandalous allegations against Scruggs Katrina Group member Nutt & McAllister, including a violation of the Acker protective order. Of course, bad publicity is always a strategy of the plaintiffs’ bar, even when they’re suing other trial attorneys, so the allegations may not be true.