Overlawyered: Chronicling The High Cost Of Our Legal System

Archive for March, 2008

Redesign issues continue

An advisory about a few continuing issues arising from our Movable Type upgrade a week ago and the site redesign that it’s triggered:

* We’re experiencing a surge in comment spam which we’re trying to fix. In the past these attacks have sometimes forced us to close comments briefly or have even brought down the whole site.

* Relatedly, we’re suffering email disruptions which are affecting email addresses @ this domain name and at my personal domain walterolson dot com. If you have sent mail to me or Ted through these sites in the past week, it may not have gotten to us. Editor – at – pointoflaw – dot – com should reach me and is unaffected by the disruptions. Using comments on posts as a substitute for messaging is best saved for a last resort. Facebook messaging is another alternative to consider.

* A couple of readers have reported disruptions to Overlawyered’s RSS feeds. If this is happening to you, too, feel free to point it out in comments to this post. I don’t use feeds and rely on readers to let me know when they malfunction.

* I’m slowly moving up the learning curve on customizing display styles on things like font size and white space. The gavel icon is back on the front page address line. Don’t assume that this design is final as I’m by no means done tweaking it — I might even go back to the pink color scheme.

P.S. Prof. Bainbridge likes the new design. But does Ron Coleman? And QuizLaw favors the distinctive pink.

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UK: ire over £200,000 payout for defense office worker

“Soldiers’ families reacted angrily after it emerged the Ministry of Defence awarded £202,000 to an office employee who strained his back picking up a printer. The ‘disgraceful’ decision left the civil servant with a larger payout than almost all the servicemen injured in Iraq and Afghanistan.” (Stephen Adams, “MoD office worker gets £200,000 payout”, Telegraph, Mar. 18).

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Update: T-shirts critical of Wal-Mart

Updating our Mar. 29, 2006 post: “Computer store owner Charles Smith has won a two-year legal battle with Wal-Mart, which has demanded he stop making and selling T-shirts and other items with slogans such as ‘Wal-ocaust’ and ‘Wal-Qaeda.’ U.S. District Judge Timothy C. Batten Sr. found that Smith’s products qualified as protected noncommercial speech because his goal was to criticize Wal-Mart, not to make a profit from his products. The judge noted that Smith had sold only 62 T-shirts, including 15 to one of Wal-Mart’s outside law firms.” (Janet L. Conley, “Parody of Wal-Mart Trumps Its Trademark”, Fulton County Daily Report, Mar. 26; Likelihood of Confusion, Mar. 22; Randazza, Mar. 23).

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N.H. jury: lawyer’s demand letters amounted to extortion

Now this could crimp the business plans of quite a few attorneys:

A Manchester lawyer who threatened to sue a Concord salon for pricing haircuts differently for men and women and then took money to settle the matter was found guilty of theft by extortion.

A jury took about 1½ hours to convict Daniel Hynes, 27, on Wednesday. Assistant Attorney General Elizabeth Baker said Hynes sent letters to at least 19 salons in the state.

One arrived Dec. 20, 2006, at Claudia’s, the North Main Street hair salon owned by Claudia Lambert. In the letter, Hynes said prices should be based on the time a cut takes or on the length of hair, instead of on gender. He wrote: “I demand payment in the amount of $1,000 in order to avoid litigation,” according to court documents. …

Hynes said yesterday that he plans to appeal.

“The conviction goes against the First Amendment,” he said. “People have a right to petition the courts. In my case, I wanted to address my concern with the Human Rights Commission.”

Asked why he sent letters to salons instead of contacting the commission directly, Hynes said lawyers often settle out of court.

“I believe it’s more appropriate to attempt as amicable a resolution as possible,” he said.

… In one court document, he argued that the price structure that he saw as discriminatory had caused him stress and mental anguish, despite the fact that prices for men were less than those for women. He said he was being denied an “inherent benefit in being treated equally.”

(Chelsea Conaboy, “Lawyer guilty of salon extortion”, Concord Monitor, Mar. 21; Greenfield, Mar. 23; Above the Law, Mar. 25; Pasquale, Concurring Opinions, Mar. 24).

Prof. Bainbridge (Mar. 25) cites California’s experience with the now somewhat reformed s. 17200 unfair business practices law, which empowered freelancing lawyers to send out demand letters to businesses over a wide variety of alleged infractions. He concludes that the answer is to amend underlying laws which sweep too broadly in banning business practices, authorize damage claims unrelated to actual injury, and so forth. Although I much appreciate the kind suggestions for further reading he offers in his post, I can’t say I entirely go along with the idea that the scope for possible abuse would vanish if only the underlying laws were written properly. At Concurring Opinions, incidentally, one commenter draws a connection to RIAA’s mass production of demand letters against file-sharers, while another warns that for a target to complain to the authorities of extortion, as did the New Hampshire salon owner, might itself be construed by many courts as “retaliation” against the filer of a discrimination claim and thus as grounds for penalties on its own.

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Lawsuit abuse kills puppies

Blogger Rogier van Bakel is furious (via Balko (h/t Slim)) at his local SPCA because they would rather put a dog to sleep than place it with his family with small children. See, they’re worried about getting sued if the dog bites one of the children. van Bakel can’t believe it: he’s even willing to sign a waiver!

His anger is misdirected. The SPCA didn’t kill his dog; trial lawyers did. Courts’ failure to recognize the right of parties to contract out of excessive liability means that the SPCA has to protect itself against attorneys, and can only do so if they avoid situations where they might be sued. With 20/20 hindsight, the would-be John Edwards will say to a jury: “The SPCA has placed other dogs that bit small children and has been sued for it, yet they continue to place dogs with small children!”, and demand punitive damages. Between judges who won’t recognize the right of contract when it interferes with a lawyer’s paycheck, and legislative efforts to prevent parties from agreeing to contract out of the high costs of the liability system, von Bakel cannot distinguish himself from the families who would blame the SPCA if a dog-attack occurs. The offer of a waiver does not help: the SPCA can’t afford to take the risk that an adoptive family will renege on its agreement not to sue if the dog attacks a child.

Now, perhaps we as a society do not want shelters to place animals in homes with small children. Or perhaps we do. But shouldn’t that be a decision that rests with a legislature, rather than random chance and a jury? But when a jury has the power to exact uncapped damages, an SPCA has to anticipate the regulation through litigation.

van Bakel and Balko direct readers to other organizations that have not yet been saddled with a lawsuit demanding such practices, but they will surely follow in the SPCA’s footsteps when the lawyers get a hold of them. The long-term solution is to insist on elected officials who will appoint judges who respect freedom of contract, and who will pass tort reform measures that put common-sense limits on the power of courts to interfere with every-day activity. Even now in Congress is debating S. 1782, which would put further limits on the power of consumers to opt out of expensive litigation, and receive the benefits of lower costs and increased choice; while President Bush will veto such legislation, an Obama administration with a Democratic Congress would surely vote it into law.

For more on the Congressional and trial-lawyer campaign to reduce consumer choice, see the Overlawyered arbitration section.

Apologies to Mr. van Bakel for the misspelling of his name in the original version of the post.

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“My client is being framed”, cont’d

Our weekend post questioning defense attorney John Keker’s assertions of the innocence of client Dickie Scruggs (“prosecutors have concocted a ‘manufactured crime’ in which his client had no part”) drew a couple of comments from readers who saw Keker’s statements as no more than the zealous advocacy we should expect of a defense attorney. They’ve also been discussing the issue over at the WSJ law blog, where they quote defense attorney Benjamin Brafman’s rapidly disproved boast that his client Mel Weiss “will be fully exonerated,” as well as Monroe Freedman, the Hofstra legal ethicist and regular antipode of views expressed on this site, who

says that generally speaking, he doesn’t see problems with a lawyer making aggressive statements to the press in defense of his client. “We don’t know what the client told the lawyer when the lawyer made the statements,” he says. “We don’t know what Scruggs told his lawyer. We don’t know if Scruggs said I did it, but I want to fight it or something else entirely.”

George Sharswood’s Essay on Professional Responsibility, the standard American text on legal ethics before the modern period, contains the following assertion (pp. 99-100 of Google Books digitized version):

…no counsel can with propriety and good conscience express to court or jury his belief in the justice of his client’s cause, contrary to the fact. Indeed, the occasions are very rare in which he ought to throw the weight of his own private opinion into the scales in favor of the side he has espoused. If that opinion has been formed on a statement of facts not in evidence, it ought not to be heard — it would be illegal and improper in the tribunal to allow any force whatever to it; if on the evidence only, it is enough to show from that the legal and moral grounds on which such opinion rests.

Read On…

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March 25 roundup

  • Speaking of patients who act against medical advice and sue anyway: doctor who advised against home birth is cleared by Ohio jury in $13 million suit [Plain Dealer and earlier via KevinMD]
  • UK: “A feud over a 4ft-wide strip of land has seen neighbours rack up £300,000 in lawyers’ bills, and left one family effectively homeless.” [Telegraph]
  • Last of the Scruggs judicial bribery defendants without a plea deal, Dickie’s son Zack, takes one [Folo]
  • By reader acclaim: securities trader sues over injury from lap dancer’s attentions [AP/NY Sun]
  • Amid the talk of FISA and retroactive telecom immunity, it would be nice to hear more about the actual lawsuits [Obbie]
  • Australian worker loses suit over firing despite a doctor’s note vouching that stress of worrying about upcoming football game made it medically necessary for him to take day off to go see it [Stumblng Tumblr]
  • Megan McArdle and Tyler Cowen toss around the question of federal FDA pre-emption of drug liability suits, as raised by Medtronic;
  • Should Coughlin Stoia have bought those stolen Coke documents? For one lawprof, question’s a real head-scratcher [David McGowan (San Diego), Legal Ethics Forum] And WSJ news side is oddly unskeptical of trial lawyers’ line that the affair just proves their power to go on fishing expeditions should never have been curtailed [Jones/Slater]
  • Dashboard-cam caught Tennessee cops red-handed planting marijuana on suspect, or so Jonathan Turley suggests — but could it be a little more complicated than that? [WSMV, AP/WATE] (& Greenfield)
  • “Heck Baptists don’t even sue you for disagreeing with them,” though no doubt there are exceptions [Instapundit; NYT on Danish cartoons; Ezra Levant with more on those Canadian speech tribunals]
  • Bestselling authors who sue their critics [four years ago on Overlawyered]

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Little guys and “structuring” law

To read Alan Dershowitz on the Spitzer affair, you might think the criminal laws against “money laundering, structuring and related financial crimes” mostly go unenforced when sums are in the “thousands, not millions, of dollars” and do not arise from “organized crime, drug dealing, terrorism and large-scale financial manipulation”. Alas, plenty of targets of these laws could tell you otherwise, as Forbes found when it went collecting examples from proprietors of cash businesses like restaurants and motels and even a couple who says their legal troubles arose after they divided up for deposit $40,000 they’d received in gifts at their big wedding. (Janet Novack, “My Big Fat IRS case”, Forbes, Apr. 7; earlier; similar from Dershowitz on CNN transcript).

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The dangers of doing an M&A agreement over a weekend

When I was practicing full-time, I strongly (and rarely successfully) argued for sticking to internal deadlines and against trying the last-minute editing of briefs or other documents for anything other than egregious errors: the risk of larger irreparable errors being introduced in a hectic rush always seemed to me to outweigh the benefits of crafting paragraphs ever so finer. Such an error may have occurred in the Bear Stearns deal, and will no doubt show up on Above the Law tomorrow. NY Times:

JPMorgan and Bear were prompted to renegotiate after shareholders began threatening to block the deal and it emerged that several “mistakes” were included in the original, hastily written contract, according to people involved in the talks.

One sentence was “inadvertently included,” according to a person briefed on the talks, which requires JPMorgan to guarantee Bear’s trades even if shareholders voted down the deal. That provision could allow Bear’s shareholders to seek a higher bid while still forcing JPMorgan to honor its guarantee, these people said.

When the error was discovered, James Dimon, JPMorgan’s chief executive, who was described by one participant as “apoplectic,” began calling his lawyers at Wachtell, Lipton, Rosen & Katz to seek a way to have the sentence modified, these people said. Finger pointing over the mistakes in the contracts began as bankers blamed the lawyers and vice versa.

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