Overlawyered: Chronicling The High Cost Of Our Legal System

Archive for October, 2017

Between Puerto Rico and food shipments, the Jones Act

After a brief suspension during the moment of maximum public outcry, the Trump administration earlier this month allowed the Jones Act to go back into effect restraining trade between Puerto Rico and the U.S. mainland. According to this WSJ editorial, Puerto Ricans are paying the price:

Ricky Castro is a food and beverage wholesaler and president of Puerto Rico’s Chamber of Food Marketing, Industry and Distribution, known as MIDA, which boasts 200 members across the island. This month MIDA conducted an informal survey of 15 members and found there are roughly 1,400 containers of their provisions sitting in U.S. ports, waiting to be shipped to Puerto Rico.

Mr. Castro attributes the delay to the Jones Act, which mandates that U.S.-flagged, -built and -manned carriers conduct all shipping between U.S. ports. This means an oligopoly of three companies—Crowley Maritime Corp., TOTE Maritime and Trailer Bridge Inc.—conduct the vast majority of the protected trade between the mainland and the island, at inflated costs on aging ships. The ocean-going Jones Act fleet numbers a mere 99 vessels, compared to thousands available from foreign-flagged carriers.

Earlier here, here, here, etc.

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“Woman caught stealing cement pavers threatens to sue for back injury”

“A 54-year-old Florida woman was arrested Sunday after she was caught stealing cement pavers from a home in Port Richey….Upright said she thought they were trash. Deputies said she then threatened to sue the owner because she hurt her back on his property while loading the blocks into her vehicle.” The homeowner said the 42 decorative blocks, worth an estimated $420, were being stored not far from the roadway as part of a remodeling project. [WFLA]

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“[It was] just a butter knife”

The Florida first-grader didn’t understand that bringing a butter knife to lunch would get her in trouble with the school. She was suspended under the school’s nondiscretionary discipline policy for possession of “dangerous items.” “We’re just here for the safety and security of all our students and that’s our number one goal,” explained principal Pamela Jones. [WHJG; DeFuniak Springs, Fla.]

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Law enforcement for profit roundup

  • In Mississippi, a “mother has been forbidden from any contact with her newborn for 14 of the 18 months the child has been alive” because of unpaid misdemeanor fines [Radley Balko, WLBT/MSNewsNow; judge has now resigned, but similar practices reported to be common] Is Biloxi going to do better? [ABA Journal]
  • “They … didn’t give it back”: outrageous tales of asset forfeiture from Alabama [Connor Sheets, AL.com]
  • Efforts afoot in Lansing to write down nearly $595 million in unpaid Michigan drivers’ fees [Chad Livengood, Crain’s Detroit Business] Warren, Mich., residents invited to turn in neighbors on suspicion, win bounties from forfeiture funds [Scott Shackford]
  • Ethical red flags: maker of heroin-cessation compound “marketing directly to drug court judges and other officials.” [Jake Harper, NPR]
  • In Craighead County, Arkansas, private probation firms sue judges who cut them out of the process [Andrew Cohen, The Marshall Project]
  • From Ohio “mayor’s courts” to asset forfeiture, prosecution for profit imperils due process [Jacob Sullum]

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Turning the legal screws on retail wine-over-the-net

The powerful alcohol wholesalers’ lobby has been putting the legal squeeze on consumers’ access to retail wine across state lines. I explain in a new Cato post.

More: Also possibly relevant, this 2012 paper by Omer Gokcekus and Dennis Nottebaum, abstract:

This study develops thirteen criteria to detail diverging direct shipping laws of the U.S. states. It also investigates why some states have prohibitive laws by utilizing a logit regression model. Regression results provide strong support for public finance and special interest arguments: It appears that states concerned about incurring losses in tax revenues, that is, that are heavily dependent on federal aid and have low state revenues, and protecting the wholesalers and retailers that benefit from the three-tier system (at the expense of wineries and wine drinkers) are most likely to have a prohibitive law.

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Tales of discovery: document request in qui tam case

And speaking of discovery, reader W.C. writes to say:

This is a False Claims Act case. I am not terribly interested in the substance (relators claim that a drug was recommended for off-label use and that Medicaid shouldn’t have paid for it; they complained and were fired).

What is interesting is taxable costs. Fifth Circuit affirmed (finding no abuse of discretion for an award of) $232,809.92.

Money quotes for me: “The district court acknowledged that [Defendant]’s invoices were not detailed but explained that, given nearly three million pages of copies [Defendant] produced for its defense in this case, it would have been impossible for [Defendant] to explain each page’s usefulness.” (emphasis added). The Court also allowed for “costs relating to (1) TIFF image conversion, (2) scanning, (3) formatting electronic documents, and (4) PDF conversion – per [28 U.S.C.] § 1920(4), which allows recovery for ‘exemplification’ and ‘making copies’ of case materials,” and confirmed that the district “allow[s] a prevailing party to recover the costs of complying with an opposing party’s request to reformat electronic documents or scan hard copies of documents” under 28 USDC s 1920.

Lessons: (i) You might want to more narrowly tailor those discovery request; (ii) Defendants had asked for $961,380.52, so maybe the back up the truck strategy was not 100% effective.

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Co-pay mechanism would improve discovery incentives

“Skin in the Game: A Proposed Co-Pay Requirement for Discovery-Requesting Parties” by Robert D. Owen and Francis X. Nolan, WLF, excerpt:

Economics teaches that underpriced commodities are inevitably overconsumed. This truth has become increasingly evident in the world of large-litigation discovery over the last decade. Requesting parties (typically plaintiffs) are not effectively limited by outside forces to moderate the breadth of the discovery, nor are they incentivized to curb excess demands. Discovery is currently free to requesting parties, and judges have limited time to mediate and resolve inevitable discovery disputes. Accordingly, discovery has spun out of control….

This Legal Backgrounder first explains how litigation has reached the current tipping point, and then offers examples of recent attempts by the Committee and the judiciary to push back against rising discovery costs. The publication concludes by offering a basic outline for a percentage-based requestor-pay rule, while also noting the advantages and hurdles attendant with such a proposal.

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Campus free speech roundup

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Florida law firm sanctioned; many clients had not authorized it to sue

Federal judges have fined the Jacksonville law firm of Farah & Farah $9.1 million over improperly handled claims against a fund set up after litigation to compensate smokers in the state of Florida [WTLV/First Coast News]:

The judges’ order states 1,250 frivolous tobacco claims were filed by Farah & Farah and the Wilner Firm against the Engle Trust Fund….

…cases filed collectively by Jacksonville attorneys Charlie Farah and Norwood Wilner prompted a U.S. Attorney Special Master seven month investigation into possible misconduct in 2012.

The investigation revealed some cases filed by the attorneys were for deceased clients, non-smokers, those who did not suffer from one of the required diseases, and 572 that did not authorize the attorneys to file lawsuits on their behalf.

More: Glenn Lammi.

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