Overlawyered: Chronicling The High Cost Of Our Legal System

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“The most expensive bill ever written”?

This Sunday’s Boston Globe magazine had a long feature piece which addressed the burning question, “Do We Really Need A Law To Protect Fat Workers?” The “law” in question would be a law which forbid “discrimination against overweight and unusually short people.” While I resemble that remark, you won’t be surprised to find me answering the question, “No,” in contrast to the politicians and activists who think it’s a great idea. The problem they face? Too many people inconveniently think that being overweight is a choice; they need to convince these skeptics that weight and race are really the same thing.

Although some people worry that the law would lead to a flood of lawsuits, the supporters of the bill pooh-pooh that notion, based on implausible statistics about disability discrimination lawsuits. Besides, their goal (nudge-nudge, wink-wink) isn’t really lawsuits at all:

Like the race laws, then, the weight-discrimination bill has a goal that extends beyond the legal system: to change the way we think. The idea is not to clog up the courts. Instead, it’s to create a society where hundreds of lawsuits aren’t needed, because there’s not as much to sue over – a society of people who have the legal right to say hurtful things and the compassion to know better than to act on them.

But if it does clog up the courts — the ADA only applies to those so obese that they can call themselves disabled, while the proposed Massachusetts law would apply to anybody who is overweight, which seems to be most of the population — it won’t be the author of the bill who suffers, but employees and business owners.

Of course, even if Massachusetts does pass this law, it wouldn’t be the worst; California already has far wackier anti-discrimination laws with its full-employment-for-lawyers Unruh Act. Unruh, despite listing the usual categories found in anti-discrimination laws (sex, race, color, religion, ancestry, national origin, disability, medical condition, marital status, and sexual orientation) actually has been interpreted by state courts to prohibit all “arbitrary” discrimination. As Cal Biz Lit explains:

In earlier cases, the courts have held the act to prohibit business discrimination based on :
• A customer’s association with a male with long hair and “unconventional” dress; 
• Having children; and
• Status as a police officer (when the ACLU tried to kick a cop out of a meeting).

If a creative lawyer hasn’t shoehorned obesity in there already, he will soon enough.

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Updates – August 8

1. Yet another Roy Pearson update: the Washington Post, confirming a previous rumor, reports that he’s closer to losing his job. The Commission on Selection and Tenure of Administrative Law Judges (CSTALJ?) has voted to start the process of terminating him, by sending him a letter notifying him that he may not be reappointed to his job. Of course, the procedure alone makes the story a perfect fit for Overlawyered. Pearson can’t just be fired; that would be too easy. First, his boss had to make a formal recommendation. Then, the Commission had to decide to send that letter. And now?

Pearson is not out of work yet. The letter is a key step, though, alerting him that his reappointment is in jeopardy. He has 15 days to file a rebuttal and could push for reappointment by appearing before the commission at its next meeting in September.

The wonders of public employment. And then if he’s turned down, of course, he can sue!

Apparently trying to destroy a business by using the legal system to extort millions from the owners isn’t his big sin; his big sin is being rude to his boss:

Concerns about Pearson’s temperament as an administrative law judge preceded the publicity about the lawsuit this spring. The letter from the commission focuses on those concerns, addressing the lawsuit only briefly.

In e-mails sent to his fellow judges and cited in the letter, Pearson’s contempt for Chief Administrative Law Judge Tyrone T. Butler was evident. In one of the missives, he spoke of protecting himself from any attempt by Butler “to knife” him. In another, he questioned Butler’s competence and integrity.

Incidentally, he was serving a two year term, but if he wins reappointment, it will be for a ten year term.

2. Updating a story from Mar. 25, a federal judge has banned the navy from using sonar in training exercises:

Cooper said it was never easy to balance the interests of wildlife with those of national security. But in this case, she said, environmental lawyers have made a persuasive case that the potential harm to whales and other marine life outweighs any harm to the Navy while the court case proceeds.

Because, clearly, a bunch of lawyers are in the best position to design United States naval strategy.

(Other whale-sonar lawsuit coverage: May 17, Jul. 2006)

3. Remember the Kentucky Fen-Phen scandal? The one in which the class action attorneys were accused of misplacing $60 million of their clients’ money into their own pockets? (We’ve covered it May 20 and earlier) Well, a federal judge has now ruled that they need to repay $62.1 million to their clients. So far. Still to come: a ruling on punitive damages, a criminal trial, and the suit against Cincinnati attorney Stan Chesley, who’s accused of the same wrongdoing. (AP/Forbes)

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Serial spam litigation backfires on plaintiff

I think it’s fair to say that serial spam litigation is less lucrative than serial ADA litigation. Walter discussed the setback suffered by plaintiff James Gordon (June 2007), in which a federal court ruled that Gordon, who makes his entire living using anti-spam laws to sue emailers, had no legitimate claims because he had not suffered any damages (and indeed, could not, since his only “business” was filing lawsuits for receiving spam).

The court was clearly disgusted by Gordon and his attempt to manipulate the CAN-SPAM act to extort millions of dollars from an emailer, because not only did it rule against him, but this week it awarded attorneys’ fees to his victim. Now, regular readers of Overlawyered know that one of my pet peeves is that even when courts order sanctions, they often award mere token amounts which are inadequate to deter plaintiffs or reimburse defendants for their troubles. That wasn’t the case here; the court awarded $110,440 in fees and costs to the victorious defendants. (This was actually significantly less than the defendants had requested — half a million dollars — but the court found that this was grossly inflated and not substantiated by the defense counsel’s own billing records. Still, $110,000 is nothing to sneeze at.)

So this case provides lessons for both sides about being greedy:

  • If you’re going to try to become a professional plaintiff, try to suffer actual damages — if possible, physical damages — rather than demanding millions of dollars for receiving emails. If you insist on suing without having been injured, at least try to be a sympathetic plaintiff in a wheelchair who can’t use public restrooms, rather than being a guy who sits around his living room in his pajamas looking at spam.
  • If you’re up against an unsympathetic professional plaintiff, don’t squander the court’s goodwill by demanding far more in legal fees than you’re entitled to. And if you’re going to pad your fee request to the court, at least make sure that the bills you submit to substantiate your demands actually match the numbers you’ve told the court. Judges don’t like it when you claim that you spent 2,000 hours and your own records show that you’ve only spent 1,500 hours. The judge was so annoyed here that after he re-calculated the legitimate bills, he determined that they were grossly overinflated and slashed them by an additional 70%.

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California ADA lawsuit mills: “Wheelchairs of fortune”

Serial ADA litigant (and Overlawyered repeat offender) Thomas Frankovich was profiled recently in SF Weekly. Overlawyered readers will be familiar with just about everything in there, from Frankovich’s extortionate tactics to his collaboration with professional plaintiffs like Jarek Molski, to his use of front groups in an attempt to make his litigiousness seem like a public service. (Frankovich, incidentally, does not work in a wheelchair accessible office.)

Matthew Hirsch of LegalPad reports that Frankovich is attempting to rehabilitate his image before the Ninth Circuit rules on whether he, and his fellow traveler Molski, are vexatious litigants:

Starting this month, Frankovich and a major client are offering defendants a deal: “You make your [entrance] doorway accessible, and we will waive any and all claims — including money damages,” he said.

Yes, but Frankovich is a lawyer, so be sure to read the fine print:

Frankovich said his clients who are affiliated with DREES will offer the front door deal if they are visiting only to check out the entrance. But if they spot a door that wheelchair users can’t open, then they go inside to shop and notice more problems, “that becomes something different,” Frankovich said, and the deal is off.

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Illinois court: Taxpayers not responsible for porch collapse

In June 2003, there was a tragic porch collapse at an apartment building in Chicago; 13 people were killed and at least 50 more were injured. The quest for deep pockets began; as we discussed in August 2005, even though the porch was on private property, trial lawyers aimed their litigation guns at the city of Chicago, on the theory that Chicago taxpayers have more money than the building owner if city inspectors had done a better job, the accident wouldn’t have happened.

A trial judge bought that argument, but yesterday, in a victory for taxpayers, an appellate court reversed that ruling, holding that, contrary to the theory of the trial lawyers, the city is not a guarantor that nothing bad will ever happen within its city limits. The mere fact that the city inspectors failed to issue violation notices for the porch construction does not make the city financially liable for the collapse; if it did, then the potential to extend liability to taxpayers would be limited only by the imagination of the trial lawyer. Police fail to stop a driver who’s speeding, and he later hits you? Blame the city. Inspectors don’t make your neighbor cut down the dead tree on his property, and it falls on your house during a storm? Blame the city. The possibilities are endless.

The victims of the accident do have a legitimate case — but that legitimate case is against the building landlord, not taxpayers. But those deep pockets aren’t quite deep enough, so the trial lawyers aren’t satisfied with that answer:

But plaintiffs’ lawyers said that was not enough.

Pappas and his companies have about $17 million in insurance coverage, said Terry Ekl, who represents the family of Robert Koranda, who died in the collapse.

“Without the City of Chicago in the case, these families are not going to get anywhere near fair compensation,” Ekl said.

If the Appellate Court’s ruling stands, the plaintiffs would take up the issue with state lawmakers, Murphy said.

“We’re going to be having our clients go down to the legislature and say, ‘You can’t be letting this happen,’ ” Murphy said. “These children cannot have died or be injured in vain.’

Yep; they’re not doing it for their own bank accounts; rather, this is For the Children™.

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iSue

I wonder what the quickest time between the introduction of a consumer product and the introduction of the consumer fraud class action lawsuit is. Apple’s new iPhone was released on June 29, 2007; last Thursday, the first — as far as I know — class action lawsuit was filed. (I’m sure that this doesn’t qualify as the fastest consumer lawsuit, but I am curious.)

A Chicago-area resident, Jose Trujillo, is suing Apple and AT&T under Illinois’s “consumer fraud” law; the typo-filled complaint claims that the defendants failed to disclose to consumers that the phone’s battery — like that of the iPod — could only be replaced by Apple, and not the user. The suit also alleges that the battery only lasts for 300 charges and will have to be changed annually; given that Mr. Trujillo has had the phone for a maximum of a month, and that each charge lasts for several days, it is unclear how he could possibly know this or have a good faith basis for alleging it.

The suit contains the usual features of bogus consumer fraud litigation, such as claiming “fraud” without identifying any false statements, but instead by alleging a failure to disclose information that was widely known; attempting to represent consumers who are perfectly happy with the product; suing based on hypothetical damages that may or may not be incurred in the future; and claiming to be an unhappy consumer, but failing to act as an ordinary consumer would — e.g., by returning the product for a refund.

Incidentally, I just got a new cell phone (not an iPhone) last week. I checked the box; nowhere does it disclose that the battery won’t last for an infinitely long time, or that I will have to pay for a new one when it does die. Also, I’m pretty sure the car dealership that sold me my SUV never mentioned that it required a substance called “gasoline” to run, and that I would need to keep buying this substance. I wonder if I’ve got a case.

As an addendum, the trial lawyer in this case, Larry Drury, is no stranger to ludicrous “consumer” litigation; he played a leading role in the bogus Million Little Pieces class action suits. (Covered on Overlawyered in many posts). And he once sued Arista Records over the Milli Vanilli “scandal.”

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Trademark abuses of the month

Although trademark law certainly has plenty of intricacies, the essence of trademarks is the protection of consumers from confusion in the marketplace. When one buys goods or services, one should be able to know the manufacturer of those goods or provider of those services. Except, of course, when lawyers get involved; then trademarks are just used by large businesses to stifle competition. Infoworld reports on how some companies are abusing trademarks to shut down smaller competitors on EBay. EBay, to avoid liability for trademark infringement by its sellers, is quick to shut down any auction when a trademark holder complains. And then makes it difficult for the seller to reverse the decision:

As she began the process of getting EBay to reinstate her account – which includes having to take a condescending online tutorial on intellectual property and swearing that you’ll never be bad again – the reader also was able to contact with other EBay sellers whose Don Ed Hardy auctions had been taken down. “Some sellers who had not yet actually sold any Don Ed Hardy goods were told by the fraud department that ‘test purchases’ had proven their goods were counterfeit,” the reader wrote. “Some were told that it didn’t matter they could prove their merchandise was authentic – Don Ed Hardy would continue to take down their listings via VeRO by citing ‘violation of a trade agreement’ between the company and its distributors. And all were threatened as I was with trademark litigation that could result in treble damages, paying their legal costs, etc.”

But the threat of running up legal fees with trademark lawsuits isn’t just felt by individual EBay sellers; even large companies — like ABC television — are afraid to fight ridiculous claims of trademark infringement:

“Sam I Am” isn’t—anymore.

The planned ABC fall comedy starring Christina Applegate has changed its name to “Samantha Be Good” after receiving a “cease-and-desist” letter from lawyers representing the rights-holder to Dr. Seuss characters, an attorney said Tuesday.

[…]

“We asserted a trademark infringement claim,” in a May 17 letter to ABC, said Jonathan B. Sokol, an attorney representing San Diego-based Dr. Seuss Enterprises, LP.

“People worldwide associate those characters with Dr. Seuss books and … Dr. Seuss vigilantly protects its trademark rights,” Sokol said.

The TV show’s original title might have confused people as to whether the company was sponsoring or otherwise involved with the program, Sokol said.

This is just a guess, but it’s unlikely that someone watching a sitcom in which Christina Applegate has amnesia is going to confuse it with Green Eggs And Ham, a book in which a cartoon character tries to entice another cartoon character to eat unkosher food with classic lines like “Could you, would you, with a goat?”

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$21 million lawsuit for negligent prosecution

In June 2004, 21-year old Vermont resident Samantha Perreault went out drinking with a couple of friends, Norman Poulin and Justin Lawrence. After three rum and cokes each, they left; Lawrence hopped on one motorcycle, and Poulin and Perreault got on another and followed him. Although they may not have been legally drunk, they had had several drinks, it was night, and they were driving 70 mph. Lawrence lost control of his motorcycle and crashed. Poulin, attempting to avoid Lawrence, also lost control and crashed. Perreault, unfortunately, was killed.

Both Poulin and Lawrence were prosecuted for criminal negligence, but Lawrence, apparently, was not also charged with driving without a motorcycle license. Feeling that Lawrence’s punishment was insufficient, Perreault’s father has now filed a $21 million lawsuit. Did he sue Poulin? No; apparently he forgave Poulin. Did he sue Lawrence? Of course not; Lawrence doesn’t have deep pockets. No; he sued the state of Vermont.

The Plainfield resident says officials in the Department of Public Safety and Office of the Attorney General showed disregard for his daughter and for the law by failing to fully prosecute a man involved with her death.

“I don’t want anybody else to go through this,” Perrault said Friday. “I think she deserved more than this.”

[…]

“By the state not doing anything, they’re saying it’s okay for you to drive without a license,” Perreault says. “I’ve gone through all the right channels, called the state police, called (the Office of the Attorney General). All I’m getting is blown off.”

In addition to seeking monetary damages, Perreault is also demanding that Lawrence be charged and prosecuted for driving without a license.

Of course, it’s hard not to feel sympathy for someone whose daughter is killed. And the lawsuit isn’t likely to succeed, as the article notes; the state is probably immune, and “failure to prosecute” isn’t a cause of action anyway. But that doesn’t alter the fact that the lawsuit reflects an all-too common mindset that picking a random big number out of a hat and filing a lawsuit against someone with deep pockets is the right approach whenever one is annoyed. (No, the case probably won’t last as long, and cost taxpayers as much, as the Roy Pearson pants lawsuit, but it certainly won’t be free, and will contribute to congestion in the courts which slows down — and thus raises the cost of — legitimate lawsuits.)

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The significance of Roy Pearson

As we’ve covered, Roy Pearson lost his $67 million lawsuit against his dry cleaners. Predictably, Bizarro-Overlawyered is trumpeting the outcome as evidence that the system works, that the “system has effective, built-in checks against such things.” I doubt many Overlawyered readers buy into that spin, but just in case, here are a few reminders about this case that, to the extent it had any merit at all, should have been a small claims suit:

  1. The Chungs offered Pearson $12,000 to drop this suit. If he had not been so greedy, they’d have been out that much money, plus a year’s worth of legal costs. The fact that our legal system enables people to extort tens of thousands of undeserved dollars from others is not evidence that there are “effective, built-in checks” on frivolous litigation.

  2. Putting aside any money issues, this lawsuit was filed on June 7, 2005; for more than two years, this case has been hanging over the Chungs’ heads. That’s two years of legal and financial uncertainty. Two years where they couldn’t make any significant business decisions because they had the possibility of an eight figure liability hanging over their heads. The fact that someone can drag out a case almost too small to have been on Judge Judy for two years is not evidence that there are “effective, built-in checks” on frivolous litigation.

  3. The Chungs “won” the case, but Pearson used the legal system to impose what was likely $100,000 in legal costs on them. Of course, there is a motion for sanctions pending against Pearson, but there are no guarantees here. Courts are very reluctant to impose sanctions, and even when they do (as the court probably will here) they very rarely impose sanctions sufficient to make the defendants whole. Note that sanctions are not automatic; the Chungs had to pay their attorney even more money to prepare a motion for sanctions. The fact that the Chungs have to endure two years of frivolous litigation and then cross their fingers and hope the judge awards them their legal fees is not evidence that there are “effective, built-in checks” on frivolous litigation.

  4. Oh, one other problem: the Examiner reported, even before the decision, that Pearson’s chances of keeping his job were slim. I think most reasonable people agree that Pearson hasn’t quite demonstrated that he’s fit to be a judge. But if he loses his job, the chances of the Chungs ever collecting any part of those sanctions drop from slim to none. (Their chances of recouping their losses are low to begin with — is it likely Pearson has $100,000 sitting around?)

  5. And let’s not forget one other party to this case, also abused by Roy Pearson: the taxpayers of the District of Columbia, who have to pay for the legal system. And they have no chance to get reimbursed.

  6. Finally, remember that the case is not necessarily over. It would be insane for Pearson to appeal, but that hasn’t proved to be a limiting factor in his actions in the past. The worst that happens is that he gets slapped with more sanctions, which he’ll never pay.

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