In a rural corner of Alabama, four different mobile home manufacturers get sued for alleged defects and independently agree to accept arbitration of the lawsuits. Each of them then gets whacked by the arbitrator for an award ranging from $360,000 to $590,000, even though the plaintiff’s own expert didn’t claim damages to any of the mobile homes exceeding $5,000. After the companies learn of each other’s misfortune, they begin comparing notes. “What they found, according to court records, were startling similarities in the cases, including undisclosed connections between the arbitrator, Grove Hill lawyer Spencer Walker, and Butler lawyer Jeff Utsey, the plaintiff’s attorney in all four cases. … In a blistering affidavit cited prominently in the [Alabama] Supreme Court’s decision [a unanimous decision in February to reopen one of the cases], Birmingham lawyer Joel Williams laid out evidence to support his contention that the awards resulted from a secret deal between Walker and Utsey, and that the men received assistance from a third lawyer, David Jordan of Brewton. …’The facts strongly suggest that this general plot to “set up” manufacturers was hatched in early 1999,’ Williams stated in his affidavit.” Perhaps even more remarkable, it seems the state bar association blessed attorney Utsey’s questionable conduct beforehand in an opinion letter in that year. This one looks like it will be worth watching (Eddie Curran, “Arbitration awards raise questions”, Mobile Register, Sept. 21).
Archive for the ‘Uncategorized’ Category
Mississippi lame duck Supreme Court Justice troubles
Mississippi has an unusual system where not only do its state Supreme Court justices run for election (complete with full-scale television advertising), but the judges elected in November 2002 don’t take their seats until January 2004. Justice Chuck McRae (see Sep. 9, 2002) finished a distant third in 2002. (Robert Lenzner and Matthew Miller, “Buying Justice”, Forbes, Jul. 21). Now his fellow Justices have raised a complaint that he is acting petulantly as a lame duck, delaying cases and threatening violence. The unprecedented public hearing on whether to suspend Justice McRae will be held later this month. (Matt Volz, “Justices allege misconduct by McRae”, AP, Sep. 29; Jerry Mitchell, “Public to get rare glimpse of high court”, Hattiesburg American, Sep. 30; Eric Stringfellow, “McRae’s lame-duck term harmful to high court”, The Clarion-Ledger, Sep. 30). The Mississippi Supreme Court has had other troubles recently, as this site discussed on Aug. 19.
Update: (Jerry Mitchell, “2 justices must testify in McRae case”, The Clarion-Ledger, Oct. 3).
“Police can sue citizens for damages”
Since Florida’s repeal in 1990 of a little-known doctrine in state law known as the “fireman’s rule”, police officers and firefighters injured while responding to calls have been free to sue private parties for damages. “In the past month, a Jupiter motorcycle officer and a Palm Beach County sheriff’s deputy have sued people who called for help. In both cases, the officers blamed their injuries on the negligence of people they were dispatched to protect. Earlier this year, officers in Sunrise and Plantation filed similar suits after suffering serious injuries.” Although the fireman’s rule still exists in most states, it’s “being slowly eradicated state-by-state” according to one observer; in Florida, lobbying by a police union helped ensure its demise. And although the Florida police union claims it only wanted to open the gates for suits over gross negligence and the like, suits have become a growth area and often name deep-pocket bystanders. (Bill Douthat, Palm Beach Post, Sept. 30).
Update: s. 17200
It looks like there may be competing voter initiatives relating to California’s Unfair Competition Law (see Aug. 27, Jul. 22). While bipartisan legislative attempts to reform the notoriously overbroad Section 17200 have failed, the Civil Justice Association of California is looking into a possible voter initiative for reform. In response, a trial lawyers’ organization is threatening a voter initiative to expand ? 17200 liability to individual executives. The lengthy San Francisco Chronicle story includes extensive discussion of the Trevor Law Group scandal, where a law firm used ? 17200 to shake down thousands of businesses for $20 million with frivolous lawsuits (see Aug. 4, Jul. 28). (Bernadette Tansey, “Battle brews over consumer protection in state”, Sep. 28). Update Oct. 26: initiative campaign launched.
“Video games back in US dock”
“Claims by teenage boys in Tennessee that they were acting out the Grand Theft Auto game when they shot at vehicles are threatening to put the US entertainment industry back on trial.” (Rachel Clarke, BBC, Sept. 15; “Game blamed for murder, $100 million lawsuit likely”, Out-Law.com (UK), Sept. 26). Jeff Taylor at Reason Online has the full story (“You Do Know Jack”, Sept. 10) on Miami attorney Jack Thompson, impresario of this and other litigation against videogame makers (see Apr. 3-4, 2002). Thompson is the author of a fondly remembered letter to this site (“go to Afghanistan where your anarchist, pro-drug views will be greatly rewarded” — Apr. 11, 2002) and his website stopkill.com must be seen to be believed.
More: Will Baude points to a relevant opinion by Judge Richard Posner in American Amusement Machine Association v. Teri Kendrick, and Curmudgeonly Clerk also comments.
Ruffing v. Union Carbide “fraud” case goes forward
One of the disturbing trends in the tort system is the expansion of liability among the multiple axes of time and causation. For centuries, a fraud case required a plaintiff who was injured when he or she relied upon a material misrepresentation. More and more, plaintiffs’ attorneys are asking courts to disregard the black-letter requirement of reliance, and simply punish a defendant for an ostensible lie. In some cases, a constitutionally questionable statute permits a lawsuit against a corporation even where the plaintiff has no dealing with the corporation. (See Jul. 1). In others, judges who should know better endorse huge expansions of tort law.
A recent New York appellate court case, Ruffing v. Union Carbide, adopted such an argument in a 3-2 decision. The plaintiff’s mother, Heather Curtis, was allegedly lied to by IBM 23 years earlier; the statute of limitations has run for her, however, so she cannot bring a case. But her minor daughter, Candac?–who was unborn when the alleged misrepresentation occurred–claims a fraud cause of action that is now allowed to go forward. (Candac? suffers from severe birth defects; Ms. Curtis’s other two children do not.) The plaintiffs’ attorney is gleeful about the impact on corporations: “there are very severe legal consequences that they face — uninsurable legal consequences”. IBM denies that there are more instances of birth defects in the children of its employees than among the population in general, but if the causation requirement of reliance can be removed at the stroke of a pen, what’s to stop a court from removing the rest of the causation requirement and just hold IBM strictly liable for any birth defects its workers suffer? (Tom Perrotta, “Woman Can Sue Over ‘Lie’ to Mother”, New York Law Journal, Sep. 25; Bob Herbert, “I.B.M. Families Ask Why?”, New York Times, Sep. 15 archive).
“Trial Lawyers Inc.”
In an editorial yesterday, the Wall Street Journal hailed the new study by the Manhattan Institute (with which I’m affiliated) dissecting the finances and operating methods of what might be “America’s only recession-proof industry: the plaintiffs’ bar. … [The] estimated $40 billion in revenues our tort warriors took in for 2001 was 50% more than Microsoft or Intel and double that of Coca-Cola.” (Sept. 23, online subscribers only). More coverage: Marguerite Higgins, “Lawsuit industry generates billions”, Washington Times, Sept. 24; UPI/Washington Times, Sept. 24. The study itself, along with updates and lots of other related information, can be found at the eponymous site TrialLawyersInc.com.
Legal Reform Summit
As mentioned, I spent Monday attending the fourth annual Legal Reform Summit in Washington, D.C., an event co-sponsored by the U.S. Chamber of Commerce Institute for Legal Reform, the American Tort Reform Association, the Business Roundtable, the Doctors Company of Napa, Calif., and law firms Jenner & Block and Mayer Brown, Rowe & Maw. I gave a short talk on the subject of “who’s next as a target of mass litigation?”, which correspondent Mark Hofmann of Business Insurance magazine wrote up on the magazine’s web journal (“Employers face new wave of lawsuits”, Sept. 22).
I was also surprised and gratified, at the Summit’s awards luncheon, to be named the recipient of its annual “Individual Achievement Award”. The engraved glass award is now sitting on my desk even as I type. Many thanks to all concerned!
Our editor on the road
Postings (from me, at least) will be sparser than usual this week as I will be spending a lot of time on the road. On Mon. the 22nd, I’ll be addressing the annual Legal Reform Summit at the U.S. Chamber of Commerce in Washington. The next day, Tues. the 23rd, I’ll also be in Washington to attend the unveiling of an important new study from the Manhattan Institute entitled Trial Lawyers Inc., which tries to get a handle on the scope, operations and future direction of the industry of suing people, considered as an industry; former Attorney General Dick Thornburgh will give the main presentation. And on Thurs. Sept. 25th, I’ll be a panelist at a daytime discussion of Litigation and the Economy held at Ramapo College of New Jersey.
Update: immigration law fraud
In Miami, immigration lawyer Javier Lopera was sentenced to eight years in prison and faces deportation afterward for his role in operating a visa mill which may have provided as many as 3,500 persons with false papers qualifying them to enter the country as religious ministers or business executives. In another major fraud case, “Virginia lawyer Samuel Kooritzky was sentenced in March to 10 years in prison for crimes involving 2,700 applications submitted in 18 months.” (Catherine Wilson, “Probe of immigration lawyer balloons into massive visa fraud case”, AP/Atlanta Journal Constitution, Aug. 29). Last year Harvard Law-educated Robert Porges, who once ran the country’s largest political asylum practice, and his wife pleaded guilty to charges of racketeering, conspiracy and tax fraud and were sentenced to about eight years in prison for their role in filing 6,000 or more false asylum applications as well as false affidavits (see Sept. 22, 2000; Matt Hayes, “Corrupt Lawyers Aid Immigration Woes”, Fox News, Apr. 29, 2002; “Lawyer, wife admit Chinese smuggling scheme”, AP/Court TV, 2002; Elizabeth Amon, “The Snakehead Lawyers”, National Law Journal, Jul. 17, 2002).