Overlawyered: Chronicling The High Cost Of Our Legal System

Posts Tagged ‘antitrust’

From comments: lawyer referral fees

Reader Phil Grossman, in comments to yesterday’s post about the hawking of injury case leads to lawyers, advances some interesting contentions, including some I’m not knowledgeable enough to evaluate, about lawyer referrals and fee-splitting:

…Lawyers are the only professional group that considers it ethical to pay referral fees. The bar associations allow and approve referral fees as long as they are paid only to other lawyers.

In the sort of mass tort lawsuits that this company is dealing in, it is extremely common for ‘clients’ to be bought and sold, sometimes multiple times, with a typical referral fee being around a third of the contingency fee. The general public doesn’t realize that the lawyer advertising on TV or out on the Internet for mass tort clients is usually just a marketer, selling all the clients he collects to other lawyers. It is actually more lucrative to advertise for clients and then sell them to other lawyers than to do the actual work of representing clients.

If, for example, someone is injured in an auto accident, it is common for a relative or friend who happens to be a lawyer to offer to refer the victim to a “good personal injury lawyer”. But the victims aren’t aware that their relative or friend is probably making money off of their accident by collecting around a third or so of the contingency fee from the lawyer they have been referred to. Although bar association rules usually say the referral fee and its amount should be disclosed to the client, in practice it is always kept secret from the client, who thinks his or her lawyer relative or friend is just being altruistic.

But it appears that this company might be trying to collect money up front from its targeted lawyers, rather than taking the normal percentage payment of their referral fees from the contingency fees after the fact. If so, the targeted lawyers need to be very cautious indeed.

And:
Read On…

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Update: Lawrence Poliner v. Texas Health Systems appeal

We hear frequently that the medical profession doesn’t do enough to police its own. Cases like that of Lawrence Poliner might explain why. In 1997, in response to complaints by nurses at Presbyterian Hospital of Dallas, and the allegation by a doctor that Poliner had performed an angioplasty on the wrong artery, the hospital asked Poliner to stop work while they investigated. These limited privileges lasted 29 days, followed by a unanimous decision to suspend, a five-month suspension from echocardiography privileges, and then reinstated Poliner five months later subject to conditions that he consult with other cardiologists.

For this, Poliner sued for defamation and under federal antitrust law, alleging that other cardiologists were trying to dominate the market and prevent his competition. The five-month suspension had federal immunity under the Health Care Quality Improvement Act, 42 U.S.C. § 11101 et seq. (just one of many federal tort reforms that promote safety), but the trial court held that the 29-day limited-privileges created a cause of action that should go to a jury. Poliner lost $10,000 in income over that time “but was awarded more than $90 million in defamation damages, nearly all for mental anguish and injury to career. The jury also awarded $110 million in punitive damages”–despite the fact that Poliner would have to prove damages were caused by the allegedly unprivileged temporary limitation rather than by the five-month suspension. We covered the initial $366 million verdict in 2004, the outraged medical blogosphere reaction, and the remittitur to a still ludicrous $22.5 million in 2006.

Read On…

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June 30 roundup

  • To hold a party in the public parks of Bergenfield, N.J., you’ll need homeowner’s or renter’s insurance to throw on the line [Bergen Record]

  • More on suits against Victoria’s Secret over allegedly hazardous bras, thongs, and undergarments, including an aspiring class action over contact rashes [Heller/On Point News]

  • Supreme Court will review Navy sonar controversy, which we’ve long covered in this space [Adler @ Volokh]

  • Hope of legalized online gambling fades, and you can blame Republicans on Capitol Hill for that [Stuttaford, NRO “Corner”]

  • Disney said to be behind bad proposal to soak foreign tourists to fund visit-America promotions [Crooked Timber]

  • “Squishier than most”: Nocera on A.M.D.’s predatory-pricing antitrust suit against Intel [NYT]

  • Process serving company lied about delivering SEC witness subpoena and falsified later document, judge rules, awarding victim $3 million [Boston Globe]

  • Revisiting the false-accusation ordeal of Dr. Patrick Griffin, and how it relates to pressure to have needless chaperones at medical procedures [Buckeye Surgeon, Dorothy Rabinowitz Pulitzer piece]

  • Overlawyered turns nine years old tomorrow (more). Commenters: how long have you been reading the site? Any of you go back to its first year?

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June 21 roundup

  • Sure enough, former Milberg lawyers sue the convicted ex-Milberg lawyers for breach of fiduciary duty. I was wondering when that was going to happen. [WSJ Law Blog; NYLJ/law.com; earlier]
  • Why file grievance against a fellow attorney who’s only stolen $200,000 from clients? Colleagues wonder [Las Vegas Review-Journal via ABA]
  • Judge: No evidence of wrongdoing by Kenneth Pasternak. Too bad he can’t get his three years back. Meanwhile SEC keeps bringing enforcement cases on same repeatedly rejected theory of liability. [WSJ; Law Blog]
  • “What the AP and The New York Times’ Hansell don’t seem to realize is how hostile an act it is to send lawyer letters to individuals.” [Jarvis via Patterico]
  • “When judges act like politicians, the judicial selection process – elected or appointed – becomes increasingly political. Action and reaction. The politicization of the court led to the politicization of the elections for justices. … When justices arrogate political policymaking to themselves, they should not be surprised when they are held to the same standards as politicians.” [Wisconsin Policy Research Institute via American Courthouse; I said that, too]
  • Even Susan Estrich finds the Alex Kozinski web site mini-to-do as evidence of media bias. [Estrich; Patterico link roundup]
  • Senator McCaskill shows her ignorance on the Anheuser-Busch merger and corporate officer duties. [Hodak]
  • A clever attorney will already have a fill-in-the-blanks product liability complaint drafted against Lego. [Childs]
  • Hugo Chavez expropriates wealth to consolidate dictatorship. American lawyer helps. Somehow I don’t think we’ll see an Alien Tort Claims Act suit against his law firm. [AmLaw Daily]

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What newspapers need, and why antitrust law may block it

Jonathan Rauch:

Unfortunately, however, it is probably illegal for newspapers to form a subscription consortium [enabling consumers to pay for web content through a one-stop subscription to hundreds of newspaper sites]. Antitrust law was written generations ago, when newspapers were local monopolies or duopolies. Today, of course, they compete with the whole Internet. The problem now is that they have too little market power, not too much.

Even so, antitrust law regards collective pricing as collusion. “There is a well-established tunnel vision in applying antitrust laws,” says Lee Simowitz, a media lawyer with Baker Hostetler in Washington. “Broader values don’t enter the equation.” Allowing newspapers to combine forces, he says, is “really up to Congress.” …

Sooner or later, newspapers will need to get their acts together — literally — and charge collectively for content, and it will be in the public’s interest to let them do so.

(“How to Save Newspapers–and Why”, National Journal, Jun. 14; will rotate off site).

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Mark Steyn on the suing-OPEC bill

“[Then Congress] went off and passed by 324 to 82 votes the so-called NOPEC bill. The NOPEC bill is, in effect, a suit against OPEC, which, if I recall correctly, stands for the Oil Price-Exploiting Club. “No War For Oil!,” as the bumper stickers say. But a massive suit for oil — now that’s the American way! …

“Congress hauls Big Oil execs in for the dinner-theatre version of a Soviet show trial and then passes irrelevant poseur legislation like the NOPEC bill. Plus ca change you can believe in, plus c’est la meme chose. The NOPEC bill is really the NO PECS bill — a waste of photocopier paper passed by what C. S. Lewis called ‘men without chests’.” (“Fill Her Up with Hot Air”, National Review Online, May 24)(via Lindgren @ Volokh).

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Update: alt-weekly predatory pricing case

Antitrust law trips up pillar-of-counterculture-journalism Village Voice Media, cont’d: “San Francisco Superior Court Judge Marla Miller raised the amount the Weekly [SF Weekly] must pay in damages to the Bay Guardian — from $6.3 million to $15.9 million — for undercutting its rival with below-cost ads.” (Meredith May, “Judge raises damages in case against SF Weekly”, San Francisco Chronicle, May 21; earlier; sample SF Weekly business-bashing piece, channeling plaintiff’s lawyers’ contentions in Parmalat case). “Predatory pricing — selling ads below cost with the goal of putting your competition out of business — is typically something alt weeklies cover, not something they get caught and fined for.” (Josh Feit, TheStranger.com (which competes with VVM’s Seattle Weekly), Mar. 5).

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Congress: let’s sue OPEC

This wretched proposal to pursue sensitive foreign policy goals by way of treble-damage antitrust suits against sovereign nations is met by a hail of dead cats from Below the Beltway, Gateway Pundit, Liberty Reborn, Buffalog, Coalition of the Swilling, Sense of Events, Q and O, Coyote, Politics in the Zeros, Socrates’ Academy, It’s a Funny Thing, Bronze Blog, Discerning Texan, Blog About Nothing, It Looks Obvious, NoBrainer’s, Wheeling Intelligencer, and Collideoscope, among others. Earlier here.

And yet more: Perry de Havilland, Samizdata (“a derangement of legislators”)(via ASI).

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April 29 roundup

  • “Dog owners in Switzerland will have to pass a test to prove they can control and care for their animal, or risk losing it, the Swiss government said yesterday.” [Daily Telegraph]
  • 72-year-old mom visits daughter’s Southport, Ct. home, falls down stairs searching for bathroom at night, sues daughter for lack of night light, law firm boasts of her $2.475 million win on its website [Casper & deToledo, scroll to “Jeremy C. Virgil”]
  • Can’t possibly be right: “Every American enjoys a constitutional right to sue any other American in a West Virginia court” [W.V. Record]
  • Video contest for best spoof personal injury attorney ads [Sick of Lawsuits; YouTube]
  • Good profile of Kathleen Seidel, courageous blogger nemesis of autism/vaccine litigation [Concord Monitor*, Orac]. Plus: all three White House hopefuls now pander to anti-vaxers, Dems having matched McCain [Orac]
  • One dollar for every defamed Chinese person amounts to a mighty big lawsuit demand against CNN anchor Jack Cafferty [NYDN link now dead; Independent (U.K.)]
  • Hapless Ben Stein whipped up one side of the street [Salmon on financial regulation] and down the other [Derbyshire on creationism]
  • If only Weimar Germany had Canada-style hate-speech laws to prevent the rise of — wait, you mean they did? [Steyn/Maclean’s] Plus: unlawful in Alberta to expose a person to contempt based on his “source of income” [Levant quoting sec. 3 (1)(b) of Human Rights Law]
  • Hey, these coupon settlements are giving all of us class action lawyers a bad name [Leviant/The Complex Litigator]
  • Because patent law is bad enough all by itself? D.C. Circuit tosses out FTC’s antitrust ruling against Rambus [GrokLaw; earlier]
  • “The fell attorney prowls for prey” — who wrote that line, and about which city? [four years ago on Overlawyered]

*Okay, one flaw in the profile: If Prof. Irving Gottesman compares Seidel to Erin Brockovich he probably doesn’t know much about Brockovich.

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December 18 roundup

  • “Of all the body parts to Xerox!” Another round of stories on efforts to reduce liabilities from office holiday parties [ABA Journal, Above the Law, and relatedly Megan McArdle]

  • New edition of Tillinghast/Towers Perrin study on insurance costs of liability system finds they went down last year, which doesn’t happen often [2007 update, PDF]

  • Vermont student sues Burger King over indelicate object found in his sandwich; one wonders whether he’s ruled out it being a latex finger cot, sometimes used by bakery workers [AP/FoxNews.com]

  • Good discussions of “human rights commission” complaints against columnist Mark Steyn in Canada [Volokh, David Warren and again @ RCP, Dan Gardner; for a contrasting view, see Wise Law Blog]

  • Having trousered $60-odd million in fees suing Microsoft in Minnesota and Iowa antitrust cases, Zelle Hofmann now upset after judge says $4 million in fees should suffice for Wisconsin me-too action [Star-Tribune, PheistyBlog]

  • Australian rail operator will appeal order to pay $A600,000 to man who illegally jumped tracks, spat at ticket inspectors, hurt himself fleeing when detained [Herald Sun]

  • Lawyers’ fees in Kia brake class action (Oct. 29, Oct. 30) defended by judge who assails honesty of chief defense witness [Legal Intelligencer]

  • Who deserves credit for founding Facebook? Question is headed for court [02138 mag]

  • Yes, jury verdicts do sometimes bankrupt defendants, as did this $8 million class action award against a Kansas City car dealer [KC Star, KC Business Journal]

  • Dispute over Burt Neuborne’s Holocaust fees is finally over, he’ll get $3.1 million [NY Sun]

  • So long as we’re only fifty votes behind in the race for this “best general legal blog” honor, we’re going to keep nagging you to vote for Overlawyered [if you haven’t already]

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