Overlawyered: Chronicling The High Cost Of Our Legal System

Posts Tagged ‘class actions’

Water-bill refunds for Seattle residents

Aren’t class actions great? The only problem is that the money for the residents will have to come from, well, themselves:

“We are having an accounting game. It’s basically saying, ‘we’re sorry you paid it from this pocket, instead it should have come from this pocket,” said Seattle City Council member Richard Conlin. …

“The only party benefiting from this are the law firms,” said Conlin.

The attorneys who fought the city on the hydrants will get $4.2 million plus interest charges.

City water customers will get refunds averaging $45 but will be obliged to pay surcharges averaging $59 to cover the cost of the settlement [KOMO].

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A Prediction For 2009

Not quite gone yet.

Which firm will be the first to file a class action against Microsoft over the New Year’s Eve Zune crash? Apparently every 30 gigabyte Zune in America is stuck on a loading screen, refusing to play music due to some bizarre Y2K-like programming error.

This would be a posterchild case of the sort that many advocates say is the merit of the class action.  Millions (well, perhaps thousands – the Zune is also a good illustration of Microsoft’s inability to get things right the first time, or the second) of people have been injured, or at least inconvenienced, in some small fashion, all suffering the same injury, none of them able to obtain legal assistance due to small damages in each individual case, against a heavily lawyered, deep pocket defendant.

A settlement, if such an action is filed, would also illustrate the problems inherent in the form, with a few lawyers and an individual named class representative getting a bonanza of millions spread among a few people, while class “members” receive coupons good for one free download, assuming they’re willing to take the time to fill out a form and mail it to a Post Office box in Oregon.

All of this assumes that the problem, reported this morning, hasn’t already been fixed.  Personally, if I owned a Zune, and Microsoft irrevocably “bricked” it, I would emulate my hero Mitchell Berns and get a default judgment in small claims court over my lunch hour, when Microsoft inevitably failed to appear.

Still, whether the inconvenience is permanent, or just one day’s duration, the Zune case is a perfect class action.  I predict that in some plaintiffs’ firm, somewhere, an associate attorney’s New Year’s has already been ruined.  Maybe I should upset my wife and do it myself tomorrow.  Does anyone here own a 30 gigabyte Zune, and are you willing to be a class representative?

Thanks to Kip Esquire for the notion.

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Katrina Formaldehyde Plaintiffs: Not A Class

Judge Kurt Engelhardt of the Eastern District of Louisiana, who held in October that the Federal Emergency Management Agency does not enjoy immunity from suit by plaintiffs seeking to recover from exposure to formaldehyde in trailers, yesterday dealt plaintiffs a setback by holding that they are not entitled to present their claims against various trailer manufacturers through a class action.

I have not read the opinion, but one can find a good summary of the issues presented in this story from the Times Picayune, which emphasizes the court’s concern over impossibility of determining liability, proximate causation of injury, and damages for a “class” of people of varying health, age, demographics, and lengths of exposure.  Each plaintiff will have to try his or her case separately.

All of the above are individual issues that render analysis on a class-wide basis utterly impossible, ” Engelhardt ruled in a 50-page decision. “Each plaintiff’s claims and alleged injuries will require an examination of individual evidence.

This makes sense because, from a practical standpoint, it would be impossible to present over 100 chemical injury claims to one jury, a problem that isn’t present in class settlements such as Vioxx.  (The Vioxx case still had problems aplenty.)  The opinion also emphasizes that each of the trailer manufacturer defendants may have separate defenses, including different manufacturing techniques and levels of formaldehyde within its trailers.

If anyone knows of a publicly available link to the opinion (I’m not writing this from a computer where a PACER download would be practical), it would be greatly appreciated.

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Starbucks job-application suit fails

Starbucks’s job application asked prospective baristas if they’d been convicted of a crime in the past seven years and added for “CALIFORNIA APPLICANTS ONLY”, at the end, that minor marijuana possession convictions more than two years old didn’t have to be disclosed, in accord with a state law along those lines. Entrepreneurial lawyers then tried to steam-press $26 million or so out of the coffee chain on the following theory: that the clarification was placed too far down the application after the original question; that Starbucks had therefore violated the California Labor Code; and that each and every Starbucks job applicant in California since June 2004, perhaps 135,000 persons, was owed $200 in statutory damages regardless of whether they had suffered any harm. Per John Sullivan of the Civil Justice Association of California, the lawyers also took the position that “it didn’t matter that two of the three job applicants who signed on as named plaintiffs testified in court that they read the entire application and knew they didn’t have to mention a marijuana conviction (which neither had anyway!)” The court refused to certify the class and made the following observations (courtesy CJAC blog):

* “There are better ways to filter out impermissible question on job applications than allowing ‘lawyer bounty hunter’ lawsuits brought on behalf of tens of thousands of unaffected job applicants. Plaintiffs’ strained efforts to use the marijuana reform legislation to recover millions of dollars from Starbucks gives a bizarre new dimension to the every day expressions ‘coffee joint’ and ‘coffee pot.'”

* “Enhancing the prospects for obtaining a settlement on a basis other than the merits is hardly a worthy legislative objective.”

* “Given the size of the class, the potential exposure is so large that the pressure to settle may become irresistible. …’This is a valid concern: Many corporate executives are unwilling to bet their company that they are in the right in in big-stakes litigation, and a grant of class status can propel the stakes of a case into the stratosphere …This interaction of procedure with the merits justifies an earlier appellate look. By the end of the case it will be too late — if indeed the case has an ending that is subject to appellate review.'”

* “The civil justice system is not well-served by turning Starbucks into a Daddy Warbucks.”

More coverage: Aaron Morris, Metropolitan News-Enterprise, and Carlton DiSante & Freudenberger. One of the plaintiff’s lawyers in the case, H. Scott Leviant, is known for his blog The Complex Litigator.

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New Orleans: brawl between class action lawyers

And not a figurative brawl either: “fisticuffs broke out between attorneys Madro Bandaries and J. Robert Ates, who were pushing rival class-action suits about the late handling of insurance claims …[lead attorney Wiley] Beevers and Bandaries have traded hostile rhetoric in recent weeks as they try to gain advantage for their rival class-action suits against Louisiana Citizens Property Insurance Corp., which could produce $5 million in spoils for the victorious legal team.” (Rebecca Mowbray, “Brawl erupts between two lawyers at civil court”, New Orleans Times-Picayune, Dec. 16).

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Altria v Good affirmed 5-4

The Supreme Court rejected (h/t Beck/Herrmann) tobacco companies’ argument that the FTC’s use of the Cambridge Filter Method standard of measuring tar and nicotine impliedly preempted lawsuits against the tobacco companies for advertising their cigarettes using data from the Cambridge Filter Method standard of measuring tar and nicotine.  The fact that the federal government disavowed preemption lends another data point in support of Professor Catherine Sharkey’s argument that the Court tends to defer to the Solicitor General’s position on preemption disputes.  Justice Thomas’s dissent, which would undo the unworkable Cipollone plurality, appears to me to be the stronger argument, but it didn’t carry the Kennedy Five.

The fact pattern is the subject of numerous multi-billion dollar lawsuits against tobacco companies alleging that their sales of light cigarettes are fraudulent.  The light-cigarette consumer fraud litigation still suffers from constitutional flaws relating to due process in aggregate litigation, but these remain to be resolved.

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Wii class action claim: controller keeps flying out of our hands

“Nintendo’s Wii game remote controller has a defective wrist strap that lets the thing fly out of the users’ hands while they simulate tennis, nunchucks or similar actions, and then it crashes into TVs, walls and children,” according to an intended class action filed by attorney Robert Kleinman of Austin, Texas on behalf of a Colorado woman. (Courthouse News, Dec. 4 via Above the Law).

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November 29 roundup

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