Overlawyered: Chronicling The High Cost Of Our Legal System

Posts Tagged ‘scandals’

“The Use of Litigation Screenings in Mass Torts: A Formula for Fraud?”

Lester Brickman has a new must-read paper on an under-reported problem:

Lawyers obtain the “mass” for some mass tort litigations by conducting screenings to sign-up potential litigants en masse. These “litigation screenings” have no intended medical benefit. Screenings are mostly held in motels, shopping center parking lots, local union offices and lawyers’ offices. There, an occupational history is taken by persons with no medical training, a doctor may do a cursory physical exam, and medical technicians administer tests, including X-rays, pulmonary function tests, echocardiograms and blood tests. The sole purpose of screenings is to generate “medical” evidence of the existence of an injury to be attributed to exposure to or ingestion of defendants’ products. Usually a handful of doctors (“litigation doctors”) provide the vast majority of the thousands and tens of thousands of medical reports prepared for that litigation.

By my count, approximately 1,500,000 potential litigants have been screened in the asbestos, silica, fen-phen (diet drugs), silicone breast implant, and welding fume litigations. Litigation doctors found that approximately 1,000,000 of those screened had the requisite condition that could qualify for compensation, such as asbestosis, silicosis, moderate mitral or mild aortic value regurgitation or a neurological disorder. I further estimate that lawyers have spent at least $500 million and as much as $1 billion to conduct these litigation screenings, paying litigation doctors and screening companies well in excess of $250 million, and obtaining contingency fees well in excess of $13 billion.

On the basis of the evidence I review in this article, I conclude that approximately 900,000 of the 1,000,000 claims generated were based on “diagnoses” of the type that U.S. District Court Judge Janis Jack, in the silica MDL, found were “manufactured for money.”

Despite the considerable evidence I review that most of the “medical” evidence produced by litigation screenings is at least specious, I find that there is no effective mechanism in the civil justice system for reliably detecting or deterring this claim generation process. Indeed, I demonstrate how the civil justice system erects significant impediments to even exposing the specious claim generation methods used in litigation screenings. Furthermore, I present evidence that bankruptcy courts adjudicating asbestos related bankruptcies have effectively legitimized the use of these litigation screenings. I also present evidence that the criminal justice system has conferred immunity on the litigation doctors and the lawyers that hire them, granting them a special dispensation to advance specious claims.

Finally, I discuss various strategies that need to be adopted to counter this assault on the integrity of the civil justice system.

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Rielle Hunter scandal: update on the Andrew Young real estate issue

(Bumping Aug. 14 6:43 pm post to keep at the top of the page.)

In a post I made yesterday, I noted a transaction between Andrew Young and Timothy Toben that I suggested may raise the possibility of a sweetheart deal on the purchase and sale of a 5000-square-foot Raleigh home. I have since done some additional research that rules out that possibility–it turns out that Young purchased a plot of land in a different county, which explains what had otherwise appeared to be a discrepancy–but raises other interesting issues about Young’s cash flow shortly after the National Enquirer allegations first appeared. I have updated the post, and regret the error in the premise.

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The Rielle Hunter scandal: where did Andrew Young get his money?

Update: See important update below. The Toben-Young transaction appears to be for a different parcel of land than the $1.2 million house–but the new documents reveal something else that’s interesting. More details below.

Andrew Young, who publicly claims to be the father of Rielle Hunter’s baby (though he hasn’t been heard from since John Edwards’s confession of an affair), was moved to Santa Barbara by the generosity of John Edwards’s campaign chairman, trial lawyer Fred Baron. He was paid $3,500/month to work for the Edwards campaign. Yet the Raleigh News & Observer reports that Andrew Young and his wife sold their Raleigh house to Carolyn Grissom for a jaw-dropping $1.2 million on February 14, 2007, and moved into the Chapel Hill Governors Club country-club gated community, where they rented a few doors down from Hunter. (Rentals there are available for as low as $1700/month, and home prices range from $289,000 to $2.3 million, so nothing necessarily unusual about that.)

(Update: New documents I’ve found show that the Toben-Young transaction appears to be for a different parcel of land than the $1.2 million house. More details below. This paragraph, based on the mistaken reading of the transaction that it was for the Raleigh home, is incorrect. I regret the error, but the correction reveals something else interesting about the Toben transaction; see the discussion below.) What’s more unusual is that North Carolina real-estate records on the web show that Andrew and Cheri Young purchased the 5000-square-foot house for $300,000 on September 28, 2005. (Update: this is incorrect. The house was purchased in 2001.) (The home was built in 1989, so they weren’t buying a vacant lot and building.) So either Andrew Young is a secret real-estate genius on a level not seen since Hillary Clinton’s commodities trading, and was able to flip a house for a 300% and $900,000 return in under eighteen months, or something else is going on.

It’s interesting to note that the Youngs purchased the place from North Carolina real-estate developer Timothy Toben–a long-time North Carolina Democratic fundraiser who donated $6,500 to the Edwards campaign in 2007 (which, if the FEC reports are accurate, exceeds the federal campaign limits substantially). If Toben gave Young an unusually good deal, the 2005 timing suggests that Young got the deal for some reason other than Rielle Hunter, but, if so, what?

Meanwhile, if one looks up the home on Zillow.com, one sees that Zillow is skeptical of the $1.2 million purchase price, and values the house for substantially less (though well over $300,000), because of “anomalies” in the deal, though it does not specify what those anomalies are. (I found no indication that Carolyn Grissom is anything other than an innocent homebuyer; she’s not listed in the FEC database.)

This could all be coincidence in hindsight, and there could be a perfectly innocent explanation for all of this. It could be that the $300,000 figure is wrong, though then that raises the question of how Young was able to afford a 5000-square-foot house on a $42,000/year salary. But reporters with more resources than I might want to look into whether an Edwards staffer was getting a sweetheart deal from an Edwards contributor, why, and whether campaign finance laws were violated.

And welcome Michelle Malkin readers; apologies that so many of you clicked through that you briefly crashed the site. For Overlawyered’s coverage of the Rielle Hunter scandal, see the tag, and don’t miss our years-long coverage of John Edwards and his trial-lawyer record.

(August 14: Welcome Kaus and Instapundit readers. Post was corrected August 14, because it incorrectly said “Chapel Hill” instead of “Raleigh” as the location of the $1.2 million house.)

Read On…

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Claim: Spitzer’s floozy used my lost ID

New Jersey dental assistant Amber Arpaio found herself an asterisk-to-an-asterisk in the history of political scandals when it was reported that Ashley Dupre used Arpaio’s lost driver’s license to pass for more than 17 when she made a “Girls Gone Wild” video that later became notorious after the exposure of Dupre’s paid liaison with Gov. Eliot Spitzer. So now Arpaio is suing Dupre and Joe Francis, impresario of the “Girls Gone Wild” series. The news coverage of the lawsuit contains no indication that Arpaio suffered any damage to her credit record or other tangible interests from the affair, but she wants upwards of $10 million in cash solace for defamation and invasion of privacy, and, per her attorney, because “when someone searches her name on the Internet, pornographic material comes up.” Much better, when someone searches her name on the Internet, for intimations of litigiousness to come up. (Nancy Dillon, “Duped by Dupre: N.J. woman charges Spitzer call girl with identity theft”, New York Daily News, Jul. 17; AP/Comcast, Jul. 17)(& Prettier Than Napoleon). Plus: complaint at The Smoking Gun (h/t commenter VMS).

More 7/22: Thanks to commenter Eric Turkewitz for pointing out that Dupre had posed as Arpaio in actual news coverage, not just in the signing of film releases and the like, which makes the basis for the suit less unreasonable than I had hastily assumed.

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Ky. fen-phen foreman: “There’s a lot of people that should have been on trial that weren’t.”

Louisville Courier-Journal:

After 52 hours of deliberation over eight days, a federal jury yesterday declared it was hopelessly deadlocked in deciding whether attorneys William Gallion and Shirley Cunningham Jr. defrauded clients of $65 million in Kentucky’s 2001 fen-phen settlement.

After the judge declared a mistrial, the jury foreman, Donald Rainone of Erlanger, said jurors were stuck at 10-2 to acquit the defendants, and had been at that vote for much of their deliberations.

“We felt the prosecution just didn’t have a strong enough case,” Rainone said in a phone interview in which he strongly criticized the prosecution for being unprepared and focusing its case on only Gallion, Cunningham and a third lawyer, Melbourne Mills Jr.

“There’s a lot of people that had their hand in this,” he said. “There’s a lot of people that should have been on trial that weren’t.”

Rainone declined to say who else should have been on trial, saying he didn’t want to “get sued.”

Of course, that the prosecution failed to indict participants in the fen-phen scam who also stole from tens of thousands to tens of millions doesn’t explain why one votes to acquit the criminal defendant attorneys who stole millions–except for the fact that the defendants were able to blame the empty chair for their actions. If the defendants’ allegations about Stan Chesley’s role are half true, the question remains why Ohio disciplinary authorities have not so much as opened an investigation, much less failed to disbar him. But we will perhaps learn more as the civil trial progresses. Meanwhile, as Peter Bronson writes, “giving immunity to someone so powerful, wealthy and politically wired was everything that destroys public trust in the justice system.”

Judge William O. Bertelsman, who has taken senior status, has recused himself from the retrial; the new judge, Danny Reeves, will likely be requested to lower the eight-digit bond for Gallion and Cunningham, who remain in jail. Melbourne Mills, who was acquitted, says he has already spent the $20 million he was paid for his role in the case–a case his lawyer told a jury that he was too drunk to work on and didn’t understand the underlying law. Nice work if you can get it.

Off-the-record reports I am receiving about the trial blame prosecutors’ performance (such as failing to object to defendant expert opinion that contradicted the facts) and Judge Bertelsman’s instructions to the jury; it also seems to me that the defendants were given far too much leeway to argue the law before the jurors when the judge should have given a straightforward instruction that the underlying case was or was not a class action covering all future Kentucky claimants rather than allow argument over that simple legal question. (Answer: it wasn’t. The settlement with AHP explicitly says it’s a lump-sum settlement for existing plaintiffs requiring the attorneys to comply with Rule 1.8, and there is no indemnification provision contrary to defense testimony arguing otherwise.)

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Melbourne Mills acquitted; jury deadlocked

Melbourne Mills’s defense that he was too drunk to know what was going on when he and two other attorneys stole tens of millions of dollars appears to have created reasonable doubt in the mind of a Kentucky jury.  Mills may have been helped by the revelation that his two co-counsel tried to hide $50 million from him, too, permitting his attorney to more plausibly blame the scheme on others.   Or the jury may have believed the argument of Mills’s attorney that the three attorneys were too stupid to understand the settlement agreement and didn’t intend to steal any money (though they transferred a lot of money from their personal account to their clients when they learned the bar was investigating, and lied to the bar about how much money their clients received).  (Jim Hannah, “One cleared in diet drug case”, Cincinnati Enquirer, Jul. 2; Beth Musgrave, “Fen-phen lawyer Mills is found not guilty”, Lexington Herald-Leader, Jul. 2; Beth Musgrave, “Jury hears closing arguments in fen-phen trial”, Lexington Herald-Leader, Jun. 24; AP/Kentucky Post, Jun. 23).  The jury, today in its seventh day of deliberations, claims a deadlock on the other two attorneys, no doubt confused by why Judge Jay Bamberger and co-counsel and Democratic bigwig Stanley Chesley have not also been indicted. Defendants Cunningham and Gallion have sought to blame the tens of millions they stole on the fact that Bamberger (who was indirectly paid millions) judicially approved the settlement and Chesley (who was directly paid tens of millions) was allegedly the architect of the settlement that ensured lawyers would get far more than their contracts with their clients provided. Since there is no dispute that those two were indeed intimately involved in the scheme, the jury isn’t the only one confused why the Kentucky fen-phen three are being treated differently than the judge, the judge’s former law partner, and Stan Chesley, who all profited mightily.

Read On…

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Dickie Scruggs gets the five-year max

ILR comments. The judge-bribing attorney had requested a 30-month sentence (in conjunction with the now-standard set of hundreds of letters listing his supposed good deeds); his plea agreement provided for a five-year maximum sentence, which he got. He’ll still have the jet and millions of dollars when he gets out, even after paying the $250,000 fine imposed at the sentencing. David Rossmiller and Folo will undoubtably continue their excellent coverage, or check our previous Dickie Scruggs coverage.

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Peter Bronson on Stanley Chesley’s testimony

From the Cincinnati Enquirer columnist, a refreshingly acerbic account of the erstwhile Master of Disaster’s time on the stand in the Kentucky fen-phen trial, during which he compared himself to Tiger Woods in explaining why he should not be asked to stoop to taking an hourly fee:

Jurors have been anesthetized by six weeks of watching witnesses avoid the truth the way cats avoid a bath. …

…when [defense attorney O. Hale] Almand tried to make Chesley admit – yes or no – that he knew his own lawyer told prosecutors he would take the Fifth unless he got immunity, Chesley’s serial evasions made the courtroom squirm.

I counted at least nine tries. After the seventh, the judge twice ordered Chesley to answer yes or no.

He would not. He wheedled, ducked, swerved and danced. He blustered about attorney-client privilege, corrected the grammar of the question, and griped about how he has been mistreated by the press. …

If you’re hoping to hit a slip-and-fall lotto jackpot by suing Amalgamated Banana Peel Inc., Chesley is just the guy to take on herds of high-paid lawyers. But if you’re looking for a straight answer under oath, look somewhere else.

(“Tiger Woods of Torts”, Cincinnati Enquirer, Jun. 19).

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