Posts Tagged ‘The Litigation Explosion’

Selling an item on eBay…

…is not enough contact with the buyer’s state to subject you to the jurisdiction of its courts, according to a judge on Staten Island who ruled that even New York’s “long arm” law has its limits. (Mark Fass, “Contact Held Insufficient to Sue eBay Seller”, New York Law Journal, Mar. 7). I discussed the rise of long-arm jurisdiction, and the powerful impetus it can provide to litigation in many situations, in Chapter 4 (PDF) of my book The Litigation Explosion.

P.S. As commenter Elliot points out, “even” was not the mot juste in this circumstance; New York’s long-arm statute has never been interpreted as liberally as, say, California’s.

Author: Penguin tagged my book as “black interest”

Many large bookstores carry sections devoted to works of African-American interest, and a number of book clubs and other specialized selling channels do a thriving business by specializing in black themes and authors. In October, however, Florida-based author Nadine Aldred, who writes under the pen name “Millennia Black“, filed a pro se lawsuit in federal court in Manhattan against her publisher, Penguin Group, on the grounds that Penguin (she alleges) insisted on steering her work into black-interest channels although she would rather have been marketed as a general-interest author. On the Wrong Side of the Alligator has reprinted excerpts from the complaint (Jan. 6).

The estimation of whether a particular author’s work will sell better if marketed to a niche or to a more general audience is inescapably going to depend on case-by-case judgment (assuming that marketing dollars and available cues of cover design, etc. are limited and cannot be dispatched in both directions at once). It is not immediately apparent why Penguin would not have an interest in taking a path that maximized its author’s sales. Aldred’s suit asks $250 million. See also Jeffrey A. Trachtenberg, “Why book industry sees the world split still by race”, Wall Street Journal/Pittsburgh Post-Gazette, Dec. 6.

P.S. Disclosure, for whatever it’s worth: Penguin was my publisher on my first book (The Litigation Explosion).

More: Charles E. Petit of Scrivener’s Error writes to say:

The real problem in this instance is not with Penguin. The real problem is an antitrust nightmare: the book distribution system, which is probably the paradigmatic example of “one man’s antitrust is another man’s economy of scale”–at least until you look into the financing and terms of doing business, which makes me ask “What economies of scale?” The _distributors_ are the ones who demand “pigeonholing” of books, and Penguin’s best defense will be to point out that books that are released _without_ a category tend to stay in distributors’ warehouses unshipped. In other words, “We had to put _some_ category on it as a business necessity, and this is the one that in our commercial judgment was the best fit.”

Contingency fee-o-rama

Anyone interested in the ethical, practical and philosophical case for and against the lawyers’ contingency fee (or contingent fee; usage varies) should be sure to check out two new resources:

* At Point of Law, the new Featured Discussion just underway pits George Mason lawprof Alex Tabarrok, who’s generally supportive of contingency fees, against Jim Copland of the Manhattan Institute, who’s critical;

* David Giacalone, who has written extensively on the problems inherent in protecting clients from overreaching by their lawyers, has now posted a four-part series (one, two, three, four) laying out his views on the pluses and minuses of the contingency fee more systematically than his blog posts have done up to now.

For my own views, see Chapter Two of my 1991 book The Litigation Explosion, which Point of Law has posted in PDF format.

Roger Scruton interview

An excerpt from the interview (pt. II) with the British philosopher at Right Reason:

My advice to President Bush would be to look at the ways in which the power of the state might be needed in order to support the autonomous associations and ‘little platoons’ of American civil society. There are two evils in particular which need to be addressed: the litigation explosion, which has vastly increased the risk of small businesses, and also sown discord among neighbours; and the disaster of the inner cities, which have suffered from the worst effects of American zoning laws and laissez-faire aesthetics, with the result that the middle class has fled from the city centres, causing social decay at the heart, and an unsustainable growth in transportation and suburban infrastructure all around. I believe that federal policies could be initiated that would address both these evils, without increasing the role of the state in the conduct of litigation or in the planning of city streets.

Blawg Review #33

Welcome to Blawg Review #33, the latest installment of the weekly carnival assembling some of the best recent weblog posts about law.

If this is your first visit to Overlawyered, we’re among the oldest legal sites (launched in July 1999, practically the Eocene era), and over the years we’ve built a vast collection of information (with links/sources) on strange, excessive and costly legal cases, examples of the over-legalization of everyday life, pointers on litigation reform, policy stuff of generally libertarian leanings, and much more. We’re a fairly high-volume site; 6-8,000 unique visitors on a weekday is pretty typical. And although our work is regularly critical of trends in the legal profession — or maybe because of that fact — practicing lawyers around the world are among our most valued and loyal readers.

More specifically, there are two of us posting here. One of us (Walter Olson) has been writing about these topics for twenty years as the author of several books (The Litigation Explosion, The Excuse Factory, The Rule of Lawyers) and a great many shorter articles. He’s a senior fellow at the Manhattan Institute who lives and works in Chappaqua, N.Y., north of New York City. More recently Ted Frank, who’s in Washington with the American Enterprise Institute, joined as a regular blogger. Unlike Walter, Ted is a lawyer, having practiced until lately with O’Melveny & Myers. Both of us also blog at the (somewhat more serious-toned) website Point Of Law, which unlike this one is sponsored by our respective institutes and boasts numerous other contributing writers.

Enough about us. Here’s Blawg Review #33, written by Walter with

indented sections by Ted.

* * *

The week in headlines

The talk of the blawg world last week? The New Yorker’s unmasking of the girlish “Article III Groupie” who’s blogged anonymously about federal judges at “Underneath Their Robes”, as, in fact, a (male) Assistant U.S. Attorney in Newark. Much more on that from Ted, below.

The pace of commentary on Samuel Alito Jr.’s Supreme Court nomination has slowed a good bit, despite the release of a 1985 memo detailing Alito’s views on abortion (which occasioned this post by Will Baude taking exception to a Dahlia Lithwick Slate column) and, more tantalizingly, on the Warren Court’s reapportionment cases (see posts by Nathan Newman and Steve Bainbridge). Alito is now heavily favored among bettors to win confirmation, notes San Diego lawprof Tom Smith.

Possibly the week’s strangest headline, discussed by J-Walk: “1,100 Lawyers Leave Saddam Defense Team”. 1,100?

And the Fifth Circuit is coming back to New Orleans (Tom Kirkendall).

* * *

Splendors and miseries of legal practice

Find out:

* What makes a talented 39 year old attorney burn out of a criminal defense practice? (Norm Pattis, Crime and Federalism)

* What sorts of squirm-inducing compliments do criminal defense lawyers hear from their clients after scoring legal points on their behalf? (Ken Lammers, CrimLaw)

* Is it smarter for big law firms to compensate their partners on an “eat what you kill” model, a “lockstep” model, or something between the two? (Bruce MacEwen, Adam Smith, Esq.)

* How do licensing professionals decide what’s a reasonable royalty rate? (Patent Baristas)

* What sorts of bad things can happen to a law firm when one of its individual lawyers behaves rudely to a stranger? (Jim Calloway)

* * *

Controversies galore

Read, ponder, and make up your own mind:

Did Texas execute an innocent man, Ruben Cantu? (Doug Berman)

Conservatives are still griping about the Ninth Circuit, but the new twist is that they think its judges aren’t activist enough. (Eugene Volokh)

Every so often, through luck or pluck, the “fair use” side manages to win one in copyright litigation (Ron Coleman, Likelihood of Confusion).

A group is “pushing for a ballot referendum that would strip South Dakota judges of their immunity from suit for actions taken in their capacity as judges.” Atlanta attorney Jonathan B. Wilson calls it “one of the worst reform ideas ever”.

Michael Newdow, of Pledge of Allegiance suit fame, has filed a new legal action demanding that the motto “In God We Trust” be removed from U.S. currency. Jon Rowe winces.

Our own Ted Frank takes a look at the much-talked of “Dodgeball” document and concludes that it by no means proves Merck’s guilt in the Vioxx matter. (Point of Law). Also at Point of Law, James Copland of the Manhattan Institute and Dr. Bill Sage of Columbia have been engaged in a spirited debate on med-mal litigation.

In a Providence courtroom, the state of Rhode Island is demanding that companies that once manufactured lead paint be held liable for the cost of lead abatement programs. Speechwriter/ghostwriter Jane Genova is liveblogging the case’s retrial, and suggests that the defense side has been making its points more effectively.

A court has ordered the Armour Star meatpacking concern to pay $3 million for using a strength test to screen applicants for a job requiring much lifting. George Lenard’s Employment Blawg originally covered the case last month, Overlawyered picked it up, and now George has returned to the subject, observing that those dissatisfied with the suit’s outcome should realize that sex discrimination law’s distrust of strength tests isn’t something the EEOC just came up with the other day and in fact dates back at least a couple of decades. (I quite concur, having written at length on the subject back in the 1990s.)

The British government recently published a white paper entitled “The Future of Legal Services: Putting the Consumer First”. Dennis Kennedy at Between Lawyers provides a link.

In other consumer news, State Farm conceded earlier this year that when it disposed of many wrecked-and-repaired vehicles it failed to ensure that they were given appropriate “salvage titles”. E.L. Eversman at AutoMuse has been following the issue.

The head of the NY state bar association is advising prospective clients not to be swayed by lawyers’ advertising. David Giacalone, who frequently discusses legal advertising on his blog f/k/a, isn’t impressed.

San Diego lawprof Gail Heriot discovers a convicted rapist is living a few doors down from her, which gets her to thinking about the interaction of “Megan’s Law” statutes and statutory rape.

New York AG Eliot Spitzer has gone after former NYSE head Richard Grasso but not the board that approved Grasso’s plans. Larry Ribstein suspects the worst, charging that Spitzer “gets securities industry political support if he handles this so only Grasso gets hurt.”

* * *

Student division

Scheherezade at Stay of Execution, who wrote a classic post last year giving advice on whether or not to go to law school, now fields a reader’s question: Should I transfer to a higher-ranked law school?

Called for jury duty, Jeremy Blachman gets shown a somewhat hokey video entitled “Your Turn: Jury Service in New York State.” “I wanted to really mock the video, but in all honesty it was a better explanation of the jury system than anything we got in law school”.

Michael Froomkin offers a surprising and counterintuitive quiz on the U.S. Constitution in the form of a “scavenger hunt”. He also suspects that a national ID card might abet price discrimination.

And this from Ted:

Congratulations to Amber, G, Marissa, Grigori, Eve, Jeremy, and others who passed the bar. Third Attempt failed for the second time, and is opening a blog on the subject of his third try, with links to other passers and failers. Only 13% of those who repeated the California bar passed.

On the lighter side, law student Kurt Hunt quotes his prof’s maxim that “Cahoots is not a crime” but wonders what would happen if “tomfoolery, cahoots, no-gooding, antics and shenanigans were redefined as ‘Crime-Lite'”. And Colin Samuels of Infamy or Praise is among the many human beings who don’t manage to eat as well as (UCLA lawprof) Steve Bainbridge’s dog.

* * *

Buzz about blogs

Now I’ll turn the floor over to Ted again to discuss the UTR affair:

The blawgosphere likes nothing more than navel-gazing, and the New Yorker’s outing of anony-blawger “Article III Groupie” as Newark AUSA David Lat and resulting implosion of “her”/his popular “Underneath Their Robes” blawg has generated lots of curiosity and posts with Austin Powers references; the story even made Drudge and the New York Times. Blawg Review has a retrospective look at the blawg. Howard Bashman has done the most original reporting, interviewing Jeffrey Toobin, who revealed Lat’s identity, and publishing the reminiscences of a former co-worker of Lat’s. Denise Howell provides an obituary for the blawg. The Kitchen Cabinet’s “Lily” comments from the perspective of another anonymous blawger, as does Jeremy Blachman, who got a book deal from his anony-blogging. Ann Althouse muses on the nature of humor; Professor Solove and Howard Bashman comment on blogger anonymity, as does Half Sigma, who pulled a similar hoax using the photo of a Russian mail-order bride earlier this year as the image of “Libertarian Girl.” Another blawgger claiming to be a libertarian female, this one with the implausible name of “Amber,” meta-comments on the various shattered blog-crushes exhibited in the garment-rending Volokh Conspiracy reader comments on the subject; JD expresses his own disappointment. (Judge Kozinski claims to have known all along, but Judge Posner has proof of his foresight.) And Ian has sound commentary on A3G’s “status anxiety.” (And speaking of status anxiety, a Harvard Law School admissions dean snarks on Yale and gets snarked back. One can understand the sniping: HLS and YLS are good schools, and there’s a lot of competition for who’s #2 behind Chicago Law.)

Some fallout: anony-blogger “Opinionistas” got an e-mail accusing her of really being a man, and Will Baude and Heidi Bond make a bet over the gender of anony-law-prof Juan Non-Volokh, who promises to come out of the closet soon.

Taking second place in interblog buzz is the IP sticky wicket that awaited the former Pajamas Media (discussed by Blawg Review here) when shortly before launching it decided to switch to the more dignified monicker of Open Source Media. Turned out there was already a well-known public radio show by the name of Open Source which hadn’t been consulted even though it occupied such URLs as opensourcemedia.net. Ann Althouse has been merciless (here, here and here) in needling the OSM organizers, while Prof. Bainbridge piles on with a law and economics analysis of OSM’s market.

Monica Bay passes along the views of legal-tech consultant and frequent CLE presenter Ross Kodner, who charges that law blogs are “narrow-minded” and display “elitist exclusionism”. “I am sick and tired of being repeatedly asked why I don’t have a blog,” he declares. Okay, Mr. Kodner, we promise never to ask you that.

* * *

In conclusion

Finally, intellectual property lawyer Doug Sorocco, of the ReThink(IP) and phosita blogs, arrives “fashionably late to the BlawgThink ball” (in Chicago last week). Sorocco’s Oklahoma City firm also figures prominently (as the acquiring party) in what Dennis Kennedy says may amount to a milestone: “the first move of one legal blogger to the law firm of another legal blogger.” Stephen Nipper has more details about this “move” at ReThink(IP).

By coincidence, and giving us a nice way to wrap things up, phosita is going to be the home of next week’s Blawg Review #34. Blawg Review has information about that and other upcoming matters, as well as instructions how to get your blawg posts considered for upcoming issues.

P.S. As Bob Ambrogi notes, you can now check out — and tag your own location in — Blawg Review’s reader map feature.

First WTC bombing: terrorists 32% to blame, building owners 68%

Twelve years after the event, a jury finds someone to blame for the Islamist van-bomb attack that killed six, injured nearly 1,000, and caused costly business dislocation (Sept. 21, 2005, Dec. 5, 2004, Oct. 12-14, 2001). The culprit? The Port Authority, an agency whose losses are likely to be ultimately borne by New York and New Jersey taxpayers, motorists and air travelers:

The jury voted unanimously that the Port Authority [then-owner of the WTC] was negligent. It found the authority 68 percent at fault for the bombing, while the terrorists who carried it out were 32 percent at fault.

Mr. [David J.] Dean, the plaintiffs’ lawyer, said that because the jury apportioned more than half the blame to the Port Authority, the agency will have to pay 100 percent of any damages for pain and suffering, the so-called non-economic damages, that might be awarded.

Regardless of how the blame was shared, the Port Authority would have to pay 100 percent of any economic damages, like lost business, he said.

Separate legal proceedings will be used to determine actual payouts; “Lawyers for the plaintiffs said they were seeking a total of as much as $1.8 billion.” And this from Mr. Dean: “The case was never about blaming the terrorists.” Well, of course it wasn’t, from his point of view, was it? (Anemona Hartocollis, “Port Authority Found Negligent in 1993 Bombing”, New York Times, Oct. 27).

So there you have it. “What is robbing a bank compared with founding a bank?” wrote Bertolt Brecht, and now we learn that being the target of a terrorist act carries with it more than twice as much responsibility for the resulting damage as actually planting and detonating the bomb. The jury’s (and plaintiff’s lawyer’s) rationale was that security experts had warned that the use of car bombs was on the rise, and yet the PA did not take the (massively disruptive to its tenants) step of closing its enormous underground garage to the public. Inevitably, the lawyers portrayed the earlier advice as a “smoking gun”, a strategem I describe in Chapter 6 of The Litigation Explosion:

Among the favorite smoking-gun generators are memo debates or unheeded suggestions within an organization. The sought-after memo will advise the hotel to dismantle the diving board, the brokerage to go easy on the risky investment, the magazine to kill the hard-hitting investigative story, the hospital to close down the vaccination program that has attracted malpractice suits. (They knew it was wrong to go ahead!) New York City injury king Harry Lipsig’s law firm got a $1.8 million settlement for forty-six-year-old postal worker Freddie Brown, mugged and badly hurt in a housing project lobby, after they found a security specialist whose recommendations to upgrade security at the project had gone unheeded. “We couldn’t lose,” jubilated lawyer Thomas Stickel. “With that witness, we had the city by the throat.” Actually, it would be a wonder if the files of a city as intensively governed as New York did not contain unheeded recommendations by the bushelful on countless subjects.

The logic of lawyers’ search for “smoking guns” is that an organization faces one of three unattractive choices: put itself at risk for verdicts like this; implement any and all recommendations it gets from security experts, no matter that many of them will be costly and intrusive (like, say, stadium patdowns for football fans) and will guard against dangers that never would have materialized; or alternatively, arrange its affairs so that fewer safety recommendations enter its files in the first place, either by asking its experts to commit fewer ideas to paper, or just by not employing them. The New York Sun quotes me today in its coverage of the story: David Lombino, “Port Authority Is Held Liable in Bombing That Killed Six in 1993 Attack on WTC”, New York Sun, Oct. 27. More:Ann Althouse and commenters discuss the verdict, while Michael Krauss at Point of Law hopes it will be thrown out on grounds of lack of proximate cause.

Teacher’s pet barracuda

Via Lyle Roberts at 10b-5 Daily (Aug. 29), we learn of the latest advance in methods guaranteed to bring us a more ruthless legal profession: “Christopher Waddell, general counsel of the California State Teachers’ Retirement System, said that he uses both bounty and sliding-scale fees in order to ‘incentivize’ his outside counsel to go after personal assets. CalSTRS, the nation’s third-largest public pension fund, has promised its lawyers a 2.5 percent bounty, plus an undisclosed fee, in a pending suit against the former directors of WorldCom.” (Sue Reisinger, “Securities Fraud: Attorneys Are Receiving Bounties for Pursuing Officers and Directors”, Corporate Counsel, Aug. 24). For the reasons most other countries’ legal systems consider contingency fees for lawyers to be unethical, see Chapter 2 (“A Piece of the Action”) of The Litigation Explosion (PDF).

Champerty and maintenance watch

The law firm of Cellino & Barnes bills itself as the largest personal injury firm in western New York, and the “faces of [name partners Ross M.] Cellino and [Stephen E.] Barnes grace a reported 150 billboards across upstate New York. The attorneys’ names and likenesses frame their phone number and the one-word question ‘Injured?'” However, the firm has now gotten itself into hot water: an appellate panel has suspended Cellino and censured Barnes for, among other infractions, “advancing financial assistance to clients that was unrelated to the expenses of litigation”.

The unanimous five-judge panel found that Cellino and Barnes advanced financial assistance to clients beyond the expenses of litigation and, when they subsequently became aware that such actions violated the disciplinary rules, “arranged for the establishment of, funded and controlled [a] company owned by respondent Cellino’s cousin and that they did so in order to continue loaning money to clients.”

At common law, champerty (supplying clients with money in exchange for a share in the action) and maintenance (supplying them with money in order to keep their lawsuits going) were both offenses, but the prohibitions have tended to fall into disuse or to be repealed outright in recent times. On champerty, see Jun. 19, 2005, Jun. 27, 2004, Oct. 25, 2003, and this excerpt from The Litigation Explosion. (Mark Fass, “Bad Lawyer, No Billboard”, New York Law Journal, Jun. 14; Michael Ziegler, “Cellino & Barnes leaders punished”, Rochester Democrat & Chronicle, Jun. 11; Rick Pfeiffer, “Lawyers Cellino and Barnes found guilty of violating conduct code”, Tonawanda News, Jun. 11). More on the Barnes law firm: Jan. 31, 2006.

Broadcast appearances

I’m scheduled to join a reporter and anchor in the studios of New York’s WCBS-Channel 2 this afternoon to discuss the retirement of Justice Sandra Day O’Connor; look for me sometime in the 5-to-6 p.m. slot.

More (7:30 p.m. Eastern): I’ll be on WCBS-TV again tomorrow between 9 and 10 a.m. for a second appearance. And (updated) on Monday morning I did two Texas radio phone interviews, including KTSA (San Antonio) with Steve Gehrlein, on the battle over Justice O’Connor’s seat, and KOLE (Beaumont), on the litigation explosion. P.S. on WCBS I mentioned Judge Edith Jones. It’s fun to be a mentioner!

Signed a waiver? Doesn’t matter

Courts stoking the litigation explosion: “For years, companies that sponsor higher risk activities such as scuba diving and skydiving have asked participants to sign waivers designed to absolve them from lawsuits if injury or death results. Yesterday, a [New Jersey] state appeals court declared those release forms do not bar relatives from filing a wrongful death lawsuit. … The court said while [Eugene J.] Pietroluongo [who died in a scuba diving accident at age 44] had the power to sign away his right to sue, the law did not allow him to sign away the rights of his survivors to bring a wrongful death lawsuit.” The court declared the waiver, voluntary or no, to be unenforceable as a policy matter. Attorneys, presumably deadpan, said the decision “could result in more lawsuits”. (Kathy Barrett Carter, “Survivors can sue despite a waiver”, Newark Star-Ledger, Apr. 13)(& letters to the editor, Jul. 26: first, second).