Archive for the ‘Liability / Lawsuits / Insurance’ Category.

Software Patent Horror

Ever since Amazon managed to patent one-click ordering, I have been skeptical of software patents.  When I was in the Internet field, I saw companies patent some, uh, patently obvious stuff, roughly akin to patenting an on/off switch.  Or even worse, multiple companies would get patents for the equivalent of an on/off switch, with this company claiming it has the patent for on-off switches for lighting, and this one for appliances, and this one for all electrical devices, and then all three end up sitting in court for about 10 years arguing about who has the patent for turning on the bulb in your refrigerator.

Kevin Drum brings us an amazing horror story of a patent that apparently I owe licensing fees for -- and probably you do too.

Vicinanza soon got in touch with the attorney representing Project Paperless: Steven Hill, a partner at Hill, Kertscher & Wharton, an Atlanta law firm.

"[Hill] was very cordial and very nice," he told Ars. "He said, if you hook up a scanner and e-mail a PDF document—we have a patent that covers that as a process."

It didn’t seem credible that Hill was demanding money for just using basic office equipment exactly the way it was intended to be used. So Vicinanza clarified:

"So you're claiming anyone on a network with a scanner owes you a license?" asked Vicinanza. "He said, 'Yes, that's correct.' And at that point, I just lost it."

Drum has a good discussion, including some prior art with which he actually participated.

Great Moments In Lawsuits

I have mixed feelings about Groupon.  Having been an executive at Mercata 10+ years ago, I recognize that they have gotten further than we did with the group buying model by a) waiting for there to actually be social media and b) delivering electronic goods (coupons) rather than hard goods.  As a customer, I have satisfactorily participated in several groupons and as a business we have used it a couple of times as a promotional program.  As an investor, I was short Groupon for quite a while, convinced that they had no particular barrier to entry for competitors like Amazon who could grab the market if there was enough money at stake.

So, all that aside, I was fascinated by the recent settlement of a class action lawsuit.  Prior to the lawsuit, all customers could get a full refund of their Groupon through a simple contact with Groupon customer service.  After the lawsuit, customers during the class action period can only get a partial refund and then only by going to a separate class website and hassling with forms and doing a lot of waiting.  The plaintiffs will actually get less than they would have had the lawsuit not gone forward, the difference being the millions required to pay off the tort lawyers to go away.

Having just had to pay the fees of a tort lawyer who brought a frivolous suit against our company just to make him go away, I am sympathetic.  Had the plaintiff approached me directly, I might have given her a few bucks just to settle and avoid getting lawyers involved.  But instead the lawyer got part of his fees paid in the settlement and the plaintiff got zip.  Basically just legal blackmail, with the plaintiff as unpaid pawn.

Enjoy the NFL This Weekend, You May Not Have It For Long

I think Walter Olson is dead on with this:

Steve Chapman at the Chicago Tribune looks at the cultural and legal responses to the mounting evidence that professional football inflicts brain damage on many of its players. He quotes my view that if the litigation system carries over to football the legal principles it applies to other industries, the game isn’t likely to survive in its current form.  [sorry for quoting the whole thing Walter, I just couldn't figure out how to excerpt it]

There is a very good chance that the NFL could go the way of Johns Manville or Dow Corning.  Those companies still exist after being sued into bankruptcy, but that is only because they had other businesses to shift into.  The NFL just has football.  And after reading the concussion stories recently, plaintiff's lawyers are going to have a hell of a lot better scientific case than they had with breast implants.    I honestly think it will take an act of Congress to keep the NFL alive, giving them some sort of liability exemption similar to what ski resorts got years ago.

And don't think the NFL does not know this.  If you are wondering why they handed out insanely over-the-top penalties for bounty-gate in New Orleans, this is why.  They are working to establish a paper trail of extreme diligence on player safety issues for future litigation.

As an aside, I find it frustrating that there is not a better helmet solution.

As a second aside, there is a guy here in Phoenix who was showing off an accelerometer for football helmets, with some kind of maximum single g-force or cumulative g-force trigger that would cause a player to be pulled from a game, sort of like how a radiation badge works.  Good idea.  Look for these to be mandatory equipment in high schools in colleges.    Takes the absurd guess work out of concussion diagnosis today, particularly since this diagnosis is done by people (the player and their team) who have strong incentives to decide that there was no concussion.

As a third aside, there are those who argue helmets are the problem.  Just as people drive less safely with seat belts and air bags in cars, helmets lead to less care on the field.  I will say I played rugby for years (without a helmet of course) and never had one concussion, or any head hit anywhere close to a concussion.  In amateur rugby in the leagues I played in, reckless behavior that might lead to injuries was strongly frowned upon and punished by the group.  Teams that played this way quickly found themselves without a game.  There were plenty of ways to demonstrate toughness without trying to injure people.

Attention Lawyers, We need a Hand, Not a Brain: A Licensing Parable

Several sites have reposted this Craigslist ad, gasping in shock at it as evidence of massive foreclosure fraud

We are a collection agency/debt buyer. What we are looking for is a part time attorney to work for us as our corporate counsel, on our payroll, about 5 to 6 hours a week. This is a short term employment arrangement, no longer than 90 to 120 days.

Your job will be to sign pleadings, praecipe for entry of appearances, praecipe for writ of execution, and garnishment orders. Our paralegal will prepare all paperwork for your signature. This is very standard stuff for us.

If you are an attorney looking for challenging legal work, this is not for you. WE DO NOT NEED F LEE BAILEY- we are fee shopping. If you passed your boards with a D+, and you can sign your name, you possess all the credentials required for this job. If this opportunity interests you, please feel free to reply to this email with a brief description of who you are, when you got your law license, and what you will be needing from us in the way of compensation.

I would instead offer it as a lesson in the stupidity of state-enforced professional licensing arrangements.  Let me rewrite it:

We have all the legal knowlege we need.  We know exactly what the forms look like and mean.  We have written all the documents and tested them over time during our long presence in this business and we know them to meet our legal needs.   We have no need, in other words, for legal help.

However, attorneys have gotten together and created an attorneys guild, and, what's more, have convinced the government to pass laws that require membership in the guild to perform certain gate-keeping functions.  In our case, we need a member of the guild to sign some forms to make them legal, both because the guild has strong influence and because certain folks have convinced everyone that all mortgage pain in this country came from having a machine perform this signature function rather than a flesh and blood hand.  So we need a flesh and blood hand rather than a machine to sign foreclosure documents.  Unfortunately, that hand has to be attached to a brain that has passed the bar exam, and because the guild is pretty good at limiting its membership, we expect to have to pay an absurd amount of money for this trivial function that could be duplicated by a six-year-old (and used to be performed by a simple $100 machine).

Don't get us wrong -- if we were on trial for our lives or facing a nasty, complicated lawsuit or wanted to draft a custom contract to protect our interests, we would be very happy to consider the opinion of third party licensing groups as to the merit of a particular attorney.  Ironically, though, even then current licensing would be absurd, for in this case it would not greatly exceed our quality requirements (as it does for signing our foreclosure paperwork) but it would vastly undershoot our need due diligence needs.   Perhaps there is some legal function for which attending an ABA-accredited school and passing the bar exam is the perfect level of quality assurance, but we have not found it yet.

More SLAPP-happy Lawyer Fun

Apparently the co-owner of the Miami Heat Ranaan Katz does not like to be criticized by the plebes.  So like many rich guys nowadays, he sued a blogger who he felt was saying hurtful things about him, because as we all know the First Amendment has a built in exception for college students and billionaires who have a right not to be offended by other peoples' speech.  So far, this is just the usual SLAPP nuttiness, up to and including a rallying of support by attorneys willing to help out pro bono.  This latter can usually solve the problem, as these suits gain their strength not from any legal merit but from the ability to intimidate ordinary people unfamiliar with the legal system and without the resources to hire top attorneys to defend themselves.

But, as with the case of serial moron Charles Carreon, Katz and his attorneys then proceeded to drive right over the cliff.  Because they then sued the attorney's representing the blogger on the brilliant theory that by providing legal advice to the blogger, the attorneys made themselves parties to the bloggers "crimes."  Seriously.   By which theory Jerry Sandusky's attorneys will soon be serving time for child abuse.

Charles Carreon Totally Loses It

I will admit, I can get angry, especially when I believe someone has done me wrong.  But over time, I have learned to distrust this anger.  About twenty of twenty of the actions that I have most regretted in life or that have backfired on me have been undertaken during such periods of anger -- from yelling at innocent airline employees to writing scathing business letters that only make a situation worse.  I have learned to impose on myself a sort of count-to-ten rule, where if I am really ticked off about something, I force myself to wait 24 hours before I respond.  It works for me.

Attorney Charles Carreon needs to figure out a parallel strategy, or else he needs a business partner or family member who can perform an intervention for him.  Because last week, he totally lost it.

As you might remember from our last episode, Carreon was representing a web site called Funnyjunk where people post content strip-mined from other sites.  One of those sites, the Oatmeal, got mad about their cartoons ending up on this site without compensation, and called them out online.  No lawsuit, nothing unnatural, just good old American criticism.

I don't know enough about copyright law to know if Funnyjunk was in the right or wrong.  The Oatmeal could have tied it up anyway in copyright suits, but chose not to.  So of course Funnyjunk responded in asymmetric fashi0n by hiring Carreon to threaten the Oatmeal with a $20,000 lawsuit.  Apparently they were really sad and hurt by the Oatmeal's criticism, and argued that the Oatmeal abused their copyrighted name by using it online in the criticism (a hilarious charge given how the whole thing started).  By the way, in case anyone is confused about this, though this approach is tried constantly, courts have routinely held that there is no such copyright that bars someone from criticism or comment using one's name.

At this point, this all constituted irritating but fairly normal (unfortunately) behavior of people and lawyers online who don't really understand the First Amendment.

Then Charles Carreon drove over the cliff.

On Friday, he apparently sued not only the Oatmeal  (for criticizing him online, causing other people to hate him, and for violating his copyright in his own name) but also, get ready for this, the National Wildlife Federation and the American Cancer Society.  Why?  Because when the Oatmeal first got Carreon's demand letter, its proprietor said he would raise $20,000 for charity instead, and send Funnyjunk a picture of the money.  To date, nearly $200,000 has been raised for the two charities by Oatmeal fans who wanted to show their support.

Apparently, according to Carreon's suit  (I still can't believe he actually filed this), the money that was raised for these charities was tainted because it was raised in the name of making him look like a doofus.  Which, by the way, is exactly right.  I am not a huge fan of either charity (they use too much money in both cases for political activism rather than solving problems), but I gave $100 just to help hammer home the point that Charles Carreon is an idiot.

Perhaps this guy has no friends.  But if he does, one of them needs to be grabbing his collar and shoving him up against the wall and explaining in one syllable words how suing two prominent charities is NOT a path to success in the war to reclaim his reputation.  The guy basically kneecapped himself with his opening shot.   He will soon learn that while it may be increasingly against the law on college campuses to hurt someone's feelings with your speech, it is not illegal in the rest of America.  And he will also soon learn all about California's tough anti-SLAPP law, as he finds himself headed to Bank of America to take out a second mortgage on his home so he can pay the legal bills of those he has sued with the intent to suppress their speech.

Update:  Mr. Carreon, welcome to the Streisand effect.  Last Thursday, none of his first page Google results mentioned this incident.  Today, there are five.

Update #2:  Mr. Carreon claims his web site has been hacked.  Maybe.  But I will observe that for the web NOOB, "buying the cheapest Godaddy hosting account that is fine for my normal 12 visitors but crashes when I get 50,000 hits in an hour from Reddit" and "hacking" often look the same.

Update #3 and irony alert:  If you want to see something odd, check out the web site he and his wife run.  The site is full of very raw critiques that would easily land a desk full of lawsuits in the Carreon mailbox if the legal system routinely accepted the type of censorious lawsuits he himself is attempting to initiate.  If he takes the linked site down, the screenshot is here.  As an aside, I am constantly amazed at how liberals, including those who claim to be feminists, seem so obsessed with the sexuality of Conservative women and couch so much of their criticism in terms up to and including rape images (particularly oral sex).

Shareholder Lawsuits

The general utility of shareholder lawsuits has confused me for quite some time.  Way back in the blogging stone age of 2006 I wrote a guest post at Overlawyered that said in part:

But from a philosophical standpoint, shareholder suits have never made much sense to me. While I can understand the shareholders of the company suing a minority shareholder who might be enriching themselves disproportionately (e.g. Rigas family at Adelphia), suits by shareholders against the company they own seem… crazy.

Any successful verdict for shareholders against the company would effectively come out of the pockets of the company’s owners who are.. the shareholders. So in effect, shareholders are suing themselves, and, win or lose, they as a group end up with less than if the suit had never been started, since a good chunk of the payout goes to the lawyers. The only way these suits make financial sense (except to the lawyers, like Bill Lerach) is if only a small subset of the shareholders participate, and then these are just vehicles for transferring money from half the shareholders to the other half, or in other words from one wronged party that does not engage in litigation to another wronged party who is aggressively litigious. Is there really justice here?

OK, you could argue that many of these shareholders are not suing themselves, because they are past shareholders that dumped their stock at a loss. But given these facts, these suits are even less fair. If these suits are made by past shareholders who held stock (ie, were the owners) at the time certain wrongs were committed, they are in fact paid by current and future shareholders who may well have not even owned the company at the time of the abuses, and who may in fact be participating in cleaning the company up. So these litigants are in effect making the argument that because the company was run unethically when they owned it, they are going to sue the people who bought it from them and cleaned it up? Shouldn’t the payment be the other way around, with past owners paying current owners for the mess they left?

So I found this decision in a case at Sears refreshing:

A federal appeals court on Wednesday put the kibosh on a shareholder antitrust suit against the board members of Sears Holding Corp, finding that the suit only served to enrich the plaintiffs' lawyers.

The ruling from the Chicago-based U.S. Court of Appeals for the 7th Circuit marks the latest victory for Ted Frank, of the Center for Class Action Fairness, who argued that the suit was an abuse of the legal system and conferred no benefit on Sears shareholders at large. The 7th Circuit agreed.

"The only goal of this suit appears to be fees for the plaintiffs' lawyers," Judge Frank Easterbrook wrote for a unanimous three-judge panel.

Several law firms, including Vianale & Vianale, filed the proposed class action on behalf of two named investors in 2009. The derivative suit accused two Sears directors of holding positions on the boards of several competing companies, in violation of federal antitrust law.

Given the high cost of litigating an antitrust suit, Sears reached a settlement with the investor plaintiffs, agreeing to get rid of one of the directors and pay $925,000 to the investors' attorneys.

Frank, who specializes in challenging class action settlements, argued that the resolution was a raw deal for Sears shareholders, costing them legal fees and a director they had recently re-elected. The deal also would not prevent someone else from filing a copycat suit, given that one of the two targeted directors would remain on the Sears board. What's more, the problem of interlocking boards is usually resolved when the Department of Justice or the Federal Trade Commission asks a company to fix the violation.

Frank, himself a Sears shareholder, asked to intervene in the case to block the settlement, but the Illinois district court refused, finding that the plaintiff investors adequately represented the interests of Frank and the other shareholders.

On appeal, the 7th Circuit panel reached the opposite conclusion, finding the interests to be "entirely incompatible." The panel sent the case back to the district court, with instructions to allow Frank to intervene and to rule in favor of the Sears defendants.

"The suit serves no goal other than to move money from the corporate treasury to the attorneys' coffers, while depriving Sears of directors whom its investors freely elected," Easterbrook wrote.

Charles Carreon Discovers the Streisand Effect in 3..2..1...

I hate excerpting Ken at Popehat in times like this, because I simply love reading all his prose and hope you will do so as well rather than settling for the excerpt only.  I love Neal Stephenson's Cryptonomicon not because it is his best story (it's not) but because it has some of his best prose.  Six pages on eating Cap'n Crunch and ten or so on getting a wisdom tooth extraction, and I was left begging for more.  Ken is my blogging equivalent.  I could read a whole book just with Ken calling out censorious lawyers for threatening bloggers to try to shut them up.

That said, he has been writing of late about a site called Funnyjunk sending a lawyer-cum- Tony-Soprano after the Oatmeal.  Today he really rips into said lawyer, named Charles Carreon:

See, a legal threat like the one Charles Carreon sent — "shut up, delete your criticism of my client, give me $20,000, or I'll file a federal lawsuit against you" — is unquestionably a form of bullying. It's a form that's endorsed by our broken legal system. Charles Carreon doesn't have to speak the subtext, any more than the local lout has to tell the corner bodega-owner that "protection money" means "pay of we'll trash your shop." The message is plain to anyone who is at all familiar with the system, whether by experience or by cultural messages. What Charles Carreon's letter conveyed was this: "It doesn't matter if you're in the right. It doesn't matter if I'm in the wrong. It doesn't matter that my client makes money off of traffic generated from its troglodytic users scraping content, and looks the other way with a smirk. It just doesn't matter. Right often doesn't prevail in our legal system. When it does, it is often ruinously expensive and unpleasant to secure. And on the way I will humiliate you, delve into private irrelevancies, harass your business associates and family, disrupt your sleep, stomp on your peace of mind, and consume huge precious swaths of your life. And, because the system is so bad at redressing frivolous lawsuits, I'll get away with it even if I lose — which I won't for years. Yield — stand and deliver — or suffer."

Our system privileges Charles Carreon to issue that threat, rather than jailing or flogging him for it. And so Carreon supports bullying like that. He's got a license to do it. He knows that his licensed threats — coming, as they do, on the [slightly odd] letterhead of a lawyer — inspire far more fear and stress than the complaints of a mere citizen, and by God he plays it to the hilt.

By contrast, Charles Carreon doesn't like shows of force that you or I can muster. "I'm completely unfamiliar really with this style of responding to a legal threat," he sniffs. There's a whiff of Paul Christoforo of Ocean Marketing in there — the sentiment "how was I to know that I was picking on someone stronger than I am? Is that fair?" But what he means is "if the people I threaten don't have to dig into their pockets to go hire a lawyer, and spend unpleasant hours with that lawyer, and lay awake at night worrying, and rely on a lawyer who is part of my privileged culture, but can stand up for themselves . . . how can I intimidate them so easily?" Perhaps some rude Oatmeal followers did actually send true threats or abuse to Charles Carreon's office — which I condemn. That's morally wrong and not helpful to the cause of free speech; it's harmful. But I fail to see why Charles Carreon sending that threat letter is more legitimate, admirable, or proper than ten thousand Oatmeal fans sending back the message that Charles Carreon is a petulant, amoral, censorious douchebag. It doesn't take lawyers, it doesn't take law school, it doesn't take any special privilege conferred by the state — it only takes a robust right of free expression — sending it back by blogging it, tweeting it, posting it on Facebook, and posting it in comments on forums. Charles Carreon has power derived from an inadequate legal system and letters of marque from the State Bar; The Oatmeal has the power of goodwill and community respect earned by talent. There's no reason to exalt Carreon's power and condemn The Oatmeal's.

Read it all.  The Oatmeal's response is also classic.

Ken at Popehat Fires Off Another Classic Letter

There is nothing I find so entertaining as when Ken at Popehat fires off a legal letter in response to a particularly ludicrous legal action or threat thereof.  Check this one out.  I am not a fan of reality TV but I would tune in for a weekly show featuring Ken pouncing on yet another asshat.

PS-  the comments are hilarious, with random women throwing themselves at Ken.

Damned if You Do, Damned if You Don't

I am increasingly convinced that contradictory regulations that make it impossible even for people of goodwill to be in compliance are a feature, not a bug of the current system.

…Common sense dictates that any medication that carries with it a warning that it “may cause drowsiness” or that the patient should “use caution” if operating machinery may pose a risk in the workplace. It is for this reason that many employers adopt a policy requiring employees to self report the use of prescription pain killers. This is especially important in potentially dangerous workplaces such as manufacturing and construction.

In a recent action that defies common sense, the Equal Employment Opportunity Commission has taken the position that such policies are unlawful under the Americans With Disabilities Act. The ADA prohibits an employer from conducting “medical inquiries” without a business reason to do so. In EEOC v. Product Fabricators, Inc., an action in federal court in Minnesota, the EEOC required a manufacturing employer to abandon its policy of encouraging employees to inform supervisors if they are under the influence of narcotic pain killers such as Vicodin. The EEOC took the position that an employer cannot ask about prescription pain killer usage unless it has “objective” evidence that an employee is impaired on the job.

This places employers in a very difficult position….

Walter Olson also has comments at the link.

Workers Comp. and Unemployment

Breaking news from California:

The Workers' Compensation Insurance Rating Bureau (WCIRB) made it official and submitted a mid-year filing for a 9.1% increase in the pure premium advisory rate that Insurance Commissioner Dave Jones approved less than six months ago. The proposed July 1 increase follows the 37% increase that Jones approved for January 1 that was hidden by the change in benchmarks for pure premium rates that was made at his request....

The Bureau insists that an increase of this magnitude is necessary to combat the continued deterioration in the claims experience, as well as an uptick in claim frequency in the 2010 accident year. Much of the increase will also go to pay for the higher loss adjustment expenses carriers are incurring fighting liens and litigating permanent disability claims. Projected ALAE costs are up to $11,403 per indemnity claim for the 2011 accident year compared to $10,698 the year before.

A 9.1% increase a half year after a 37% increase is just crazy.  This tends to confirm three issues I have written about before:

  1. People are filing workers comp claims as a substitute for or a supplement to unemployment.  Our company has seen a significant increase in people "coincidentally" suffering an injury on one of the last few days, and particularly the very last day, before they are to be laid off.  Only such fraud explains an increase in claims when economic activity is way down, particularly when more dangerous professions like construction employment fell much more than office employment in the recession.  We have also seen, by the way, an increase in frivolous labor lawsuits in CA coincident with the economic decline.  A year ago I had an employee in CA tell me that she had attended a brainstorming session the night before among several of my ex-employees trying to generate ideas for ways to sue our company.  I can't wait for an improvement in the economy when the returns of working are higher than the returns of brainstorming ways to extract money from our company via the legal system.
  2. California in general does a bad job of policing workers comp. fraud.  Woe to the employer that actually attempts to question an outrageously suspicious claim.  Last time I tried to do so in CA I got slapped with a lawsuit.
  3. All states do a terrible job policing permanent disability claims.  I hire a lot of older workers.  I can't tell you how many people show up at my door trying to be paid under the table because they don't want to endanger their permanent disability by having a record of getting paid for doing very physical outdoor work for us.  They assure me they are 100% capable to do heavy physical labor.  Since I don't pay anyone off the books, they end up finding work elsewhere.   Many of you may not believe such people exist, but I have met a number of folks who consider getting a permanent disability, or at least something a doctor will testify is a permanent disability, the equivalent of hitting the lotto.  I have even been sued by a woman for submitting testimony to the social security administration that might have harmed her chances of getting a permanent disability ruling.  The lawsuit stated that if she was denied the disability payment after I testified that I had seen no evidence of any limitations in what she could do on the job,  that I should be liable for paying her the lifetime amount she would have gotten.  So I wimped out and withdrew my testimony and let the taxpayers pay her rather than farting around with a lawsuit.

The Mapmakers Petition

This could have also been labelled as from the files of "anti-trust is not about consumers."  Apparently, a mapmaker in France has successfully sued and won damages from Google for unfair competition, ie from providing Google Maps for free.

Just as in the Microsoft anti-trust case and just about every anti-trust case in history, companies who brought the suit are really trying to stop an up-start competitor from trashing their business model, but they have to couch this true concern in mumbled words about the consumer.  Specifically, they raise that ever-popular boogeyman of jacking up prices once the  monopoly is secured.  The next time this happens, of course, will be the first time.  Its a myth.  For example, in Google's case, left unsaid is how they would jack up their prices when at least two other companies (Bing, Mapquest) also provide mapping services online for free.

Patent Process Officially Broken

Google awarded a patent for changing the Google logo on particular days with date-relevent doodles.  Really.  From the patent award

A system provides a periodically changing story line and/or a special event company logo to entice users to access a web page. For the story line, the system may receive objects that tell a story according to the story line and successively provide the objects on the web page for predetermined or random amounts of time. For the special event company logo, the system may modify a standard company logo for a special event to create a special event logo, associate one or more search terms with the special event logo, and upload the special event logo to the web page. The system may then receive a user selection of the special event logo and provide search results relating to the special event.

Put a turkey on Thanksgiving in your website banner, and just wait for the Google lawyers to call.  Outstanding.

Recording Industry Responsible For Entire World Economic Output

Apparently the RIAA has demanded $75 trillion in damages from file sharing site Lime Wire.  Via Overlawyered.

Official Announcement: Civil Rights Movement Can Declare Victory

The Civil Rights movement can officially declare victory, if this is the kind of racism being faced by African Americans today.  Seriously, if the harms are really this trivial, let's move on to other issues.  If there is still meaningful racism out there, let's stop clogging the courts and wasting our time with this kind of trivial BS and work the real issues.

Postscript:  It could be that I am just not hip to modern lingo.  I suppose that the words "please turn off your cell phones during the movie" is actually a well known code phrase meaning "back to slavery all of you" and I am just not aware.  If I am missing something, please let me know so I too can feel appropriately victimized next time I go see a movie.

Nice Satire

If you want some enjoyable satire this Friday, this is a nice piece from Ken at Popehat, who has gone the libel tourism route by using French courts to sue a US editor for a bad review of a US book by a US author.

The article becomes all the sweeter as a recent email he received raises the possibility that this particular academic completely missed the heavy-handed irony and satire.

What a Bunch of Wusses

It would be difficult to find many folks who are more paranoid protectors of privacy information than I am.  But I have to say the tone of this is really pathetic.  (via Overlawyered)   Seriously, how many people think these folks feel truly harmed and how many think they are acting in order to try to score a tort payoff?

Consumers are hoping to cash in on last week's state Supreme Court ruling that it's illegal for retailers to ask customers for their ZIP Codes during credit card transactions, except in limited cases.

More than a dozen new lawsuits have been filed against major chains that do business in California, including Wal-Mart Stores Inc., Bed Bath & Beyond Inc., Crate & Barrel andVictoria's Secret. More filings are expected in the coming weeks.

The flurry of litigation stems from a decision last week againstWilliams-Sonoma Inc. in which the state high court ruled unanimously that ZIP Codes were "personal identification information" that merchants can't demand from customers under a California consumer privacy law.

This rush to court is pathetic on a number of levels

  • Zip code is personal, really?  Do you believe that?
  • Just say no.  Seriously.  I do it all the time -- I get asked for a phone number or a zip code and I always answer "no, sorry."  You know how many retailers have decided they did not want to make a sale to me at that point?  Zero.
  • It's ex post facto law.  Nowhere was it made clear to retailers that the law barred collecting zip codes.  Not until a group of judges effectively made this individual practice illegal did it become so, and then it was enforced retroactively on stores.  If the legislature wants collecting zip codes to be illegal, it should have written in the law that collecting zip codes is illegal.  Or, as a minimum, liability should begin on the day after the court decision.  Suing someone for taking a zip code last year when it only became clear this week it was illegal is classic ex post facto law.
  • Ira Stoll has a funny comment - guess what the first piece of information Jerry Brown's web site asks for?

Strategic Vs. Tactical Victory

This is a strategy that I think makes a lot of sense (via Overlawyered)

Vowing no longer to be Mister Nice City (assuming it ever qualified as such), Chicago is now willing to pay $50,000 to fight (successfully) a police-misconduct case it could have settled for $10,000:

Even though the city stands to lose money litigating every case under $100,000, a spokeswoman for the law department said that recently compiled figures showed the strategy seemed to be saving taxpayer money by dissuading lawyers from suing the police unless they are confident of victory.

I used to work for Emerson Electric, a company that amongst its divisions made both ladders and table saws, two sure-fire litigation magnets.  We got ladder suits, for example, from some guy who propped the base of the ladder up on 6 stacked paint cans and then leaned the top of the ladder on some high voltage lines, all during a hurricane and got hurt, and immediately sued the ladder manufacturer for making a defective product.

Emerson decided early on it was going to be a hard target.  It hired in-house legal staff and fought nearly every single suit all the way to court if necessary.  If attorneys had a good case of a real defect or negligence, fine, they could win their day in court.  However, if they were looking for a quick percentage of a settlement, they needed to look elsewhere.  Turned out there were a lot of the latter.

It's Official: Trial Lawyers Manufactured the Vaccine Autism Scare

From CNN:

A now-retracted British study that linked autism to childhood vaccines was an "elaborate fraud" that has done long-lasting damage to public health, a leading medical publication reported Wednesday.An investigation published by the British medical journal BMJ concludes the study's author, Dr. Andrew Wakefield, misrepresented or altered the medical histories of all 12 of the patients whose cases formed the basis of the 1998 study -- and that there was "no doubt" Wakefield was responsible.

"It's one thing to have a bad study, a study full of error, and for the authors then to admit that they made errors," Fiona Godlee, BMJ's editor-in-chief, told CNN. "But in this case, we have a very different picture of what seems to be a deliberate attempt to create an impression that there was a link by falsifying the data."

Why anyone took a study serioiusly based on a population of 12 whole people always amazed me.  Anyway, to continue:

Wakefield has been unable to reproduce his results in the face of criticism, and other researchers have been unable to match them. Most of his co-authors withdrew their names from the study in 2004 after learning he had had been paid by a law firm that intended to sue vaccine manufacturers -- a serious conflict of interest he failed to disclose. After years on controversy, the Lancet, the prestigious journal that originally published the research, retracted Wakefield's paper last February.

The series of articles launched Wednesday are investigative journalism, not results of a clinical study. The writer, Brian Deer, said Wakefield "chiseled" the data before him, "falsifying medical histories of children and essentially concocting a picture, which was the picture he was contracted to find by lawyers hoping to sue vaccine manufacturers and to create a vaccine scare."

According to BMJ, Wakefield received more than 435,000 pounds ($674,000) from the lawyers. Godlee said the study shows that of the 12 cases Wakefield examined in his paper, five showed developmental problems before receiving the MMR vaccine and three never had autism.

"It's always hard to explain fraud and where it affects people to lie in science," Godlee said. "But it does seem a financial motive was underlying this, both in terms of payments by lawyers and through legal aid grants that he received but also through financial schemes that he hoped would benefit him through diagnostic and other tests for autism and MMR-related issues."

Wakefield has been responsible for a whole lot of misery and probably not a few deaths over the last decade.  Just losing his medical license, which happened earlier this year, is getting off cheap.

Government Oversight Worse Than Private Alternatives

Via Overlawyered:

As part of the Consumer Product Safety Improvement Act of 2008 (CPSIA), Congress mandated that the CPSC create a "publicly available consumer product safety information database" compiling consumer complaints about the safety of products. Last week, by a 3-2 majority, the commission voted to adopt regulations that have dismayed many in the business community by ensuring that the database will needlessly include a wide range of secondhand, false, unfounded or tactical reports. The Washington Times editorializes:

"¦[Under the regulations as adopted last week] anybody who wants to trash a product, for whatever reason, can do so. The commission can leave a complaint on the database indefinitely without investigating its merits "even if a manufacturer has already provided evidence the claim is inaccurate," as noted by Carter Wood of the National Association of Manufacturers' "Shopfloor" blog"¦.

Trial lawyers pushing class-action suits could gin up hundreds of anonymous complaints, then point the jurors to those complaints at the "official" CPSC website as [support for] their theories that a product in question caused vast harm. "The agency does not appear to be concerned about fairness and does not care that unfounded complaints could damage the reputation of a company," said [Commissioner Nancy] Nord.

Commissioners Nord and Anne Northup introduced an alternative proposal (PDF) aimed at making the contents of the database more reliable and accurate but were outvoted by the Democratic commission majority led by Chairman Inez Tenenbaum. Nord: "under the majority's approach, the database will not differentiate between complaints entered by lawyers, competitors, labor unions and advocacy groups who may have their own reasons to "˜salt' the database, from those of actual consumers with firsthand experience with a product."

Any number of private actors have already tackled this problem. has probably the most comprehensive set of product reviews, and has taken a number of steps (e.g. real name reviews) to increase trust in their system.  Reviewers who are shills (either for or against a product) are quickly outed by other reviewers.   Another site whose reviews I rely on a lot is TripAdvisor, which has hotel and other travel reviews.   TripAdvisor allows the reviewed hotels to respond to individual reviews in a way that the consumer can see to get both sides of the story.

Apparently, none of this back and forth will be allowed in the CPSC data base.  The Democrats who wrote the process only want bad stuff in the data base, so it will not allow manufacturer responses or even positive reviews to appear.  The only possible justification for the government to run this database would be for the government to take a role in investigating and confirming or overturning claims and complaints, but it is clear it won't be doing this either.   This will just be a location for disgruntled people to drop turds on various manufacturers, all with the imprimatur of the government.  I can't see consumers finding much value here compared to the alternatives, but I can see the value in a courtroom to be able to stuff a government site with unsubstantiated claims and then use that site to say that the "official" government site is full of criticisms of the product.

Shareholder Suits

From Overlawyered today:

"A new study in the Financial Analysts Journal casts serious doubt on the premise [of litigation social efficiency], at least when it comes to shareholder class actions. In most cases, the authors found, the litigation mainly serves to punish shareholders who have already suffered from a downturn in their stock. Only suits targeting illegal insider trading, and to a lesser extent, accounting fraud were associated with subsequent higher long-term returns."

Way back in early 2006 (have I been blogging so long?) I was guest blogging at Overlawyered and I wrote this:

But from a philosophical standpoint, shareholder suits have never made much sense to me. While I can understand the shareholders of the company suing a minority shareholder who might be enriching themselves disproportionately (e.g. Rigas family at Adelphia), suits by shareholders against the company they own seem"¦ crazy.

Any successful verdict for shareholders against the company would effectively come out of the pockets of the company's owners who are.. the shareholders. So in effect, shareholders are suing themselves, and, win or lose, they as a group end up with less than if the suit had never been started, since a good chunk of the payout goes to the lawyers. The only way these suits make financial sense (except to the lawyers, like Bill Lerach) is if only a small subset of the shareholders participate, and then these are just vehicles for transferring money from half the shareholders to the other half, or in other words from one wronged party that does not engage in litigation to another wronged party who is aggressively litigious. Is there really justice here?

OK, you could argue that many of these shareholders are not suing themselves, because they are past shareholders that dumped their stock at a loss. But given these facts, these suits are even less fair. If these suits are made by past shareholders who held stock (ie, were the owners) at the time certain wrongs were committed, they are in fact paid by current and future shareholders who may well have not even owned the company at the time of the abuses, and who may in fact be participating in cleaning the company up. So these litigants are in effect making the argument that because the company was run unethically when they owned it, they are going to sue the people who bought it from them and cleaned it up? Shouldn't the payment be the other way around, with past owners paying current owners for the mess they left?

I understand that theoretically they might have an incentive improvement from the threat of these suits that improves corporate governance.  But this is mitigated by the fact that most corporations consider these suits to be random landmines without merit, to be avoided if possible, to be settled if necessary, but that have little bearing on the underlying governance of the company.

OK, Its Time to Fix Internet Patents (or Maybe Just Put Them Down)

A patent troll company thinks it owns exclusive rights to rollover messages on web sites, among many other common features as outlined in the brazenly, ridiculously general patent entitled "Accessing, assembling, and using bodies of information."    I am just waiting for the patent on breathing or metabolizing food.  Story here, via Overlawyered.

Irony Alert

Via Overlawyered, from here

Taiwan's Intellectual Property Office said it had disqualified Wu Chih-wei and asked him to return the medal and prize money he got for winning the "Protect Copyright" poster-design contest, after Wu admitted he had copied the design he submitted.

Quote of the Day

I am sure this will garner much sympathy from all of you

"[Attorney George Fleming] said he had worked too long and too hard for a lousy $41 million," said Jim Doyle, who left the firm after objecting to Fleming's unusual decision to include non-client expenses among those billed to clients.

Via Overlawyered.  Fleming is accused of padding his expenses in a class action settlement.

What Kind of Freaking Lawyer is This Lady?

Everyone seems to know who Gloria Allred is, though I have never heard of her.  Apparently she is opposed to Meg Whitman getting elected (I am not even sure - is Whitman running for Senator or Governor?).  But her approach is weird.  She attacks Whitman for not identifying and firing an illegal immigrant fast enough.  There is no way for this accusation to be true given the timeline Allred outlines unless Ms. Whitman's illegal immigrant maid at some point farbricated or falsified documents.  In specific, Allred is claiming Whitman did not act fast enough when the Feds sent her a letter saying there was a problem with her maid's social security number.  Implicit in all this is that Whitman's maid must have fabricated documentation and as a minimum provided a false or stolen social security number.

OK, all normal team pepsi - team coke political BS, except for this:  Whitman's maid is Allred's legal client.  Allred, in order to publicly score points on Whitman, is hanging her own client out to dry by as much as admitting her client engaged in identity theft.  The maid's lawyer is complaining that her client was not fired fast enough.  Unbelievable.  Is this the true state of legal ethics today?  And not a mention of this obvious ethical issue in the AP story.