Coyote Blog

Because of the all-to-prevalent theory (which may become even more common if Jon Edwards becomes our next AG) that every accident must be the fault of the nearest person with deep pockets, I wasted an hour today.

I visited the NFL experience today with my son.  The NFLX is a kind of football-themed fair or amusement park that the NFL sets up near the site of each Superbowl  (HA HA NFL — I said it.  I said "Superbowl" and not "the big game."  Come and get me).  After waiting in a reasonable line to enter, we found that to play the games (e.g. throw the football through a hoop) every participant (read 10,000+ people) had to individually fill out and sign a liability waiver and get a wristband attesting to the fact.  There were about 16 clerks at work, but it still was about an hour-long wait. 

It struck me that the NFL could have come up with a much better process.  Why not have people with Internet access (about everyone, since almost 98% seemed to be there with tickets they bought on the internet) print out the waiver and bring it with them already filled out?  The manager on-site claimed that Arizona state law and the Arizona AG required that the process proceed the way it did.  I give that explanation about a 50-50 between being correct and just covering their butt for something stupid.

Anyway, once signed, we had a good time at the event, and it was well worth the effort.

More absurd legal theories from the RIAA:

[I]n
an unusual case in which an Arizona recipient of an RIAA letter has
fought back in court rather than write a check to avoid hefty legal
fees, the industry is taking its argument against music sharing one
step further: In legal documents in its federal case against Jeffrey
Howell, a Scottsdale, Ariz., man who kept a collection of about 2,000
music recordings on his personal computer, the industry maintains that it is illegal for someone who has legally purchased a CD to transfer that music into his computer.

The industry’s lawyer in the case, Ira Schwartz, argues in a brief
filed earlier this month that the MP3 files Howell made on his computer
from legally bought CDs are "unauthorized copies" of copyrighted
recordings.

"I couldn’t believe it when I read that," says Ray Beckerman, a New
York lawyer who represents six clients who have been sued by the RIAA.
"The basic principle in the law is that you have to distribute actual
physical copies to be guilty of violating copyright. But recently, the
industry has been going around saying that even a personal copy on your
computer is a violation."

In the earlier days of this blog, I used to post links to a lot of insane lawsuits.  The lawsuits just keep coming, but I have lost the energy to keep posting such stupidity.  And besides, Overlawyered does such a good job and seems to have infinite patience. 

But it was worth noting a silly shareholder suit that the media actually seems to have sniffed out for what it is:  Pure garbage.  For those who are not aware, there are a group of law firms who immediately file suit against any company whose stock drops by more than a few percent.  Bill Lerach, soon to be taking up residence in jail, used to keep a whole bullpen of folks on a sort of retainer to hold shares in numerous companies, so he instantly had someone close at hand who could file suit when any stock drops.  And since stocks go up and down, often in ways that the company itself has no control over, this leads to a lot of lawsuits.

Recently, the maker of Crocs sandles apparently had an IPO, had its stock price shoot up, and then had its stock price fall back when the company could not sustain its previous torrid growth pace.  Al Lewis of the Denver Post takes it from there:  (HT Overlawyered, of course)

Anybody who purchased stock in
Niwot-based Crocs Inc. between July 27 and Oct. 31 should not join the
class-action shareholders lawsuit that was recently filed against the
company and its stock-dumping executives.

Instead, they should look themselves in the mirror and admit two things:

      

I look ridiculous in these plastic shoes.

      

Anybody
who would pay an average of more than $60 a share for a company that
makes ugly plastic shoes deserves to take a hit in the stock market.

He continues:

Crocs and its officers also allegedly
misrepresented or failed to disclose their distribution problems in
Europe and their rising inventory levels, the lawsuit alleges. They
also failed to disclose that sales of their hole-riddled plastic clogs
were suddenly becoming more of a seasonal item. Imagine that! Sandals
seasonal? Who knew?

By the way, if you really want your head to explode, take a minute a think about shareholder lawsuits.  A group of shareholders are suing the company for a fall in the stock price.  Who do you think pays?  Why, current shareholders!  Though I do not accept the "logic" of these suits, if one were to accept their logic, then the most guilty party is the stockholder who sold the plaintiffs their stock just before the drop.  But these folks are exactly who will NOT owe any money on the suit.  They are no longer owners.  The people who will pay will be the owners of the stock at whatever time the suit settles, likely many people who bought in after the plaintiffs did.  The only real winner when the shareholders pay themselves such a verdict are the lawyers, who rake off 30%.  More on this bizarre situation here.

Update:  I will have to think about this more, but it kind of reminds me of a prisoners dilemma game in which the prosecutor gets a monetary bonus that increases with longer prison terms.

It’s been a while since I posted any tort pr0n, so here are a couple of juicy onces:

From West Virginia:

Joe Meadows was drunk. Very drunk. 0.296 percent blood-alcohol content
drunk, 12 or 13 beers worth. Fortunately, he didn’t drive in that
state. Unfortunately, he chose to sleep it off by resting under a
parked 18-wheel truck. More unfortunately, the driver, Doug Rader, who
didn’t check to see whether there might be drunks lying under his truck
at 1:40 a.m., ran over Meadows. Rader had EMT training, and was able to
save Meadows’s life, but Meadows lost a leg, and sued both the truck
company and the store that owned the parking lot. A Kanawha County jury
decided that Meadows was only a third responsible for his injury, which
means he "only" gets two thirds of the three million dollars they
awarded.

And from Florida:

"A police officer has sued the family of a 1-year-old boy who nearly
drowned because she slipped and injured a knee responding to their
9-1-1 rescue call." Andrea Eichhorn, a police sergeant in Casselberry,
Florida, responded to the pool accident, and now "claims the boy’s
family left a puddle of water on the floor, causing her fall during the
rescue efforts. She broke her knee and missed two months of work." So
she’s suing the Cosmillo family. "It’s a situation where the Cosmillos
have caused these problems, brought them on themselves, then tried to
play the victim," says her attorney, David Heil. Joey Cosmillo, the
infant in question, suffered severe brain damage and lives in a nursing
home now.

West Virginia and Florida — who’d have thought it?

This may be my new favorite tort:  (via Overlawyered)

A Pennsylvania man has sued search giant Google
for $5 billion, claiming that when his Social Security number is turned
upside down, "it is a scrambled code that does spell the name Google."
The handwritten complaint filed in the U.S. District Court in Scranton
alleges that the U.S. Justice Department "is heading the investigation
into allegations of crimes against Humanity" involving Google’s
founders and that the plaintiff’s "safety is in jepordy."

Up next, the owner of Social Security number 71077345 sues Shell Oil for the same reason.

Unfortunately, in other tort news, this is not a laughing matter.  It is just plain stupid AG megalomania:

For a while now, lawyers in Minnesota, Oklahoma and elsewhere have been suing companies that make over-the-counter cold remedies containing ephedrine and pseudoephedrine on the grounds that they were aware
some buyers were using the drugs as raw material for illegal
methamphetamine labs. Now such litigation appears to be gaining
momentum in Arkansas, where many county governments have signed up to
sue Johnson & Johnson, Pfizer, and other companies. "If successful,
it could open up litigation against manufacturers of other produce used
in making meth, such as drain cleaners and acetone."

One local judge discusses the case in a way that sounds like a commercial for the Publishers Clearing House Sweepstakes:

"What more could we have done with a million dollars a year for our
county? Would that have meant a half dozen more police officers? Would
that have meant a better solid waste program? Who knows, what could
your county have done with an extra million dollars," asked Judge Bill
Hicks of Independence County, a backer of the suits.

Chris Horner reports that the next mass-state-AG-tort, modeled after their fairly succesful efforts against tobacco companies, will be against oil companies over global warming:

A little birdie recently chirped about some
usual-suspect state attorneys general preparing a litigation strategy
document for/with environmental pressure groups, providing a roadmap
for cooperatively replicating the tobacco litigation of a decade ago in
the "global warming" context, substituting that projected catastrophe
for cancer and "big energy" for tobacco companies.

The point of
such exercise would not be to litigate the matter to conclusion — ever
more challenging what with forced corrections of the temperature
record, recent exposure of the woeful reliability of our own world’s
most reliable surface measuring network, and of course no global
warming in a decade (or, we now know, since 1900 for that matter) — but
to extract massive settlements from the energy industry to further fund
the trial lawyers, greens and the greens’ pet projects. Just imagine
the anti-energy campaign that this model would yield! And at no cost,
really, except to anyone who uses energy and/or invests in these sleepy
"granny stocks". Oh, and the economy.

He goes on to include a copy of the memo making the rounds of the AG offices.   This will certainly be a circus, and generally an expensive time-waster that will just serve to line the pockets of tort lawyers and the politically connected.  If things turn out like the tobacco settlement, the oil companies may jump on board early, since the tobacco settlement has turned into a state-enforced oligopoly for the major tobacco companies.  On the bright side, this might be an opportunity to subpoena the details of a bunch of climate work that is currently kept secret.

Via Overlawyered:

Score another one for personal responsibility: 29-year old St. Louis
Cardinals pitcher Josh Hancock killed himself in April when he drove –
faster than the speed limit, drunk, on a cell phone, and not wearing a
seat belt — into a tow truck stopped on the side of a road. Obviously,
we ought to blame… everyone except Josh Hancock for this. Three and a
half weeks after the accident, his father has filed suit
in St. Louis against: the restaurant where Hancock was drinking, the
manager of the restaurant, the tow truck driver, the towing company,
and (!) the driver of the stalled vehicle that the tow truck was
assisting, for having the temerity to get his car stuck on the side of
the road.

So far, he hasn’t sued the Cardinals or Major League Baseball, but, while praising the team, his lawyer pointedly refused to rule out suing them.

Absolutely hilarious interaction between TJIC and an attorney looking for class actions in all the wrong places.  Extra marks for gratuitous Conan reference. 

And while we are on the subject of class actions, note this case in Overlawyered  where the class itself received a sum total (not average per person, but cumulative total) of $2,402 while their lawyers received $1,000,000.  Once a useful tool for redressing fraudulent behavior, class actions now have become primarily either 1) a profit-making-through-extortion tool for lawyers or 2) a way to legislate without actually going to the legislature. 

Patterico has a link to this interesting account of a week in the life of Jarek Molski, who makes a living from filing ADA suits (emphasis added):

For example, in Molski v. El 7 Mares Restaurant, Case
No. C04-1882 (N.D. Cal. 2004), Molski claims that, on May 20, 2003, he
and significant other, Brygida Molski, attended the El 7 Mares
Restaurant for the purposes of dining out. Molski alleges that the
restaurant lacked adequate handicapped parking, and that the food
counter was too high. After the meal, Molski attempted to use the
restroom, but because the toilet’s grab bars were improperly installed,
he injured his shoulders in the process of transferring himself from
his wheelchair to the toilet. Thereafter, he was unable to wash his
hands because of the lavatory’s design.

Although this complaint appears credible standing alone, its
validity is undermined when viewed alongside Molski’s other complaints.
In Molski v. Casa De Fruta, L.P., Case No. C04-1981 (N.D. Cal. 2004),
Molski alleges that he sustained nearly identical injuries on the exact
same day, May 20, 2003. In Casa de Fruta, Molski alleges that he and
significant other, Brygida Molski, patronized Casa de Fruta for the
purpose of wine tasting. On arrival, Molski was again unable to locate
van accessible parking. Once inside, Molski again found the counter to
be too high. After wine tasting, Molski again decided to use the
restroom, and again, injured his upper extremities while in the process
of transferring himself to the toilet. Thereafter, he was once again
unable to wash his hands due to the design of the lavatory.

This was, apparently, not the end of Molski’s day. In Molski v.
Rapazzini Winery, Case No. C04-1881 (N.D. Cal. 2004), Molski once again
alleges that he sustained nearly identical injuries on the exact same
day, May 20, 2003. Molski, again accompanied by Brygida Molski, claims
he visited the Rapazzini Winery for the purpose of wine tasting. Again,
Molski complains that the parking lot lacked adequate handicapped van
accessible parking. Upon entering the establishment, he discovered that
the counter was too high. After tasting wine, he again needed to use
the restroom. In the course of transferring himself from his wheelchair
to the toilet, he injured himself yet again. Thereafter, he was again
unable to wash his hands due to the lavatory’s design.

The Court is tempted to exclaim: “what a lousy day!” It would be
highly unusual — to say the least — for anyone to sustain two injuries,
let alone three, in a single day, each of which necessitated a separate
federal lawsuit. But in Molski’s case, May 20, 2003, was simply
business as usual. Molski filed 13 separate complaints for essentially
identical injuries sustained between May 19, 2003 and May 23, 2003. The
Court simply does not believe that Molski suffered 13 nearly identical
injuries, generally to the same part of his body, in the course of
performing the same activity, over a five-day period. This is to say
nothing of the hundreds of other lawsuits Molski has filed over the
last four years, many of which make nearly identical allegations. The
record before this Court leads it to conclude that these suits were
filed maliciously, in order to extort a cash settlement.

For several years, I have been wondering why punitive damage awards like this one, that punish a company for various misdeeds, don’t create a double jeapardy situation where defendents must pay over and over for the same "crime" (since the next individual suing also gets punitive damages).

Here’s the problem:  A jury in Texas already hit Merck with $259
million in punitive damages*.  This number was based on a lot of
testimony about Merck’s sales and profits from Vioxx, so it was
presumably aimed at punishing Merck for "errors" in their whole Vioxx
program.  So if that is the case, how can Merck end up facing a jury
again coming up with a separate punitive damage award for the same
"crime"?  Sure, it makes sense that Merck can owe actual damages to
individual claimants in trial after trial.  But how can they owe
punitive damages for the whole Vioxx program over and over again?
Aren’t they being punished over and over for the same misdeed,
violating their Constitutional protection against double jeopardy?

In the recent Supreme Court decision involving a judgment against Philip Morris, the SCOTUS didn’t really take this issue on, but did take on a related issue, arguing that punitive damage awards that take into account damages against more than just the defendant violate due process, since these other damages were not tried on the facts in that case.

Today, in a decision involving an astonishing $79.5 million punitive
damage award to the widow of an Oregon man who died of lung cancer
after smoking Marlboros for 42 years, the U.S. Supreme Court ruled
that a jury in a civil case may not punish a defendant for harm to
people who are not parties to the case. To do so, the five-justice
majority said,
violates the defendant’s right to due process because he cannot defend
against hypothetical damage claims by people who are not involved in
the lawsuit. Furthermore, the Court said, "to permit punishment for
injuring a nonparty victim would add a near standardless dimension to
the punitive damages equation." Although this makes sense to me, the
Court’s proposed solution—that juries may consider harm to nonparties
in judging the "reprehensibility" of a defendant’s conduct but not to
"punish a defendant directly" for that harm—seems untenable.

A few weeks ago I wrote about the changing relationship between attorney and client:

It used to be that clients would suffer some sort of injury and seek
redress in the courts.  To do so, they would hire an attorney to help
them.  The attorney was the hired help, compensated either hourly or
via a percentage of any awards.

Today, the situation is often reversed.  It is the attorney who is
identifying lawsuit targets for class actions and shareholder suits,
and then seeking out clients who can maximize his chances of success.
Clients, who typically make orders of magnitude less than the attorney
in class actions (think 50-cent coupons and $8 million attorney fees)
are selected because they are sympathetic, or give access to a
particularly plaintiff-attractive jurisdiction, or, in cases such as
ADA suits in California, because they have effectively become partners
with the attorney in serial torts.

At that time, the issue was Bill Lerach suing his clients for dropping him as attorney (Because, after all, it was really his lawsuit and not theirs).  This time, the issue is in a class action against Microsoft (emphasis added, via Overlawyered)

Judge Scott Rosenberg ruled Friday that Microsoft attorneys could
not ask the named plaintiffs about their relationship with attorney
Roxanne Conlin. The company’s lawyers wanted to question the
plaintiffs, arguing that Conlin had referred to them during jury
selection as "just regular people who bought software" and who
volunteered to step forward to sue Microsoft.

The lawsuit was brought by Joe Comes, a Des Moines businessman who
owns a chain of pizza restaurants, and Patricia Anne Larsen, a retiree
from northwest Iowa, and two business _ Riley Paint Inc. of Burlington
and Skeffington’s Formal Wear of Iowa Inc. of Des Moines.

Microsoft attorney David Tulchin said Larsen has been a friend of
Conlin’s since 1982, when Larsen held fundraisers for Conlin’s failed
run for governor. In 1999, Conlin represented Larsen in an employment
discrimination case against Larsen’s former employer, Eaton Corp.

Tulchin said Comes has been Conlin’s son’s best friend since high school.

Microsoft attorneys claimed Conlin recruited these friends to act as
plaintiffs in the case so she could sue the company and that her
comments during jury selection opened the door for Microsoft to
challenge the plaintiffs’ motivation in filing the lawsuit.

Who would even imagine such a thing?  In this class action, as in many, the class members will probably get coupons while Conlin makes millions.  Or, as Microsoft observes:

Tulchin claimed that Conlin and her co-counsel, Richard
Hagstrom of Minneapolis, have the most to gain in the lawsuit

Attorneys like Conlin know they are vulnerable on this

Conlin said Microsoft wants the jury to believe that class-action
lawsuits are attorney-driven cases brought for money when in reality
they are a way for individuals with small claims to come together to
take on large, powerful companies.

"Businesses like Microsoft have poisoned the public view of these
forms for seeking redress by spending billions of dollars to spread
propaganda. Now they seek to collect on their investment by improperly
suggesting to the jury that the plaintiffs are not real plaintiffs,"
she said.

You think?

Overlawyered today provides a link to this article in Roger Parloff’s blog at Fortune

The nation’s leading class-action lawyer, Bill Lerach, is currently in
an ugly scrape in federal court in Dallas, where the sole lead
plaintiff in a high-profile shareholder suit against Halliburton (HAL)
no longer wants Lerach or his firm to act as its co-lead counsel. (I’ve
posted about it before here and here.)
To recap, the fund has said that it is concerned about all the
distractions and the sleaze factor now surrounding Lerach and his prior
firm, Milberg Weiss Bershad Hynes & Lerach (which Lerach co-ran)…

The squeamish plaintiff, the Archdiocese of Milwaukee
Supporting Fund, has asked that Lerach Coughlin be replaced by David
Boies and his firm, Boies Schiller & Flexner, which firm has
indicated that it is ready, willing, and able to assume the role.

Needless to say, Lerach is fighting the uppity plaintiff to keep control of the case.

Parloff goes on to question some of Lerach’s statements in the case.  However, I want to make a different point.  This points out fairly clearly that Lerach and other top litigators have adopted a whole new theory of litigation and of the relationship between lawyer and client.

It used to be that clients would suffer some sort of injury and seek redress in the courts.  To do so, they would hire an attorney to help them.  The attorney was the hired help, compensated either hourly or via a percentage of any awards.

Today, the situation is often reversed.  It is the attorney who is identifying lawsuit targets for class actions and shareholder suits, and then seeking out clients who can maximize his chances of success.  Clients, who typically make orders of magnitude less than the attorney in class actions (think 50-cent coupons and $8 million attorney fees) are selected because they are sympathetic, or give access to a particularly plaintiff-attractive jurisdiction, or, in cases such as ADA suits in California, because they have effectively become partners with the attorney in serial torts.

So if you wonder why Lerach is suing his client for not using his services, and if that makes you wonder who is working for whom, now you know.

Update: By the way, this reversal of the relationship between attorney and client is one of the recurring themes in my novel BMOC.

Ted Frank at Overlawyered is posting links to his favorite Overlawyered stories of 2006, month by month .  Don’t miss the link to yours truly in March.  update:  Hey, I’m in February too.

I have written on this before on the context of Vioxx, but is it really rational public policy to have juries be allowed to effectively ban products, products that both legislatures and regulatory bodies have explicitly or implicitly deemed as legal?  Ted Frank takes this on at Overlawyered in a nice follow-up post on a $31 million jury verdict against Ford:

SUVs are designed to have high clearance to traverse rugged terrain.
This raises the center of gravity and affects the handling: it’s a
known tradeoff of the laws of physics. There are a wide variety of
tests of varying degrees of scientific merit one can use to suggest a
vehicle is "too prone" to roll over, and plaintiffs have the benefit of
cherry-picking which tests to apply to which vehicles. You’ll find lots
of lawyers complaining that the Bronco II allegedly responded poorly in
"J-turn tests", where the steering wheel is turned 330 degrees in one
third of a second and held there for another 4.67 seconds. Ford
designed the Explorer to pass the J-turn test to take away this claim,
and the trial lawyers started using different methodologies to claim
that the Explorer was too prone to roll over.

Empirically, however, the Bronco doesn’t roll over more than several
other SUVs on the market, which is why NHTSA, in both the Bush I and
Clinton administrations, refused to recall the Bronco when the
plaintiffs’ bar asked it to. When I say Ford was held liable for
producing an SUV, I’m not spinning: it was because it was held liable
for producing an SUV.

Moreover, a vehicle should be viewed in totality: an auto that is
more likely to roll over may be safer in other particulars that more
than compensate for that increased propensity. So I question the
premise. One can’t change the rollover propensity without creating a
different vehicle entirely. The vehicle should be viewed holistically,
and holistically, the Bronco is a safe car when used as designed.

Perhaps we as a society would be better off taking the nanny-state
step of banning SUVs, forbidding people from wildnerness driving
because too many drivers don’t know how to drive SUVs in highway
conditions, but that’s a decision that not only would end the American
auto industry, but should be made other than by a 12-person jury of
laypeople. This vehicle rolled over because the driver drove off the
road.

I had similar thoughts about the Vioxx cases:

Anyway, the point of this post is that this verdict represents a very dangerous assault on individual choice.  Recognize that there are many, many activities in life where individuals are presented with the following choice:

If I choose to do X, my life will be improved in some way but I may statiscally increase my chance of an early death.

You
may react at first to say that "I would never risk death to improve my
life", but likely you make this choice every day.  For example, if you
drive a car, you are certainly increasing your chance of early death
via a auto accident, but you accept this risk because driving allows
you to get so much more done in your life (vs. walking).  If you ride a
bike, swim, snow ski, roller blade, etc. you are making this choice.
Heck, everyone on the California coast is playing Russian Roulette with
an earthquake in exchange for a great climate, beautiful scenery, and
plentiful jobs.

The vast majority of drugs and medical therapies carry this same
value proposition:  A drug will likely improve or extend your life in
some way but carries a statistical chance of inducing a side effect
that is worse than the original problem, up to and including death.
The problem is that we have structured a liability system in this
country such that the few people who evince the side effects can claim
more money in damages than the drug was worth to all the people it
helped.  For example, if a drug helps 999 people, but kills the
thousandth, and that thousandth person’s family is awarded $253 million
in damages (as in this case), the drug is never going to be put on the
market again.  Even if the next 1000 people sign a paper saying we are
willing to take the one-in-a-thousand risk to relieve the pain that is
ruining our lives, they still are not going to get the drug because the
drug companies know that some Oprah-loving jury will buy the argument
that they did not understand the risk they were taking and award the
next death another quarter of a billion dollars….

By the way, have you noticed the odd irony here?  Robert Ernst (the
gentleman who died in the Vioxx case) is assumed, both by the FDA and
the litigation system, to be unable to make informed decisions about
risk and his own health.  But a jury of 12 random people who never
experienced his pain can make such decisions for him?  And us?

Alex Tabarrok at Marginal Revolution said it even more succinctly:

How did we arrive at a system in which 12 random Texans are assigned
responsibility for evaluating the scientific merits of statistical evidence of
this type, weighing the costs and benefits, and potentially
sending a productive blue-chip American company into bankruptcy protection?

Via Overlawyered, this is the hilarious account from a Doctor Hebert about finding out that he was suing Cisco.  He was a little non-plussed by this:

Did I want to sign up for the largesse, it inquired. It politely
offered me the option of declining, saying, "IF YOU DO NOT WISH TO BE
INCLUDED IN THE CLASS AND YOU DO NOT WISH TO PARTICIPATE IN THE
PROPOSED SETTLEMENT DESCRIBED IN THIS NOTICE, YOU MAY REQUEST TO BE
EXCLUDED." (The capitalization is theirs. I am not usually that
annoying.) Well, THANK GOD, I said. I can opt out of a lawsuit that was
filed in my name without my approval if I should have, well, you know,
scruples.

Except, as lawyers like to say, don’t neglect to
read the next sentence. And the next, and the next, and the next, and
the next. Somewhere in there is the  gotcha. "TO DO SO, YOU MUST SUBMIT
A WRITTEN REQUEST FOR EXCLUSION THAT MUST BE RECEIVED ON OR BEFORE
OCTOBER 31, 2006."

All right, now. I got the letter on
November 13, 2006. Admittedly the U.S. Post Office is slow, but I’ll
give them credit for getting a letter from the West Coast to
Mississippi in less than 14 days. Unfortunately, the letter was mass
mailed and thus bypassed the local post office. It bore no postmark. In
other words, I got the letter two weeks too late to opt out of the
lawsuit, and I had no postmark to prove it was intentionally mailed out
late to prevent me from refusing to participate. The old expiration
date trick. That was slick, Mssrs. Lerach, Coughlin, Stoia, Geller,
Rudman, Robbins, Levin, Papantonio, Thomas, Mitchell, Echsner, &
Proctor — real slick.

He is even more non-plussed to learn that he is in line for a check for $0.90, while the lawyers are in for $23.9 million.  I feel his pain.  I, for example, have been informed on several occasions that Visa and Mastercard, among others, are being sued in my name, though I never engaged anyone to do so.

Update:  Another huge fee for the attorneys, 50-cent coupons for customers class action is in the midst of an ugly fight over attorney billing rates – ironically in a cosmetics lawsuit alleging overpricing.

Among the alleged abuses were
bills of $195 an hour for work by paralegals who were paid just $30,
claims that attorneys and paralegals worked 24-hour or even 72-hour
days, and charges of $90 an hour or more for cleaning desks and
filing….

                           
                           
                              

According
to records filed with the federal court, individuals at one legal group
representing the class, the Law Offices of John Burris in Oakland,
billed as much as 72 hours in a single day for document review and, in
dozens of instances, billed for 24-hour days.

Of course the attorneys had a strong rebuttal to these revelations:

The lawyers accused of overstating their hours and expenses responded
by strenuously objecting to Judge Armstrong about the public disclosure
of their billing records, which the attorneys said were confidential.

Yet another nutty jury has decided that it should be national policy to have warning signs every few feet on a railroad to warn trespassers against danger:

Jeffrey Klein and Brett Birdwell were 17 "when they trespassed onto
railroad property and climbed atop a rail car" because they wanted to
see the view from there. They were shocked by a 12,500-volt wire and
severely injured. The incident took place in Lancaster, Pa. but through
the miracle of forum selection the lawsuit against Amtrak and Norfolk
Southern landed before a jury in Philadelphia, a locality notably more
favorable for plaintiffs than Lancaster. An attorney said the railroads
should have posted signs for the benefit of trespassers warning of the
overhead hazard and also should have had the electricity turned off at
the time.

This is by no means the first such verdict.  I featured another here:

By the way, the exact wording on the complaint against the railroad is even better than I thought:

"The
[engineer] did not stop the train in a timely manner, and failed to
yield the right of way to a pedestrian walking along the tracks in
plain view"

A freight train’s topping distance is measured in miles, even with full emergency braking.

She and her attorney’s further argue:

that
the railroad was negligent for failing to post signs warning ‘of the
dangers of walking near train tracks and that the tracks were actively
in use

Lets leave aside the obvious point
about individual responsibility, and ask what would happen if this were
the legal standard, to have such signs.  To make sure someone saw one,
you would have to have one say every 30 feet.  Since there are just over 200,000 miles of freight railroads in the North America that works out to a bit over 35,000,000 signs that need to be posted.  At $100 per sign this would cost $3.5 billion.

My company runs recreation areas, and from time-to-time customers try to file claims against our company for dangers that are inherent to being out in nature  (example:  "I was climbing a tree out in the forest and fell down and hurt myself.  Your company needs to pay my medical bills.")

As a result of these experiences, I laughed when I saw this from the Nelson Rocks Preserve, who run a private nature park.  Here is just part of their disclaimer:

The Preserve does not provide rangers or security personnel. The other people in the preserve, including other visitors, our employees,
agents, and guests, and anyone else who might sneak in, may be stupid,
reckless, or otherwise dangerous. They may be mentally ill, criminally
insane, drunk, using illegal drugs and/or armed with deadly weapons and
ready to use them. We aren’t necessarily going to do anything about it.
We refuse to take responsibility.

If you climb, you may die or be seriously injured. This is true whether
you are experienced or not, trained or not, equipped or not, though
training and equipment may help. It’s a fact, climbing is extremely
dangerous. If you don’t like it, stay at home. You really shouldn’t be
doing it anyway. We do not provide supervision or instruction. We are
not responsible for, and do not inspect or maintain, climbing anchors
(including bolts, pitons, slings, trees, etc.) As far as we know, any
of them can and will fail and send you plunging to your death. There
are countless tons of loose rock ready to be dislodged and fall on you
or someone else. There are any number of extremely and unusually
dangerous conditions existing on and around the rocks, and elsewhere on
the property. We may or may not know about any specific hazard, but
even if we do, don’t expect us to try to warn you. You’re on your own.

Rescue services are not provided by the Preserve, and may not be
available quickly or at all. Local rescue squads may not be equipped
for or trained in mountain rescue. If you are lucky enough to have
somebody try to rescue you or treat your injuries, they may be
incompetent or worse. This includes doctors and hospitals. We assume no
responsibility. Also, if you decide to participate in a rescue of some
other unfortunate, that’s your choice. Don’t do it unless you are
willing to assume all risks.

By entering the Preserve, you are agreeing that we owe you no duty of
care or any other duty. We promise you nothing. We do not and will not
even try to keep the premises safe for any purpose. The premises are
not safe for any purpose. This is no joke. We won’t even try to warn
you about any dangerous or hazardous condition, whether we know about
it or not. If we do decide to warn you about something, that doesn’t
mean we will try to warn you about anything else. If we do make an
effort to fix an unsafe condition, we may not try to correct any
others, and we may make matters worse! We and our employees or agents
may do things that are unwise and dangerous. Sorry, we’re not
responsible. We may give you bad advice. Don’t listen to us. In short,
ENTER AND USE THE PRESERVE AT YOUR OWN RISK. And have fun!

Hat tip: Overlawyered.

In my new novel, one of the elements of humor is added by a fictional law firm that has no sense of right and wrong but a very finely tuned sense for who has deep pockets.  Early readers of the book have accused me of exaggerating reality.  In fact, all the humorous cases in the book are based on real analogs.  Just check out this one via Overlawyered:

Katoria Lee refused a carjacker’s command to surrender her car-keys in 2001, so
he shot her in the back. This, a Georgia state court jury decided, was the fault
of Wal-Mart, who owned the parking lot where the shooting occurred. Eric Deown
Riggins, 22, was caught within minutes, and is serving a 15-year sentence in
state prison for the crime.

Ted Frank has this update on Vioxx litigation, and it couldn’t possibly be more depressing:

Take, for example, the last
case Merck lost, that of Leonel Garza in south Texas. Mr. Garza, who
was said by plaintiffs to have taken Vioxx for three weeks, was a
71-year-old overweight smoker, with high cholesterol, decades of heart
disease, and a history of a heart attack and a quadruple bypass, yet a
jury awarded his survivors $7 million in "compensatory" damages, and
punitive damages to boot

He goes on to recount the very reasonable suspicion that Garza may not have even taken Vioxx at all, as he never had a prescription and his doctor has denied that he passed Garza a series of free samples in little brown bottles.

So out of eleven cases that
have gone to trial or almost gone to trial, there is a reasonable
suspicion that plaintiffs faked Vioxx usage in as many as five of them.
How many more of the tens of thousands of pending plaintiffs have
similar flaws?

He concludes with this excellent point:

Perhaps appellate courts
will get around to correcting these travesties, but the plaintiffs’ bar
is counting on enough bad verdicts to slip through the cracks to make
these cases profitable.

The equation of expected returns is certainly helped by the fact
that no one is even suggesting that presenting this sort of
questionable evidence is unethical, much less illegal. Drug safety is
important, but so are the health costs from vaccines and drugs not
marketed because of liability risks. If the judicial system cannot
police itself adequately, the question then becomes why we want to
entrust national drug safety policy to an elected judge and a handful
of randomly selected jurors in Starr County, Texas?

Props to Merck for fighting each and every case so far and resisting the mass tort pressure to start offering settlements to anyone who asks for one.

I was in the Peoples Republic of Santa Monica this weekend.  Yes, I’m glad I don’t have to live there (but I paid $50 per night in hotel taxes — wow!) but the beach is gorgeous and the weather usually good.  We were shopping down the 3rd Avenue outdoor mall and were in a fairly large (3 story) Borders Books store when we found there was no bathrooms for customers.  The manager told us that it was for liability reasons.

Liability?  Has it really gotten this bad, or is this just becoming the convenient excuse nowadays when any public service is not offered?  I did a search and found that Santa Monica is ruthless in going after ADA access issues, so my guess is that they could not bring their bathroom into compliance in this older building for the 0.1% of customers who were handicapped so they closed it for the other 99.9%.  My other guess is that it might have something to do with the huge homeless population in Santa Monica, perhaps with them having trouble barring access to them (the public restroom we finally found had a homeless man camped out in it).

Answer: Don’t wear a helmet!(via Overlawyered)

Police refused to chase a thief who had stolen a moped because
the youth was not wearing a helmet, the victim said yesterday.

Max Foster, 18, said officers told him they feared being sued if
the thief fell off the moped and injured himself….

The Association of Chief Police Officers said: "There is no blanket ban on
calling off chases where a rider has no helmet, however most forces will adopt
similar stances."

A new study on medical malpractice decisions by Alexander Tabarrok and Amanda Agan of George Mason University was released last week.  A lot of the study is dedicated to countering some economically-ignorant canards (e.g. the charge that the recent rise in malpractice insurance is all due to price gouging and not due to malpractice awards).

The most interesting piece is where they compare malpractice awards to results of the independent medical review board rulings.

Our test finds that the tort system and review system do not correlate. Figure Five shows that
adverse actions per doctor in the medical review board system do not correlate with the number of medical malpractice cases per doctor in the tort system, nor do they correlate with the
average award per doctor….                               

In no case is the correlation large; in some
cases, it is actually slightly negative. What these results indicate is that the two systems
we have for determining malpractice, the tort
system and the medical review system, result 
in very different determinations of malpractice.
Surely, one of them is wrong!

The conclusion is one I think many neutral parties have suspected for quite a while:  The tort system is doubly broken:  Bad outcomes that truly are the result of malpractice often do not result in an award, while numerous tort awards go to people who are not the victim of any real malpractice.  Or to put it simply, people who are owed restitution aren’t getting it and people who get money often shouldn’t be owed anything.

The obvious result is a gross miscarriage of justice.  However, there is a second, less talked about result:  If the tort system is random, having no correlation to real doctor error or doctor quality, then it is impossible to charge doctors with risk-adjusted premiums.  In an efficient market, the worst doctors would pay the highest premiums and would get driven out of the market, just like bad drivers must change their behavior or face lifelong high auto premiums.  However, if tort awards are not correlated with bad behavior, as the study implies, then the system creates a huge moral hazard, with bad doctors underpaying for insurance and good doctors overpaying.  The result is that at best, good doctors will be driven out of the system at least as frequently as bad doctors.  At worst, good doctors, frustrated by the lack of justice in the system, will actually be more likely to leave the system than bad doctors.

Last week, Milberg-Weiss and two of its partners were formally charged with bribery and fraud surround their aggressive pursuit of class-action lawsuits, often against companies with falling share prices.  Walter Olson helps describe in detail what was going on, but the short answer is that the firm, as many of us suspected for years, appears to have been generating class action suits against large companies mainly for the benefit of itself and the legal fees generated.  A few months ago, I questioned shareholder suits and their fundamental logic when I was guestblogging at Overlawyered.

So I am happy that this particular rock is finally being turned over.  However, there are substantial problems on the prosecution side of this as well.  The Justice department is using the abusive Thompson Memo guidelines to go after Milberg-Weiss.  Larry Ribstein is concerned with the firm death penalty approach being taken here that was used to bring down Arthur Anderson.

Milberg is a different story. The case seems to be based on the
alleged misconduct of a couple of partners. If the partners did what
they are accused of, they should go down. Moreover, the firm will have
earned fees under questionable circumstances and should bear civil
consequences for that. But the criminal indictment casts a shadow on
the entire firm that it will have a hard time surviving, given the need
to establish its credibility for courts and institutional investors in
the highly competitive class action industry. Moreover, unlike AA, it’s
not clear the indictment reveals a continuing public policy problem,
given the post-PSLRA reliance on unbribable plaintiffs.

We (and I) may not like Milberg’s business. But the class action
part of it was one enabled by legal rules. The right way to deal with
the problems of this business is to change the rules, as I’ve argued
for securities class actions in my Fraud on a Noisy Market.
When we criminally condemn firms like Milberg because we don’t like
their business, we set a precedent for other firms in controversial
lines of work — e.g., Drexel Burnham.

More seriously, the power to criminalize a firm puts a potent tool
in the government’s hands to get the firm to cooperate in sacrificing
the rights of criminal defendants. Here the cure seems patently worse
the disease. The questions are no less in Milberg than in KPMG just
because Milberg was in an unpopular line of work.

The government tactic de jour, as outlined in the Thompson memo, is to threaten a large company with extinction, telling them they might get off the hook but only if they agree to throw a number of their employees to the wolves.  These steps include the unbelievable step of forcing companies to waive attorney client privilege, including privilege between any company-paid attorney and any employee.  Does anyone doubt that if the company who employs you was given the choice of having the government prosecute them or you, who they would choose?  In this context, Arthur Anderson should be commended for not sacrificing its employees for its own survival.  KPMG survived, because it chose to roll over on its employees.  I commented on many of the problems with the AA takedown here, and on the dangers of the Thompson Memo here and here.  Tom Kirkendall is all over the story.

Via Overlawyered, one of my absolute favorite blogs, comes my favorite headline of the week, courtesy of KCRA in California:

Paraplegic Activist Leaps From Wheelchair, Runs From Police

That’s classic.  Apparently, the person involved had defrauded numerous organizations with spurious ADA complaints under California’s ridiculous sue-anyone-with-higher-net-worth-than-yours laws.

Police said Laura Lee Medley, who repeatedly filed claims and lawsuits
for noncompliance with the Americans with Disabilities Act, was a con
artist.

A San Bernardino County spokesman, David Wert, said
Medley had complained to police earlier that she was having medical
problems so she was taken to a hospital for treatment.

Wert said, "That’s where the great miracle occurred."

Officers
said Medley, 35, leaped from her wheelchair and ran for freedom after
being placed under arrest by Las Vegas police. The barefoot woman was
caught after a brief pursuit.

According to authorities in
Southern California, Medley was never disabled but used her supposed
condition to file many medical claims and lawsuits. Her questionable
claims led to the arrest in Las Vegas.

The vast majority of my employees and many of my customers are over 60, so we try extra-hard to accommodate people with all kinds of disabilities.  That is why this type of fraud really burns me up.  Not once but twice we have killed incipient lawsuits when we have had customers who were claiming severe physical disabilities observed playing football or unloading a truck.  I have had one person I was interviewing for a job tell me that I had to hire him since he was disabled, because if I didn’t choose him I would be discriminating against the handicapped (we chose a different candidate).

Update: More Unruh act silliness:

A Los Angeles psychologist who was denied a tote bag during a Mother’s
Day giveaway at an Angel game is suing the baseball team, alleging sex
and age discrimination.

Michael Cohn’s class-action claim in Orange County Superior Court
alleges that thousands of males and fans under 18 were "treated
unequally" at a "Family Sunday" promotion last May and are entitled to
$4,000 each in damages.

Vioxx went to 3 for 6 in jury verdicts today as Merck lost a case in Texas (WSJ $).  Merck got hit with $7 million in damages plus $25 million in punitive damages, presumably since Merck was so clearly at fault as to be considered to have acted recklessly.  With that in mind, consider a couple of facts in the case:  First, the plaintiff..

died of a heart attack after taking Vioxx for less than a month.

I know what you are thinking.  How, after less than a month of use (and maybe as little as a week), could any plaintiff prove their heart attack was from Vioxx?   I mean, out of the thousands of people who took Vioxx, some statistically were due for a heart attack even had they not taken the drug.  Having one event (the heart attack) follow another (Vioxx use) does not prove causation, after all.  I guess the jury decided that this guy was not at risk for a heart attack otherwise.  Of course, they admitted that:

Mr. Garza, a Vietnam veteran who was 71 years old when he died in 2001,
had a history of smoking, had suffered a prior heart attack in 1981 and
had quadruple bypass surgery in 1985.

But I’m sure that had no bearing on his heart attack.  It must have been from the week of Vioxx.  His lawyers mitigated this by arguing:

he had a stress test shortly before his heart attack that showed he was in good health

Do you know how many men die of heart attacks within months of having a clean stress test?  A lot.

The plaintiffs initially asked for a billion dollars, so I guess if only by comparison the verdict was reasonable.  I wrote more about the danger of making uninformed juries the arbiter of what risk trade-offs we as individuals can take with our medications here and here and here.  I questioned multiple punitive damage awards for the same offense in the context of double jeopardy here.