Corp Reform - Not Tort Reform

The Rather Effect?

Law and More suggests that Dan Rather's lawsuit against CBS is going to be the next poster-child for tort reform.  I'm doubtful for a few reasons.  But first, the relevant excerpts:

On the surface, Dan Rather's lawsuit against former employer, reports Joe Hagan in December 3rd NEW YORK Magazine, "is a mundane contract dispute over whether he received the airtime he was promised in his final year on CBS."  But to Rather it's a morality play of how evil attempted to destroy his good name, professionally and personally.  In this drama he is convinced good will win out.

But what could win is the common sense realization that it's reckless to try to right individual wrongs with monster lawsuits.  Tort reform could take a quantum and unanticipated leap. 

After all, this lawsuit is big.  Rather is asking $70 million.  He is suing CBS, its former parent Viacom, the chairman of Viacom Sumner Redstone, CBS head Leslie Moonves, and former CBS president of news Andrew Heyward.  And like everything else Rather it is filled with noise and hyperbole.  Conspiracy is everywhere. Likewise for corruption.

Law And More: The Rather Effect in Tort Reform

First, why is it reckless to try and right individual wrongs with the civil justice system?  The alternative is to return to feuds and private wars between individual citizens and between rival corporations.  Would the world really be a better place if Dan Rather decided to take a flamethrower to CBS headquarters?

Second, most "tort reform" measures will have little or no effect on contract disputes.  For example:

• To begin with, contract cases are not torts.
• Many contracts have "loser pays" provisions built in to them.
• Punitive damages are not available in contract cases. (Absent an additional tort.)
• Liquidated damages clauses often take the place of noneconomic damages.
• Damage caps won't apply to economic damages.
• Contract cases involve questions of law more often than questions of fact, thus there is a greater likelihood these will be resolved by summary judgment than jury trial.  And contract cases don't turn into "battle of the expert witness" cases very often, either.

Is Dan Rather entitled to $70 million?  I have no idea, and no overall opinion of Dan Rather.  But I do know he's entitled to use the court system to settle a contractual dispute with CBS.  And I also know there's nothing wrong with using the justice system to right a wrong; that's what it's for.

Technorati Tags: Dan Rather, Law and More, tort reform

Conservative Blogger Warner Todd Huston Misses the Point and Attacks the Civil Justice System

Warner Todd Huston notes with great disdain that Lowe's now sells "family trees" instead of "Christmas trees" and blames it on, of course, the civil justice system:

Now, obviously this is a simple business decision made by Lowe’s made in order to keep the militant atheists off their backs. Who can doubt that the Lowe’s folks are doing their best to avoid the costly nuisance lawsuits so commonly filed by these anti-American trouble makers? After all, Lowe’s is a large Corporation, but their pockets aren’t so deep that they can afford such idiotic lawsuit filings — efforts that prove we should have a “losers pay all fees” system instead of what we now have. In a way, one can sympathize with Lowe’s for making the effort to avoid the trouble those hateful of American traditions and religions cause these days. It almost makes smart business sense… at least smart where it concerns the legal department.

Blogger News Network / Christmas Under Assault: Dumping the Christmas Tree for a ‘Family Tree’

Warner, have you considered that this decision was made to entice those "anti-American" Jews, Muslims, and Hindus into buying their trees?  By rebranding the Christmas tree as a Family tree, Lowe's is attempting to appeal to a wider market and sell more trees. 

"Christmas under assault..."  Warner, Christmas has been under assault for decades by the capitalist system.  What was once a solemn religious holiday (So I'm told) is now a "shopping season" with the entire point of enriching merchants.  If you want to attack Lowe's (0r others) about Christmas, why not attack them for trying to make a buck off the death of Jesus?  I seem to recall reading something in the Bible about Jesus not caring for those who tried to commercialize religion.  Say what you will about trial lawyers, but they sure as hell don't hold "Christmas sales" or otherwise try and commercialize Christmas.

In my living room this year, there will be a Christmas tree.  You can call it a family tree, a holiday tree, or a garish tree covered with tacky ornaments... but in my heart it will always be a Christmas tree.  Unlike so many conservative zealots, the strength of my beliefs isn't dependent upon what others say or do.  If Lowe's wants to attempt to rebrand Christmas into a nondenominational holiday, so be it.  But let's not blame the civil justice system.  And certainly, let's not claim that everyone who doesn't celebrate Christmas is "anti-American."  I wonder how the American soldiers in Iraq who don't celebrate Christmas would feel about being called anti-American...

Technorati Tags: Warner Todd Huston, Christmas, anti-American, conservative zealot, blaming the civil justice system, knee-jerk

Race Baiting, Ted Frank Style

 To most tort "reformers" Judge Roy Pearson's lawsuit was upsetting.  But the "reformers" were truly outraged by something else: The fact that the AAJ openly condemned the lawsuit and came to the defense of the defendants.  Unfortunately for the "reform" lobby, there were no trial lawyers to demonize in this case.  So since Ted can't blame trial lawyers for this lawsuit, he does the next best thing: He plays the race card and accuses trial lawyers of opposing Pearson's lawsuit simply because Pearson is black.  (Ted also describes Pearson as being poor, but since Pearson earns a bit over $100k per year, that claim fails.)

We're excited to see Franklin join the world of reformers and recognize that many more lawsuits are frivolous than what Public Citizen recognizes. We encourage her to read the data and arguments of those she mistakenly claims to oppose, and to scrutinize those she mistakenly thinks are her allies a bit more closely. Why is it alright for wealthy white trial lawyers to extort billions from big business using the same ad terrorem tactics (and even the same consumer-protection laws!) as a poor African-American pro se did to extort $12,000 from a small business? We encourage Franklin to examine the Association of Trial Lawyers of America's racial double-standard.

Source: Overlawyered: The Litigation Lobby's "frivolous" bait-and-switch: the Judge Roy Pearson pants-suit

If Ted Frank is truly offended by racism, perhaps he should take a closer look at his employer, the American Enterprise Institute for awarding fellowships to Dinesh D'Souza and Charles Murray.

In addition to blaming liberals for 9/11, D'Souza has also gained a reputation for being a racist for such unique writings as:

The American slave was treated like property, which is to say, pretty well. [Justinian: Wow.]

If America as a nation owes blacks as a group reparations for slavery, what do blacks as a group owe America for the abolition of slavery?

[S]egregation was designed "...to assure that [Blacks], like the handicapped, would be...permitted to perform to the capacity of their arrested development.

Sources: Dinesh D'Souza - SourceWatch, Dinesh D'Souza

D'Souza is no longer with AEI, but Charles Murray is.  He gained a great deal of notoriety in the mid 1990's when he wrote The Bell Curve, a book that theorized (among other things) blacks aren't as smart as whites, and it is their intellectual inferiority that prevents blacks from succeeding in America.  Murray based this conclusion based partially upon "studies" performed by groups not generally renowned for their scholarship:

Charles Lane discovered that 17 researchers cited in the book's bibliography were contributors to the racist journal Mankind Quarterly. Murray and Hernstein also relied on at least 13 scholars who had received grants from the Pioneer Fund, established and run by men who were Nazi sympathizers, eugenicists, and advocates of white racial superiority.

Source: Media Matters - Altercation: You've got to be taught to hate and fear ...

In stark contrast D'Souza and Murray, the AAJ and its members fights for the rights of African Americans.  For example, many of the companies that fund the AEI have been successfully sued by members of the AAJ for racial discrimination.

It's more than a little ironic for Ted to accuse trial lawyers of having a racial double standard.  He's condemning the AAJ for opposing one African American's frivolous lawsuit, but Ted works tirelessly to deprive the members of the AAJ of the ability to file meritorious discrimination lawsuits on behalf of all African Americans.

Accusing one's opponents of being racist is truly the lowest form of ad hominem attacks.  That Ted would resort to such foolishness shows just how foolish he is to criticize the AAJ for opposing Pearson's suit. 

Technorati tags: Ted Frank, American Enterprise Institute, AEI, AAJ, ATLA, racism, racist, smoking crack

E-discovery gone wild in TorrentSpy case

A Law.com story today is about the recent order that TorrentSpy must produce data kept in its servers RAM:

Magistrate Judge Jacqueline Chooljian's May 29 order requires TorrentSpy to turn over customer data only ephemerally kept in its computers' random access memory, or RAM. It could result in floods of similar requests in other civil cases, according to Ira Rothken, the Novato, Calif.-based attorney for the TorrentSpy site.

The Los Angeles magistrate's order also has privacy watchdogs concerned.

This is the first case Rothken said he could find where a court considered transient RAM data as something discoverable, he said. Any company currently being sued -- even before any liability has been found -- could end up having to collect and turn over RAM data at great cost, Rothken said.

"Lawyers will be flinging around preservation letters, coming up with all kinds of creative ways to tell the other to preserve RAM," he said. "That would cause huge economic implications. If it's not changed, it can create e-discovery chaos."

Source: Law.com - RAM Ruling Portends a New E-Discovery Brawl

Before I continue, I want to point out that this is not supposed to set a precedent:

She also noted that it was not her goal to set a far-reaching precedent with her decision.

"The court emphasizes that its ruling," Chooljian said in the documents, "should not be read to require litigants in all cases to preserve and produce electronically stored information that is temporarily stored only in RAM."

Source: MPAA accuses TorrentSpy of concealing evidence | Tech news blog - CNET News.com

If corporations think that SOX is bad, they should be scared to death that this decision might eventually lead to the requirement to preserve data in RAM.  Such preservation would be close to impossible and would be incredibly expensive.  First, the data storage requirements would be extraordinary, especially if workstations are included.  Second, servers and workstations would take a huge performance hit if every action written into RAM had to be written to a hard drive.  I can't think of any way this is practical at all.  Scary, scary stuff.

Technorati tags: torrentspy, MPAA, RAM, e-discovery, electronic discovery, scary, law.com, CNET, bad idea

Walter Olson misses an important point about NYC aluminum bat ban

At Point of Law, Walter Olson notes that the NYC city council has banned aluminum baseball bats from NYC high school games on the grounds that they may lead to more injuries and deaths than wooden bats.  Olson preemptively rebuts a common argument used to defend such bans:

Don't miss Julian Sanchez's concise account ("The Nanny Two-Step") of the dangers to liberty in accepting the argument that runs roughly, "We pay through taxes when someone gets injured, why shouldn't we regulate the risks people take in sports?"

Source: PointofLaw.com | PointOfLaw Forum: Aluminum bats and NYC paternalism

Sanchez' post and Walter's citation of it is inappropriate in this context.  Sanchez' suggests that perhaps we shouldn't force taxpayers to pay for such programs as Medicaid, thus obviating the need to regulate risky behavior on financial grounds.  But here's the big point Olson and Sanchez seem to miss: High school sports are paid for by taxpayers.

The NYC council has no right to tell citizens what bats they may purchase with private funds to use on private property.  But it has every right to regulate how public funds can be spent to subsidize high school baseball - especially if taxpayers will be liable for injuries sustained during the ball games.  It's worth debating whether metal bats are more dangerous than wooden bats, but it's unreasonable to deny the city council the right to regulate a sport that taxpayers pay for.

Conservatives often complain about so-called entitlement programs such as Medicare/Medicaid, etc. and suggest that society would be better off if those programs were curtailed or eliminated.  The same argument can be used against high school baseball: If we're not going to pay for injuries caused when kids play baseball, why should we pay for kids to play baseball? 

Technorati tags: Point of Law, Walter Olson, New York City, NYC, baseball, aluminum bats

An attorney who clearly doesn't understand how a contingency fee works

I wasn't surprised that an attorney who writes for "The Conservative Voice" would praise Bush's recent Executive Order that bars Federal agencies from using contingency fee contracts.  I was surprised that such an attorney would have no idea how contingency fees work.

The media, relatively speaking, has all but ignored the EO, the excised text of which follows. How few people, otherwise reasonably informed, knew that the Federal Government sometimes retained attorneys to litigate upon a contingency-fee basis! Many States, of course, do likewise. The fees so earned by and large are minimal compared to the millions and multi-millions of dollars collected by the more high-flying “trial lawyers.” However, they are fees paid by taxpayers.

Source: “Hail to the Chief,” for Saving Taxpayers from Payment of Contingency Fees by Marion Edwyn Harrison

Under a contingency fee agreement, the attorneys are only compensated if they obtain a monetary recovery.  Their fee comes from that recovery, not the pocket of the taxpayers.  Because a contingency fee agreement is the epitome of "pay for performance," they tend to motivate attorneys to zealously and aggressively work to obtain a recovery for their client.  In fact, that's the reason this EO was signed - because government attorneys and their contracted attorneys are supposed to remain impartial, and not be zealous or aggressive. 

For better or worse, taxpayers will now be forced to pay high hourly rates to outside counsel, and pay them regardless of how effective the attorney is.  Now, rather than having an incentive to quickly recover a lot of money for the taxpayers, outside counsel will have an incentive to make cases unnecessarily complicated and to prolong them as much as possible to accrue as many billable hours as possible, all at the taxpayer's expense. 

Technorati tags: Mariod Edwyn Harrison, Conservative Voice, contingency fees, Bush, Executive order

Dear Mike Judge...

It is with a heavy heart and a pint of hard cider that I write this  letter to you.  Let me preface this letter by telling you that Office Space and Idiocracy are two of my favorite movies.  I consider Idiocracy to be the most accurate "post apocalyptic future" movie ever made.  I bought the Office Space kit just for the "Is this good for the company?" banner.  And I date the decline of American society at the exact moment Beavis and Butthead went of the air.

However, after watching tonight's King of the Hill episode, I would like to kick you in the shins.  I speak of the season finale in which Lucky and "The King of Torts" file a series of frivolous lawsuits, and in which Hank Hill performs a soliloquy on the evils of lawyers and litigation in general. Besides being a wildly inaccurate depiction of the U.S. civil justice system, portions of the dialogue in this episode could have been written by a PR flak for one of the many corporate front groups that ceaselessly attack our courts to benefit their corporate masters.

While I'm the first to admit there are a few scumbag personal injury attorneys who lack morals, ethics, or decency, they do not represent the average attorney anymore than the handful of priests who molest children represent the average priest. 

First, I would like to explain the legal problems with Lucky's lawsuit against Hank Hill.  A brief recap for those who missed the episode:

Luanne's fiancee Lucky is in need of work.  Hank Hill suggests to Dale that he should hire Lucky for his extermination business.  Dale does so, and invites Lucky into his home's basement/office.  The two of them engage in some horseplay (instigated by Lucky), and Lucky falls and injures himself.  Lucky retains his attorney, who proceeds to file a lawsuit against Dale.  As it turns out, Dale isn't insured, so the quest for "deep pockets" begins.  They first consider the manufacturer of Dale's pesticides, but he brews his own.  Then they consider suing the homebuilder, but Dale built the staircase that Lucky fell on.  Finally, they settle on Hank Hill for recommending Lucky to Dale.  Or more to the point, they settle on Strickland Propane, Hank's employer.

Under the theory of "respondent superior", Lucky claims Hank's employer is liable for Hank's recommendation and the injury that Lucky sustained.  Under respondent (or respondeat) superior, an employer is liable for the acts of its employees performed in the course and scope of the employee's job.  Since Hank's recommendation was not in the course and scope of Hank's employment, and since the recommendation occurred on Hank's property, Strickland Propane would be in no way liable for Hank's recommendation.  And even more importantly, Hank wouldn't be liable, either anymore than Monster.com would be liable if Dale hired Lucky after reviewing his resume online.

If you're looking for additional stories involving lawsuits for the show, here are two that are much more realistic:

• After years of protracted use, Dale develops cancer from the chemicals he uses to make pesticide.  He has difficulty finding a lawyer to take his case because he's used chemicals from three different manufacturers over the years and determining liability will be difficult.  He eventually finds an attorney who sues the three different manufacturers and the chemical distributor.  All four defendants deny all liability and alternate between blaming each other and blaming Dale.  The defendants mount a multi-million dollar defense and fight tooth and nail not to release internal documents, citing such reasons as "trade secrets."  Dale's lawyer, a sole practitioner, is overwhelmed and persuades Dale to settle for a fraction of the case's true value.  Dale dies a slow, painful death, and the majority of his settlement goes to pay medical bills.  Once Dale is dead, his notoriously unfaithful wife could become a stripper with a coke habit.  Obviously, there's lots of hilarity there.
• The notoriously cheap Mr. Strickland decides to save money by cutting corners in the safety department.  After years of neglect, one of the main propane tanks explodes, paralyzing Hank from the neck down.  Because the accident happened on the job, Hank can't bring a personal injury lawsuit.  And thanks to the "reform" to the Texas workers' compensation system, Hank is forced to accept permanent disability benefits that are far less than his salary.  After blowing through Bobby's college fund trying to make ends meet, the Hills lose their house and are forced to move into an apartment.  The rest of the show could depict the difficulties of a family of three trying to live off of Peggy's meager salary as a substitute teacher with a poor grasp of Spanish.

I doubt you'll use either of these stories because they're so miserably depressing.  Unfortunately, stories far worse than these occur time and time again because so many people want to "reform" the justice system instead of reforming the systems that let these injuries occur in the first place.

Mr. Judge, I can forgive you for your false depiction of the justice system as I'm sure it was unintentional.  What I'm not sure if I can forgive you for is the inevitable fallout: The blogosphere will be aflame with poorly-written rants about your show proves we need tort reform.  Some conservative nutjob group (CFIF is my bet) will cite the show as another example of lawyers run amok, and an already cynical public will find yet another reason to distrust lawyers.

Technorati tags: Mike Judge, King of the Hill, Hank Hill, frivolous lawsuits, tort Reform, nutjob

Demagoguery By David (Nieporent)

David Nieporent at Overlawyered had an update on Roy Pearson's bogus pants lawsuit.  As with many of his posts, it's rife with demagoguery and factual omissions.

Contrary to what we had speculated, it appears that Pants Judge Roy Pearson still has a job and may continue to do so. According to an unnamed D.C. official, and exemplifying the attitude with which the tort reform movement is fighting, "I don't think it's appropriate not to reappoint someone just because they file a lawsuit. You can't retaliate against someone for exercising their constitutional, First Amendment right to file a lawsuit to vindicate their rights." (No, but you can retaliate against someone for filing a frivolous lawsuit.) Meanwhile, as a face-saving publicity stunt, the American Trial Lawyers Association filed an ethics complaint against Pearson; really, Pearson isn't doing anything that ATLA doesn't endorse in other situations.

Source: Overlawyered: Updates - May 17

First, I agree wholeheartedly that this lawsuit is frivolous.  So does David.  But neither he nor I can discipline Roy Pearson.  Until a judge does make the judicial determination that this lawsuit is frivolous, vexatious, or otherwise inappropriate, Pearson is nothing more than a litigant in a civil lawsuit and there is no legitimate reason to terminate him for this lawsuit.  Terminating him now sets a dangerous precedent; should your bosses be able to terminate you for firing any lawsuit they determine to be frivolous?  No.  Pearson should keep his job unless and until the judge in his case makes the determination that the case is frivolous, vexatious, malicious, or otherwise improper.  Once that determination is made, however, Pearson should be out on his ass.

Second, Nieporent's attack on the ATLA is without factual basis, and is nothing more than another of Nieporent's knee-jerk reactions against trial lawyers.  This wasn't a face-saving stunt in any way, if for no other reason than the ATLA was not affiliated with or otherwise associated with Pearson or this lawsuit.  One of the reasons this case shocks us is because Pearson is a judge.  If any group of people need to "save face" then, it's not trial lawyers, but judges.  Moreover, ATLA members are giving money to the Chungs.  I wonder if Nieporent has written them a check yet.

Technorati tags: David Nieporent, Roy Pearson, Chungs, pants lawsuit, Overlawyered

PRI Propaganda Author Responds to Criticism

The author of the Pacific Research Institute's bogus study on the tort system responds to criticism in the following letter to the editor:

Our calculations are based on the best scholarly studies by the nation's top economists and legal scholars -- in fact, 34 studies written by 52 scholars. If one compares direct U.S. tort costs to the tort costs of other industrialized nations, for example, one realizes that the U.S. tort system is the most expensive in the industrialized world. At 2.2 percent of GDP, direct costs are bigger than our counterparts in Germany, France, Japan, and the United Kingdom.

Source: montgomeryadvertiser.com ::  Director of study defends work

OK, so we spend 2.2 percent of our GDP on the tort system.  (Maybe.)  So what?  How much should we spend?  2 percent?  1.5 percent?  .05 percent?

By stating the number and implying that it is too high, the "reformers" can always claim there's something wrong with the tort system.  What they won't do, and indeed what they can't do is state what percentage of the GDP the tort system should be, and then state what "reform" measures will lower the tort costs to that percentage.

Technorati tags: PRI, propaganda, tort costs, tort reform, Lawrence J. McQuillan, Pacific Research Institute, Ralph Cook

David Nieporent Wants to Party Like It's 1899

 Below, David Nieporent bemoans the creation of a new cause of action:

Just what we need: more causes of action. If you've ever wondered why this country is overlawyered -- besides greed and lack of personal responsibility, I mean -- you might want to look to our law schools, where law professors with too much time on their hands spend some of it thinking of new ideas for increasing litigation. The latest example, from Fortune.com's The Browser:

The mere act of forwarding an email or posting an exchange to a website is grounds for legal action, according to University of Arkansas law professor Ned Snow. In a paper to be published in the Kansas Law Review this summer, Snow contends that one of the most common acts of the digital age is a violation of privacy and warns that our courts are running headlong into this issue.

...And if there's big money to be made somewhere along the way, well, I guess that's just the price we all have to pay.

Source: Overlawyered: Forward an email, get sued?

David apparently would prefer that as society and technology evolves, the law stands still.  Why, if the law never evolved, we wouldn't have such "problems" as minority rights, voter rights laws, school integration, Miranda rights, the ability to sue the government if a police officer brutalizes you, etc.  While David might prefer a justice system from the 19th century in which injured persons had limited rights of redress, I prefer a justice system that evolves and adapts to new wrongs.  I doubt David would complain about the evolution of law that allows pharmaceutical companies to protect their research into biotechnology, or that allows companies like Microsoft to prevent their competitors from stealing their source code.

As technology marches on, so too must the law.  It must evolve to protect individuals, corporations, and society.  And if there's "big money" to be made by enforcing the rights of citizens and corporations, well, that's not a very big price for America to have the most robust justice system in the world.

David, if you want to rail against greed and the "overlawyered" nature of the country, why don't you do all your work pro bono, or better yet, quit practicing law.  I just love how defense lawyers, who charge hundreds of dollars per hour, complain about greedy lawyers and those injured plaintiffs who dare to demand their medical bills be paid by the entity that injured them.

Cross-posted to TortDeform 

Technorati tags: David Nieporent, Overlawyered, tort reform, torts, email forwarding