U.S. Tort Costs Exceed Federal Spending on Homeland Security, Education And Infrastructure
November 24, 2008
Each American paid an $835 “tort tax” in 2007 to finance the $252 billion burden the tort system imposes on our economy, according to the 2008 Update on U.S. Tort Cost Trends by consulting firm Towers Perrin. That $252 billion is more than triple what the federal government spent on education; nearly five times federal spending on highways and mass transit; and almost six times the 2007 budget for the entire Department of Homeland Security.
U.S. tort costs rose by 2.1% in 2007, reversing a one-year decline. Towers Perrin expects tort costs to keep rising in 2008 and beyond, as tort lawyers target investment banks, mortgage brokers and other financial institutions in the wake of the subprime mortgage meltdown and financial crisis.
More Trial Lawyers Behaving Badly
November 24, 2008
A New York trial lawyer who specializes in securities class action cases has admitting to cheating the U.S. government out of $4.75 million in taxes, reports the New York Post. “Melly” Lifshitz – a major contributor to Democratic political campaigns – has “promised to resign from the [New York] state bar as a condition of staying out of jail.”
Buying Influence In Texas
November 21, 2008
Texas Watchdog lifts the rock on the efforts by powerful Texas trial lawyer Mikal Watts to buy influence on state courts and in the state legislature – all with an eye toward fattening his already bulging wallet. In the past eight years, Texas Watchdog reports, Watts and his law firm have funneled $4.5 million to Democratic candidate and left-leaning PACs.
What has all this money bought? Mr. Watts isn’t shy about telling. In a letter to an opposing counsel in a personal injury case, Mr. Watts tried to strong arm the defendant into paying a $60 million settlement because any appeal would surely be overturned by a court bought and paid for by his law firm:
In his correspondence, Watts bragged he would prevail in an appeal because his law firm helped finance the campaigns of judges on the state’s 13th Court of Appeals in Corpus Christi.
“This court is composed of six justices, all of whom are good Democrats,” Watts wrote in the letter. “The Chief Justice, Hon. Rogelio Valdez, was recently elected with our firm’s heavy support, and is a man who believes in the sanctity of jury verdicts.”
… Watts then proceeds to list other judges on the court that his law firm supported, including justices Nelda Rodriguez and Linda Yanez.
The discovery of the letter was enough of an embarrassment that Mr. Watts was forced to abandon his own campaign for the U.S. Senate. But it hasn’t stopped him from using his millions to shape the judicial and legislative environment in Texas.
According to Sherry Sylvester of Texans for Lawsuit Reform, Texas legislators “introduced 394 pieces of legislation [last year] that would have weakened tort reforms or made it easier to sue.” One particular target is Proposition 12 – a constitutional amendment adopted by Texas voters in 2003 that imposed a reasonable limit on “pain and suffering” awards in medical malpractice cases.
In the final days of the 2008 election season, Mr. Watts and his cronies in the Texas trial bar “accounted for an astounding 97 percent of the Democratic Party’s campaign contributions in the critical last weeks….” A $25,000 check from Mr. Watts helped one Democratic state Senate candidate defeat a Republican incumbent in what Texas Watchdog called “one of the biggest upsets in Texas.”
“It’s clear to me that Mr. Watts has gone above and beyond to make certain our elected officials work for the people and not large special interests,” says a state Democratic Party flack.
Well…except for one large special interest.
Standing Up For Michigan Taxpayers
November 19, 2008
My post from last week on the plan by Michigan’s Supreme Court to close several satellite offices – which both the Detroit News and Detroit Free Press say would save suffering Michigan taxpayers $400,000 per year – seems to have hit a nerve. One reader all but called me a traitor to my party for criticizing Justice Betty Weaver’s vote to keep her $60,000+ per year digs in Traverse City.
Well, here at American Courthouse we call ‘em like we see ‘em – and Republican or not, Justice Betty Weaver has become an embarrassment to the court who is far more committed to protecting the perks and privileges of her office than helping long-suffering Michigan taxpayers or the court she serves.
For those readers unfamiliar with Justice Weaver’s antics, a little history may be in order. Ms. Weaver was first elected in 1994 and served as Chief Justice from 1998 to 1999 – until the court voted 6-1 to remove her. (She alone was steadfast in support of herself remaining Chief.) It was during her tenure as Chief that the Michigan Supreme Court ranked the worst in America, according to a University of Chicago study, not during the tenure of Chief Justice Taylor, as was erroneously reported in the recent campaign.
In 2005, Justice Weaver announced her resignation: “I intend to put my money where my mouth is, and step down in October 2005, after more than 10 years on the Supreme Court.” She then rescinded her resignation and pledged to fight – believe it or not – for term limits. Considering Justice Weaver has been hunkered down on the bench for 14 years, it’s hard to take seriously her claim that justices should be limited to one eight-year term.
Irony aside, Justice Weaver’s main goal in remaining on the court seems to be making the lives of her fellow justices miserable. As Detroit Free Press columnist Brian Dickerson put it in one 2007 column:
If you ran into Betty Weaver on a street corner and didn’t know she was a Michigan Supreme Court Justice, you might mistake her for a bag lady….Weaver can, in her most distracted moments, leave casual observers with the impression that she has temporarily lost her moorings in time and space. So it is tempting for her embarrassed colleagues on the state’s highest court to dismiss Weaver’s latest criticism of that august institution as the ravings of a lunatic.
Justice Weaver’s fight to keep her Traverse City office is reminiscent of her blowup last year when the rest of her colleagues on the court gave up their taxpayer-funded state cars without complaint. If she really believes Michigan Supreme Court Justices should only serve for 8 years she should lead by example and retire when her term is up in 2010 – if not sooner.
Does The New York Times Believe The Presidency Has Been “Tainted”?
November 17, 2008
The New York Times ran an editorial last week under the headline, “Tainted Justice,” arguing that the $29.4 million raised by state Supreme Court candidates in 26 races poses “an escalating threat to the integrity and independence of the justice system.…” If the Times’ figures are accurate, that means each of the 52 candidates in those races accepted an average of $565,384 in total campaign donations.
I certainly agree that state judicial races have become too expensive and too political. But this is a problem that afflicts campaigns for nearly all prominent public offices, not just state Supreme Court seats.
As of October 15, President-elect Barack Obama had raised $640 million. When the final figures come in, it seems very likely that the Obama campaign will have raised and spent more than both the 2004 Bush and Kerry campaigns combined. According to the Center for Responsive Politics, Mr. Obama took in 50% more from investment banking firm Goldman Sachs alone than the average state Supreme Court judicial candidate raised from all contributors. He also raised more from both JP Morgan Chase and Citigroup than the $565,384 raised by the average judicial candidate. Goldman Sachs, JP Morgan Chase and Citigroup of course, will be among the prime beneficiaries of the $700 billion financial rescue package that recently passed Congress with Mr. Obama’s support.
If $565,000 is enough to “taint” a state judicial seat, what does $640,000,000 do to the presidency?
Michigan High Court Votes To Close Offices
November 14, 2008
The Detroit Free Press reports today that Michigan’s Supreme Court voted yesterday to close several satellite offices used by justices – saving hard-hit Michigan taxpayers an estimated $400,000 per year. You’d think such a modest cost-cutting measure would win unanimous support given Michigan’s severe budget crisis – especially considering that Michigan taxpayers footed the bill for the plush, new $88 million Hall of Justice that houses the Court in Lansing.
But you’d be wrong.
At a time when many Michigan residents are losing their homes, three Justices – including Betty Weaver – voted to keep their second offices. Justice Weaver has a history of fighting to keep her perks and privileges; she even whined about giving up her taxpayer-funded state car.
Any savings that might trickle down to the taxpayers might be short-lived, however. The 4-3 decision may well be reversed early next year when Diane Hathaway takes the seat of Clifford Taylor after defeating him in the recent election. Justice Weaver likes to pose as the great defender of the “little guy” – except, it seems, when it comes to lightening the load on his/her wallet. She runs on the campaign slogan: “Weaver. We Need Her.” As far as Michigan taxpayers are concerned, it ought to be: Weaver. Who Needs Her.
Fighting For Truth, Justice And The American Way: Superman? No, It’s The Trial Bar!
November 13, 2008
“We are the most important people in America,” famed trial lawyer Gerry Spence proclaimed to a rapturous crowd – and who in the audience of 500 personal injury lawyers would argue? (Hat tip to the Illinois Civil Justice League for turning us on to Mr. Spence’s absurd puffery.)
Ever the peacock, Mr. Spence wasn’t done spreading his feathers:
“I want to ask you which would be more important: If all the doctors in the country somehow disappeared or all the trial lawyers in America somehow disappeared?”
Fortunately for Mr. Spence, he was speaking to what may be the only audience in the world that values ambulance chasers over ambulance drivers: “We can live without medical care, but we cannot live without justice,” he boomed.
But elevating greedy trial lawyers above mere life-saving physicians is nothing, and Mr. Spence was just warming up.
“There is no other profession in America that fights for freedom, that fights for what America is about…”
Was it just bad timing or some sort of cosmic justice that Mr. Spence made this preposterous claim on Veterans Day? Perhaps a trip to the Tomb of the Unknown Soldier is in order.
A Quid Pro Quo For Demonizing The Wisconsin Business Community?
November 13, 2008
A special report by the Wisconsin Club for Growth has a couple fascinating items detailing some recent email exchanges between outgoing University of Wisconsin Chancellor John Wiley and defeated Supreme Court Justice Louis Butler.
Back in August, Chancellor Wiley authored a pernicious attack on the state’s business community, blaming Wisconsin employers for poisoning the political atmosphere in the state. Despite the embarrassing lack of any real facts or substantiating evidence, Mr. Wiley’s screed drew a hearty cheer from former Justice Butler, who praised him for “taking the time to speak out about the problems caused by the WMC [Wisconsin Manufacturers and Commerce], particularly as it concerned my Supreme Court race.”
Justice Butler, readers of American Courthouse will recall, was appointed to the high court in “open defiance” of the wishes of Wisconsin voters, who overwhelmingly rejected him by a 2:1 margin when he ran in 2000. After sidestepping voters and joining the bench, Justice Butler promptly shifted the court sharply to the left and began inventing wacky new theories that made Wisconsin businesses an easy target for predatory trial lawyers. Wisconsin voters dumped Justice Butler the minute they had the opportunity, ousting him in favor of the more moderate Michael Gableman.
But, the Wisconsin Club for Growth reports, the link between Chancellor Wiley and Justice Butler runs deeper than a mutual contempt for Wisconsin businesses and disdain for the wishes of Wisconsin voters. In an email, Mr. Wiley directs Kenneth Davis of the University of Wisconsin Law School to “reach out and try to work with him [Butler] to craft something mutually beneficial.” As the Wisconsin Club for Growth puts it:
… it’s no surprise that the UW would want a former Supreme Court justice on their staff – especially a liberal justice. But what you have here is two high-ranking officials essentially creating a position for Butler before any official duties exist. It’s a “let’s hire him, then figure out what he’s going to do” situation.
Incoming Chancellor Biddy Martin wisely warned Mr. Wiley that his article trashing Wisconsin businesses “would produce awkwardness for you, for me, and for the university …” – counsel he ignored. Perhaps Mr. Wiley might want to consider whether there are other factors contributing to the “toxic” political tone in Wisconsin – such as governors who appoint judges in open defiance of the people; Supreme Court justices who bring radical, personal agendas to the bench; and university chancellors who howl with rage against the taxpaying companies and voters who make his university possible in the first place.
More Trial Lawyers Behaving Badly
November 13, 2008
Two bigshot
The Disciplinary Board concluded that Baton Rouge trial bar kingpins E. Eric Guirard and his partner Thomas R. Pittenger set up a “business first format” that allowed non-lawyers to practice law, split legal settlements on a commission basis and created outrageous conflicts of interest between the law firm and its clients. Under this arrangement:
… the potential for harm to the clients, the public, the legal system and the profession is immeasurable. [Because of the actions of Mr. Guirard and Mr. Pittenger] the reputation of the profession and the legal system has been undoubtedly marred.
Here’s how the scheme worked, according to the formal charges filed with the disciplinary office:
Calls to the Guirard law firm from prospective clients were given to non-lawyer case managers who dispatched investigators to visit the client and collect documentation of the claim. (Investigators returning with a signed legal contract were paid a bonus.) After a demand letter was sent to the defendant, the case manager was given a “high” and “low” range for negotiating a settlement within a specified period of time. If the case was settled, the case manager pocketed a commission – as high as 17% for some case managers. If the case had to be litigated, however, the case manager received zero.
This conflict of interest “created an overwhelming motive to settle a claim at any price before the case manager lost control” over the case – and, needless to say, put the financial interests of the law firm ahead of the interests of the clients.
Just as troubling, but somewhat more amusing, was the role Mr. Guirard and Mr. Pittenger reserved for themselves. After negotiating a settlement, the case manger would call the client and set up an appointment to pick up the check. That’s where the law partners stepped in:
On occasion, Mr. Guirard meets with the client at the disbursement to hand the client a check, pose for photographs, and/or give the client some type of advertising material such as a t-shirt or a Frisbee.
Mr. Guirard told one newspaper, “We always have approached this as a business first and a law firm second.” Putting legal case managers on a pay scheme more suited to used car salesman may have been good business, but it “unquestionably undermines the reputation of lawyers generally and the public’s attitude toward the profession,” wrote the Disciplinary Board. Given how low public esteem for lawyers already is, that’s a pretty tough standard to meet.
No Doctor In The House
November 11, 2008
Personal injury lawyers typically hire doctors to examine their clients and corroborate their injury claims, but one Pittsburgh, PA firm didn’t bother – and it may cost them more than just a lost lawsuit. The case comes courtesy of the American Justice Partnership Foundation, which just posted another episode in its Legal Shakedowns and Scandals series.
In 2006, CSX Transportation tried to reach a Dr. Oscar Frye, who had signed a medical report in a West Virginia asbestos lawsuit brought by personal injury firm Robert Pierce & Associates. CSX called three West Virginia medical boards – none of them had ever issued a license to Dr. Oscar Frye. The company called the number on the medical report – and reached the home of a woman who had lived there for years and had never heard of Dr. Frye. CSX attorneys went to the office address Dr. Frye provided on his report – and found a vacant lot.
The Pierce firm is pointing the finger at its client, a man named Rodney Chambers, and claims it had no knowledge the medical report signed by the phantom Dr. Frye was fraudulent. Yet according to news reports, the firm is resisting efforts by CSX to verify other asbestos claims it has filed in the state – and no wonder. In a separate lawsuit, CSX claims that one former CSX employee was allowed to pose as another plaintiff during an X-ray to provide a positive test for asbestosis. CSX also found that medical documentation from Dr. Frye was basically cut and pasted from other doctors in other asbestos lawsuits around the country. Which means that more phantom doctors may (or I should say may not) be popping up.
Phantom doctors, body double clients and cover-up attorneys – all in service of a litigation machine that has droned on for decades, destroyed dozens of companies and wiped out thousands of jobs. It might make a great novel; John Grisham, call your office.