Another Powerball Payday for Class Action Lawyers
June 29, 2010
That sound of champagne corks popping that you’re hearing may be coming from the party over at the Pomerantz Haudek law firm. WSJ’s Law Blog reports that the firm has just reeled in a $56 million fee in a securities fraud class action suit.
While trial lawyer fees in the tens of millions are par for the course in our nation’s jackpot justice system, that’s a 25% cut of the $225 million settlement. Fees typically are around 15% in major awards. In signing off on the fee, NY Federal Court Judge Nicolas Garaufis wrote,
“While it may be that a lower percentage would also be sufficient, this court will not pretend that it has the expertise necessary to divine the ideal percentage.”
In other words, “How much? Beats me! Party on, dudes!”
New Report: An Empire Disaster
November 20, 2009
Earlier this week the New York Daily News ran a great op-ed co-authored by Lawrence McQuillan of the Pacific Research Institute and Mark Kriss, head of New Yorkers for Lawsuit Reform. The piece describes how lawsuit abuse is harming New York state’s economy and how trial lawyers and their friends in the state legislature are blocking attempts to stop the abuse.
Just what would legal reform mean for New York? Money quote:
…if such reforms were put in place, New York would create at least 86,000 new jobs, increase state output $17 billion annually, boost state tax revenues by more than $1 billion a year, raise the income of every New Yorker by more than $2,600 a year, attract new customers and entrepreneurs to the state and cut insurance premiums up to 16% per annum.
For more, read the terrific report that PRI just released, “An Empire Disaster.”
Lawsuit Abuse Must-Read
July 16, 2009
The Manhattan Institute’s John Avlon has a must-read commentary in Forbes that documents how trial lawyers have turned the New York City government into a personal injury lawyers’ full-employment program - all to the detriment of the Big Apple’s taxpayers. Some highlights:
- New York taxpayers spent $568 million on lawsuits in 2008 - 20 times what they paid in 1977.
- New York taxpayers now spend more money on lawsuits than the next five cities (Los Angeles, Chicago, Houston, Phoenix, Philadelphia) combined.
- New Yorkers dedicates more tax dollars to settling personal-injury lawsuits than they do for parks, transportation, homeless services or the City University system.
- In 2008, nearly 90 cases were settlement for $1 million or more.
- Many jury verdicts are even more costly. A Brooklyn man won $2.3 million after he fell onto the subway tracks in a drunken stupor and lost his right leg. A corrections officer was awarded $7.25 million following an unsuccessful suicide attempt on the theory that the city should have never allowed her to carry a gun.
For New York’s cash-strapped city (and state) political leaders looking for ways to trim budgets in a tough economy have a big, fat target: Rein in the personal injury lawyers.
Slip-And-Fall Lawyers Get Tripped Up In New York
January 5, 2009
A recent court ruling could raise the legal bar on slip-and-fall lawsuits in the Big Apple, according to an article in the New York Times – a staple of predatory trial lawyers, who feasted on more than $600 million of sidewalk settlements paid by the City in the decade between 1997 and 2006. (Hat Tip, Carter Wood at ShopFloor.)
Back in 1982, some enterprising attorneys in the New York State Trial Lawyers Association hit on the idea of starting the Big Apple Pothole and Sidewalk Protection Committee. While posing as a public-spirited, good neighbor group interested only in alerting city officials and residents to needed sidewalk repairs, in reality the Committee had a far less noble purpose: backstopping thousands of lawsuits aimed solely at enriching personal injury lawyers. To fatten their wallets, the lawyers hired a mapping company to “scour the streets and sketch every crack, clink and pothole, with the ostensible purpose of giving the city notice of potential hazards it must fix, or face the consequences.” The Committee generates about 5,000 maps every year, cataloging more than 700,000 potential hazards along New York’s 13,000 miles of sidewalks.
For years, a squiggly line on one of these maps connected to a slip-and-fall case meant fast cash for a trial lawyer and trouble for the City. In a December 18 ruling, the New York Court of Appeals said a squiggle on a Committee map was not sufficient evidence to support a slip-and-fall case against the City. The decision prompted cries of “Hallelujah!” from former Mayor Ed Koch:
The money that’s paid out by such claims, which in my judgment are not worthy in many cases, is what deprives the city of spending money on matters that really are needed for the entire city.
Mayor Koch hits on the crucial point. The $600 million in taxpayer funds used to resolve slip-and-fall claims is money that couldn’t be spent on police, fire protection, paramedics and other essential services. Hopefully the Court of Appeals’ ruling will deter quick-buck trial lawyers from filing more merit-less cases – but don’t hold your breath.