Innocent Targets: Target class action settlement worthless to consumers

target-board-with-bullseyeConsumer class actions are supposed to bundle many small consumer claims together so justice will be done.  Normally, such small claims wouldn’t be viable on their own because there’s not enough at stake to justify the legal fees, even a small claims court with no lawyers wouldn’t be cost-effective.  The court system, and arbitration for that matter, are for much bigger claims — it’s hard in many courts to justify litigation over anything less than the high five figure numbers and often it needs to be far more.  (To discourage claims, legislators and some judges, as well as professional litigants, craft extra litigation hurdles to further tip the scales against the general public.)

About a year ago, Target reported that its consumer credit card database was hacked and the data stolen, putting tens of millions of credit card holders at risk.  Naturally, class action lawyers raced to various courthouses and recently they came up with a settlement proposal, capped at $10 million for the class — pennies per potential victim — which appears to be more of a public relations stunt than serious relief for consumers (many of whom may be vulnerable for years — credit cards take years to expire). Continue reading

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Legal Roulette: Malpractice insurer seeks to drop claims after the fact

Insurance is a form of gambling:  You put your bet down (call it a premium), then the roulette tablewheel of life starts spinning, and you see what happens while the wheel spins for the term of your policy.  If the ball drops into a “safe” slot — you never make a claim — you might feel like you wasted your money, but that’s only because you had no claim against you for insurance to cover.  Or, if the ball drops in another “bad news” slot, you’ve got a claim against you, but it’s covered by insurance.

Most people only know those two options, but it’s the others that are often a bigger problem:  What if the ball drops and you’ve got a claim against you, but it’s supposedly not insured — says the insurer — because the ball dropped too early or late, or the insurer refuses to pay based on some excuse, even if your claim would normally be insured.  (A coverage dispute is like arguing with the “house” at a casino — casinos like to disqualify sophisticated gamblers, for example, because they expect the odds to skewed in their favor.)  By denying a claim after the fact, the insurance company wants to use the benefit of perfect hindsight — eliminating the risk it was supposed to be running in exchange for taking your premium payment.

That’s where the big money in insurance coverage litigation arises — because the cost of litigating the coverage claim is far less than the cost of paying the claim or pursuing a frivolous claim.

Legal malpractice insurance is about the only protection clients with big claims against law firms have to get paid.  Even big firms carry little insurance and it doesn’t cover everything — like excessive legal bills in most situations.  Healthy law firms might have some assets, but that’s usually accounts receivable, which can dry up if the firm fails.  Chasing lawyers to pay a judgment of an old firm is tricky, as you can imagine.  One crooked or incompetent lawyer (or employee) can bring an entire law firm down, leaving their clients out of luck except for insurance (and sometimes special bar funds set up for certain types of lawyer fraud). Continue reading

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New Jersey Casino: Contingent fees are not for everyone

LAPT LIMA PERU SEASON 3New Jersey sued Exxon Mobil for billions in environmental damages, using a private law firm, which gets a big piece of the taxpayers’ pie, even though the state has plenty of lawyers of its own who are paid much less.  The outside firm here will receive over $45 million, including costs as well as legal fees, to settle a case after trial but before the judge was allowed to rule.  The firm negotiated a contingent fee of 20% with the state, with the money coming off the top from the settlement that was supposed to remedy billions in environmental damages to the state and taxpayers.  Many reports suggest that the only winner is the law firm.

As you might expect, part of what’s going on here is the result of lobbying by law firms to sign up states with a simple “something for nothing” pitch:  If the case is lost, the state’s off the hook, but if it wins, politicians look like geniuses for recovering money without investing much taxpayer money to get it — except if the law firm’s oversized piece of the pie gets headlines, like here.  Even if the press picks up on the law firms’ share, what’s left out of the usual press analysis is that most of these cases never go to trial and the cases don’t have the circumstances that typically justify a big contingent fee.

This sort of state-lawyer arrangement became big business with the tobacco litigation and now occurs in all sorts of situations.  Some states regulate the practice, others pretty much let anything go — leaving it to the judge usually to approve the fee, with no one in a position to object.  Like anywhere else that politics and money intersect, this has attracted all sorts of dubious arrangements and relationships. Continue reading

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Lying Detectors: California polygraphs sex offenders for “dangerousness”

The intersection of science and the law is a confused place:  Lawyers used to lie detector machinebending facts and law to suit their clients often cannot tell real science from quackery and many scientists get their understanding of the law and court proceedings from TV detective shows.  A long-running example of the nonsense on the science-law border revolves around the “lie detector” or, by it’s pseudo-scientific name, the “polygraph,” from the Greek for much or many writings — even it’s name is nonsense.  Lie detector interpretation is entirely subjective, with high error rates — both false positives and negatives.

The polygraph’s efficacy is a myth — it’s “gizmo theater” — not real science.  The show of the various inputs for pulse, electrical resistance on the skin (for sweating), respiration rate — with the little scratchy pens tracing in parallel on a roll of graph paper — is supposed to impress you that it’s “scientific.”  The script followed by the person administering the test is part of the game, to make the subject nervous and believe in the magic powers of the machine.  About the only time the polygraph “works” is when the subject spontaneously (but under duress) admits guilt or something probative of guilt.  In that situation, the machine is just a prop, along with the patter of the operating con artist.

I know quite a bit about lie detectors and the fools who use them because I used to be a trial attorney at the US Department of Justice, which lets federal agencies use them, mostly as part of security clearance procedures, where it’s all about the theater — no one goes to jail, but they do cost people their jobs.  I also worked on a well known case brought by a quasi-religious sect which uses a crude version of a lie detector  to gather information about its members.  And I brought perhaps the only, and apparently the first at least, civil case for lie detector malpractice.  When the lie detector company engaged by my client failed to catch a manager who was actively stealing from the cash register, my client sued.  The lie detector operator’s defense (raised by his insurance company) was that lie detectors are fake — so any client relying on them should have known they cannot be relied upon. Continue reading

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Search and Destroy: How lawyers aspire to unmask and sue negative online comments

cloudIn the good old days of the internet, everyone thought they were free to say what was on their mind, and share it with the world.  As many people pursued pornography, recipes, Star Trek trivia, and so on, there were a few interested in righting the wrongs of the world that “little people” without money for advertising and PR could not do in the age of TV, radio, and print media.  The age of nearly universal expression on the internet was born, including the avalanches of vicious, threatening comments that drive some people to suicide, for example.

About fifteen minutes after the first negative comment was posted, the subjects of these exercises in free speech started looking for ways to squelch negative comments (while faking positive comments, tracking everyone’s use of the internet surreptitiously, and so on, too).  So, about thirty minutes into the exercise of free expression, the age of the threat of litigation against negative comments on the internet was born. Continue reading

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The Retention Dance: Law firm claims duty to forward potential client’s inquiry to his employer

Nearly all law firms now have websites, which are primarily marketing tools to impress jump gunpotential clients.  I suppose some firms would say their websites are not looking for business, they are just “informational,” whatever that means, but that’s certainly how they are used by the public.  And that’s why most state bar organizations assume they should be regulating websites as legal advertising.

Most but not all of these websites provide email or equivalent links for potential clients to contact the firm.  (If no link, email address, or form is provided, the firm would usually provide a telephone number, which actually would have been a solution to the problem described below.)  In addition to providing contact information so the firm can get back to the potential client, or the potential client can call the firm, the usual “contact” form typically has a box through which an aspiring client can say whatever they want — so most potential clients are going to describe their problem and why they think your firm should be interested, so they will get the firm to respond. Continue reading

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Talking to Yourself: Lawyer discourages overcommunication with needy clients

angry callerLegal problems make many clients nervous — even if it’s something minor than can easily afford.  The whole legal process, including lawyers and courts and so on, just makes you worry. And the superior, condescending attitude of many lawyers, even toward their own clients, does not help.

But, despite the hostile environment, many clients need someone to talk to.  They need reassurance and hope, but, even if the predictions are bleak, they hope that talking to the lawyer will bring them some sort of comfort.  Without an understanding ear to explain the process, many clients cannot sleep or think of much else.  It is this discomfort (and legal fees) that causes many people to settle on bad terms, plead guilty to charges rather than defend themselves, sign a legal document without reading it, and so on. Continue reading

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Bailing Out: Malpractice defense lawyers recommend bailing on difficult clients

Many legal malpractice cases are based on snap judgments gone wrong, perhaps during a bailing-buckettrial or other court appearance.  A failure to object at a key time or making a mistake in an argument might qualify for this.  Others have to do with what the lawyer didn’t do — deadlines missed, work not done, and so on — things the lawyer didn’t know or forgot to check.  A typical example would be missing the statute of limitations to file a complaint or missing an appeal deadline.

But there are some malpractice issues that are right in front of the lawyer’s face, usually from early in the representation or for months.  This typically includes problems that start with a client unhappy about the lawyer’s bills, the lawyer’s failure to respond to client questions or calls, or an ongoing struggle by the client to get something done — which the lawyer either ignores or disagrees with.  Disagreeing with a client isn’t malpractice, but an upset client can be a client looking for other mistakes.  (And if you sue an upset client for legal fees, they are especially likely to counterclaim for malpractice.) Continue reading

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Trolls Have It: Patent plaintiff loses, but prevails on legal fee issue

While the law is supposed to be objective and the results of lawsuits foreordained by the troll doll 2facts and law, litigation is really an art (not a science) and a gamble entirely dependent on human unpredictability.  The outcome of litigation depends on the facts and law, but also sometimes the good or bad performance of lawyers, witnesses, judges, jurors, and others involved in preparing for and executing a trial.  Change any of these variables and the result may differ, even if the facts and law are the same.

A good lawyer helps his or her client run this obstacle course at least as well as the opponent’s will.  The value of a particular lawyer is often exaggerated in victory or wrongly excused in defeat — some litigants waste lots of money on inexperienced, overly expensive, even incompetent lawyers.  But what many litigants find is that if you don’t have enough money to afford at least a decent lawyer, you may not be able to litigate at all (or may start out fine, then collapse if the money, then the lawyer, run out).  You might have all the facts and law on your side, but if you don’t have a lawyer you can afford to pay, or a “free” lawyer committed to doing a good job, you could easily lose a matter you should win. Continue reading

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Getting Robed: Election of state judge gets expensive, dirty, and stupid

Ijudge costume 2n some state courts the judges are appointed, usually by executive nomination and often with legislative approval.  (All federal judges are appointed this way, and many for life.)  In other states, judges are elected, like governors, legislators, and other state posts.  In theory, electing judges is the democratic way to go — not that it’s going that well for the positions normally elected, let alone with judges.  Unfortunately, popular election of judges, who are typically invisible when they do their job well and only more visible if they crave the limelight, has been and will continue to be a disaster in far too many situations.

Even if the public understood what judges do, they have little information about judges — can you name even one local judge in your area?  In theory, judges are supposed to conduct low level campaigns, avoid taking tainted money, and just look smart, I suppose.  These days, however, in some states judges are spending double or more the annual salary for a judge to be elected as a judge. Continue reading

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