Not Every Mediated Settlement is a Good Settlement.

A little caveat for this post.  I am stepping slightly outside my bounds as a neutral here.  Some might say that it is not my place as a mediator to comment on the reasonableness of a settlement.  I agree. When I am the mediator on that case. The rest of the time, I am entitled to my opinions. I certainly don’t disagree with attorneys being fairly compensated for their work. But as an objective observer and as a consumer, this case doesn’t seem right.

Last week, business hardware company Pitney Bowes announced a mediated settlement of a class action “blast fax” lawsuit originally filed here in Georgia.  The suit arose when Pitney Bowes purchased a smaller supplier of printer products and used that customer list to solicit business from the supplier’s customers. The “blast fax” law prohibits companies from sending solicitation faxes without permission of the recipient or an existing business relationship.  Even though the supplier Pitney Bowes purchased had a relationship, the law prohibits companies from buying customer lists to circumvent this prohibition.

I think it was perfectly reasonable for Pitney Bowes to assume it had the right to use the customer list, which is an asset it purchased and which had a distinct value.  It was likely itemized among the various line items in the settlement papers.  The people on the customer list bought toner from the old company.

In any event, the lawyers who specialize in suing for such violations got involved.  Classes were certified.  The case was removed. And the parties decided to go through voluntary mediation. After two days of “some of the most intense mediation [the Plaintiffs' lawyer has] been through,” the parties agreed to settle the claim.  Normally, I’d be all for this.

The final settlement provided that “each member of the class will receive a coupon worth $26 toward any $100 purchase of ink or toner from Pitney Bowes for each week they received one of the faxes, with a $2 million cap on redeemed coupons.”

So what about the plaintiff’s lawyers?  They got roughly $1 million.  In cash.

It just doesn’t sit right with me.  Again, I am not against the plaintiffs bar or for attorneys being fairly compensated.  I understand class actions can be quite expensive, but this just seems out of proportion, to both the length of time the case was active and the actual settlement agreed upon.  As Walter Olson of Overlawyered notes in a 2006 article, it has become quite the cottage industry for a small group of lawyers. Assuming Pitney Bowes is “out” the maximum $2 million in lost revenue from coupon use, the attorneys will have collected 47.5%  of the damages as fees.

In the abstract, I can see the benefit of laws like this.  By creating a civil liability enforceable through the courts, it transfers the power to police the behavior from the state to the individual.  The threat of a potentially crushing monetary judgment for violating the law is meant to deter the violator from engaging in the prohibited activity.  Whether it works or not is debatable.  My guess is that blast faxes have disappeared more from the simple fact that nobody faxes anything anymore when you can scan and email.

Back to the case at hand. Pitney Bowes sent blast faxes to customers of the business it just purchased. Apparently, some customers didn’t want to do business with Pitney Bowes, or just wanted the faxes to stop.  Those blast faxes violated the letter of the law and exposed the company to significant money damages payable to the aggrieved customers.

So what did the plaintiffs’ lawyers negotiate on behalf of the plaintiffs, who supposedly sued to stop receiving faxed coupons, and who were entitled to money damages?  Coupons for the plaintiffs.  Cash for the lawyers.

Of course, we don’t know what happened in this “intense” mediation.   Nor do we know whether the initial demand from the plaintiff’s lawyers was for a cash payout to the relatively small and easily identifiable class.  But it is hard to say that this settlement benefited the interests or needs of anyone except the plaintiff’s lawyers.

I sue. You sue. We all sue for ice cream?

Yes, it’s happened again.  It’s so routine, I’m not sure why I’m mentioning it.   Another helpless adult was viciously injured by an 8-year old boy “making a mad dash” to get ice cream at school.   It’s a good thing the poor, poor teacher’s aide has a lawyer like to protect her against that scourge of the earth: the 8-year old boy.

It’s a better thing this didn’t happen in a backwards-ass state like Georgia, where we have a ridiculous law that states that children under 13 are generally not responsible for their actions in tort.

Hat tip to Overlawyered.

It’s mine now, you whippersnapper!

It’s every 13 year-old boy’s nightmare.  Losing your football over the fence and into the “crazy old lady’s” yard. Now thrown in the arrest of the “crazy old lady” for doing her best Lionel Hutz imitation and citing the legal precedent of Finders v. Keepers when asked to return the football, add in the resulting lawsuit, and you’ve got the farce that happened in suburban Cincinnati.

While it would appear that the parents of the presumably “snot-nosed kid” initiated a call to the police or else the old woman would not have been arrested, they did try to meet to discuss how they “could peacefully coexist and how [they]  could retrieve anything that might land or blow in her yard.”

This one befuddles me.  Everyone suffers.  The young teen and his friends have to walk on eggshells when playing outside lest a stray gust of wind blow their ball or frisbee into the neighbor’s yard.  The 88-year old neighbor is forced to resume mowing her own lawn, which had previously been mowed by the boy or his father.

I really fault the elderly woman’s lawyer for this.  Frankly, he should know better.

Hat tip to Overlawyered.

It’s FINALLY OVER

Yes, I know that I’m violating my own hiatus, but it is finally over (save for the application for certiorari). The D.C. Court of Appeals this morning rejected Roy L. Pearson Jr.’s request for a new trial regarding his highly publicized $54 million lawsuit against a neighborhood dry cleaners over a pair of lost pants.

Thus ends one of the saddest and strangest chapters in Modern American jurisprudence.

Almost Cooked by a Goose.

Courtesy of Overlawyered comes this tale of an abusive lawsuit.  It has everything: small business owners, ridiculous government regulation, and an overreaching plaintiff.

In short, two Canada geese took up residence in a planter located in front of a pool supply store in a strip-mall.  The store owner asked the local authorities to remove the geese, but was told they were protected by federal law.  During their federally protected roost, they attacked a passer-by, who, of course, sued.

I’ll let you watch to find out what happened.  A video will play when you click on the link, but no worries, it is safe for work.

My favorite line comes in around the 1:20 mark of the video,

“The goose was not our employee or our agent.”

As committed as I am to ADR, I am glad there are lawyers out there willing to fight these types of cases.

Just when you thought it safe to read my blog again….

Ex-Judge Roy Pearson returns!!!

It seems a District of Columbia Appellate Court has agreed to hear an appeal of this stupendously ridiculous case.   I’m not sure who’s more ridiculous – Pearson or these three judges.  Let’s only hope they granted appeal to slap Pearson with further sanctions for abuse of the legal process.

The $54 Million Laptop? Great….a Roy Pearson Copy Cat.

It appears we have our first confirmed Roy Pearson copy cat. Washington Area consumer Raelyn Campbell is suing Best Buy for $54 million after they lost her $1,100 laptop computer. What makes Ms. Campbell only slightly different from Pearson is that a) she seems to have a legitimate gripe against Best Buy; b) she appears to have been reasonable in attempting to resolve the matter; c) she admits that she “has no expectation she will win a multimillion-dollar judgment”; and d) Best Buy handled the problem poorly. What makes her exactly the same as the infamous Judge Pearson is that she became entrenched in her position and rejected reasonable offers that protected her interests and fairly compensated her.

More after the jump.

Spanish driver sues the cyclist he killed for property damage caused in wreck.

Who says the Europeans aren’t as litigious as Americans? This guy certainly proves that theory wrong:

A Spanish driver who collided with a cyclist is suing the dead youth’s family 20,000 euros (14,800 pounds) for the damage the impact of his body did to his luxury car, a Spanish newspaper reported on Friday.

I’m not sure what his legal theory against the family is. This certainly wouldn’t fly here. And if this guy drove a roughly $80,000 Audi A8 - their flagship sedan, why didn’t he have collision insurance? Is auto insurance that radically different in Spain?

The family are understandably distraught. After taking pity on the man for his role in their son’s accidental death, they now say they are disgusted that the driver is only concerned about getting reimbursed for his property damage.

“This was the final straw, a kick in the teeth,” the youth’s mother Rosa Trinidad told El Pais.

As a cyclist, I hope the judge laughs this guy out of court. Does Spain have a “loser pays” system?

Ridiculous Lawsuit of the Month.

This story has already filtered down to that bellwether of the news industry, The Today Show, but I thought I’d mention it, too. A would be “base jumper” has sued the Empire State Building for $30 million for allegedly “endangering” his life when he climbed over the so-called “suicide fence” surrounding the Observation Deck of the Empire State Building so he could parachute off. I haven’t read the complaint, but I understand it claims he has been defamed, and alleges some theory of false imprisonment because he was handcuffed to the suicide fence.

In his defense, Ms. Corliss is apparently quite accomplished at this “activity” and has jumped from various landmarks, by permit and sometimes at the request of local authorities, including the Eiffel Tower, Golden Gate and Petronas Towers. Further, there is no specific statute prohibiting this “activity.” The Manhattan D.A., in a move worthy of the TV show Law and Order, charged him with “reckless endangerment.” A New York judge dismissed the criminal charges against him, holding that as a “professional,” he was experienced and careful, therefore, he could not have been recklessly endangering his own life or anyone else’s.

But his claims for damages and tortured theories of liability strain all logic. This morning on Today, he claimed the actions of the security team endangered his life because had his chute opened while he was cuffed, it could have ripped his torso from his arms. In all my years handling personal injury cases, I’ve never heard a jury award damages for what “coulda” happened. Imagine that argument: “If that truck was going 20 mph faster when it hit me…” or “If that other car had struck me on the driver side door instead of the rear end…” or “If the gas tank had exploded into a fireball…” or “If there had been ice on those steps…”.

He claims to have offered

to serve as a security consultant to the Empire State Building so that others, including suicidal people, would not be able to jump off.“Very small tweaks in their security will make it impossible to jump off that building,” Mr. Corliss said. “I would be more than happy to come in there and show them how to do that.”

Again, on Today, he claimed that there have been 3 or 4 successful “Base Jumps” from the Empire State, and over 30 suicides. As a mediator, I see a great solution here. I think both sides are angry, and nobody has really been hurt. (Adrenal fatigue? Sounds like a tortured attempt to show some physical harm to meet the requirements of a claim of infliction of emotional distress). The Building has a distinct interest in preventing suicides, as well as (the apparently legal) base jumps. Mr. Corliss would like to rehabilitate his “good name.” A highly public news conference announcing their partnership to “jump proof” the Observation Deck might satisfy everyone (except the publicity hound shyster that Corliss hired).