Sounds like it’s a long opinion–93(!) pages–but it looks like the Bush administration suffered a serious smack down in federal district court. Here’s the media report on the court’s ruling that President Bush’s aids must in fact honor Congressional subpoenas and appear and testify in response.

The district court’s ruling by Judge John Bates is a major blow to the Bush administration’s unprecedented claims of executive power. According to the MSNBC report, Judge Bates found that the assertion of immunity was entirely unsupported by existing law.  I have not yet read the opinion, so I can’t confirm the accuracy.

Side note and a bit of a digression: President Bush appointed Judge Bates.  This is of no import to most of us who work in the justice system. My experience is that most judges–especially those on the federal bench–highly value judicial independence.  It’s a core value of great importance, as we want judges to decide hard questions without political calculations.  While I frequently disagree with how a judge decides a particular case or issue, the value of judicial independence remains important. Nice to know that Judge Bates is not reluctant to find against the man who appointed him. To me, that’s the essence of judicial integrity and independence.

Bad week for the Bush administration. We got a re-run of the hack job done by Monica Goodling earlier this week. And now this slap down.

David Sugerman

On the political side, it’s a bit interesting to see President Bush cave and sign the housing rescue bill that he threatened to veto.  The president had little choice.  From what the experts say, if Freddie Mac and Fannie Mae go down, we would be looking at a profound financial crisis.

And of course, this means a taxpayer bailout.  I’ve got precious little math talent, so you should take my rough calculations with a grain of salt. But according to my pencil, when you add this bailout in the cost of the Iraq war and subtract revenue from tax cuts, we’ll be paying for this for…looks like about 407 years.  (Like I say, rough reckoning; you may get different numbers if you check my math.)

The sad truth is that this collision was brought to bear by very simple human forces. The truth is that people tend to be greedy.  And when you have a complex market, that tendency toward greed can go off in different directions. It will motivate lenders to loan money they should never loan. It will push borrowers to sign deals that are too good to be true. It will drive investors to buy junk securities that are nothing more than piles of bad debt. Everyone who gets a cut has an incentive to push and grab.

That’s where regulation comes in.  While market regulation isn’t perfect, it is the best way of controlling unchecked greed that gets you down into the multi-trillion hole that we will now bequeath to our children and grandchildren. I wonder if the president understands this now? Or is this profoundly expensive rescue going to be nothing more than the cost of doing future business?

I’m curious how the free market purists are reacting to this deal. I imagine that most concede that this rescue was inevitable. Regardless of whether they think the rescue was inevitable, I hope that a few have come to understand that unregulated markets don’t work in a complex world.

This issue of unregulated commerce is actually important to the work that I do.  Here’s how.

When a manufacturer sells an unsafe product that causes a profound injury, I have to come try to put the pieces back together.  That’s a claim and/or lawsuit process.

The purpose of that process is to assign responsibility for unlawful conduct and pay the injured person for his or her harms and losses.  Of course, we would all be better off if the injury didn’t happen. Reasonable regulation of product safety is the best way to prevent injury. And for those who really dislike trial lawyers, there is an added incentive: when regulations promote safety and injuries decrease, people like me have less work. That’s an outcome I’m ready to embrace.

I would really like to hear from free market advocates about whether this rescue was essential and whether this costly stain doesn’t undermine the argument that unregulated markets are essential.

David Sugerman

Great news. Another juror from the recent Craig Berkman trial contacted me following the most recent post about the Berkman case.  Jim served as the presiding juror. He is properly proud of the hard work that he and his colleagues did on the case. He’s apparently been following the thread on this case, and he weighed in with the following:

***

I saw your blog posting about total damages and wanted to comment. The chicken scratch on the verdict form is mine – I was the presiding juror.

If you add up the amounts in questions 8, 9 and 19, the amount that the jury intended to award in economic or compensatory damages totaled $30,514,921. Note that’s separate from the $23M+ awarded against Arthur Anderson. And separate from the $15M in punitive damages awarded the following day.

But for reasons I don’t fully understand, the court interpreted some of the numbers differently and came up with a lower total number for the damages. This was despite two questions of clarification that were submitted to Judge Hodson during deliberations (and answered in what appeared to be a clear and concise manner). Many of the jurors were upset about that, particularly given it may have made Arthur Anderson look “more guilty” than Craig Berkman because the reported amount of damages against Anderson was more than Berkman. Further confusing the issue is that different amounts were reported in different news sources. Candidly, if we had known that the $30M total would be reduced, this probably would have affected the amount of punitive damages awarded.

Of course, this is probably a moot point given Mr. Berkman claims that he, personally, and his companies are millions in debt and it’s questionable how much the victims will end up receiving.

***

More from David: Jim is referring to the verdict form that is posted in this entry.

Jim-As with your colleague in her earlier post, it’s apparent that you and the other jurors served attentively and worked hard to do the right thing in this case.  Once again, it shows the strength and integrity of the Oregon jury system. Kind of makes me proud to be part of this thing.  Thanks so much for sharing your experience with us.  Even though I have no connection to your case, I want to thank you and your colleagues for your service.

David Sugerman

Gosh, why am I so not surprised by this report that disgraced former Attorney General Alberto Gonzales’ top aid broke hiring laws when she worked for the Department of Justice. Media reports indicate that the U.S. Dept. of Justice released a report finding that Monica Goodling broke federal law and Department of Justice rules by discriminating against applicants who weren’t Republicans or loyal conservatives.

This is something of a re-run, as the Gonzales DOJ also fired US Attorneys based upon loyalist considerations.  At least they’re consistent, as they illegally discriminated in both the hiring and the firing.

Sad to see what I’ve long suspected and that is that the Bush DOJ chose doctrine over talent. But then again, I think we’ve seen this elsewhere from this administration.

Heckuva job, Brownie.

David Sugerman

I got a polite but fairly annoyed letter note from Craig Berkman’s lawyers last week about how I had made false and disparaging comments about Mr. Berkman in an earlier post on this blog. After some back and forth, counsel supplied me with a copy of the verdict form. It’s here: berkman-trial-signed-verdict-form for those geeky enough to want to read.

It’s been an interesting back and forth with Mr. Berkman’s lawyers. On one level, correction is the right thing to do, as I always strive to be accurate. But it also raised a host of other questions. Had I not corrected the post, I imagine that I would perhaps have been sued for defamation.

The law of defamation is one of those special areas taught briefly to law students. It’s all about injury to reputation by false statements. The thing about someone claiming defamation is that you have to show–among other things–that the false statement damaged the plaintiff’s reputation. Always an interesting question.

The mistake I made in the post–since corrected–is that I talked about the fraud trial and the amount awarded. By the time the case got to trial, the fraud claim had been removed. Thus, the jury did not consider fraud and did not make a finding. There were, however, claims for conversion, which means intentionally taking property that isn’t yours and using it for your own benefit, and for negligent misrepresentation. But there was no claim for fraud.

I also got wrong the amount awarded against Mr. Berkman, implying in one place that it was $36 million, where I explain later in the original post that the amount was split between the defendants. That was just sloppy drafting on my part.

Anyway, my apologies to my readers for passing on bad information and to Mr. Berkman and his attorneys, as it’s not my intention to provide inaccurate reports. Hope this sets the record straight.

David Sugerman

Complaints about their customer service are almost legendary. But Comcast seems to be responsive when someone is blogging about them. Full disclosure: I represent consumers suing Comcast Oregon over what we claim are illegally charged cable late fees. So I’ve probably got a bone or two to pick.

It’s a bit sobering to see the revelation of corporate web pr strategies. I guess it’s a reminder that the guy or gal who comments on the blog can be doing so on the job. Same is true of the legions of pretenders out in the whacky web world.  Still, you have to wonder whether Comcast could be devoting resources to complying with billing laws or providing direct customer service.

David Sugerman

Catching up some more…can one blogger ever go on vacation?! Here’s a neat piece from the Oregon Supreme Court on Bill Sizemore, racketeer.  It’s a court opinion, so a lot of it is in legalese. But there are sections worth lifting from Justice Balmer’s opinion for the unanimous court:

“A jury found that defendants–a political action committee and a nonprofit corporation controlled by the same individuals–engaged with others in a pattern of racketeering activity, as defined in ORICO, by forging signatures to qualify two ballot measures for the 2000 general election and by filing false statements with the state from 1998 through 2000 concerning their expenditures and contributions. The jury also found that defendants’ illegal conduct injured plaintiffs–two labor organizations–that spent substantial amounts of money opposing the ballot measures. The jury determined that plaintiffs had suffered damages of approximately $840,000….”

The Court goes on to explain that a jury found that an enterprise that included Bill Sizemore engaged in racketeering. Mr. Sizemore–for those who don’t know–makes a living submitting poorly written and confusing initiatives to Oregon voters.  Turns out he does this by way of fraud and forgery.

As the Court explained, Sizemore’s group, Oregon Taxpayers United and the rest of the defendants, did not, “challenge the jury’s findings that they did, in fact, forge sponsorship and petition signatures or that OTU-EF submitted false reports to the Attorney General regarding its charitable activities.” Instead, the defendants made a number of technical arguments that the Oregon Supreme Court rejected.

So maybe now Bill Sizemore, Racketeer, becomes the name rightfully attached to all these horrible-idea initiatives. For years, I’ve had a sense that some people were using the Oregon initative process in inappropriate ways. But it’s only as a result of this case that I’ve come to understand that Oregonians are being played by a bunch of corrupt racketeers who are intent on hijacking our initiative system.  There ought to be a law.

Kudos to the people who pursued this case and shined a light on Bill Sizemore, Racketeer. The legal team handling the challenge includes a number of friends who should be proud of their great work for Oregonians. Two of the lawyers, Mike Morris and Gene Mechanic, are old friends who do top-flight work.  It’s particularly gratifying to see that they nailed Bill Sizemore, Racketeer. Maybe this is a lesson to Bill Sizemore, Racketeer that his days of pushing his corrupt agenda on us are coming to a close.

You can be a part of saying no more to Bill Sizemore, Racketeer.  Next time you see a petitioner circulating one of those initiative petitions, be sure to ask whether Bill Sizemore, Racketeer is involved.  And if he is, tell them that we don’t do business with Bill Sizemore, Racketeer.  And then don’t sign. Because I imagine that you agree that there’s no place in Oregon for Bill Sizemore, Racketeer.

David Sugerman

No secret that I’ve been a big critic of large insurance companies. You don’t have to look too far into the archives to find a combination of snarkiness, outrage, and jaundice over some of their practices. So this one is in the spirit of calling it fairly. While away on vacation, I missed this report on the outcome of high-flying plaintiffs’ lawyer Dickie Scruggs’ fall from grace.

Back story is that Scruggs is one of the guys who took on the tobacco industry made millions, took on the insurers on Katrina claims, and was poised to make millions more. In between he’s done all manner of injury cases. I have no basis to know the specifics, but I would be willing to bet that he’s earned sums that might shame some small countries’ gross domestic profit numbers. So he falls from grace when the state and maybe a few insurance carriers go after him for attempting to bribe a judge.  They got him, and now he’s going to jail.

Let’s be clear. Allstate, State Farm, The Wall Street Journal and everyone else has a right to call this guy a crook and to be wary of conduct like this. I join them, by the way. I particularly appreciate what Mr. Scruggs has done for injured people with legitimate claims and their lawyers who play by the rules. (Editors note: He’s being snarky, again…he’s not grateful. Not one bit.)

It’s a black mark on those who represent injured people. It’s worse than the magic pants guy, as this was an attempt to completely undermine the fairness of the civil justice system. The problem is that criminals and clowns like this provide major fuel for the efforts of those who would limit consumers’ ability to access the courts.

It was reported that Mr. Scruggs swooned when the judge sentenced him to the maximum. Good. And I hope the jerk spends each hour of his five years reflecting on how his corruption undermined the civil justice system. I say big props and major thanks to the trial judge. By slamming him, the judge made it clear that the integrity of the civil justice system will not be undermined by criminals.

David Sugerman

This one slipped under my radar. Only the heads up from a colleague alerted me that Providence healthcare system has agreed to a fine for HIPPA violations arising out of the data loss of 2005.

FYI, along with several other lawyers, I represent patients whose unencrypted computerized data was lost when a car burgler stole data from a parked car. The case for money damages is currently pending in the Oregon Court of Appeals.  We filed our opening brief on behalf of the patients, and Providence is due to file its response shortly. After they file their response, we’ll have one more brief, and the Court of Appeals will hear oral argument. I doubt very seriously that we’ll get a decision before 2009.

As for the HIPPA fine, $100,000 seems like a lot on its face, except when you realize that hundreds of thousands of patients were affected by the data loss.  Providence has now settled with both the State of Oregon and the U.S. government. Even so, they are still fighting damage claims brought by patients who seek compensation for their harms and losses.

In the life of the case on behalf of the patients, this is a non-event. We will continue forward.

David Sugerman

There’s that commercial with the earnest, wise and sentorian guy talking about all the great things they do, ending with the intonation, “That’s Allstate’s stand.”  A new American Association of Justice study noted here names Allstate the worst insurer.

Interestingly, Allstate’s CEO’s 2007 compensation topped $10 million for the year.  That’s a lot of premium money. More to the point, it’s fair to say that Allstate has some…uh…history of being naughty.

My own experience is that some insurers are worse than others. While not all are bad news, many give injured consumers and policyholders the runaround when people make claims for their harms and losses. It’s common to hear someone in my office express surprise when Allstate or one of the other carriers fails to make good on its end of the insurance contract by, for example, failing to pay medical expenses incurred by the injured policyholder.

That’s particularly outrageous because the policyholder did what they were supposed to when they paid for the coverage. And then they get stiffed or hard-timed by Allstate. This is what we in the trenches refer to as, “Allstate’s stand.”

David Sugerman