This is a post about what is not there. Right here in River City, a federal court jury found in favor of Adidas Corp. on its trade infringement claim against Payless Shoes, finding damages in excess of $300 million.  The Chamber of Commerce and its allies have long shouted out major screeds about the civil justice system, claiming that it is horribly unfair because juries award too much money.

But when a business got a huge award, the Chamber sat silently. I suppose this should come as no surprise, but the Chamber and its friends have nothing on their websites about the Adidas verdict.  Neither does the American Tort Reform Association.

Nope, their attacks on the civil justice system focus on cases brought by injured consumers.  And some–like the magic pants guy–are grounded in half truths. In the assinine case of the judge who sued the drycleaner for his lost pants–the magic pants guy–anyone who follows the whole story learns that the system works just fine.  But that won’t stop the Chamber from parading it as a horrible or the American Tort Reform Association’s ridicule.

So one thing that this deafening silence suggests is that the Chamber and the American Tort Reformers only complain about lawsuits brought by individuals. Another is that their complaints–too much money awarded in civil lawsuits–are really not complaints about the amount of money so much as they are about who gets the money.

I’ve got nothing in the Adidas case. They have a right to enforce the value that they’ve poured into their brands. But let’s be fair. When the Chamber wants the rest of the world to believe that its war on the civil justice system is honest and open, it will call foul when a corporation gets the outsized verdict. Anything else just smells really, really bad.

David Sugerman

The story is coming out that Melvin Weiss, former class action securities lawyer, was sentenced to 30 months and fined $10 million under a plea deal with the U.S. Department of Justice. The Milberg Weiss law firm has been a national presence for years, handling some of the largest securities class actions in U.S. history.

I would be a hypocrite if I failed to write about this and say the obvious. As I’ve noted before, getting rid of the cheaters is critical to a healthy civil justice system. That’s true regardless of which side the cheater operates from. Melvin Weiss did a grave disservice to consumers and investors. I have my doubts that 30 months + $10 million is sufficient, if you think about the harm inflicted. Even so, it’s done.

I imagine that there will be quite the feeeding frenzy on the corruption at the Milberg Weiss firm in the blogosphere,  at the Chamber of Commerce, from the tort reform advocates, and over at FOX news. But let’s remember that the corruption that nurtured Milberg Weiss operated heavily on the investment firms, as well. If that’s not readily apparent, here’s a quick list for the consideration: Bear Stearns, mortgage lending, Enron.

All of that is beside the point. As one who handles class actions, I’m strongly in favor of getting rid of the corrupt. Good news in the end.

David Sugerman

As Congress considers changing rules on mandatory arbitration clauses, here’s an account of how Chamber of Commerce is gearing up to protect business interests. The point that is missing from all this is in the fine print.

Those of us who oppose mandatory arbitration generally do so because of the provisions that you don’t see because they are obscured, much like the dangerous part of the iceberg that lies below the water line.

An agreement to arbitrate by itself isn’t so much of a problem, so long as the parties truly agree. But when the agreement to arbitrate includes common features that strip one party of their rights, it isn’t an agreement that we should tolerate.

What sorts of rights get stripped? Well, in consumer cases the right to recover attorney fees if you prevail. Or the ability to pursue a small claim through a class action, which is the only way anyone can do a small claim. Or the right to a truly neutral third party decision-maker. And affordable arbitration, without expenses and fees that make it impossible to pursue a claim.

It’s easy to see a sound compromise. If the Chamber truly wants mandatory arbitration, it will agree that all the nasty iceberg provisions should be outlawed. As an Oregon trial lawyer, I don’t oppose trying cases in arbitration, so long as that’s what a consumer truly agreed to and–this part is important–so long as consumers rights aren’t stripped away.

David Sugerman