Only occasionally do I really enjoy a meeting room full of lawyers. Last night was one of those occasions. My partner of 14 years was honored with the likes of Hardy Myers, Greg MacPherson and colleagues from across our state. The reason: The Oregon State Bar’s Annual President’s Award, given for meritorious service to the profession. Not just our clients, but the profession.

In large part, this award recognized work in support of access to justice, and in support of contingent fee representation. But really, there was more.  The years of dedication that David has demonstrated in fighting for the rights of employees, injured people and consumers culminated in this well-deserved award.He is also a mentor, formally and informally to younger lawyers. Well, older lawyers like me as well.

It is easy to get lost in the day to day work we do. We face piles of papers and loads of arguments. Last night allowed a bit of a vitory lap, together with many others who practice the profession.  Sure, I could list them all, but only one has been a friend for over 25 years and a mentor to me…..So congrats to David Sugerman from the staff and partner here at Paul & Sugerman, PC.

David Paul

Looks like Mr. Sizemore signed the tax forms that led to his contempt jailing yesterday. That proved to be his get-out-of-jail card. Mr. Sizemore called his jailing “political” and his wife referred to him as a “political prisoner.” She also referred to Portland as a “communist” town.

Mr. Sizemore and his family and friends seem to ignore a few important facts. Most notably, Mr. Sizemore was simply failing to comply with an order of the court. Oregon judges have the power to hold a party in contempt when the party fails to comply with the judge’s order. There are statutes and rules that govern the contempt process.  Judge Wilson apparently held Mr. Sizemore in remedial contempt. The process of remedial contempt ends once the party complies with the court order. You want out of jail? Follow the court’s order, and you’ll get out of jail.

Remedial contempt is certainly at odds with “political prisoners” and “communist” regimes, as people wind up in jail without proceedings and without any end. I suppose it’s something akin to a parent using the time-out method of gaining compliance from a wayward child. No one doubts the parent’s authority to do so and the importance of the role.

Judge Wilson did more than any parent, of course, as she stood for the integrity of the judicial system. In that way, she demanded of Mr. Sizemore what all of us demand, and that is that he follow Oregon law.

I don’t imagine we’ve heard the last from Mr. Sizemore. Bother.

David Sugerman

Good explanation in–of all places–Forbes on how caps on damages discriminate against retired and lower-earning individuals. Oregon legislators and voters are often asked to consider capping damages, and for that reason, this is a good read.

As the author explains, caps on damages typically limit non-economic damages.  Non-economic damages have been wrongfully labeled as “compensation for pain and suffering.” In fact, those damages address all forms of harms and losses bound up in the joys and pleasures inherent in life that can’t be measured by a simple paycheck or bill. So if you lose the loving relationship of your mother, that is a non-economic harm and loss. Same deal if you lose your ability to lift your child, taste food, see a sunset, or walk on the beach. Those profoud human joys are at the core of non-economic damages.

Caps often do not limit what are called economic damages, which address an injured person’s out-of-pocket losses. Miss a month of work because you got hit by a drunk driver and that loss of pay is an economic damage. So are the medical bills that you incurred.

So here’s the problem. Those who fare well in the legal system are only those who have large economic losses. If you lost 10 years of earnings from a doctor’s mistake or if you will need lifetime medical care, you will be able to recover full compensation. But if you were retired or under- or unemployed, you won’t. The capped claim system doles out justice based on wealth.  In that respect, it is fundamentally wrong.

David Sugerman

In many areas of litigation, expert witnesses provide crucial testimony about all sorts of things. Issues addressed by experts include the medical condition of a party, the complex financial transactions of an investment scheme, the mental capacity or sanity of an accused, and the safety of a product.

In the American system, experts are hired by either party, and they testify for the party that hires them. In many other judicial systems, experts are hired to advise the court and do not work for either party.

Some view the American system as a horrible practice. The criticism is that experts become little more than information prostitutes who sell themselves to the highest bidder. I don’t subscribe to this view, for what it’s worth.  My take is that an expert who can’t be objective is nearly worthless. Jurors look to us for credibility. I lose that credibility if my expert cannot take a principled approach to testimony.

All this is a long way around to this New York Times article about expert hot tubbing.  In expert hot tubbing, the experts appear at trial together and address the issues jointly. They even ask questions of each other and discuss the case jointly in front of the trier of fact.  The article claims that the practice originated in Australia.  It’s an interesting thought, though I have to wonder whether it’s the panacea suggested by its advocates.   After all, if an expert truly lacks scruples he or she isn’t going to change that point of view by appearing at trial with the opposing expert.

Even so, it’s an interesting view of the world. For those who geek out on the details of the civil justice system, it’s well worth the read.

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:

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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.

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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

Special guest today. I received a lengthy email from one of the jurors in the Craig Berkman/Arthur Andersen case, and I’ve republished most of it below. The juror is Karmen, a woman, who identifies herself as a juror who sat on the recent Berkman trial. Here is her account, which I’ve edited just a bit for brevity and clarity.  I’m fascinated by her account and hope you will be, too.

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Hi David,

Thank you. Yes, it was a lot of work. There were over 500,000 pieces of paper in this case, fortunately we didn’t see them all though, we saw the same (approx 200 over & over & over :) This was my first time serving on a jury, so that was an experience in itself. I had no idea how it worked exactly or what to expect, and certainly didn’t think it would last for so long.

Its nothing like what you see on TV. The attorney’s crack jokes, and even Judge Hodson laughed and surprisingly, he didn’t have to use his gavel, not even once. Closing arguments take 20mins on TV, but ours took all day.

I know it was very hard going into that jury room during breaks and not being able to talk about the case, it was the elephant in the room we couldn’t acknowledge. So we scrutinized and talked about everything else attorney’s tie’s, the “theatrics” in the courtroom, wondering who the people sitting in there everyday were, and we played a lot of scrabble.

I didn’t always keep a straight face, or keep from rolling my eyes in the courtroom. It’s annoying & frustrating when the evidence is right there, yet someone is trying to tell you it’s not what it obviously is, or to listen to a witness who says nothing but “I don’t recall” for 2 hours. More than once I honestly thought “They must think we’re stupid”.  Well, none of us were.

I was very impressed with the Bullivant attorney’s & Mr. Fortino, and I think they did a wonderful job of representing the plaintiffs, and obviously proved their case to us without a doubt.  Mr. George even impressed me; he did a good job with what he had to work with, as far as the evidence, etc. But it was a weak case.

It was a little difficult seeing Mr. Berkman in there everyday, because he’d make eye contact with us and smile, and I hated that. I didn’t like it when the witnesses did that either, but you really have no choice but to keep looking at them when they do it. I understand why they do it, but it was difficult.

Our first witness was Jordan Schnitzer, and I really liked that guy on the stand. He wasn’t intimidated at all. He took no crap and got his licks in as fast as he was getting them.

The most difficult part was deliberating. I felt bad for Mr. Berkman, as a person. But I wasn’t there to see him as a person, I was there to weigh the evidence, and determine what (if any) damages resulted from that evidence.

When it came to damages however, I still had to occasionally remind myself that WE were not ruining him, WE were not tarnishing his name, WE were not the thieves, WE didn’t try to hide anything, and that whatever we decided was not OUR fault, but his…. He did this to himself, it was just our job to determine what was due to the plaintiffs and not to worry about how old, pathetic, broke or ruined he was as a result of his actions. But that wasn’t always easy, it was emotionally draining at times.. the whole thing was.

You realize the responsibility you have.  It’s a lot of pressure, and its stressful. What’s even worse, is not being able to talk to anybody about the stress you’re under.

In the end, I stand behind our decision 100% for Craig Berkman & Arthur Anderson.

This whole thing has been a learning experience I will never forget, or regret doing, and I’m glad I was a part of it. I feel justice was served.

I had so many people telling me I should try to get out of jury duty, and what to do & say to accomplish that.

The funny thing is, I’m 37 and always hoped to be called for jury duty, I just never was until now. So I was actually hoping to be picked.. and I’m glad I was. I think everyone should do it if they can, at least once. For the experience.

I was fortunate enough that my job paid me my regular wages while I served, but not everyone who served with me got paid from their job. They did it on the $10 a day the court paid.. for 5 weeks!! I give them so much credit for not asking to be excused on those grounds.

We had a really great group of people, there were some tense moments, but for the most part we all got along & after spending so much time together, we really got to know each other.. 7 of us went for much needed drinks yesterday and I hope we’ll keep in touch.

So there you have it, some of this jurors thoughts…

Thank you for your kind words,

Karmen

***

Karmen-Fabulous. Thanks to you and your peers for making our jury system work. It’s really one of the true strengths of our country, isn’t it?

David Sugerman

This report from The Oregonian on the Berkman trial. According to news reports, Mr. Berkman testified yesterday that he always intended to repay the investor money that he took, and thus they were loans.  I imagine this one is going to be hard one to pull off.

The news reports also highlight Mr. Fortino (one of the investors’ lawyers) cross examination, reporting that Paul Fortino got Mr. Berkman to concede that “loans” are customarily transactions in which the borrowers atcually know that they were lending money. Apparently, these were “loans” that weren’t actually disclosed to the borrowers.

It’s not in the news report, and I don’t have a transcript or first-hand knowledge, so the rest of the cross examination is something I can only imagine. But I suspect that Mr. Fortino went through a litany about a lack of documentation including promissory notes, contracts, loan documents, and the like. He probably had a lot of fun asking about the particulars of these “loans” like the amount of principal, the interest rate, and the repayment date.

I suppose all of this should be written and read with a shred of skepticism, or what in law talk we call, a caveat. News reports sometimes get trials wrong…really wrong. Sometimes that’s innocent when a hard working and honest journalist simply misses something. Sometimes–rarely, I hope–it’s because the reporter has an agenda. And sometimes it’s as simple as an editor nixed part of the report for good or bad reason. So it’s possible that the news report gives a misleading impression of the trial. And all of us owe the system and the parties the grace of waiting for the jury to tell us how it turns out.

Still, it’s impossible not to react to the news report. While I haven’t watched a lick of this trial, it strikes me that Mr. Berkman is coming across like a youngster who hasn’t mastered the fine art of lying. There are several common attributes of good liars, including telling a story that is plausible enough for the listener to suspend his or her critical thinking. And if you’re going to be a good liar, never spin a yarn that is completely at odds with how the world works. Because who could possibly believe that this was a loan?

David Sugerman

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

Double dose of irony in this report in today’s Oregonian. It seems that a lobbyist for the Oregon Coalition of Mortgage Originators, Shane Jackson, filed suit in Multnomah County Circuit Court to collect his unpaid fees of $20,000. According to the news report, he sued both the Oregon Coalition of Mortgage Originators and its president, William Ridge.

Back story: Jackson and the Oregon Coalition of Mortgage Originators worked to stop reforms aimed at tightening the rules on mortgage lending. Alert readers might immediately connect this effort to the whole lack of regulation that got us into the mortgage lending crisis.

More detail: The Oregon Coalition of Mortgage Originators took great glee in killing SB 965 in the 2007 session. The bill,  Senate Bill 965, would have required plain language disclosures and use of underwriting standards.  It would also have allowed consumers harmed by mortgage lenders misconduct to directly sue.

According to the news report, the real estate market downturn put Mr. Ridge in a position of being unable to meet the payments on his new South Waterfront Condo.  Ridge apparently defaulted. That’s apparently part of the reason why Mr. Jackson has not been paid.

So here’s the first level of irony. These cowboys were so busy protecting their “rights” (read: positions at the trough) that they wouldn’t acknowledge the obvious. Lack of regulation and market oversight caused the mortgage lending meltdown.  And that is the main culprit in the real estate slide that bit Mr. Ridge in the backside.  While no one knows whether prompt action would have boosted consumers’ confidence in the market, it’s easy to see how Mr. Ridge, the Oregon Coalition of Mortgage Originators, and their lobbyist have all gotten swept up by the under-regulated markets.

And as for the second level of irony, my vague recollection is that the Oregon Coalition of Mortgage Originators opposed reforms in part because they allowed consumers harmed by misconduct to…gasp…file a lawsuit if the lender’s misconduct injured the consumer.  I guess Mr. Jackson didn’t lose any sleep over filing a lawsuit when he got stiffed for his rightfully owed $20,000. Maybe he now has a different take on the need to be able to pursue claims in court?

The whole thing would be little more than a belly laugh if so many others weren’t otherwise harmed by the collapse.  Can’t help but wonder what my friends at Our Oregon think of all this. They fought valiantly for consumers on SB 965. Angela Martin from Our Oregon was demonized for taking the lead. A number of good people–my friend Phil Goldsmith, for example–spent countless hours working on behalf of consumers on these issues.

I wonder now if Mr. Ridge and Mr. Jackson have had second thoughts about their work opposing lending  reform or about Our Oregon’s work on SB 965?

David Sugerman

Probably just coincidence, but it caused me to snicker.

Last night I was channel surfing in a vain attempt to find Oregon primary election results.  I happened upon an earnest woman who confided in me and all my fellow viewers that we really need to be concerned about global warming and foreign oil. With a knowing but concerned smile–and with chirping birds in the background–she faced the camera and explained that we need nuclear power now more than ever.

Like I say, it’s probably just coincidence. Today’s news reveals that a federal judge court upheld a $350 million dollar verdict in a class action brought on behalf of some 15,000 landowners against the nuclear industry.  They claimed that their lands were contaminated from the operations of the Rocky Flats nuclear weapons plant.  The jury agreed, awarding the aforementioned damages. The judge also added interest, increasing the $350 million verdict to about $900 million. Guess we’re going to see an appeal….

This is one of those staggering cases, in terms of size and duration. I don’t know anything about it other than what I read in the paper.

Even so, it’s easy to fill in the blanks. A nuclear waste contamination case would be profoundly expensive to pursue because of legal fees and the costs of experts. The nuclear industry would surely defend such a claim in a tough and hard-nosed fashion. For those reasons, a case like this probably could not go forward without the class action device.

I’m sure that the team representing the landowners has done an unimaginable amount of work to get to this point.  It takes an amazing level of commitment to take on a case like this and to see it through to the end. Let’s hope that the landowners see justice soon, and the legal team representing them is properly rewarded for taking on a very tough case.

And as for the brightly lit woman and her soothing dulcet tones who talks so earnestly about our nuclear power needs….Can’t help but wonder what the Rocky Flats people would say about that.

David Sugerman