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’ numbers.  So he falls from grace when the state and maybe a few insurance carriers go after him for attempting to bribe a judge.

And 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.

For that I am eternally thankful to Mr. Scruggs. Not.

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 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

I’m totally transfixed by news reports on the Craig Berkman trial. According to this report, Mr. Berkman admitted that he falsified his personal financial statement. It wasn’t one of those tiny little white lies, either. Apparently, he circulated financial statements showing his net worth to be $25 million when he was actually $5 million in debt.

Short version backstory: Craig Berkman is a former Oregon guberntorial candidate who lived the good life as a way wealth investment hotshot. Apparently, that living came either from self-lending made without investors’ knowledge or from outright theft. (Or maybe it’s somewhere in between?)

There are a number of other misstatements set forth in the article, too. But let’s not rush to judgment. Mr. Berkman apparently still denies that he stole money, claiming, instead, that the borrowed it and paid it back with interest.

One of the striking things about the news report is that it shows that it took a lawsuit to get to the bottom of his dealings. Until lawyers at Bullivant Houser filed a lawsuit, the investors couldn’t get the records that sheds the light that forced Mr. Berkman’s admissions.  I wonder what the story would be today if the lawyers for the investors hadn’t dug deep to get the records?

Can’t wait to see how this one turns out, but if I had to bet money–and I don’t–I wouldn’t be betting on Mr. Berkman here. At least not from what I read in the press.

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

Back in late 2005, a car prowler stole unencrypted computerized medical records of 365,000 Providence Health System patients from an employee’s car. We filed a case here in Portland on behalf of the 365,000 patients, and the trial judge granted Providence’s motion to dismiss the claim. We appealed and recently filed our opening brief with the Oregon Court of Appeals.

I co-authored the brief with my friend and colleague, Brian Campf. Here is a pdf version:

Providence Class Action: Patients’ Opening Brief Oregon Court of Appeals

Appeals move at their own pace. I don’t expect a decision from the Court of Appeals until 2009.

David Sugerman

Those of us who handle wage and hour cases learned yesterday that the Oregon Supreme Court issued a major decision denying employees the right to collect wages. In the case, Gafur v. Legacy Good Sam Hospital, workers who did not get mandatory rest breaks sued to collect unpaid wages.

Oregon law provides that employees get 10 minutes of rest for every four hours worked, and no pay may be deducted for the rest break. The employees argued that Oregon’s rest break rules means that they should have been paid 10 minutes’ wages when they were denied rest breaks. The logic to the argument is sound, in that for employees time is money. So if you’re not allowed to take the time provided to you, you should at least get the money.

But logic and law don’t always mesh. The Court got there by finding that the regulations are for health and safety and don’t create an entitlement to pay.

The other interesting thing is that the State Bureau of Labor and Industries–”BOLI”–filed an amicus, or friend of the court, brief that supported the employees. So the employees had both logic and BOLI on their side. Neither swung it with the Court.

The last interesting point is that the Court–as is common–was unanimous in its decision. At least two of the Oregon Supreme Court justices had significant background representing employees before they became judges. And most of the rest of the court had substantial experience representing the State–here BOLI. But as is common with our court, the judges’ pre-appointment backgrounds proved to be poor predictors of the outcome. This is one of those other measures of judicial integrity and judicial independence–two critically important features of our courts.

I can say as much, even though I believe the Court got it wrong. No doubt this is because I represent employees in wage claims and see these issues through a partisan filter.

David Sugerman

Interesting write up today in The Oregonian about the civil trial in a case brought by former investors against formerly high flying financier, party activist, Republican gubernatorial candidate, Craig Berkman. This is another one of those cases where I just want to grab a big tub of popcorn, plop down in an easy chair and enjoy the show.

At the front end, Mr. Berkman apparently admits that he secretly took $3.8 million in investors’ money. Apparently, his lawyer plans to claim that the investors losses of $20 million came from market conditions, not the secret taking of cash.

I’m taken with several parts to this.  Most notably is the repeat of the realization from the Adidas verdict that no one rants about businesses suing businesses for large sums of money.  Same is true about investors, I guess. And I don’t really have a beef with that, but I have to wonder why a double standard applies when a profoundly injured person dares to sue for damages.

The Big O article closes with a specific description of Jordan Schnitzer’s experience. All of Portland knows the Schnitzer family–they are successful, high profile civic leaders who have given large sums of money to many Portland institutions. I assume that Mr. Schnitzer’s net worth is such that his million dollar loss has relatively little impact on his overall wealth. I don’t mean to sound petty–it’s more that you need a sense of perspective about these things. But of course, it’s an interesting part of the story.  And regardless of his wealth and status, Mr. Schnitzer has every right to press his proper claims forward.

The other interesting piece is that Bullivant Houser’s Steve English leads the team representing the investors. He’s an accomplished trial lawyer from a law firm that focuses mostly on business and defense of claims.  It’s a large law firm by Portland standards.

While I suppose it’s easy to write it all off as a big-firm lawyer representing some pissed off rich people against a wrongdoing rich guy, the lesson underneath is that we all need a civil justice system. We all need access to the courts. We all need to be able to hold wrondoers accountable. That should be true whether the case involves multi-millionaires fighting over who owes what to whom or whether the case involves a working person who suffered profound injury caused by a dangerous product.

David Sugerman

If you read fiction about trial lawyers, you know there are some pretty inventive plot lines out there. John Grisham thrillers and Phil Margolin crime novels always have neat plot twists.  But I don’t think any lawyer/author working in fiction could conjure up a story this bizzare.

The angels at Public Justice filed a class action lawsuit today to stop the marketing of a kids toy set based on CBS TV’s popular CSI series. The toy contains asbestos.  According to Public Justice, the toy’s fingerprinting powder is laced with a deadly form of asbestos, and kids’ normal use of the product will lead to inhalation of this toxic compound.

Hard to imagine that this kind of thing can happen. Worse than that, it apparently takes a lawsuit to get this irresponsible manufacturer’s attention.

David Sugerman

For those following the consumer case on behalf of students and graduates against Western Culinary Institute and Career Education Corp., a copy of the amended is available for download.  Link should be below. (I’m crossing my fingers that I’ve done this correctly!)

David Sugerman

Gozzi et al v. Western Cul Inst Ltd, Amended-complaint

The Center for Justice and Democracy compiles fact sheets on a number of civil litigation topics, including case filings, litigation expenses, lawyer fees and the like.

Here’s a nice annotated summary from the Civil for Justice and Democracy of the myths connected with the civil justice system:

http://centerjd.org/MB_2007civil.htm

Two of my favorites:

1) The “frivolous lawsuit malpractice crisis” is shown to be a myth.

From an article in the New England Journal of Medicine:

“A recent Harvard School of Public Health study that closely examined 1452 closed claims concluded that ‘[p]ortraits of a malpractice system that is stricken with frivolous litigation are overblown.’[fn4] The study found that most injuries resulting in claims were caused by medical error, and that those that weren’t were, nevertheless, not “frivolous” claims. [fn5]”

Source: David M. Studdert, Michelle Mello, et al., “Claims, Errors, and Compensation Payments in Medical Malpractice Litigation,” New England Journal of Medicine, May 11, 2006.

2) And then there’s the tidal wave of litigation that is overrunning our courts because too many injured people file lawsuits:

“The number of tort trials concluded in U.S. District Courts declined by 80 percent from 1985 to 2003.”

Source: Bureau of Justice Statistics, U.S. Department of Justice, “Civil Justice Statistics,” found at http://www.ojp.usdoj.gov/bjs/civil.htm

There are all sorts of other topics covered in the CJD reports. If the general importance of the civil justice system matters to you, you might want to peruse their website, www.centerjd.org

David F. Sugerman