Christmas came early for current and former Wal-Mart employees with this good news. Wal-Mart has agreed to settle 63 wage and hour claims pending in various courts. Wal-Mart will pay between $350 million and $640 million to settle the pending cases. No word yet on how much any employee will receive. The settlements must still be approved by judges overseeing the various cases. Critics of Wal-Mart have long questioned whether it achieves its low prices at by chipping employees. Still, it’s a good day when a company steps up to do what is right–no one who works for wages should have to endure the death by a thousand paper cuts of small illegal wage deductions for work performed. The case illustrates the importance of wage and hour class actions. Employees who face illegal employment practices often can’t afford to pursue their small claims. But when those small claims are bundled into a class action, a company that makes money by chipping its employees can be forced to face up to a huge day of reckoning. That’s apparently what happened here. David Sugerman

This one sent a bit of a chill down my spine, as I have a number of friends, clients, and acquaintances who are insulin-dependent diabetics. Apparently, a labelling error by Covidien, Ltd. has led to a recall of over 400,000 disposable syringes. The error reportedly could result in insulin doses more than double the intended level. Affected products were apparently sold at Sam’s and Wal-Mart.

I don’t like to play fear-monger, but it seems like this is enough of a danger to insulin-dependent diabetics that getting the word out is a good thing.

David Sugerman

I try like heck to avoid the media’s scare-of-the-day mentality. But this New York Times mag report leaves me with one of those bad feelings in the gut.  Drugs manufactured in China? Great. After the various lead paint toy problems, I’ll pass.

Part of the problem is the Wal-Mart syndrome that says that lower prices are always better. In pursuing the lowest possible price, sellers move production off shore. Of course, you could make a car cheaper by simply omitting the brakes. That would be a good example of price slashing going too far.

Call me crazy, but I’ll pay more for aspirin if it means that I’m getting aspirin I can rely on to be safe. Unfortunately, recent Chinese manufacturing scandals give consumers reasons to worry.

David Sugerman

I would be remiss if I didn’t note this New York Times report on prison sentences for former insiders at Milberg Weiss for their roles in the former high-flying class action law firm’s kickback scheme. Interestingly, both former partners, Steven Schulman and David Bershad, reportedly cooperated with federal investigators to provide critical detail on the law firm’s misconduct.

There’s a certain level of sad irony in this. I won’t defend Milberg Weiss. They did wrong, and the take down is the right result. But the sad thing is that their securities work was one of the few thin forms of protection when Wall Street engaged in misconduct.  So I’m hoping that these take downs are just a prelude for the next round. Because I have to imagine that there are some people at AIG, at Bear Stearns, at some of the investment firms and credit rating agencies who did similar or worse.

David Sugerman

So I was never a huge Who fan, but they had a way of crafting a phrase or a riff that invariably resonated far beyond the tune. The rauccous revolutionary anthem ends the refrain with this staunch declaration, “We don’t get fooled again!” That line sprang to mind as I learned more about the proposed Bush administration bailout of Wall Street.

It’s a short proposal. Text is here, courtesy of the New York Times.  Buried in the middle is this short ditty in Section 8: “Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.”

Seems to me that the very same Secretary who steered the boat into the current ice berg is a poor choice for being the guy who makes “non-reviewable” decisions.  The current administration says we’re in a crisis, but doesn’t want to provide relief to mortgage holders. They claim that immediate and bold action is necessary, but they aren’t willing to consider limits on CEO compensation. And they want no one to question their decisions?

This is the same administration that got us into this mess. It’s the same administration that sent us off to an ill-considered war based on juiced up intelligence. It’s the same one that has presided over the destruction of the Bill of Rights.  The one that corrupted the Department of Justice. They have demonstrated time and again contempt for the rule of law. No wonder they propose no review by Congress or the courts.

With a track record like that, they want no oversight as they spend $700 billion of our money?

The Who had it right. No way.

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

Good piece on how it’s usually wise for plaintiffs in injury cases to settle their claims, even when the settlement feels like too little money. The short version is that pre-trial settlement of the claim is generally the wise choice.

According to the forthcoming study, plaintiffs–the people bringing the lawsuit–mistakenly go to trial 60 percent of the time.  The measure of a mistake is whether they receive more at trial than was offered or less. If it’s less, the authors treat that as a mistake.

Interestingly, while defendant’s make the wrong choice less frequently, the study reportedly finds that when they are wrong, they tend to be wrong by a much greater amount.

I’ll be interested to see the study once it’s out because it may have understated something that’s important. If the study only compares the amount of the settlement offer to the amount of the trial verdict, the study may understate the harm to the plaintiff who chooses incorrectly.

Here’s why.

It usually costs substantially more to go to trial. In contingent fee cases, it is not unusual for a lawyer’s fee to increase if the case goes to trial.  That increase is designed to reflect the sharp increase in the amount of work the lawyer must do.The hourly lawyer’s fees also increase sharply as trial approaches, as the lawyer and his or her staff will spend a lot of time on the clock preparing for trial and going to trial.  When I am in trial, it is not unusual for my work days to run 14-18 hours, and when a trial goes several weeks or longer, it’s easy to see why things get expensive.

It’s not just about lawyers fees. In addition, the expenses associated with trying a case can be postponed until late in the game, but they steeply increase on the brink of trial. Expert witnesses spend many hours getting ready to testify. That’s an expense. So are the costs of exhibits and presentations.The bottom line is that going to trial costs a heck of a lot more.

As a practical matter, it measn that a settlement today of $25,000 might result in an equivalewnt bottom-line net recovery that is roughly equal to a trial result in the same case of $40,000.  So in this example, if an injured person turned down an offer of $25,000 and went to trial and won a verdict of $30,000, it would prove to be an unwise choice because the net amount in the person’s pocket would actually be less.

It’s a sobering article. But it confirms my professional experience. It’s part of why those of us who try cases regularly tell clients about the risks of going to trial.  We always want our clients to make informed choices.

David Sugerman