I’m not a big fan of the U.S. Chamber of Commerce. For years, they’ve led a concerted effort to bar the courthouse doors for ordinary Americans.  And now we learn that the Chamber is at the center of the deregulation frenzy that led to the Wall Street financial collapse.  Among the many points of interest:

• U.S. Chamber received  some $23 million (through a foundation) paid by AIG to lobby for changes in regulatory oversight
• The same U.S. Chamber champions the $700 billion bailout (Query: How much is that really going to cost us?)
• The U.S. Chamber used “tort reform” as the wolf-in-sheep’s-clothing approach to strip away post-Enron reforms.

Look at this video where the Chamber begs and bullies for the bailout.  Against the backdrop of their responsibility, this is goofy.  Shameless.

David Sugerman

Reported here is the impending settlement of a claim by the estate of James Perez against the City of Portland. Back in 2004, Mr. Perez was shot to death by Portland police in a traffic stop. Details are sketchy, except that Elden Rosenthal represents the family. Elden is a rock star when it comes to tough civil rights cases.  I expect to hear more about this in the coming days.

In a situation like this, you can’t really congratulate the family. While money from the settlement apparently will be used to provide care to Mr. Perez’s ailing mother, there’s little joy in the resolution of these types of tragedies.

David Sugerman

The title is unfortunate, but this Oregonian piece gives a good feel for the critical importance of jury duty. I especially appreciate the extensive discussion of Judges Bearden, Walker, Wilson and LaBarre’s methods of promoting the importance of jury service.

I served on one jury in a criminal matter some years ago. It was an experience I will never forget.  I was impressed by the people who served with me. They understood that we serve in order to provide an open system of justice. There was grumbling, of course, as it’s neither fun nor easy. Still, it’s critical to the healthy functioning of our state.

The stories recounted in the linked article illustrate some of the true challenges of jury service. As well, you can find good first-hand accounts here and here from people who served in a high-profile case.

Jury service is not easy, convenient, or fun. Still, it is one of the most important roles any American can play to help maintain the integrity of our justice system.

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

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

Here’s some good news in what is something of a sleeper. Measure 51, a one-sided and unnecessary ballot measure that would limit consumers rights failed to qualify for the November ballot.  The measure would have limited attorney fees to 10 percent in most contingent fee cases.

Contingent fees are those paid as a percentage of what a lawyer recovers for an injured person.  They are an equalizer. While the wealthy and big businesses can afford to pay lawyers by the hour, the rest of us don’t have the means to do so. The contingent fee system levels the playing field, allowing middle income Oregonians and small businesses the ability to hire skilled lawyers who will work for a percentage of what they obtain for the client.

The measure limited only contingent fees; it didn’t limit what those who afford to pay by the hour could pay. Had it passed, the measure would have limited consumers’ access to the best legal talent by artificially limiting fees.

My son–a somewhat sardonic 18 year old–saw through it immediately. “Wouldn’t limiting fees actually encourage lawyers to file more frivolous lawsuits?” (He’s  smarter than his dad; I never thought of that…thanks kiddo, you’re doing the old gray fart proud.)

Here’s the thing. At bottom the one-sided measure would favor insurance companies, HMOs, and manufacturers of dangerous products. They don’t want consumers to have access to the courts. They know that the best way to close the courthouse doors is to make sure that injured consumers can’t afford to hire lawyers. This, by the way, is part of the Bush/Cheney/Rove agenda. And as with many other things they failed.

Thankfully, Oregon consumers knew better. We’ve come to realize that the initiative process is one that is used by special interests to advance a radical agenda. It’s getting harder to qualify measures, and Oregonians are getting more skeptical about the unintended consequences of poorly drafted initiatives.

That’s great news.

David Sugerman

Two weeks of vacation gone in a blink, and now there’s an accumulated pile of reading and rumination. I suppose the most notable legal development is the U.S. Supreme Court’s reduction of Exxon’s punitive damage award in the case in which its intoxicated captain took out a chunk of the ecosystem. More on that coming.

I was more struck by the death–I probably shouldn’t call him this–of one of my great influences, George Carlin.  He was such a lover of language and an individual. One of his great bits–Seven Words You Can’t Say on Television–is still a hoot. It’s too raw for a link here (not work appropriate; not family friendly). I imagine you can find it on youtube with only minimal effort.

If I were to hew the legal scholar line, I suppose I could drone on about the U.S. Supreme Court’s 1978 case involving the Seven Words, in which the Court affirmed the government’s authority to fine broadcasters of obscene materials. FCC v. Pacifica Foundation, 438 U.S. 726 (1978) (reprinted here). Obscenity cases bore me to tears, and I don’t think that it’s the important part of Carlin’s influence.

I think instead that it was Carlin’s willingness to stand up for what he believed and to call “bullshit” on hypocrisy.  He also loved language and laughter. He told stories using space, rhythm and sound in a way that taught me more than any master trial lawyer.

In the Vietnam era, Carlin had a great and well-remembered rap about the irony of Muhammad Ali, the great boxer. Ali refused to serve in the army claiming that he was a conscientious objector. As CNN reported, Ali said, “‘No, that’s where I draw the line. I’ll beat ‘em up, but I don’t want to kill ‘em.’ And the government said, ‘Well, if you won’t kill people, we won’t let you beat ‘em up.’”

The same kind of thing came from regular reading of Mad magazine. We former  adolescents raised on Alfred E. Neumann and George Carlin learned to question and doubt, two essential skills for those of us working in the civil justice system.

It’s a sweet, sad goodbye.

David Sugerman

Here’s a half-decent summary of how mandatory arbitration clauses strip away patients and families’ ability to hold bad nursing homes accountable for abusive care. It’s only half right, though, as the writer misses the most significant problem with mandatory arbitration clauses.

Too often, they come with rules that make pursuit of any claim impossible. As well, they often play into a rigged system by forcing arbitration with an organization that is notorious for finding against consumers.

When our parents and grandparents are subjected to abusive care in a nursing home, there needs to be a fair and open system that allows the family to hold the bad nursing home accountable. But when a mandatory arbitration clause prohibits going to court, when it bars claims under laws that provide for damages and attorney fees, and when it requires secrecy, families lose.

It’s even worse in the nursing home context because too often the family member who is placed in the care facility didn’t even have the ability to make an informed choice. What’s more, the family is often presented a thick stack of forms to sign that are take-it-or-leave-it deals. In other words, it’s a farce to say that grandpa chose arbitration.

Congress is starting to look at this. Let’s hope they take real action.

David Sugerman