Catching up some more…can one blogger ever go on vacation?! Here’s a neat piece from the Oregon Supreme Court on Bill Sizemore, racketeer.  It’s a court opinion, so a lot of it is in legalese. But there are sections worth lifting from Justice Balmer’s opinion for the unanimous court:

“A jury found that defendants–a political action committee and a nonprofit corporation controlled by the same individuals–engaged with others in a pattern of racketeering activity, as defined in ORICO, by forging signatures to qualify two ballot measures for the 2000 general election and by filing false statements with the state from 1998 through 2000 concerning their expenditures and contributions. The jury also found that defendants’ illegal conduct injured plaintiffs–two labor organizations–that spent substantial amounts of money opposing the ballot measures. The jury determined that plaintiffs had suffered damages of approximately $840,000….”

The Court goes on to explain that a jury found that an enterprise that included Bill Sizemore engaged in racketeering. Mr. Sizemore–for those who don’t know–makes a living submitting poorly written and confusing initiatives to Oregon voters.  Turns out he does this by way of fraud and forgery.

As the Court explained, Sizemore’s group, Oregon Taxpayers United and the rest of the defendants, did not, “challenge the jury’s findings that they did, in fact, forge sponsorship and petition signatures or that OTU-EF submitted false reports to the Attorney General regarding its charitable activities.” Instead, the defendants made a number of technical arguments that the Oregon Supreme Court rejected.

So maybe now Bill Sizemore, Racketeer, becomes the name rightfully attached to all these horrible-idea initiatives. For years, I’ve had a sense that some people were using the Oregon initative process in inappropriate ways. But it’s only as a result of this case that I’ve come to understand that Oregonians are being played by a bunch of corrupt racketeers who are intent on hijacking our initiative system.  There ought to be a law.

Kudos to the people who pursued this case and shined a light on Bill Sizemore, Racketeer. The legal team handling the challenge includes a number of friends who should be proud of their great work for Oregonians. Two of the lawyers, Mike Morris and Gene Mechanic, are old friends who do top-flight work.  It’s particularly gratifying to see that they nailed Bill Sizemore, Racketeer. Maybe this is a lesson to Bill Sizemore, Racketeer that his days of pushing his corrupt agenda on us are coming to a close.

You can be a part of saying no more to Bill Sizemore, Racketeer.  Next time you see a petitioner circulating one of those initiative petitions, be sure to ask whether Bill Sizemore, Racketeer is involved.  And if he is, tell them that we don’t do business with Bill Sizemore, Racketeer.  And then don’t sign. Because I imagine that you agree that there’s no place in Oregon for Bill Sizemore, Racketeer.

David Sugerman

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

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

Interesting piece here on the City of Portland parking patrol’s ticket writing campaign for vehicles lacking front license plates.  Apparently, our parking cops have written 3,000 high-dollar tickets on parked cars without front plates.

Assuming the report is accurate–and sometimes they aren’t–here’s the problem. While I could be mistaken, I believe that the basis of these tickets is found in the Oregon Vehicle Code violation at ORS 803.540. The problem is that the statute is makes it a traffic infraction when a person “operates” a vehicle without proper license plates. A vehicle sitting parked isn’t being operated by anyone. (ORS 801.370) So how the parking patrol can legally ticket 3,000 people in our fair is a question that occurs to me.

It’s been years since I found myself appearing in traffic court. (Talk about adventure!) So it’s possible that my take on this is off the mark. Still, I would be really curious as to whether the City is citing vehicles based only on ORS 803.540, and–if so–how they get around the “operates” requirement. They wouldn’t have illegally ticketed thousands of parked vehicles….

David Sugerman

Must be the summer heat, but today’s news annoys me to no end. Congress gave in to the Bush White House by providing it the coveted immunity to phone companies that participated in illegal wiretapping. Gutless surrender monkeys.

I’m particularly annoyed by Senator Obama’s vote with the majority. As a former constitutional law professor, he knows better. Guess he couldn’t stand up to the FOX news critique if he stood for civil liberties and protection of privacy.

I don’t know about you, but I get pretty nervous when we make it easier for the government to spy on its own citizens. Seems like it’s a quick few steps from there to really bad news. If you have doubts about the importance of civil liberties, consider the case of Brandon Mayfield, a gentle soul who was caught in the horror-net of the Patriot Act when investigators mistakenly interpreted fingerprints left at the site of the Madrid train bombing.

I know, I know. Al Queda presents a very real threat. I’m not being snarky. Daniel Perl’s horrible death and 9/11 and Madrid trains were very real terror events. But the specter of terrorist attack can’t give the government license to spy us, to torture our prisoners, and to lie about weapons of mass destruction.

Immunity means that no jury will ever consider what these people have done. No one will ever have to explain. Immunity leaves the actors free to do whatever they choose. And that is a very scary thought.

David Sugerman

Post-Katrina (still?!) formaldehyde exposure is at the center of this Congressional dust-up. It seems that Our Congress is debating whether the manufacturers or the government should shoulder responsibility for the dangerous condition of FEMA trailers provided to people displaced by Katrina.

I can’t help but think there’s a more basic question that isn’t getting asked.  Exactly why are people still living in dangerous post-Katrina trailers?  It’s tempting to go all caustic here and wonder about race and class and poverty. But I won’t.

One of the political ironies is that the Republicans want to blame the government for failing to have formaldehyde standards. Interesting. They are now wanting more regulation? But of course, neither side gets all the blame or all the credit. You have to wonder whether the Democrats can’t find a more expedient approach to solving the underlying problem.

As for the legal side, it’s pretty simple. A manufacturer that sells a dangerous product bears responsibility for the harms and losses caused by the product. That would include toxic trailers.

Manufacturers don’t get to blame the government. The government didn’t make or sell the trailers. The government didn’t make hundreds of millions of dollars selling the trailers.  Since they made and sold the goods, the manufacturers have to take the bitter with the sweet. If the product that they sold is dangerous, they pay what is necessary to cover the harms and losses caused by the dangerous product. Simple rule.

But of course, the whole discussion is sickening, in that the first priority has to be prevention of injury by getting people out of toxic buildings.

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

Two stories in today’s news provide court-side glimpses of two forms of market abuse that led us skipping down the garden path to the cratered economy. In this one from the Oregonian you can learn all about the alleged scams by various Oregon flimflam men who saw that the trough was unguarded. They apparently goosed up the value of properties, got inflated appraisals, and borrowed way out of proportion to the collateral, pocketing the overage.

They could act with impunity because the banks were turning their paper to Wall Street and didn’t have any reason to scrutinize loan applications.

And of course the liar loans promoted by banks were being bought by Bear Stearns. Here’s an update on criminal proceedings against former Bear Stearns managers facing indictments. Apparently, they knew that the loans they were buying were bunk.  Going to be fun to hear them explain why they kept hyping their hedge funds while secretly selling their own shares before it all crashed down.

All of this highlights the dark underbelly of deregulation.  Want a chuckle? Remember the movie, Wall Street? “Greed is good,” we were told by pop culture, by politicians and by professors.

So this is what they meant by “Good.”

David Sugerman

ps to regular readers-I’m out of here for a couple of weeks for vacation. While David Paul may pick up the slack, the blog may well go dark while I’m away. I’ll be back to it after the 4th of July weekend.

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