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 report ties up loose ends on the horrifying medical mistake case involving celebrity Dennis Quaid’s twin babies. Backstory here.The upshot is that each twin was given doses of heparin–a blood thinner–many times above the safe level.
The article focuses on the amount of the settlement. Frankly, I don’t think that’s the point. The problem illustrates how a combination of errors can lead to medical catastrophe. Let’s hope that the involved hospital and providers learn from this error. But for the rest of us, this is an important illustration of how medical errors can cause profound injuries.
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.
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.
One of the criticisms of class actions is that often they lead to little real benefit for consumers. Often, that criticism isn’t very accurate because consumers who suffer small economic injuries aren’t going to see much benefit individually. But taking money from the wrongdoer penalizes them for misconduct and restores the money lost–even small amounts–to consumers.
But one of the problem areas is coupon settlements. In a coupon settlement, consumers who are part of a class receive a discount on future goods or services as part of a settlement. Sometimes that’s an okay outcome when, for example, the rip off is done on low-cost commonly used goods, like–say–gasoline. Or if the coupon can be redeemed for cash, then that’s fine, too.
But when the coupon gives a discount on a high cost item, that’s generally bad. And that takes us to the recently announced Ford Explorer settlement in California. In that class action, consumers who bought Ford Explorers can receive a coupon for $500 for future purchases of Ford Explorers.
While I don’t have all the details on the settlement and have no first-hand knowlege of the case, that seems like a lousy outcome. If the coupons are redeemable for cash or if they can be sold, that’s not so bad. But if they can only be used by buying a new Ford Explorer, that’s one of those class settlements that doesn’t do consumers a lot of good.
There are times when coupon settlements make sense. And maybe more information would lead me to think differently about this. Still, it’s got a kind of smell to it.
ps-I’ll be out of town next week, so things may slow on Davids’ blog for the week. Though I guess they have an internet in that town, too.
In Seattle last week, Judge Bruce Hilyer approved a class action settlement for auto glass workers who claimed to suffer vibration injuries from use of the Chicago Pneumatic CP 838. The case is Boos v. Chicago Pneumatic Tool Co., State of Washington, King County Superior Court Case No. 02-2-16730-6SEA.
Disclosure: The author of this blog served as lead counsel for the class, and Paul & Sugerman has been involved in auto glass workers’ product liability claims against Chicago Pneumatic since 1995.
In Washington, approximately 120 workers made claims and will receive compensation in the Boos settlement. In earlier cases in Oregon, approximately 75 workers made claims and received compensation for vibration injuries. It’s been a long fight, and some good has come out of it.
Success in the case would have been impossible without a great team, and I close by acknowledging and thanking the rest of the team who made the case a success: Eric Boos and Jim Rasmussen, the two class representatives, and my colleagues in the trenches, Steve Sitcov, Candice Rutter, Rick Klingbeil and Bernie Jolles.
David F. Sugerman