The Oregoinian’s Brent Hunsberger reports on this eye-catching honking huge trade infringement verdict handed down in U.S. District Court in Portland yesterday. Looks like the grand total–some $305 million–is a lot of cash for a dispute over whether Payless stores ripped off Adidas by selling knock-off products.
I’ve got no cause to question all this, except that business vs. business disputes leave me yawning and struggling to stay awake. But here’s what’s interesting. We’ve heard for years about how we’re overlawyered, how class actions take too much money from businesses for ripped off consumers, and how people recover too much money in lawsuits. A lot of the drumbeat comes from the Chamber of Commerce. Here’s a window on one of its slick mouthpieces–I mean affiliates–that gives a great snapshot of the Chamber of Commerce’s view of litigation.
So here’s the question that I can’t avoid asking: What’s the Chamber going to say about a verdict where a business recovers $300 million for a claim of trade infringement? What are the going to say over at overlawyered? How about the institute for legal reform? How about the American Tort Reform Association? I’ll be watching. Because I’m sure that they will trumpet this case of a business getting too much money from a jury. I imagine we’ll see screeds about frivolous lawsuits. And there will surely be concerns raised about how lawsuits like these are ruining society. And that it’s too much money. Oh yeah, and the lawyers are behind it all.
Don’t get me wrong. While trade infringement lawsuits don’t get me juiced, I can see the logic and the need. As Mr. Hunsberger’s report makes clear, companies like Adidas’ intellectual property represents the true value of the enterprise. So they’re aggrieved, and they use our civil justice system to defend themselves. I get that.
But here’s the deal: I have the sneaking suspicion that all the outrage about big verdicts is really nothing more than class warfare on the middle class. So as you can imagine, I’m grabbing one of those big things of popcorn and settling in for the show. I can’t wait to hear what the Chamber of Commerce and its friends say about this one.
One of the early critics of punitive damages, Judge Robert Bork, filed a lawsuit recently that reportedly arose from injuries he suffered as he fell while climbing steps. He was on his way to the lectern to give a speech to the Yale club. According to the report, Judge Bork seeks $1 million in damages, plus punitive damages. The good people at the American Constitution Society blog report: www.acsblog.org/economic-regulation-employment-leading-conservative-activist-seeks-punitive-damages.html
There’s something a little unsettling about all this. First, it’s rare–in fact almost unheard of–that an injured person would recover punitive damages in a simple premises fall case. The standard for punitive damages generally requires wanton disregard or deliberate indifference to a hazard. It would almost require the Yale club to have deliberately left a hazardous condition there, knowing that the frail judge would fall. Kind of like tossing the old banana peel on the floor and training a camera on the spot so that you could laugh at the guy tumbling.
It’s always a little risky to comment on cases based on media reports–you really don’t have all the facts unless you’re actually handling the case. But still, this one seems a little hard to fathom.
In the past, Judge Bork has railed against the civil justice system, tort law, and punitive damages, the very tools that he is using in his case to seek redress for his injuries. So the bigger question is whether he now stands ready to repudiate decades of criticism that has fueled critics of the civil justice system. This case might be more ironic than Mr. Hemstreet’s civil rights claim (May 23, 2007 post below).
Or maybe Judge Bork would explain that his case is different?
David F. Sugerman
Comes the news today that one Mark Hemstreet and his friend Gregg Clapper filed a federal civil rights complaint for damages including economic damages, non-economic damages, punitive damages and attorney fees. The case reportedly arises from a prosecution for hunting license violations out in Eastern Oregon’s beautiful Malheur County.
It’s good that the courthouse is open so that these two aggrieved citizens may seek redress for the wrongs that they claim to have suffered. Federal civil rights laws provide important ways for ordinary citizens to seek relief when government officials act inappropriately, but anyone who has been in the trenches will tell you that they’re hard cases.
There is a bit of irony here. Some years ago, Mr. Hemstreet was one of the leading foes of access to the civil justice system for ordinary Oregonians. In the 1995 legislative session, Mr. Hemstreet strongly supported legislation that would have limited damages and would have barred the courthouse doors for ordinary Oregonians.
Maybe it’s just a simple question of whose ox is getting gored.
It would be interesting to hear today whether Mr. Hemstreet and Mr. Clapper now believe–as do most principled conservatives–that the jury system provides one of the best means of checking abuse of power. That is true whether the abuser is the government, an insurance company, an institution, or a large corporation.
So it will be interesting to see how this case progresses. And it’s good to know that Mr. Hemstreet and Mr. Clapper trust Oregon juries to sit in judgment. As well, it’s good that they feel confident that the court system provides them with a means of getting full and complete justice, based on the evidence that they will present at trial.
David F. Sugerman