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February 10, 2005



Amen, Brother.



Evan: I like the following line.

"I chose Madison County as a venue not only for its quaint scenery, but because it's where I practice."

Imagine that--an attorney filing suit where he and his clients live. I bet that is one scenario the Senator never considered!


With respect to annoyance with the right wingies assault on US citizenry's right to have their grievance heard in Court, as a trial lawyer, I have been annoyed for years with these clowns who find themselves in the pocket of the insurance companies and businesses who want to getaway with all sorts of deceptive business practices.

Mr. Hatch can read your blog and then can come hither and kiss my ass!


It would have got off the ground. Just not in Madison County. To say that your case wouldn't have held up in federal courts doesn't say much for your case.


JMoore: I didn't say that it wouldn't have held up in federal court--I said it wouldn't have gotten off the ground. In other words, it wouldn't have been filed, and the company would still be misleading innocent consumers.

As for why the case wouldn't have been filed, you'd need more facts, which I'm not going to give you. I doubt you would have listened anyway.


I would have listened. I'm sorry, I didn't mean my remarks in a rude way at all. It just seems that a lot of people are declaring this bill to be the end of class-actions just because some(perhaps most) are being removed to federal jurisdiction.


I'm listening. What are the facts?


Ted: You make me feel like I just got a counselor for free. And I know how much you care. But for some reason, I just don't feel like opening up.

Do you watch that show 24? I just started watching the first season, and Kiefer Sutherland plays this government agent who's really quite heroic but is having a very bad day. Everyone is out to get him. As he spends the day running from guys with guns who in my dreams remind me very much of tort reformers, he's always telling anyone who's willing to listen, "I'd really like to tell you what's going on, I really would, but I can't. You're just going to have to trust me."

Ted, you're just going to have to trust me. I think that case we're talking about, while being perfectly-suited for class action treatment, had strategic problems nonetheless that would have made it a waste of time to file in federal court under the new law. And that's that.


Fair enough--though I can't imagine what sort of strategic problems would make it inappropriate under the CAFA in federal court, unless it was the sort of coupon settlement that even Sen. Obama criticizes.

In any event, I have to think Durbin's certification numbers are low. I was tangentially involved in two Madison County class actions, and both were rubber-stamp certified. At a minimum, Durbin is not including settlement certifications.


Ted: I agree that Durbin did not include settlement certifications in his count.


Can someone please give me an example of a "coupon settlement" where the plaintiffs did not get an award somewhat commensurate to the harm?



I don't think there are any. The guy with $0.83 worth of harm usually doesn't even know it until he gets the initial mailer. He is then reminded of his $0.83 worth of harm when the "coupon" comes.

The thing that he's upset about, of course, is that with his $0.83 coupon, he reads the stuff that says the law firm(s) is/are entitled to $1mil or more in legal fees.

This is where the PR battle is being lost: he just doesn't realize that his actual harm is $0.83 and the law firm(s) that spend(s) oooodles of lawyer and staff hours on getting his $0.83 back is earning fees for its efforts in saving future consumers millions in the long run.



Or the actual harm is zero, and the 83-cent coupon (and the attorney fees) is the price of getting out of the lawsuit. The lawyers get fees based on the 83 cents, and the defendant pays about a nickel a customer because of the low redemption rate. The only winners are the attorneys.

But, to answer Matt's question, in one famous example, an Alabama state-court nationwide class action against BancBoston over the calculation of interest for escrow fees won up to $8.76 for each of the plaintiffs--and obtained a deduction of $100-$150 from the class members' escrow accounts to pay for the attorney fees. The plaintiffs' lawyer sued a class member who objected to the ripoff. I would think that even Evan would concede that OverAnted has a point there.


Ted: Without commenting on the specific lawsuit you mention, it's certainly true that although I do class-action work on the plaintiffs' side and I oppose the federal bill, I don't necessarily think all class-action settlements are good ones. Of course I don't think that.


Re: Coupon settlements. They are sometimes valuable. A story.

Years ago I rented two movies from Blockbuster for $5 for 5-days. These movies had not been rented for months. One was a special on lions (a 50-cent rental) and the other a documentary. I turned the movies in two days late.

Blockbuster told me I owed $16. I asked them how I could owe 4 times as much money as it would have cost me to rent the movies. They told me tough -- the late fee is 4 dollars per movie per day and that if I didn't pay, they'd put it on my credit report. Anyhow, in those days I didn't fight or negotiate with salespeople, so I caved.

Blockbuster was ultimately sued for this practice. Although the P's were only given a small amount of compensatory damages (re: a coupon), Blockbuster stopped harassing future P's.

Although I would NEVER pay such an outrageous fee (I'm a tough cookie these days), other suckers (re: me at 21 years old) would. And paying those fees would be unfair. But now no one is going to get suckered.

Pretty cool, 'eh?


Mike: And now Blockbuster has gone to a plan in which there aren't any late fees at all . . .

By the way, cable companies used to abuse late fees also, but toned it down after being sued.



Now that you've found one, how much of a percentage is that one against all the ones that are "legitimate" for want of a better word? Do you publicize the class actions like the Cigna suit filed by 600,000 doctors that illustrate the effectiveness of the process?

Surely you're not expecting complete perfection from our legal system? Do you demand that kind of perfection out of all human systems?

Your site appears to be dedicated to making mountains out of molehills. What's more, in your attack on the US legal system, you inexplicably include things from other countries that you deem "outrageous"? How do those have any relevance to "chronicling the high cost of our legal system"? Or does "our" not mean the United States? Do you live overseas?


The golden rule for a parasite is simple. Never kill the host. Coupon settlements enrich trial lawyers, while doing minimal damage to the host.


Matt: I worked on the Cigna class action on behalf of Cigna, so I'm not going to comment on that litigation without authorization from my former client. CAFA is nicely constructed so that it won't have adverse effect on legitimate class actions, and ensures that class action attorneys' fees will be funded out of consumer pockets only to the extent that there is benefit to the class. The Kamilewicz case is hardly the only example of an abusive class action; I see several such cases every day in the course of my practice.

I don't expect complete perfection from our legal system, but it's nice when a systematic abuse of the legal system is stopped. There are other abuses that should be stopped as well, and I will continue to speak out against those.

I'm unsure what your complaint about our posts about legal excesses in other countries is. Are you demanding that we delete those posts as ultra vires?


Of course, plaintiffs' lawyers had nothing to do with Blockbuster's new pricing scheme, which was entirely a function of responding to market competition. Which is the problem with a lot of "consumer" class actions; if a corporation isn't a monopoly, it's not going to survive very long if its practices are actually unfair, because consumers are going to use vendors who don't treat them unfairly. There's usually a pro-consumer rationale for most practices that plaintiffs' lawyers challenge as "unfair".



My comment is only to point out the disinformation you use in service of your clients. You are well aware that in "chronicling the high cost of OUR legal system" that it literally has no bearing what happens in Australia, for example. Yet that's a part of your site. What purpose do those instances serve toward your stated goal?

Also, what percentage of abuses constitute a "systematic abuse" thus necessitating change? For example, how many legitimate billings do health insurers have to reject before it constitutes "systematic abuse" such that you would advocate Congressional action as you have in the case of class actions?

And while I know you can't comment, I guess in your last post you are arguing that Cigna would have changed its practice on its own had the physicians not filed suit? Are you advocating that us consumers just be a little more patient, and the Enron's of the world will do what's right eventually? Maybe the docs just didn't see the "pro-consumer rationale" rationale behind Cigna's actions. I trust you explained it to them.



For lunch today, I had an ounce of this marvelous St. Agur from Auvergne. I enjoyed it greatly, and highly recommend it to others, but I couldn't tell you what purpose it served towards my stated goal of a better litigation system.

I simply am not commenting on any aspect of MDL No. 1334, and there really isn't any inference to be drawn from that in one direction or the other. Readers can evaluate the settlement for themselves.

By raising "the Enrons of the world", you change the subject. What "consumer fraud" do you contend is at issue with respect to Enron? Enron brings to mind the people who lost their jobs--but Enron went bankrupt because it made a bad investment in fiber-optics. How would litigation reform or lawsuits change that one way or the other?



You mean I can't change the subject and muddy the waters to make my point? Surely Enron has as much relevance to "consumer fraud" as a lawsuit in Israel has to the "high cost of our legal system." Or is what's good for the goose not what's good for the gander in your world?

I look forward to your definition of "systematic abuse." I know that as thorough as you are that you wouldn't think of just throwing out words designed to inflame without a firm standard behind them. Once you let us in on that standard, perhaps we can find more "systematic abuses" out there so Congress can act. Maybe even in *gasp* the insurance industry. I know you'll want to get on that, what with your zeal for justice and reform.

I will continue to wait with bated breath for your explanation of the "pro-consumer rationale" which justifies so many things these evil plaintiff's lawyers deem "unfair." You know, things like unauthorized fees on loans and undisclosed interest rates and such. I'm sure there must be a real boon for the consumer in there somewhere and you're just the guy to explain it.

I'm eagerly awaiting enlightenment.

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