Recently in NY & Region Category

$560M, more than the budgets of many smaller cities, is a fairly shocking figure, since, at typical 33% to 40% personal-injury contingency rates, it means that it's a wealth transfer of about $30 per capita from every man, woman, and child in the 99% in New York City to the 1% who are trial lawyers. And the $560M figure doesn't include the litigation expenses of a 650-member Law Department (that's more than the number of lawyers in Dewey Leboeuf's New York office at its peak, though not all of those city lawyers are defending personal injury claims) or of non-legal workers whose jobs are interrupted responding to discovery.

But the focus of a NY Times story on the subject is the reporter's inconceivable shock that NYC defends itself in lawsuits instead of blindly writing multimillion $ checks. In particular, the story is critical of the city hiring a private investigator to double-check the claimed injuries of a plaintiff claiming (and eventually receiving) millions of dollars of damages from a tree accident: of course, surveillance of a personal injury plaintiff seeking a large sum for quality-of-life injuries is common, and can uncover fraudulent claims, though courts are inconsistent and relatively lackadaisical about punishing such fraudulent claims. But given how thoroughly wracked the status quo is with fraud, imagine how much a softer touch New York City taxpayers would be if it was known that they did not double-check for fraud? "If you build it, they will come," and that $560 million a year would quickly become $5.6 billion a year. The Times investigated "ten cases"; how were those picked? How many cases involving fraudulent claims that the City successfully beat back did the Times miss?

The Times does not question City taxpayers paying an unprecedented $350,000 to the estate of an elderly woman for what was, at most, a few seconds of pain and suffering (and was probably no pain and suffering at all, but we'll credit the jury's finding for the sympathetic grandmother against the deep pocket); it gives only lip service to the legitimate claim of the City's counsel, Michael Cardozo, that taxpayers are paying excessive amounts for injuries.

The Times story is part of a three-day series suggesting that the City should do more to prevent injuries from falling trees. Of course, creating excessive liability for damage caused by trees is a great way to incentivize a defendant into having fewer trees. Trial lawyers' proposed solutions sometimes involve pure social cost: this blogger argues for warning signs, though, of course, if every tree has a warning sign to avoid liability, citizens will simply ignore the millions of dollars spent on warning signs (and also ignore far more important warning signs). And trial lawyers will still argue that injured plaintiffs were inadequately warned, because, after all, the warnings didn't prevent the injury in hindsight.

Details are sketchy, but New York state appears to be about to initiate a program requiring its 10,000 annual applicants to the bar to demonstrate 50 hours of supervised pro bono work as a prerequisite. [NY Times; Justice Lippman speech]

My view is that this proposal imposing a tax on attorneys is preferable to proposals taxing a broader tax base for the same thing under the guise of "civil Gideon." (More preferable still would be to make the requirement a substitute for, rather than in addition to, barriers to entry like the bar exam and CLE requirements.) On the other hand, fifty hours of an inexperienced attorney is perhaps comparable to twenty hours of an experienced attorney's work, so one questions how much of a gap this requirement will close. My greater concern is that the breadth of pro bono will be inconsistently applied to permit attorneys to engage in societally counterproductive activity characterized as "pro bono," but that a double standard will preclude work for the Institute for Justice or Center for Individual Rights.

(If, however, "work for a non-profit" can be out of state, I am happy to take requests to provide the Center for Class Action Fairness LLC.fifty hours of pro bono work. CCAF is not affiliated with the Manhattan Institute.)

83-year-old Evelyn Paswall was peacefully walking along in Manhasset, NY, in December 13, 2011, when she walked into the glass doors at the Apple Store Manhasset and broke her nose. For this, she wants $1 million in damages, from Apple, of course. Apple already puts warning strips on the glass in its stores, but that's not enough for Paswall's attorney, Derek Smith, who argues that Apple's "high-tech modern architecture" makes it liable. The case is 2:12-cv-01378-ADS-ARL (E.D.N.Y.). [MacRumors; NY Post via Apple Insider]

Fed. R. Civ. Proc. 53 permits a judge to appoint a "special master" to resolve complicated pretrial matters that the judge does not have time to do; most state courts have similar procedures. Such special masters are typically experienced attorneys who charge the full billing rate of experienced attorneys; rather than being put out for competitive bid, judges often pick a friend for the lucrative assignment. The existence of a rule as a safety valve allows courts to handle heavier dockets, but that in itself has its own distorting effects. A judge has reduced incentive to narrow the scope of discovery; heck, the privilege log disputes alone can generate hundreds of thousands of dollars, and create unreasonable standards that add tremendous expense to litigation beyond what is paid to the special master.

A recent scandal in New York reported by the Daily News suggests other possible problems: in 1999, Manhattan Supreme Court Justice Sherry Klein Heitler appointed Laraine Pacheco special master in a series of asbestos cases, and in 2005, Pacheco was making $368,000 a year overseeing settlement discussions. Pacheco lost her lucrative position last week when it was learned that she had overbilled parties—including city and state taxpayers—$400,000. Pacheco had previously come under fire for wanting to hold these settlement discussions near her vacation home in Tucson, Arizona, inviting lawyers to do so as a junket (and suggesting they shop at her daughter's jewelry store).

This is an area that merits much more study by the legal reform community.

As part of a settlement of a criminal investigation against questionable fund-raising where there were allegations that government contracts were traded for political contributions, Suffolk County Chief Executive Steve Levy resigned and turned over his more-than-$4 million campaign fund to the Suffolk County District Attorney's office. "Some Levy donors asked for their money back, but not all of his campaign cash has been claimed." The rest goes back to taxpayers, then, right? Not according to DA Thomas Spota, who has been using the proceeds as his own personal slush fund. It's not clear what legislative or constitutional authority permits that sort of spending. It may exist, but I couldn't find it: County Law §700(2) implies that the money is to be given to the county treasurer, and not kept within the DA's office to distribute. It's especially questionable if the DA is personally benefiting from a discretionary decision to settle the case given that there are those who believe that Levy escaped serious consequences. A left-wing blog gloats that the disgraced anti-immigration politician is now indirectly funding an immigration rights group, but doesn't raise questions why Spota is allowed to promote his own political career by giving government money to his political allies—isn't that pretty close to what Levy just got prosecuted for? I have an inquiry in to the Suffolk County's office asking for an explanation, and will update if they respond.

Demand outstrips supply for New York private schools, and thus tuition creeps upward faster than inflation and the cost of education elsewhere, reaching an astonishing $40,000/year at some schools. At no point does the New York Times article (h/t K.L.) identify what is causing the imbalance: regulatory barriers to entry that make it nearly impossible for new institutions to open and relieve some of the excess demand. Too, some of the excess demand is caused by the large difference in quality between private and public schools, a problem exacerbated by the amount of money public schools waste on union contracts designed to benefit low-quality teachers instead of students.

Eric Turkewitz confirms that this is an official policy (via Overlawyered), and that it appears to be litigation-driven—though, as Turkewitz argues, it may end up increasing civil liability to New York taxpayers in addition to the obvious increased threats to public safety.

Judge Michael Stallman of the Supreme Court of New York County, denied the petition of Occupy Wall Street Protestors to extend a temporary restraining order barring New York City and property owners Brookfield Properties from enforcing new park rules. These new rules prohibit "Camping and/or the erection of tents or other structures. Lying down on the ground, or lying down on benches ...The placement of tarps or sleeping bags or other covering on the property. Storage of placement of personal property on the ground, benches, sitting areas or
walkways which unreasonably interferes with the use of such areas by others."

In response to First Amendment arguments raised by the protestors, Judge Stallman concluded,

The movants have not demonstrated that they have a First Amendment right to remain in Zuccotti Park, along with their tents, structures, generators, and other installations to the exclusion of the owner's reasonable rights and duties to maintain Zuccotti Park, or to the rights to public access of others who might wish to use the space safely. Neither have the applicants shown a right to a temporary restraining order that would restrict the City's enforcement of law so as to promote public health and safety.

The New York Lawyers Guild, representing the protestors, contended that the 24-hour occupation itself-tents and all-is integral to the movement's message. Notwithstanding, Mayor Bloomberg has pledged to enforce the new rules when Zuccotti Park is reopened after its cleaning.

James Copland of PointofLaw and Director of the Center for Legal Policy at the Manhattan Institute discussed the ruling on PBS NewsHour.

Occupy Wall Street is keeping $500,000 in a bank, but hasn't opened its books. Protestors are getting frustrated that they aren't getting bailouts from their own collective, notwithstanding huge tax rates by the collective on their fundraising.

"The other day, I took in $2,000. I kept $650 for my group, and gave the rest to Finance. Then I went to them with a request -- so many people need things, and they should not be going without basic comfort items -- and I was told to fill out paperwork. Paperwork! Are they the government now?" Smith fumed, even as he cajoled the passing crowd for more cash.

Meanwhile, the drum circle, which was annoying protestors almost as much as the middle-class residents who have lost their neighborhood to noise and urine smells, have found their drums vandalized and the unfeeling collective unwilling to purchase new drums or storage. [NY Post and Urban Grounds and NY Post via Geraghty's Morning Jolt; must-read NY Magazine via Bernstein @ Volokh via me]

Of course, it's a standard tactic for plaintiffs' lawyers to lobby media, hedge funds, and government to mau-mau corporations into settling, so this isn't exactly a man-bites-dog scandal, but the New York Times takes a look at this often underreported aspect of big-bucks litigation. Chevron has filed a freedom-of-information request with New York state government. Chevron's Amazon Post website is an admirable attempt to get its side of the story out there (one we'd wish other corporations would emulate when being unfairly attacked by the trial bar).

Relatedly, Miami Herald film critic Glenn Garvin has some trenchant observations about the number of trial-lawyer-funded films masquerading as documentaries.

In other Lago Agrio news, the Second Circuit vacated Judge Kaplan's preliminary injunction against the plaintiffs regarding enforcement of the Ecuador judgment. A request to remove Kaplan from the case was denied.