The Strongarm Of The Law
There has been a lot of coverage in the media about the Washington, DC judge who is suing the pants off a family over a pair of pants. Walter Olson takes a look at that situation today in the Opinion Journal. Olson runs Overlawyered.com, so he's familiar with a lot of the abuses that our legal system permits. Such as suing a dry cleaner over a missing pair of pants for $54 million.
When attorney Roy Pearson filed suit demanding $67 million from the Chung family, whose Washington dry cleaners had mishandled his pair of trousers, he must have felt he was sitting pretty. Menacing a merchant who's annoyed you with terrifyingly high legal penalties–that's the way to show who wears the pants, right?
Mr. Pearson probably had no idea that his Great American Pants Suit–the trial of which just wound up in a Washington courtroom last week, with a verdict expected this week–would stir commentary around the world and come to symbolize the extent to which lawsuits in America can serve as a hobby for the spiteful and a weapon for the rapacious.
It all began two years ago when Mr. Pearson walked into Custom Cleaners, a Northeast D.C. establishment owned by Jin Chung, Soo Chung and Ki Chung. He laid down $10.50 to have a pair of pants altered. The results dissatisfied him: The job wasn't finished on time, and he says the pants he was given were someone else's, which the Chungs deny. He demanded $1,150 for a new suit; the Chungs demurred. So it was off to court, with the claimed damages subject to alterations, in an expansive direction.
How billowy did those damages get? Well, it seems Mr. Pearson needed to be paid for 10 years' worth of weekend car rentals so that he could patronize a different dry cleaner. He wanted $500,000 for emotional distress and–though representing himself–$542,000 in legal fees. Best of all, he claimed that the signs on display at Custom Cleaners, "Satisfaction Guaranteed" and "Same Day Service," were fraudulent, entitling him to damages of $1,500 each per day under D.C. consumer law. He multiplied 12 violations by three defendants by 1,200 days, and soon was up over $65 million (later cut to a mere $54 million).
The real problem here is the lack of "loser pays" rules. The Chungs are being ruined financially over this and the law is part of the problem. Someone who knows how to game the system can ruin their enemy.
By old_dawg, Monday, 18 June , 2007 @ 8:02 am
I understand that the British have a system in which a judge determines if there is any merit to the law suit and can dismiss it without ever going to trial. That and “loser pays” would solve a lot of problems in this area.
By Chris, Monday, 18 June , 2007 @ 11:24 am
Tar and feathering might put a crimp in this sort of activity as well.
By IanC, Monday, 18 June , 2007 @ 11:36 am
Canada’s common law jurisdictions (like my own Ontario) do permit the defendent to move for summary judgment before trial, but the test is high. We also have the convention that costs are borne by the “loser”. However, all that means is that access to the court on any matter, good or bad, is denied to most middle-class folks because of cost, and the risk of loss (especially against well-funded defendants). The same features that keep out the nuts keep the out the normal people that have a real grievance…only the nuts still come in. Nuts simply represent themselves, which ends up taking even more time, since judges are supposed to cut the self-represented some slack.
The problem isn’t the system. The problem is the failure of human judgement, which can thrive anywhere.
By IanC, Monday, 18 June , 2007 @ 11:41 am
Further to my post above…this is the kind of problem that arises in Canadian courts. The judge has since made his ruling, but I won’t tell you want he decided. I’ll let people chew on this problem for now.
Autism class action suit proves costly
Toronto Star Jun 11, 2007 04:30 AM
Tracey Tyler
LEGAL AFFAIRS REPORTER
Five families with autistic children are learning that suing the government is a risky and expensive venture, even through a money-saving class-action lawsuit.
The province and seven school boards are seeking $85,000 in legal costs from the families, who suffered a setback in March when a Superior Court judge dismissed most of their claims without a trial.Taline Sagharian, one of the parents, believes the province and boards are using a financial club to “bully” them into dropping their case and abandoning their appeal of Justice Maurice Cullity’s ruling. “They’re hoping to shut us down,” said Sagharian, who is suing on behalf of son Christopher, 10. “The irony is they’re doing it to families who are already financially strapped.”
In a brief filed for a court hearing today, the families say they’ve spent savings, mortgaged homes and taken extra jobs to pay for intensive treatment not readily available to their children in schools.
But lawyers for the province say ordering them to pay government legal costs “will not be denying these plaintiffs access to justice.”
The government is content to have its $50,000 share paid at the end of the case, leaving the families free to continue their litigation. The school boards, however, want their $35,000 paid within 60 days.
The case raises a little-known fact about class actions in Ontario.
While a class-action can help avoid the time and expense of multiple lawsuits and potentially benefit thousands, “representative plaintiffs” often bear responsibility for legal costs if the case fails.
Requiring the families to pay relatively modest costs would send a message that cost awards are a two-way street and plaintiffs are not free to drag defendants to court without risk, the province and boards say.
It’s also reasonable in the circumstances, their lawyers argue.
While judges sometimes forgo the “loser pay” costs rule if a lawsuit is a test case or raises issues of wide public interest, the families claimed $1.25 billion in damages, so they can hardly be described as acting in the public interest, the attorney general’s office says.
Sagharian, whose husband, Harout, is also named as a plaintiff, says damages would have been shared by as many as 10,000 families. That works out to about $125,000 per family and would pay for about two years worth of intensive autism treatment, she said.
If a court accepts that litigants who claim damages aren’t motivated by public interest concerns, it would mean no class action would ever be a public interest case, say the families’ lawyers.
Cullity struck their claim for damages and allegations that government and board officials knowingly inflicted harm on the children and violated their right to security of the person by not providing universal access to treatment.
He allowed the families to proceed with a claim for equality rights violations. The province says its costs for the five-day hearing were $71,816.75, based on a rate of $192 an hour for Crown counsel and $60 an hour for an articling student. The cost to the York, Peel and Toronto public and Catholic boards, as well as the Durham public board, were $55,010.13, their lawyer says.
By Micah, Monday, 18 June , 2007 @ 12:13 pm
There is a kind of “loser pays” rule in the Federal system, and also in many state jurisdictions. In the Federal court, it is known as rule 11, and forces a party whose lawyers brought a blatantly frivolous lawsuit or one in which they failed to do adequate factual or legal research to pay the other side’s legal fees. The rule exists precisely so that you cannot ruin someone financially merely by filing a bogus lawsuit.
There isn’t a general “loser pays” rule, but I think there shouldn’t be; people who have really been harmed (e.g. children run over by drunk driver, face burnt off by exploding gas grill, etc.) often lose lawsuits, because the burden of proof is on the plaintiff. A general “loser pays” rule would invevitably penalize some people who had every right to bring a lawsuit, but just couldn’t convince the jury by a preponderance of the evidence.