Should lawyers make millions by suing a manufacturer to fix a problem the manufacturer has already fixed, fixed for free, and fixed although none of the customers noticed the problem? That was the question in a California courtroom this month when Santa Clara Superior Court Judge Socrates Manoukian ruled that attorneys suing Intel must prove that the public has benefitted from a class action lawsuit before the lawyers can receive $1.5 million.
The lawyers had filed the suit against the Intel Corporation on behalf of every person who has purchased an Intel Pentium computer chip. They did so after reading of Intel's announcement that it had incorrectly reported benchmark speed tests for two microprocessors, and that it had corrected the problem. The lawyers negotiated a $1.5 million fee for themselves and, for the plaintiffs, $50 rebates for those who purchase an Intel OverDrive Processor. These processors are expected to cost between $299-$345 before rebate.
Berkeley attorney Lawrence W. Schonbrun, who objected to these high legal fees on behalf of one class member, noted: "It's the ultimate abusive class action settlement: Little, if any, harm to consumers; no economic damages to class members; no illegal conduct by defendants; and no meaningful recovery for anyone except the lawyers."
Virginia Democratic Representative Jim Moran has a very personal reason to support product liability reform: his six-year-old daughter, Dorothy. Writing in the Capitol Hill newspaper The Hill (September 17), Moran reported that when Dorothy was three she was given only a 50-50 chance of surviving brain cancer. One of the factors in her recovery, he says, is a medical device that may soon be pulled off the market because of, he says, "the looming danger of financial ruin posed by potential product liability lawsuits." Moran adds: "Opponents of product liability reform, especially tort lawyers, often speak of their concern for the victims of defective products. But unless we act soon to reform our laws affecting the liability of biomaterials producers, we could have more than 7.5 million more victims -- those individuals who depend on medical devices made with biomaterials."
Writing in the Baltimore Business Journal (December 6), Baltimore trial lawyer James E. Carbine calls upon private businesses to start putting "loser pays" provisions in their private contracts. Carbine says this provision, which many legal reform experts are urging Congress to enact, would help businesses when "the amount in contention is too much to ignore, yet too little to justify the expense of taking the case to trial."
Carbine cited two cases in which "loser pays" would have served justice: A four-year-old company just about to become profitable was sued for $75,000 by its landlord in a bogus suit. The landlord offered to settle for $35,000; the company's lawyers estimated that defending the lawsuit would cost $50,000. A mid-sized firm is stiffed for $60,000 by a customer. The company sues, wins, collects $60,000 from the customer and is billed $70,000 in legal fees.
Tort D'Jour: Ludicrous Lawsuits
Common sense has prevailed in a few recent ludicrous lawsuits:
A California judge dismissed a suit against Disneyland by a former Mouseketeer who was robbed in the Disney parking lot. The plaintiff complained that her grandchildren were traumatized when, after the robbery, Disney security guards took the family inside the Disney facility and the children saw the Disney characters take off their costumes, thus learning that Disney characters aren't real.
A Washington, D.C. judge dismissed a lawsuit against National Public Radio by a convicted cop killer and death row inmate when NPR decided to stop airing his radio commentaries. The convicted killer says his first amendment rights have been violated by NPR's refusal to give him air time upon demand. *